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EXHIBIT 10.49
STRATEGIC ALLIANCE AGREEMENT
This STRATEGIC ALLIANCE AGREEMENT ("Agreement") is entered into as of November
8, 1999, (the "Effective Date") by and between Cyberworld International
Corporation ("Cyberworld" or "CW") with its place of business located at ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇ Media, Inc.
("SLM"), with its place of business located at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇.
WHEREAS, Cyberworld is the leading developer and provider of visual and
interactive, multi-media, 2-D and 3D graphics technology used to create
multi-dimensional environments ("QBORGS"), including but not limited to web site
environments; and digital media; and
WHEREAS, SLM is an internet-based, multi-media company which produces original
branded animated characters and content and / or represents the properties of
third parties (collectively SLM Products").
WHEREAS, the parties desire to enter into a strategic relationship in order to
license SLM to use certain Cyberworld technology and products to market, enhance
and/or promote SLM web sites, SLM Products and to provide web hosting services
by CW for such SLM web sites;
NOW, THEREFORE, in consideration of the covenants and conditions contained
herein, the parties agree as follows:
1. DEFINITIONS
The following terms have the following meanings when used in this Agreement:
"CLIENTS" shall mean the customers of SLM who:
(i) access any SLM web site or use SLM digital media to access and or
download the SLM or CW Browser; and or the SLM or CW Personal Edition
Builder as defined herein, and / or
(ii) access and or download from any SLM web site or digital media,
directly or indirectly to buy or use SLM or CW properties created with
CW technology or for use with CW technology, and/or
(iii) access using the CW 3D mail capability, QBORGS and or SLM or CW
properties, created by or intended to be used ,within QBORGS created
using CW technology
(iv) contract with SLM to develop QBORGS or publish QBORGS to the web
(direct or through 3D mail), to Digital Media or to printed media, as
defined herein for use on any SLM web site or associated Digital Media.
"CW BROWSER" means the patents pending, multi-dimensional, multi-media, split
window CW product used to view certain Internet web sites or certain aspects of
certain such web sites, provided to SLM by CW and subject to the terms and
conditions of this Agreement.
"SLM BROWSER" means the CW Browser modified by CW on behalf of SLM to create a
branded personal viewer for SLM to use on SLM web sites and/or associated
Digital Media.
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"CW BUILDER" means the patents pending CW Technology Edition product which can
be used by SLM personnel (employee or contractors ) to create and modify SLM
QBORGS.
"SLM PERSONAL EDITION BUILDER" means a customized version of the current free CW
Personal Edition builder product which can be used by SLM Clients to create
QBORGS.
"DIGITAL MEDIA" means all digital media including but not limited to CD's and
DVD's that may contain QBORGS, SLM and/or CW Browsers, and/or SLM and/or CW
Personal Edition Builders developed and/or provided by SLM for the use by its
Clients.
"DOCUMENTATION" means the user guides and manuals, as applicable, provided by CW
as part of the CW technology, if any.
"GROSS REVENUE" means any revenue generated (or amounts used as off-sets) by the
creation, producing and/or publishing of QBORGS or Digital Media and any sums
received by SLM from any participating Client to create (whether in part or
whole) such QBORGS or Digital Media.
"QBORGS" means a binary object relationship grid developed using the patents
pending CW technology with the end result being either a web property or web
site or both.
"ROYALTIES" shall mean all amounts due to CW relating to any financial
consideration received by SLM, in any form such as but not limited to royalties,
commissions, QBORG fees, advertising, sponsorship fees, publishing to digital
media, etc. that result directly or indirectly from the use of the CW technology
by SLM. Royalties shall be calculated upon the gross value of any transaction
between SLM and any Client related to the use of CW technology and/or
development of QBORGS and ancillary products such as collectables and Theme Paks
(defined as collection of objects, images, sounds, etc. which applies to a
particular theme that can be used in conjunction with QBORGS).
"SOFTWARE LICENSE AGREEMENT" means the licensing document or "click-wrap" which
may be included with the CW technology pursuant to this Agreement. Software is
licensed not sold.
2. RIGHTS GRANTED
2.1 CW LICENSING RIGHTS GRANTED RE TECHNOLOGY EDITION PRODUCTS. Subject to CW's
standard Software License Agreement, CW hereby grants to SLM a limited,
non-exclusive right and license to use the CW Browser and CW Builder in order to
develop and view QBORGS for use by SLM and SLM Clients. The license is
restricted and is for the sole use of SLM in its facilities in Encino,
California. This license does not permit SLM to sell, lend, give away or allow
its Clients, employees, contractors, other SLM companies or third parties to use
the CW Browser and/or the CW Builder in any manner not contemplated specifically
in this Agreement.
