EXHIBIT 10.4
TECHNOLOGY LICENSE
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AND
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WEB SITE HOSTING AND MANAGEMENT AGREEMENT
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THIS AGREEMENT made effective as of the 15th day of November, 2000
("Effective Date")
BETWEEN:
XXXXXX.XXX SOFTWARE LTD., a British Columbia company having
an address at Suite 600,601 West Broadway, Vancouver,
British Columbia,
("iNoize")
AND:
IQUEST NETWORKS INC., a Wyoming company having an address at
Xxxxx 000- 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, X0X 0X0
("iQuest")
WHEREAS:
A. iNoize is in the business of developing various software applications to
enable locating and sharing of personal music collections by broadband
streaming over the Internet, collectively the " iNoize Technology";
B. iQuest is in the process of establishing a music web site on the Internet
under the domain Xxxxxxxxxxxxxx.xxx ("iQuestSite"); and
C. iQuest wishes to acquire from iNoize a license to use iNoize Technology on
the iQuestSite (whether using the Xxxxxxxxxxxxxx.xxx domain or any
successor domain), and to retain iNoize to provide the computer system,
telecommunication facilities and related services required to implement,
host, operate, manage and support the iQuestSite.
NOW THEREFORE, THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants herein contained, and other good and valuable consideration, the
parties agree as follows:
1. DEFINITIONS
1.1. In this Agreement, unless otherwise provided, the following terms will have
the following meanings:
(a) "CONFIDENTIAL INFORMATION" means any information maintained as
trade-secret or confidential now or hereafter existing during the term
of this Agreement relating to the business activities of a party, but
does not include any data or information which:
(i) is or becomes generally known or to the public, without breach of
this agreement;
(ii) was known by the receiving party at the time of disclosure by the
other party, and was not subject to any obligation of confidence;
or
(iii) is rightfully communicated to the receiving party by another
person, free of any obligations of confidence to a party;
(b) "CUSTOMER ORIGINATED ERRORS" means any deficiencies in the iQuestSite
which are due to the iQuestSite Code or the iQuestSite Content;
(c) "DOCUMENTATION" means the user manuals and other written materials
relating to the iNoize Technology that are provided to iQuest by
iNoize, or are developed by or on behalf of iQuest;
(d) "EFFECTIVE DATE" means the effective date of this Agreement and the
License, as first set out above in this Agreement;
(e) "END USER" means a person that is a user or a potential user of the
IQuest Services originating from or facilitated by the iQuestSite;
(f) "ENHANCEMENTS" means any enhancements, upgrades, improvements, and any
other changes or additions, to the iNoize Technology or Documentation,
developed by or for iNoize, or acquired by iNoize;
(g) "FUNCTIONAL SPECIFICATIONS" means the high level description of the
functionality and performance of the iNoize Technology, as set out in
Appendix "A";
(h) "HOST SYSTEM" means the computer system, including without limitation
the servers and other hardware, software, storage and network
interface connections, having the capabilities to host the iQuestSite
in accordance with the Host System Specifications;
(i) "HOST SYSTEM SPECIFICATIONS" means the requirements and specifications
set out in Appendix "B" for the Host System;
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(j) "INDEMNITEES" means, with respect to a party entitled to
indemnification hereunder, such party and its affiliates, officers,
directors, shareholders, employees, agents, successors, and assigns.
(k) "INOIZE XXXX" means any trade-xxxx, service xxxx, logo, design, and
like trade identifiers owned and used by iNoize to identify the iNoize
Technology;
(l) "INOIZE TECHNOLOGY" means the software and related technology
developed by or for iNoize, that enables locating and sharing of
personal music collections by broadband streaming over the Internet,
including network search algorithms, broadband streaming, encryption
of streaming media files and statistical data gathering, and which
meets the Functional Specifications;
(m) "INTELLECTUAL PROPERTY" means copyright, copyright applications and
all copyright registrations issuing thereon, trade secrets, know-how,
patents, patent applications and all patents issuing thereon, as well
as any improvement applications, continuations, continuations-in-part,
divisions, renewals, reissues, extensions, revision, substitutions,
confirmations, registrations or revalidation and patents issuing
thereon, and any patents of additions or patents of importation based
on any of said patents;
(n) "IQUESTSITE" means the web site and related facilities through which
iQuest will be carrying on the business of a music web site on the
Internet;
(o) "IQUESTSITE CODE" means the HTML code and other program code developed
by iQuest or on behalf of iQuest by a third party developer, that is
used to create and operate the iQuestSite, but does not include iNoize
Technology;
(p) "IQUESTSITE CONTENT" means all content created by iQuest or licensed
to or otherwise acquired by iQuest from a third party developer, for
inclusion on the iQuestSite, but does not include iNoize Technology;
(q) "IQUEST SERVICES" means the music searching and playing services
provided by iQuest to End Users, originating from or facilitated by
the iQuestSite;
(r) "LICENSE" means the license granted by iNoize to iQuest under the
Intellectual Property for the iNoize Technology;
(s) "MANAGEMENT SERVICES" means the services provided by iNoize to iQuest
to supply, implement, host, operate, manage and support the
iQuestSite;
(t) "PARTICIPATING END USER" means, for a particular calendar month, an
End-User that has subscribed for the IQuest Services, downloaded and
installed the end user software available at the iQuestSite and has
actually used the IQuest Services by both logging in at least twice in
such month and listened to at least 6 songs in such month;
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(u) "ROYALTIES" means the royalties payable by iQuest to iNoize for the
License and the Management Services;
(v) "WORK PRODUCT" shall mean all developments created by iNoize
specifically for the iQuestSite as part of the Management Services
including, but not limited to, all designs, specifications,
inventions, improvements, ideas, techniques, materials, flow charts,
diagrams, notes, outlines, lists, compilations, manuscripts, writings,
pictorial materials, and schematics, but does not mean the iNoize
Technology, Documentation or Enhancements including but not limited to
source code, object code or Intellectual Property thereto.
