THIS HEADS OF AGREEMENT made this 17th day of December,1999
BETWEEN
InfoCast Corporation a company incorporated in Nevada with registered office at
Lisle, Illinios represented by Mr A. T. ▇▇▇▇▇▇▇, Co-Chairman (hereinafter
referred to as "INFOCAST")
and
InfoCast (Australasia) Limited (ACN 090 413 200) a company incorporated in
Australia with registered office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇
represented by ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (hereinafter referred to as " IAL")
collectively known as the PARTIES
WHEREAS:
INFOCAST owns or is developing certain technologies, including licences and
software, as well as business, technical and marketing expertise in relation to
providing services in the fields of Application Service Provider (ASP) and in
particular Virtual Cell Centers (VCC), Teleworks and Distance Learning as
detailed in its Business Plan hereinafter referred to as the "Licensed
Technology".
WHEREAS:
IAL desires to license the Licensed Technology for development of business based
on the Licensed Technology in the Australasian region.
NOW THEREFORE in consideration of mutual promises and covenants the parties
agree as follows:
Article - Definitions
"Australasia" means Australia, New Zealand, the islands of the
Southern Pacific Ocean, China, Hong Kong, Vietnam, Cambodia,
Thailand, Laos, Singapore, Malaysia, Indonesia and the Philippines
"Licensed Region" means the region in which IAL has the rights to
develop the business of the Licensed Technology, which shall
comprise Australasia.
"Licensed Technology" means the licences and software, and business,
technical and marketing experience owned by INFOCAST in relation to
providing services in the fields of Application Service Provider
(ASP) and in particular Virtual Cell Centers (VCC), Teleworking and
Distance Learning as detailed in the INFOCAST Business Plan and
includes any future developments of refinements except New Rights.
"New Rights" means new technologies, whether owned or licensed, outside of the
areas defined in the Licensed Technology.
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Article 2 - Grant of License
2.1 To the extent permitted under its agreements with third parties,
INFOCAST shall grant the following exclusive license to IAL to:
i) develop and market the Licensed Technology in the
Licensed Region;
ii) enter into partnerships which are beneficial to the
development and marketing of the Licensed Technology;
` iii) transfer the Licensed Technology to a new corporation
("NEWCO") for the purpose of raising finance, expanding
the business of the Licensed Technology or increasing
the value of the Licensed Technology. Any rights or
obligations under this Agreement shall automatically
transfer from IAL to NEWCO and NEWCO will enter into a
new licensing agreement with INFOCAST.
IAL, NEWCO and any partnerships of IAL and NEWCO are prohibited from
offering to do business based on the Licensed Technology outside of
the Licensed Region.
Article 3 - Disclosure of Licensed Technologies
3.1 INFOCAST shall disclose the Licensed Technologies to IAL or NEWCO in
a timely fashion and shall not withhold any information. To the
extent permitted, any new developments or refinements which shall
mean new patents or technologies concerning the Licensed Technology
shall be disclosed to IAL for IAL to use in the Australasian region
and for the purpose of this Agreement shall become part of the
Licensed Technology other than New Rights.
Article 4 - Technical Assistance
4.1 INFOCAST shall provide IAL with technical assistance relating to the
development, marketing and implementation of the Licensed Technology
including its adaptation of a non-material nature to the
Australasian region. Such assistance shall include but not be
limited to sending INFOCAST personnel to the Australasian region on
an agreed basis, training IAL personnel in the North American
offices, access to manuals and marketing strategies and generally
providing assistance to ensure the successful implementation and
development of the Licensed Technology. The PARTIES acknowledge that
the technical assistance provided by INFOCAST is intended to train
and transfer the Licensed Technology to IAL's personnel including
assistance with marketing and shall not be construed as an offer to
run the business.
Article 5 - Consideration
5.1 For the disclosure and right to use the INFOCAST Licensed Technology
and for the ongoing technical assistance IAL shall pay to INFOCAST:
A) License Fee
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i) A First License Fee of US$250,000 payable nine months
after signing of this Agreement or at the completion of
capital raising where the net proceeds exceed
US$2,000,000, whichever occurs first.
ii) A second License Fee of US$250,000 payable 15 months
after the signing of this Agreement.
iii) An ongoing License Fee of US$500,000 every six months
starting 21 months after the signing of this Agreement.
iv) In the event that IAL completes a public fund raising
greater than Australian $5 million prior to 21 months
after the signing of this Agreement the ongoing license
fee in (iii) above will commence immediately and any
unpaid fees in (i) and (ii) above will be cancelled.