Subject to the payment of Royalties as identified herein this license does
provide for SLM to use the CW Browser and CW Builder to create QBORGs for use
internally in creating, maintaining and viewing its web site and for the
creation, maintenance and web distribution of SLM and CW web based properties
that utilize either SLM properties and / or properties that SLM represents. This
license also provides for the use of the CW Browser and CW Builder to create and
view
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QBORGs that will be downloaded from the SLM web sites, or published to Digital
Media and / or distributed through CW 3D mail capabilities.
2.2 CW LICENSING RIGHTS GRANTED RE PERSONAL EDITION PRODUCTS. Subject to CW's
standard Software Licensing Agreement, CW hereby grants to SLM a limited,
non-exclusive right and license to use and distribute the free version of the CW
Browser and CW Builder. These products may be used to create and view QBORGS
that incorporate ancillary products such as Theme Paks or other properties
created by SLM, CW or third parties, subject to the payment of Royalties as
defined herein. This license does not give SLM or any other party the right to
use these products in any manner not contemplated specifically in this
agreement.
2.3 CW LICENSING RIGHTS GRANTED RE SLM CUSTOMIZED PERSONAL EDITION PRODUCTS.
Subject to CW's standard Software Licensing Agreement, CW hereby grants to SLM a
limited, non-exclusive right and license to use and distribute the SLM Browser
and SLM Personal Edition Builder to its Clients. These custom products may be
used to create and view QBORGS that incorporate ancillary products such as Theme
Paks or other properties created by SLM, CW or third parties, subject to the
payment of Royalties as defined herein. This license does not give SLM or any
other party the right to use these products in any manner not contemplated
specifically in this agreement.
2.4 CW LICENSING RIGHTS GRANTED TO SLM RE POINTS 2.1, 2.2 AND 2.3. The licensing
rights granted pursuant to this Agreement and defined in points 2.1, 2.2, 2.3
include the right for SLM to use the CW Browser, CW Builder, SLM Browser and/or
SLM Personal Edition Builder to create revenue streams which will be shared with
CW as defined herein. Revenue streams can include, but are not limited to,
charging for the use any SLM Personal Edition Builder, building QBORGs for
resale, licensing, renting, charging for the download of Theme Paks and other
SLM properties, web products and ancillary products, etc. to create and conduct
advertising campaigns on the CW Browser and/or SLM Browser within the QBORGS, to
conduct 3D mail campaigns, publish to Digital Media and/or charging Clients or
customer sponsorship fees. This license does not give SLM or any other party the
right to create revenues from the use of the CW products in any manner not
contemplated specifically in this Agreement.
2.5 CW BROWSER RIGHTS
2.5.1 The intention of this agreement is to provide a browser that is
branded for use by SLM and customized to reflect the image that SLM wishes to
portray in the web community.
CW will provide SLM with three branding positions on the SLM Browser. The upper
right hand corner of the SLM Browser has a programmable box that may be used as
a "logo" position. The top corner of the upper left hand portion of the SLG
Browser may be used for a descriptive name, and the lower left hand corner may
be used to highlight the specific SLM program or property being viewed by the
Clients. SLM acknowledges that the term "Powered by Cyberworld " will be
prominently displayed on every SLM Browser.
CW will undertake to customize the SLM Browser cosmetically to reflect the image
that SLM wish it to have. SLM acknowledges that the cost of the non-recurring
engineering resources (NRE) to customize the SLM Browser will be to the account
of SLM.
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2.5.2 In addition, there will be a fourth programmable position or field
which will be located on the bottom and in the center of the SLM Browser . The
intent is that this position may be used for promotional purposes and, provided
this Agreement is in good standing, the usage will be subject to the
restrictions and payments of Royalties to CW as defined herein.
2.6 QBORGS RIGHTS
2.6.1 Subject to the payment of Royalties fees as indicated in Schedule
A, and provided this contract is in good standing, CW hereby grants to SLM a
license to use the CW Builder in order to build QBORGS for SLM Clients for use
on the SLM web site or associated Digital Media.
2.6.2 The QBORG development rights granted herein for the SLM or any
other rights granted pursuant to this Agreement, do not permit SLM or any
affiliated or related organization to build web sites or develop Digital Media
outside the SLM web sites or associated Digital Media using CW technology. In
addition, except as expressly permitted under this Agreement, the rights granted
under this Agreement do NOT permit SLM or any other related or non related
entity or individual(s) to, use, show or publish QBORGS built by SLM on any
Digital Media or, for use on any web site other than SLM web sites or Digital
Media relating to such web sites.