2. GRANT OF LICENSE
2.1. Subject to the terms and conditions of this Agreement, iNoize hereby grants
to iQuest a non-exclusive, world-wide Intellectual Property License of the
iNoize Technology:
(a) to copy and use the iNoize Technology, either directly or in
partnership, strategic alliance or joint venture, to provide, market,
sell and support the IQuest Services offered by the iQuestSite to End
Users; and in particular enable End-Users;
(i) to search for and locate music collections over the Internet, and
(ii) to share music collections over the Internet by broadband
streaming, and
(b) to copy, distribute and sublicense the iNoize Technology and
Documentation to End-Users as necessary to allow them to obtain the
IQuest Services;
(b) to sublicense the iNoize Technology and Documentation to any third
party retained by iQuest to develop, host or maintain the iQuestSite
and IQuest Services on behalf of iQuest; and
(d) to copy the iNoize Technology and Documentation for back-up and
archival purposes.
2.2. The License allows iQuest to use the iNoize Technology and Documentation on
and in conjunction with the Host System, or on a substitute system supplied
by iQuest or a third party contractor of iQuest provided that such third
party shall agree to be bound by the relevant restrictions and obligations
of the License and this Agreement.
2.3. iQuest will not copy or use the iNoize Technology or Documentation for any
purpose except as otherwise expressly authorized by this Agreement.
2.4. iQuest shall have the right to private label and brand the IQuest Services
in its own
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discretion. iQuest will reproduce the iNoize proprietary notices on the
iNoize Technology and Documentation as reasonably requested by iNoize,
without negatively impacting on the private labelling of the IQuest
Services.
2.5. During the Term of the License, iNoize will provide iQuest, without
additional charge or fee, all Enhancements upon their commercial release,
which will be deemed to be part of the iNoize Technology and Documentation
and subject to the License and other provisions of this Agreement.
2.6. During the Term of the License, iNoize shall at no extra cost to iQuest, to
the extent that iNoize Technology shall fail to meet the Functional
Specifications or otherwise fails to fulfill any warranty therefor, upon
written notice by iQuest of such failure or upon iNoize becoming aware of
such deficiency, use its best efforts to promptly remedy such failure, and
shall promptly develop and install the necessary bug fixes. iNoize shall
have no responsibility for the maintenance of the iQuestSite Code, other
than as may be agreed in writing by iNoize and iQuest.
3. LICENSE TERM
3.1. The Term of the License will commence on the Effective Date and will
continue for an initial term of one year, and shall automatically renew
thereafter for one year periods, unless terminated earlier pursuant to the
provisions of this Agreement.
3.2. The License shall not terminate solely as a result of the termination of
the Management Services.
3.3 iQuest shall have the right to terminate the License at any time on at
least thirty days prior written notice, without charge or penalty.
4. ROYALTIES
4.1. In consideration of the License and the Management Services, iQuest will
pay to iNoize the Royalties as set out in Appendix "A". For each month,
Royalties shall be calculated and payable only with respect to End-Users
qualifying as Participating End-Users. iQuest shall have the right to
deduct from payment of such Royalties all amounts required to be withheld
under tax and other laws.
4.2. The Royalties shall commence six months after the earlier of;
(a) the launch date of the iQuestSite, deemed to be the date of a press
release and written notice from iQuest to iNoize of such launch, and
(b) February 1,200l.
4.3. The License shall become Royalty free in the event that the iNoize
Technology falls into
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the public domain or is otherwise used by third parties without their
paying commercially reasonable royalties to iNoize.
4.4. All Royalties due under this Agreement shall be reportable and payable on a
quarterly calendar basis to the credit of iNoize, no later than 30 days
after the last day of March, June, September and December of each year, as
long as the Royalties apply. iQuest shall keep at its place of business and
preserve for at least three years, original current and complete records in
sufficient detail to accurately enable the computation and verification of
the Royalty payments. iQuest shall permit Licenser, acting at its own
expense through an independent public accountant, to inspect iQuest's
records from time to time during normal business hours, upon reasonable
notice and to the extent necessary to verify the computation of the
Royalties.