B) Royalty
A Royalty of 0.5 (one-half of one) per cent of revenue that is
derived from the sales generated from the INFOCAST Licensed
Technology during IAL' first year of operation and increasing to 1.5
(one and a half) per cent commencing in year two and each year
thereafter. The royalty will be capped to the extent that the
licensing fees and royalty payments will cumulatively not exceed 15
(fifteen) per cent of IAL' annual net profit after tax.
Notwithstanding this limitation, the semi-annual licensing fees of
US $500,000 will always be due and payable regardless of IAL' profit
margin. Equity
C Equity
After the setting up of the corporate structure in Australia and the
raising of the initial seed capital INFOCAST will own 20% (twenty
per cent) of the issued capital of the new corporate structure. At
any future capital raisings INFOCAST will have the right to maintain
its equity by contributing on the terms and conditions of the future
capital raising.
5.2 In the event that the payments made to INFOCAST are subject to
taxation and such taxes are required to be withheld from the payment
to INFOCAST then IAL shall withhold the tax from the payment to
INFOCAST provided however that IAL shall obtain the appropriate
certificates proving such tax payment and shall provide INFOCAST
with such certificates.
Article 6 - Report and Payment
6.1 IAL shall report in writing the revenue generated by IAL, and the
amount of royalty to be paid within thirty (30) days from the last
day of every half of calendar year (January 1st - June 30th; July
1st - December 31st) during the term of this Agreement and within
thirty (30) days from expiration or termination of this Agreement.
6.2 IAL shall pay the royalty to INFOCAST by the due date of each report
provided in Article 6.1 hereof. Such payments shall be made in US
dollars.
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Article 7 - Report and Audit
7.1 IAL shall maintain accurate books and records, which show the
revenue and keep them for two (2) years from the due dates of
royalty payments. IAL shall permit an independent accounting firm
designated by INFOCAST to audit aforesaid books and records as may
be necessary to confirm the royalty described in Article 5 hereof;
provided, however, such audit shall be performed during IAL's
ordinary business hours not more than once a year. INFOCAST shall
notify IAL of such audit with ten (10) days prior written notice.
Article 8 - First Refusal
8.1 Where INFOCAST, acting on its own or in any collaborative venture
with a third party:
(a) obtains New Rights; and
(b) wishes to license the New Rights,
INFOCAST must first offer to license the New Rights to IAL for the
Licensed Region on commercially reasonable terms.
8.2 Having regard to the provisions of Article 20.1 (which will ensure
that IAL has advance notice of emerging New Rights), any offer made
by INFOCAST under Article 8.1 will be open for discussion,
negotiation and acceptance for a period of sixty (60) days from the
date of the offer under Article 8.1 to IAL.
8.3 If any such offer under Article 8.1 is not accepted within sixty
(60) days, the offer will lapse and INFOCAST will be free to license
the New Rights to any party on terms no better than those offered to
IAL.
Article 9 - Term and Termination
9.1 INFOCAST shall have the right to terminate this Agreement in the
event that IAL becomes bankrupt or insolvent.
9.2 In the event that IAL has not achieved the following sales from the
INFOCAST Licensed Technology by the date shown:
- $10 million two years after INFOCAST achieves sales of $10
million;
- $20 million three years after INFOCAST achieves sales of $20
million;
- $40 million three years after INFOCAST achieves sales of $40
million;
then INFOCAST will have the right to license the Licensed Technology
for the Licensed Region to a second party who may compete with IAL.
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9.3 In the event either party ("Breaching Party") breaches any term or
condition of this Agreement, the other party (Non-breaching Party")
may terminate this Agreement if such Breaching Party does not
correct such breaches within sixty (60) days from the receipt of
written notice of breach given by the Non-breaching party; or
9.4 In the event that this Agreement is lawfully terminated by INFOCAST,
IAL will immediately lose all rights provided under this Agreement.
To the extent permitted, in the event that INFOCAST becomes
bankrupt, insolvent or any other similar situation, then IAL will
automatically have the rights to the Licensed Technology and
everything that has been disclosed previously.
9.5 In the event that IAL is solely prohibited from carrying on business
from any country in the Licensed Region then INFOCAST will have the
right to license the Licensed Technology to a second party who may
compete with IAL in that country.
Article 10 - Confidentiality
10.1 During the term of this Agreement, the parties hereto shall keep the
conditions of this Agreement confidential and shall not disclose to
any third party except in the following cases;
i) the party obtains prior written consent from the other party;
ii) disclosure is required by the competent governmental authorities;
iii) disclosure is required by applicable laws;
iv) disclosure is required for raising of finance; or
v) disclosure is necessary to be made to an attorney who represents the
disclosing party.