2.6.3 SLM shall be solely responsible for providing first level support
("First Level Support") to its Clients unless mutually agreed in writing
otherwise. First Level Support means that SLM Clients will contact SLM directly
for any and all problems related to QBORGS or associated Digital Media. It is
the responsibility of SLM to resolve such problems. If such problems cannot be
resolved, SLM and only SLM may contact CW for second level support. CW may
charge SLM for any and all time that CW spends providing support to SLM on
problems if it is determined by CW that the problem is not attributable to the
CW technology. CW also reserves the right to renegotiate the maintenance
agreement and rates as relates to this Section 2 if SLM or its' designate are
unable to provide the level of First Level Support necessary to ensure Client
satisfaction to the degree deemed appropriate by CW.
2.6.4 SLM MUST SATISFY CW COUNSEL THAT THE SLM AGREEMENTS BETWEEN SLM
AND CLIENTS PROVIDE COMPLETE PROTECTION OF CW RIGHTS AND INTELLECTUAL PROPERTY
RELATIVE TO THE CLIENTS USE OF THE QBORGS AND/OR DIGITAL MEDIA. SUCH AGREEMENTS
MUST CLEARLY INDICATE THAT NEITHER SLM OR THEIR CLIENTS, THEIR AFFILIATES OR
SUBDIVISIONS HAVE ANY RIGHTS TO THE CW TECHNOLOGY BEYOND THOSE GRANTED WITH THE
SLM BROWSER AND THE SLM PERSONAL EDITION BUILDER, NOR TO ANY QBORGS CREATED BY
SLM OR CW ,DIRECTLY OR INDIRECTLY, OTHER THAN TO USE IT ON THE SLM WEB SITE
AND/OR ASSOCIATED DIGITAL MEDIA. IN ADDITION, SUCH AGREEMENTS MUST CLEARLY STATE
THAT UPON TERMINATION OF THIS AGREEMENT OR, UPON THE TERMINATION OF THE
AGREEMENTS BETWEEN SLM AND ANY CLIENT, THE CLIENT, LOSES ALL RIGHT TO USE, SHOW,
COPY OR PUBLISH QBORGS.
2.7 DIGITAL MEDIA LICENSING RIGHTS. CW hereby grants to SLM the limited
non-exclusive right and license to use the CW Browser, SLM Browser, CW Builder
and/or SLM Personal Edition Builder in order to produce, publish and distribute
Digital Media with QBORGS,
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including advertising to promote the SLM web sites and/or for Client promotional
purposes related to the SLM web sites subject to the following:
1. Providing revenue is not derived from Digital Media publishing and
distribution, this activity shall be Royalty free. However, should any
Gross Revenue be derived from such Digital Media publishing and
distribution, Royalties would be due and payable to CW as identified
herein.
2. Should SLM derive any Gross Revenue from the creation, publishing and/or
distribution, etc. of the Digital Media, SLM shall pay to CW the
Royalties in accordance with Schedule A.
2.8 LIMITATIONS ON USE BY SLM. SLM shall not use or duplicate the CW technology
for any purpose other than as specified in this Agreement or make the CW
technology available to unauthorized third parties. SLM shall not rent,
electronically distribute, or timeshare the CW technology or market the CW
technology by interactive cable or remote processing services or otherwise
distribute the CW technology other than as specified in this Agreement. SLM
agrees not to cause or permit the reverse engineering, disassembly, or
decompilation of the CW technology.
2.9 CW INTELLECTUAL PROPERTY RIGHTS. CW and its suppliers shall retain all
title, copyright, and other proprietary rights in the CW technology as provided
to SLM by CW pursuant to this Agreement, or any modifications or translations
thereof. SLM, and/or SLM's Clients do not acquire any rights, title or interest
in the CW technology other than those rights specified in this Agreement.
2.10 SLM PRODUCT RIGHTS. In consideration of the rights and option to purchase
warrants, as indicated in Schedule A, granted here, SLM hereby grants to CW the
perpetual, limited, non-exclusive, worldwide right and license to use,
distribute, sublicense the SLM Products in order to promote CW technology. CW
shall not use or duplicate the SLM Products for any purpose other than as
specified in this Agreement or make the SLM Products available to unauthorized
third parties
2.11 SLM INTELLECTUAL PROPERTY RIGHTS. SLM shall retain all title, copyright,
and other proprietary rights in the SLM Products, any modifications or
translations thereof. CW, and/or CW's customers do not acquire any rights, title
or interest in the SLM Products other than those rights specified in this
Agreement.