5. SOURCE CODE ESCROW
5.1. iNoize agrees to negotiate in good faith and enter into a source code
escrow agreement with iQuest and a third party escrow agent within 30 days
of the effective Date of this Agreement. iNoize will provide the Escrow
Agent with a copy of the source code of the iNoize Technology software, to
be held in escrow pursuant to the terms and conditions of the escrow
agreement. The escrow agreement will provide that the source code will be
released to iQuest;
(a) upon iQuest terminating the Management Services due to the default of
iNoize,
(b) upon iNoize making an assignment for the benefit of its creditors, or
upon iNoize filing under any voluntary bankruptcy or insolvency law,
the reorganization of iNoize's assets or the appointment of a trustee
or receiver for iNoize property; or
(c) upon the material breach of this Agreement by iNoize, unless within 30
days of written notice from iQuest, iNoize has remedied the breach.
5.2. iQuest will be responsible for the escrow agent's fees. The source code
deposit shall be updated by iNoize no less than quarterly, and shall be
also updated whenever iNoize changes the source code in a substantial
manner.
6. MANAGEMENT SERVICES
6.1. iNoize shall provide to iQuest the following Management Services at
iNoize's premises in Vancouver, BC, or at such other location as the
parties agree on:
(a) supply, operate and support the Host System for the iQuestSite,
(b) obtain telecommunication services, and related software and/or
hardware, as necessary to function with the Host System to support the
iQuestSite, after consultation with iQuest,
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(c) install, host, and operate the iQuestSite Code, iQuestSite Content and
the iNoize Technology on the Host System, and manage the
telecommunication services, and
(d) maintain the Host System.
6.2. If the number of Participating End Users exceeds 5,000 in any month, then
iQuest shall at iNoize's request supply to iNoize on a loan basis a server,
configured as agreed on by the parties, to be used solely as part of the
Host System. iNoize shall keep the server free from damage and secure, and
shall return it to iQuest upon termination of the Management Services.
6.3. After iNoize installs the iQuestSite Code, iQuestSite Content and the
iNoize Technology on the Host System, and obtains the telecommunication
services, it shall notify iQuest of completion of such installation. iQuest
shall have 10 days to test the iQuestSite after receipt of notification
from iNoize, to determine that it conforms to the requirements of this
Agreement. The iQuestSite shall be accepted only upon written notice by
iQuest to iNoize of such acceptance. iQuest will not unreasonably withhold
or delay acceptance. If the iQuestSite fails to conform to the such
requirements then iQuest shall give iNoize written notice of the defects.
iNoize shall then have a reasonable period as mutually agreed to remedy
such failure and renotify iQuest of the remedy. After renotification,
iQuest shall once again have 10 days to inspect the iQuestSite. If the
iQuestSite again fails to conform to the requirements, iQuest may, in its
sole discretion;
(a) deem the failure to be a default under this Agreement;
(b) provide iNoize such additional time as iQuest shall reasonably
determine is necessary to remedy such failure so that iQuest may
continue acceptance testing in accordance with this paragraph; or
(c) accept the iQuestSite as non-conforming, with a mutually agreed-upon
offset of the fees payable to iNoize for Management Services.
6.4. iNoize shall have no obligations or liability if the iQuestSite is
defective or malfunctioning due to Customer Originated Errors, or due to a
third-party telecommunications service provider. Except for the provision
of the Management Services, iNoize shall have no liability or obligations
in connection with IQuest Services or End Users.
6.5. iQuest shall have sole authority and responsibility for developing,
providing, and updating the iQuestSite Code and iQuestSite Content (whether
text, graphics, applications, databases, or other materials) used on the
Web Site, except for the iNoize Technology which shall be the
responsibility of iNoize. iQuest may at any time and from time to time make
additions or changes to the iQuestSite. iNoize shall make no changes to the
iQuestSite, or the iNoize Technology as installed on the iQuestSite,
without the
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prior written approval of iQuest. iQuest shall make the final determination
of all code and content to be used on the iQuestSite.
6.6. iNoize shall supply the staff to provide the Management Services including
maintaining and operating the Host System and the iQuestSite. iNoize shall
be responsible for, and IQuest shall not be liable for, the actions of the
iNoize staff. iNoize's staff shall remain employees of iNoize, and iNoize
will have sole responsibility for such employees including (but not limited
to) responsibility for payment of compensation to such personnel for injury
to them in the course of their employment, and all aspects of labour
relations with such employees including but not limited to their hiring,
supervision, evaluation, discipline, firing, wages, benefits, overtime and
job assignments, and all other terms and conditions of their employment.