10.2 During the term of this Agreement, the parties shall keep the trade
secrets of the other party, including the Licensed Technologies,
disclosed by the other party, confidential and shall not disclose to
any third party except in the following cases:
(a) such disclosed information was already known to the
public at the time of the disclosure, or becomes public
through patent applications, publications or sales of
the products which utilise the Licensed Technologies;
(b) the disclosing party obtains prior written consent from
the other party for disclosure;
(c) such information was disclosed by the order of the
court, request of administrative agencies or in
accordance with the requirement under the laws;
(d) the disclosing party obtains such information from any
third party without owing any confidentiality
obligation; or
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(e) such information necessarily becomes public by the sales
of the Licensed Technology.
10.3 In case either party disclosed the conditions of this Agreement or
trade secret of the another party such disclosing party shall have
the other party bear the same confidentiality obligation as provided
in Articles 10.1 and 10.2 herein.
Article 11 - Representation and Warranty
INFOCAST represents and warrants the following:
i) INFOCAST is the legitimate owner of all rights, ownership and
interests of the Licensed Technologies;
ii) INFOCAST has the right to execute this Agreement; and
iii) There is no written, oral or implied transfer, permission, license,
mortgage, debt or agreement interfering with this Agreement.
Article 12 - Assignment
This Agreement or any right hereunder, in whole or in part, voluntarily or not,
except those anticipated by Article 2 shall not be in any case subject to
assignment or transfer by either party without prior written consent of the
other party, and such consent shall not be unreasonably withheld.
Article 13 - Communications
All communications required hereunder shall be in writing and shall be sent by
postage prepaid mail, courier, facsimile, telex or telegram addressed to the
other party to the above mentioned address or at any other address as may be
furnished to the notifying party in accordance with this Article. Each
communication shall be deemed to have been sufficiently given when the addressee
receives such communication from the notifying party.
Article 14 - Force Majeure
Neither party shall be liable to the other party for non-performance or breach
of any term or condition of this Agreement if such non-performance or breach is
caused by Acts of God, strikes, fires, floods, or restrictions by administrative
authorities or any other cause beyond the reasonable control of the party
including delay in the transfer or adaptation of the Licensed Technology to the
Licensed Region.
Article 15 - Arbitration
The parties hereto shall make best efforts to solve the disputes arising from,
relating to or in connection with this Agreement in amicable manners. In case
such disputes are not solved within ninety (90) days from occurrence of such
disputes, the disputes shall be, upon the application of either party, settled
by arbitration rendered by one or more arbitrators nominated in accordance with
the Arbitration Rules of the International Chamber of Commerce in Toronto. The
award to be rendered shall be final.
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Article 16 - Governing Law
This Agreement shall be governed by and construed in accordance with the law of
the Province of Ontario and the Federal Laws of Canada.
Article 17 - Entire Agreement
This Agreement constitutes the entire agreement between the parties concerning
the subject matters of this Agreement and supersedes all previous agreements and
other communications, whether in writing or oral.
Article 18 - Waiver
Any failure of either party to enforce, at any time or for any period of time,
any of the provisions of this Agreement shall not be construed as a waiver of
such provisions or of the right of the party thereafter to enforce each and
every such provision.
Article 19 - Severability
In the event that any provision hereof is found violating or inconsistent with
any law or regulation, both parties shall have a meeting to make necessary
amendment to this Agreement. The validity, legality and enforceability of any
provision hereof shall not be affected or impaired in any way by any holding
that any other provision or provisions contained herein are invalid, illegal or
unenforceable in any respect.
Article 20 - Improvements
20.1 Subject to the rights of any third party engaged in any
collaborative development program with INFOCAST the parties agree to
regularly exchange technical information about any improvements to
the Licensed Technologies developed by either of the parties.
20.2 If IAL develops any improvements to the Licensed Technologies, IAL
may apply for patent and technology protection of those improvements
in any countries; and
Article 21 - Definitive Agreement
21.1 The Parties agree that this Heads of Agreement shall be the basis
for a Definitive Licensing Agreement to be executed by the Parties
within three (3) months of the signing of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first above written by its duly authorised
representatives.
For and on behalf of For and on behalf of
INFOCAST CORPORATION IAL
/s/ A T ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇
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Name: A T ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇ ▇▇▇▇▇▇
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Date: December 17, 1999 Date: December 17, 1999
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