3. SLM WEB SITE HOSTING SERVICES
CW HOSTING SERVICE. CW shall provide hosting services for the SLM web site that
include QBORGS via a CW provided server which shall be located on the SLM
communications backbone and located at the SLM site. SLM shall be responsible
for maintenance of the CW provided server and SLM web site. Title to and
ownership of the CW provided server shall remain with CW. In addition, SLM shall
be solely responsible for providing high quality and speed communications links
(T3 or better) to the CW provided server. CW reserves to right to test and
either accept or reject any communication link which fails to meet the quality
and speed CW determines is necessary to support the SLM web site. CW is free to
add third party web sites to the
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CW provided server and shall be solely responsible for maintenance of such third
party web sites.
4. ANNUAL MAINTENANCE
4.1 MAINTENANCE AND SUPPORT. CW will provide direct support to SLM for the
versions of the software provided to SLM through the term of the. Under this
level of support SLM will be entitled to any and all maintenance releases of the
CW Viewer and CW Builder products released by CW during the term of the
Agreement and to email and phone support during the hours of 9:00 am - 6:00pm
EDT, Monday through Friday. Primary contacts will be designated for CW and SLM
through whom these communications will take place.
4.2 FIRST LEVEL SUPPORT. SLM will be responsible for providing first level
support to its Clients throughout the term of the Agreement unless mutually
agreed in writing otherwise. CW would be pleased to provide second line support
if requested by SLM under mutually agreed upon terms and conditions terms.
4.3 CUSTOMER SATISFACTION. CW reserves the right to renegotiate the support
component of this Agreement and take over direct support if , CW, deems that SLM
or its' designate is unable to provide the level of first line support necessary
to ensure customer satisfaction to the degree deemed appropriate by CW.
5. RESPONSIBILITIES OF THE PARTIES
5.1 SLM RESPONSIBILITIES. In addition to any other obligations of SLM under this
Agreement, SLM shall be responsible for the following:
5.1.1 SLM shall provide to CW the most current release of the SLM Products
and any new SLM Products, as such new SLM Products are developed by
SLM, during the term of this Agreement.
5.1.2 SLM shall actively produce and maintain the SLM web siteand/ or web
properties using the SLM Browser or any other CW technology.
5.1.3 SLM shall work with CW to facilitate and create the required
software links to the CW web site necessary to fulfill the
transactions contemplated in this Agreement, including without
limitation, a prominent button on the home page of any SLM web site
which includes the button "Powered by CyberWorld".
5.1.4 SLM shall provide sufficient proof to CW, as determined solely by
CW, that SLM has the capability to track the number of end-users who
use the Internet viewing any web site through the use of the SLM
Browser. Should CW determine that the SLM tracking system is
inadequate to track such end-user, then any decrease in Royalties
shall be null and void until such time as CW is satisfied with such
tracking.
5.1.5 SLM will ensure that CW will be fairly and promptly compensated, as
per the terms of this Agreement, for all revenues received by the
SLM from all sources directly or indirectly during the term of this
Agreement.
5.1.6 SLM shall maintain books and records in connection with the
activities under this Agreement and make such books and records
available to CW in accordance with Section 7 herein below.
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5.1.7 SLM agrees it will acknowledge, on a best efforts and reasonable
basis, to identify CW as the technology used in the development of
the SLM Browser web site and include the language "Powered by
Cyberworld" in any and all publicity of any kind related to such web
sites, including without limitation, any Digital Media.
5.1.8 SLM shall prominently display "Powered by Cyberworld" on any and all
SLM Browser web site home pages.
5.1.9 SLM will work with CW in conducting joint press conferences from
time to time with regards to the SLM Browser web sites, including
the direct involvement of ▇▇▇▇ ▇▇▇.
5.1.10 SLM shall ensure that its agreements with Clients provide protection
of the rights of CW relative to CW technology and/or and its use
thereof and will vigorously enforce protection of CW rights if SLM
becomes aware CW's rights are being violated or if requested to do
so by CW.
5.2 CW RESPONSIBILITIES. In addition to any other obligations of CW under this
Agreement, CW shall be responsible for the following:
5.2.1 CW shall provide the most current release of the standard CW Browser
and Builder to SLM for the construction of the CW powdered SLM web
sites. As of the date of execution of this Agreement, this is
version 4.0 of both the standard CW Browser and the Builder
products.
5.2.2 CW shall work with SLM to facilitate and create the required
software links to the CW web site.
5.2.3 CW shall provide a CW server at CW's expense on site at SLM in order
to host the SLM Browser web site.
5.2.4 CW, subject to the availability of resources, may provide
Professional Services if requested by SLM in accordance with the
then current CW fees for such services. Prior to commencement of any
Professional Services, SLM shall submit a written request for such
services and CW shall provide a good faith estimate of the cost of
such requested Professional Services.