During the Term of this Agreement, iNoize shall not solicit for employment
any of iQuest's employees without iQuest's prior written consent.
6.7. iNoize shall provide such training (not to exceed two days), advice and
information concerning the use and features of iQuestSite as iQuest shall
reasonably request without charge. Any additional training will be at an
additional charge mutually agreed-on in advance.
6.8. iNoize shall be responsible for obtaining from third parties all rights and
licenses required to perform the Management Services.
6.9. iNoize will implement and maintain a real time iQuestSite activity monitor
and will promptly notify iQuest of any performance degradation or down
time, as well as provide monthly iQuestSite throughput and activity
reports, including, but not limited to the information set out in Appendix
"B".
6.10. During the Term of the Management Services, iNoize shall at no extra cost
to iQuest use its best efforts to promptly remedy any deficiencies in the
Host System with regard to the requirements of this Agreement, upon
receiving written notice from iQuest of such deficiency, or upon iNoize
becoming aware of such deficiency.
6.11. iNoize shall provide assistance as requested by iQuest in promoting
iQuestSite through press releases and messages. iNoize will not place any
such promotional material without prior written approval of iQuest. iNoize
will have no liability for the inaccuracy of iQuestSite Content or any
promotional material provided by iQuest, provided that iNoize does not
alter, modify or change in any way such materials and uses such materials
in compliance with the directions provided by the iQuest.
6.12. iQuest, and its authorized representatives, will have the right to perform
operational reviews with respect to the Management Services and iNoize's
operation of the iQuestSite. iNoize shall grant iQuest and its
representatives full and complete access, subject to iNoize's standard
security policies, during normal business hours and upon reasonable notice,
to the Host System facilities, and shall provide iQuest, with the
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information and assistance as reasonably requested in order to perform such
operational reviews.
6.13. In consideration of the Management Services, iQuest will pay to iNoize the
Royaltiesas set out in Appendix "A", which arethe only payments to be made
by iQuest to iNoize hereunder for the Host System and the Management
Services. iNoize shall be solely responsible for, and shall indemnify
iQuest against, all costs and expenses related to the acquisition, set-up,
operation and maintenance of the Host System.
6.14. iQuest shall have the right to reduce the scope of the Management Services
at any time on at least thirty days prior written notice, without charge or
penalty, with a corresponding proportionate reduction in charges. Any
additional cost for services and fees beyond those outlined in this
Agreement shall be submitted to iQuest by iNoize in writing and shall be
subject to approved in advance by iQuest in writing.
7. MANAGEMENT SERVICES TERM
7.1. The Term of the Management Services will commence on the Effective Date and
will continue for an initial term of one year, and shall automatically
renew thereafter for one year periods, unless terminated earlier pursuant
to the provisions of this Agreement.
7.2. iQuest shall have the right to terminate the Management Services at any
time on at least 60 days prior written notice, without charge or penalty.
7.3. iNoize shall have the right to terminate the Management Services at any
time on at least 120 days prior written notice, without charge or penalty.
8. WORK PRODUCT
8.1. iQuest shall be the sole and exclusive owner of all of the Work Product,
and of all Intellectual Property in the Work Product. Ownership of Work
Product will inure to the benefit of iQuest from the date of creation or of
fixation in a tangible medium of expression, as applicable, of such Work
Product. iNoize hereby assigns and agrees to assign to iQuest exclusively
all right, title, and interest in and to the Work Product, and all copies
thereof, and the Intellectual Property in the Work Product, without further
consideration, free from any claim or lien. iNoize shall promptly and fully
disclose and deliver the Work Product to iQuest, in writing if requested by
iQuest, and shall execute and deliver any and all applications,
assignments, and other documents that iQuest requests for protecting the
Work Product. iQuest shall have the full and sole power to prosecute such
applications and to take all other action concerning the Work Product, and
iNoize shall cooperate fully, at the expense of iQuest, in the preparation
and prosecution of all such applications and in any legal actions and
proceedings concerning the Work Product.
9. IQUESTSITE CODE, CONTENT AND DOMAIN NAMES
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9.1. Nothing herein shall be construed to grant any ownership or rights to
iNoize in or to iQuestSite Code or iQuestSite Content, other than the right
to use such material on the iQuestSite solely on behalf of iQuest as part
of providing the Management Services. The iQuestSite Code and iQuestSite
Content, and all Intellectual Property therein, are and shall remain the
property of iQuest or its licensers.
9.2. All right, title and interest in iQuest's domain names used to locate or
link to the iQuestSite shall vest exclusively in iQuest, and iNoize shall
have no rights or interest in respect of such domain names.
10. INOIZE MARKS
10.1. iNoize grants to iQuest a non-exclusive, non-transferable, royalty free
right to use iNoize Marks solely in connection with the License of the
iNoize Technology and Documentation, to support the marketing, maintenance,
support, and sales of the IQuest Services, and other iQuestSite activities
authorized by this Agreement, provided that iQuest includes the appropriate
notices of ownership of such iNoize Marks. All iNoize Marks usage by iQuest
shall be subject to the inspection and control of iNoize.
10.2. Nothing herein shall be construed to grant any ownership or rights to
iQuest in or to the iNoize Technology, Documentation or Enhancements, and
all Intellectual Property therein, other than in accordance with the terms
of this Agreement and the License as set out in this Agreement. The iNoize
Technology, Documentation and Enhancements, and all Intellectual Property
therein, are and will remain the property of iNoize.
11. WARRANTIES
11.l. iNoize represents and warrants to iQuest that:
(a) iNoize is the owner of, and has the right to license the iNoize
Technology, the Documentation and the iNoize Marks in accordance with
this Agreement,
(b) iNoize is not aware of any claim by a third party that the iNoize
Technology infringes any proprietary rights of a third party,
(c) the iNoize Technology will substantially conform to the Functional
Specifications,
(d) iNoize shall take at iNoize's cost, all actions reasonably necessary
to protect the Intellectual Property and other legal rights in the
iNoize Technology, including without limitation steps to file,
prosecute and maintain any patent application, secure any patent,
maintain any patent in force, and file and prosecute patent
applications on Enhancements,
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(e) the iNoize Technology is and will be free of any software disabling
devices or internal controls, including, without limitation, time
bombs, viruses, or devices of similar nature,
(f) iNoize has the ability and right to supply the Host System, in
accordance with this Agreement,
(g) the Host System shall meet or exceed the Host System Specifications
with respect to performance and functionality including, but not
limited to, processing speeds, response times, support for encrypted
and secure Internet communications and bandwidth,
(h) the Host System shall be maintained and kept up-to-date utilizing
current developments in Internet-related technology, within a
reasonable time after such technology becomes generally commercially
available,
(i) iNoize shall provide the Management Services in a professional and
competent manner in accordance with generally recognized industry
standards, and
(j) as of the Effective Date of this Agreement iNoize has made, and shall
continue to make during the Term, full , complete, and timely
disclosure to iQuest of all facts and information that it has in its
possession concerning any circumstances that could adversely affect in
a material manner the iNoize Technology, Host System, or the License.
12. PUBLICITY
12.1. iNoize shall not, except as required for the performance of the Management
Services, without the written consent of iQuest in each instance, refer to
this Agreement or use the name of iQuest, iQuest's domain name, any
trademark, trade name, symbol owned by or referring to iQuest, in any
advertising, marketing, publicity or otherwise, or represent, directly or
indirectly, that any product or service offered by iNoize has been approved
by or endorsed by iQuest.
13. INDEMNIFICATION
13.1. iNoize shall defend, indemnify, and hold the iQuest Indemnitees harmless
from and against, and shall pay, all final damages and costs awarded
against any of them arising out of, any claim or action brought by any
third party against any of them for actual or alleged infringement of any
Intellectual Property, based upon the iNoize Technology, the Documentation,
the iNoize Marks, the Management Services or the License, and iNoize shall
defend, indemnify, and hold the iQuest Indemnitees harmless from and
against any and all liabilities, losses, costs, damages, and expenses,
including reasonable attorney's fees incurred by any of them in connection
with any such infringement claim. iNoize may, in its reasonable discretion,
either procure a license to enable iQuest to continue to
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liquidation or other termination of the existence of iQuest; or
(c) if any proceeding under the Bankruptcy and Insolvency Act of Canada,
or any other statute of similar purport, is commenced by iQuest.
14.2. If either party commits a material default under this Agreement, then the
non-defaulting party shall have the right to terminate this Agreement if:
(a) in cases where such default is reasonably curable within 30 days after
receipt of written notice of such default, and such default has not
been cured within such 30 day period, or
(b) in cases where such default is not reasonably curable within 30 days
after receipt of written notice of such default, such default has not
been cured within such further period of time as may reasonably be
necessary for the curing of such default.
14.3. Within 30 days after the termination of this Agreement by iNoize pursuant
to Section 14.1, iQuest will cease to use the iNoize Technology and the
Documentation in any manner whatsoever.
15. MANAGEMENT SERVICES TRANSITION PROCESS
15.1. Commencing upon notice of termination of the Management Services under any
of the provisions of this Agreement, the Parties shall cooperate fully with
one another to facilitate a smooth transition of the Management Services to
iQuest or to iQuest's designated replacement provider, without additional
charge paid by iQuest. The parties shall use the following process;
(a) iNoize shall exercise its best efforts to procure any third party
authorizations necessary to grant iQuest the benefit of any contracts
between iNoize and third party contractors required to provide such
Management Services;
(b) iNoize shall transfer, license, or sub-license to iQuest all
proprietary and third party software previously used on iQuest's
behalf, in order to allow iQuest to continue to perform for itself, or
obtain from other providers, the Management Services; and
(c) iNoize shall provide to iQuest and iQuest's other service providers
sufficient information and cooperation to ensure a smooth transition
and enable iQuest's personnel, or that of its other providers, to
fully assume the provision to iQuest of the Management Services.
15.2. Notwithstanding any other provision, if any problem or other dispute
arises between the parties, in no event nor for any reason shall iNoize
interrupt the provision of Management
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Services to iQuest, disable or impair the Host System or other facilities
used to provide Management Services, or perform any other action that
prevents or reduces in any way the iQuest Services or iQuest's ability to
conduct its business unless the authority to do so is granted by iQuest or
conferred by a court of competent jurisdiction, or the then current Term
for the Management Services has been terminated or expired in accordance
with this Agreement and a transition process reasonably satisfactory to
iQuest has occurred.
16. CONFIDENTIAL INFORMATION
16.1. Each party shall with respect to the other party's Confidential
Information:
(a) keep such Confidential Information in confidence and not disclose it
to any person, except as otherwise expressly permitted by this
Agreement or with the prior written authorization of the other party;
(b) exercise a degree of care in protecting the confidentiality of such
Confidential Information that is at least equivalent to that which the
recipient party uses to protect its own information of like
sensitivity and importance;
(c) not use such Confidential Information in any way which may be
reasonably considered as detrimental to the interests of the party
owning such Confidential Information;
(d) not use such Confidential Information for any purpose other than as
expressly authorized by this Agreement or in writing by the party
owning such Confidential Information;
(e) permit access to such Confidential Information only to those of its
employees, agents and subcontractors as need such Confidential
Information for use as expressly authorized by this Agreement, and who
prior to receiving such Confidential Information have agreed to abide
by the relevant restrictions contained herein;
(f) promptly advise the party owning such Confidential Information in
writing if any unauthorized use or disclosure of such Confidential
Information comes the recipient party's attention, and to assist the
party owning such Confidential Information take reasonable steps to
stop such unauthorized use or disclosure; and
(g) promptly return all Confidential Information to the party owning such
Confidential Information upon demand, after any termination of the
License.
16.2. Notwithstanding any other provision herein, a party may disclose the
Confidential Information as required by law or pursuant to an order of a
court of competent jurisdiction.
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16.3. The parties acknowledge and agree that the use or disclosure of the
Confidential Information by them or any of their directors, officers,
employees, agents or subcontractors in breach of the terms of this
Agreement will cause irreparable and continuing damage which could not
adequately be compensated for in damages alone. In such case, the injured
party will have the right to seek equitable and injunctive relief to
prevent any actual or anticipated unauthorized use or disclosure of the
Confidential Information as well as all other remedies available at law or
in equity, without proof of actual damages.
17. GENERAL
17.1. Except as otherwise expressly permitted by this Agreement, iQuest shall
not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of iNoize, which consent shall
not be unreasonably withheld. Any assignment by iQuest without consent
shall be null and void. iQuest shall have the right to assign this
Agreement to a wholly owned-subsidiary or its parent company, or to a third
party as part of the sale by iQuest to the third party of substantially all
of the assets of iQuest. iNoize shall have the right to assign this
Agreement to a wholly owned-subsidiary or its parent company, or to a third
party as part of the sale by iNoize to the third party of substantially all
of the assets of iNoize.
17.2. Nothing in this Agreement will be deemed or construed to create between
the parties hereto a partnership. No party will have the authority to act
on behalf of the other party, or to commit the other party in any manner or
cause whatsoever, or to use the other party's name in any way not
specifically authorized by this Agreement.
17.3. No condoning or excusing by a party of any default, breach or
non-observance by the other party at any time in respect of any covenants
or conditions of this Agreement shall operate as a waiver of such party's
rights under this Agreement in respect of any continuing or subsequent
default, breach or non-observance, and no waiver shall be inferred from or
implied by anything done or omitted by such party in the absence of an
express waiver in writing.
17.4. The provisions contained in this Agreement which by the terms hereof
require their performance by the Parties after the expiration or
termination of this Agreement will be and remain in force notwithstanding
such expiration or other termination of this Agreement for any reason
whatsoever.
17.5. This Agreement will enure to the benefit of and be binding upon the
Parties and their respective successors and permitted assigns.
17.6. This Agreement may be executed in counterparts and delivered by facsimile,
and such counterparts together will constitute a single instrument.
17.7. If any provision of this Agreement is found by a court of competent
authority to be void,
15
17.6. This Agreement may be executed in counterparts and delivered by facsimile,
and such counterparts together will constitute a single instrument.
17.7. If any provision of this Agreement is found by a court of competent
authority to be void, unenforceable, illegal or invalid, then it shall be
severed and shall not affect the validity of the remainder of this
Agreement.
17.8. This Agreement shall be governed by and construed in accordance with the
laws of British Columbia.
17.9. Each of the parties represents and warrants that it is duly formed and in
good standing under the laws of the jurisdiction of its formation and is
qualified and registered to transact business in all locations where the
performance of its obligations would require such qualification; that it
has all necessary rights, powers, and authority to enter into and perform
this Agreement; that the execution, delivery, and performance of this
Agreement has been duly authorized by all necessary managerial or corporate
action; and that the execution and performance of this Agreement will not
breach any agreement, covenant, court order, judgment, or decree by which
such party is bound.
17.10. This Agreement sets forth the entire understanding between the Parties
with respect to its subject-matter and supersedes any previous agreement,
written or oral, between the Parties with respect to such subject-matter,
and there are no oral or written agreements, promises, warranties, terms,
conditions, representations or collateral agreements, express or implied,
other than those contained in this Agreement.
IN WITNESS WHEREOF the Parties have duly executed this Agreement by their duly
authorized representatives.
xXXXXX.XXX SOFTWARE LTD.
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
-----------------------------------
Title: President
----------------------------------
Date: Dec 13/00
-----------------------------------
iQuest Networks Inc.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
-----------------------------------
16
APPENDIX "A"
1. FUNCTIONAL SPECIFICATION
PRODUCT FEATURES
-----------------
STREAMING MP3 - ideal for listeners, immediate playback, no storage
requirements, no copying of digital files
RESTRICTED ACCESS - limited streams from users eliminates concerns for
commercial use or widespread broadcast applications
ENCRYPTION OF STREAMING MEDIA FILES - centralized server stores encryption keys,
eliminating copy concerns
CHAT CHANNELS - communications amongst community members to enhance sharing
experience
SCALABILITY - access to a large number of nodes on the network facilitating the
discovery of more obscure music.
PRODUCT DESCRIPTION
--------------------
Internet users with broadband internet connectivity may download the iQuestSite
application software and register to become members of the iQuestSite community.
Community members (End Users) can listen to music from the private collections
of other iQuestSite members around the world. Users log on to iQuestSite, search
for files of interest - a particular artist or a song title- and the iQuestSite
service locates a source of the desired music from the collective music library
and then streams the music to the listener.
iQuestSite is a distributed intemet-based library. By registering with
iQuestSite, users who have their own private library CD collection stored as MP3
files on their hard drives agree to share their collection with other iQuestSite
members. iQuestSite adds each user's music collection to the distributed
database, and any member at any time can access iQuestSite from its web page (if
they have iQuestSite software running on their current computer), state what
they'd like to listen to, and iQuestSite software searches the collective music
library, and streams in real-time the desired selection to the destination
computer.
Streaming is the process wherein the digital file arrives at the user's computer
in near real-time and is decrypted and decoded as it arrives. The file is never
completely present in the user's PC either in memory or on the user's hard-drive
and therefore cannot be stored or copied. This provides Internet users with the
first service that will allow them to legally listen to copyrighted material
on-demand. iQuestSite offers unlimited access to a
virtually infinite library of music, while respecting copyright laws. By
streaming real-time encrypted music files from a member's hard drives to
listener's computers, copying is prevented and therefore the iQuestSite service
provides a powerful competitive edge over other MP3-based companies, whose
services may facilitate the piracy of music through unlawful copying.
For computer users to become active members of the iQuestSite community all that
is required is a broadband connection to the Internet, one of many MP3 players
that can be downloaded for free from the internet, and a soundcard in their PC.
Note: iNoize has not entered into any licensing agreements with music creators
for licensing which may be required. One scenario that has been suggested by
music creators is controlling the access to music on the iQuestSite network. An
example of this would be that the current top forty hits would only be available
to be listened to once every xx hours. Access control such as this may go a long
ways towards enabling strategic partnerships with companies, and as such, iNoize
cannot make any guarantee that iQuestSite users will receive a service with no
access control policy implemented as is currently available. This access control
policy could be implemented at the sole discretion of iNoize.
TECHNOLOGY
----------
iNoize has developed proprietary technology as its solution to the increasing
market demand for locating and sharing media files. These technological
innovations center on the means for maintaining security of streaming files when
they are transferred between users in the network. These developments offer
iQuestSite a powerful competitive advantage over other MP3 file-sharing
companies.
Redundant identification data and dynamic network updates are tailored to
provide a high probability of fulfillment of a search request from the network.
Proprietary iNoize software maintains a record of the locations of source files
across the network and dynamically updates library file records in real-time to
maintain access to live files on network nodes, and to balance the load for file
retrieval across many sources. The search algorithm also controls the degree of
redundancy in search pathways (necessary to maintain high probability of request
fulfillment) in the network to control server load, and serves as an overall
manager of file availability.
iNoize's patent-pending streaming file security software encrypts and delivers
media while restricting access to authorized accounts and preventing file
copying. The iNoize application and iNoize -developed media-specific plug-ins
allow a user to listen or view a media file but not copy, store and replay it.
Public-key encryption is used to secure data during delivery of the file and the
file encryption keys. Media files distributed throughout the community are only
accessible through the application, which exchanges encryption keys with an
iQuestSite maintained central server.
2
Through the connection to the central key servers, secure file sharing is
monitored centrally by automated iNoize software. The iNoize application and
plug-in manage the encryption, decryption and secure delivery of the file to the
media player on the user's PC preventing any copying of the digital data stream
during the sharing process. In addition, the software restricts streaming to
only one file at a time and limits the total number of streams sourced from any
one node thereby ensuring the source media files are not useable for unlawful
commercial, private pirating or multicasting applications. In order to protect
its position in the market place and to sustain a competitive advantage, the
company has filed, and will continue to file, patents on its core technology
related to searching and secure delivery of distributed digital media as well as
business processes related to the use of those technologies in the company's
e-commerce initiatives.
FUTURE PRODUCT ENHANCEMENTS
-----------------------------
(Note: At times the word soon is used to describe proposed features for the
iQuestSite network. No express guarantee as to schedule for role out for any or
all of the following features is implied.)
iNoize products and services will develop to best meet the requirements of music
listeners, artists and record labels in this rapidly changing marketplace.
iNoize is continually expanding the feature set of its service and will soon be
offering users additional content including band biographies, lyrics, concert
info, and links to other music-related goods, such as apparel. iNoize will seek
partnerships with tour operators, ticket retailers, record labels and music
merchants (on- and off-line) to offer the most relevant and interesting content
to its community.
Music file sharing has proven very taxing on bandwidth for institutions such as
universities, as well as broadband service providers. The bottleneck occurs at
the relatively small pipe that some of these organizations have to the Internet.
iNoize network will soon have the ability to perform "smart sourcing" of music
files. This feature, currently under development at the company, will allow
iNoize technology to eliminate the scenario of a user from Indiana University
streaming a song from a user at UCLA when another user at Indiana University has
that song. The file will simply be sourced from the user that is on the same
network sub-net, eliminating the unnecessary streaming of the files over the
Internet and reducing bottlenecks due to file transfers.
iQuestSite also is developing "MatchMaker", a technology that enables members to
----------
browse and listen to the collections of other users with similar musical tastes.
Members can also generate playlists, which are custom compilations of songs that
can come from various different members' collections on the network. These
playlists can be saved and played back at any time, that is, automatically
streamed as a preset sequence from available sources in the network. Playlists
will be exchanged among members.
3
Because of the demand for portability in digital music, iNoize will look to
partner with those companies in the broadband wireless industry to link its
network into the growing handheld hardware player market.
2. ROYALTIES (SECTION 4)
The royalty shall be:
(a) for the first 500,000 Participating End-Users, $0.02 for each such
Participating End-User, and
(b) for all Participating End-Users over the first 500,000 Participating
End-Users, $0.05 for each such Participating End-User
4
APPENDIX "B"
I MANAGEMENT SERVICES AND HOST SYSTEM REQUIREMENTS AND
SPECIFICATIONS
The Host System, including its various parts, shall be maintained and operated
in accordance with, but not limited to, the following:
1. The computer hardware servers, disk storage, and other components
configured as follows;
- 2 Dell Poweredge 1300 Servers, 000 Xxx Xxxxxxx'x 000 XX Ram 9 Gigs of
disk space
- Oracle 8i installed with replication between the two servers.
- Tomcat Webserver V 3.1 on each server
- JDK 1.2 running java on each box
2. A protected and secure computer room environment with physical access
restricted to authorized personnel and network. Remote access restricted by
firewall and other electronic means to authorized Users, sufficient tire
suppression equipment so as to protect the computer hardware and network
hardware, and backup power supplies to provide uninterrupted supplies of
electricity.
3. Redundant Internet network connections to the computer room, including
multiple connections to more than one Internet access provider.
4. Automatic cutover of servers so that failure of any one server shall not
affect nor disrupt the operation of the iQuestSite.
5. Automatic and regularly scheduled backup of the iQuestSite, including the
iQuestSite Code and the iQuestSite Content, and the restoration of such
backups as requested by iQuest, with such backups stored at a location
different than from the iQuestSite.
6. Twenty-four (24) hours per day, seven (7) days per week support of the Host
System; and complete facilities management, including data backups,
computer hardware maintenance, network hardware maintenance, installation
of software updates and fixes as supplied by the manufacturers of the
computer and network hardware in place, and any such other tasks as
required to operate the Host System in accordance with the requirements and
obligations herein,
7. Establish and maintain arrangements for emergency backup services and
resources. If any threatened or actual interruption or shutdown (of any
duration) the Host System occurs, iNoize shall take all commercially
reasonable measures to minimize the damage caused and shall work diligently
to restore the Host System to the levels specified herein.
II IQUESTSITE MONTHLY REPORTS
Participating end users
Nonparticipating end users
Age
Zip
Country
Date logged in
Email address
Tracks (songs) listened to per month
How many tracks streamed each month
2