5.2.5 CW shall provide two (2) days of training relative to the CW
technology at no cost to SLM on CW's site in Canada. This training
can be provided to SLM at the SLM site subject to payment of all
expenses for travel, food and lodging.
6. FEES, ROYALTIES AND TAXES
6.1 LICENSE FEES. In consideration of the licenses granted herein to SLM, SLM
shall pay to CW the non-refundable, irrevocable amount of 25,000 shares of SLM
stock (net of any local taxes, royalties or fees) in accordance with Schedule A,
Part I, "Program License Fees".
6.2 ROYALTIES. SLM shall pay to CW, on a monthly basis, Royalties as defined in
this Agreement and as indicated and in accordance with Schedule A. SLM shall
provide CW with a quarterly report detailing all sources of Royalties payable to
CW.
6.3 DIGITAL MEDIA FEES. SLM shall pay to CW, on a monthly basis, the Digital
Media fees in accordance with Schedule A.
6.4 ADVERTISING FEES. SLM shall pay to CW, on a monthly basis, Royalties from
advertising gross revenue as indicated in Schedule A of this Agreement.
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6.5 TAXES. Prices quoted herein do not include any applicable taxes or duties.
SLM shall pay, indemnify and hold CW harmless from, any and all sales / use,
consumption, gross receipts, value-added, personal property, duties or other tax
(including interest and penalties imposed thereon) on the transactions
contemplated herein.
6.6 GENERAL PAYMENT TERMS. Unless otherwise indicated in this Agreement, SLM
shall pay to CW any and all amounts due to CW within fifteen (15) days of the
end of each month or as indicated in Schedule A, as applicable. The failure to
pay such amounts when due shall be considered a material breach of this
Agreement. All amounts referred to herein or in any Schedules hereto are in
United States dollars and shall be made without deductions based on any taxes or
withholdings, except where such deduction is based on the gross income of CW.
The Royalties and/or fees listed in this Agreement do not include taxes, duties,
etc. and/or fees imposed by federal, state, provincial or local government. If
CW is required to pay sales, use, property, value-added, or other federal,
state, provincial or local taxes and/or fees based on the licenses granted or
services provided under this Agreement, or the licenses granted or services
provided by SLM pursuant to this Agreement, then such taxes shall be billed to
and paid by SLM. This shall not apply to taxes based on CW's income. Any amounts
due and payable by SLM hereunder which remain unpaid after the due date shall be
subject to late penalty fees equal to 1.5% per month from the due date until
such amount is paid. SLM agrees to pay any and all media and shipping charges
where applicable.
6.7 TIMELY PAYMENTS. Failure on the part of SLM to make timely payments of all
Royalties under this Agreement, including without limitation licensing fees,
shall be a material breach of this Agreement.
7. REPORTS AND RECORDS
7.1 REPORTS AND PAYMENT. At the end of each quarter, SLM shall provide a written
report of all Client activity and royalties for which SLM received compensation
or consideration as defined in this Agreement. Payment of any Royalties due to
CW shall have this accompanying documentation provided by SLM in accordance with
the terms of this Agreement.
7.2 RECORDS INSPECTION. SLM shall maintain books and records in connection with
activity contemplated under this Agreement. CW may audit the relevant books,
records and computer systems of the SLM to ensure compliance with the terms of
this Agreement. Any such audits shall be conducted during regular business hours
at the SLM's offices and shall not interfere unreasonably with the SLM's
business activities. If an audit reveals that the SLM has underpaid Royalties to
CW, SLM shall be invoiced for such underpaid Royalties plus interest on such
underpaid Royalties at the lesser of twelve (12) percent per annum or the
maximum rate allowed under applicable law, calculated from the time the
underpaid Royalties were originally due until the time they are paid, with such
payment due immediately upon receipt of invoice. If an audit reveals a 5% or
greater non-compliance for any particular quarter by SLM in accordance with the
terms of this Agreement, then the SLM shall pay CW's reasonable costs of
conducting the audit.
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8. TERM AND TERMINATION
8.1 TERM. This Agreement shall become effective on the Effective Date and shall
continue for a term of five (5) years and will automatically terminate without
written notice unless the parties mutually agree to an extension prior to the
expiration of the Agreement.
8.2 TERMINATION BY CW. CW may terminate this Agreement in the event of the
default by SLM in the performance of any of the terms and conditions of this
Agreement or any present or future Schedule hereto if SLM fails to correct the
breach within the ten (10) day period following delivery of written notice to
SLM of such default. This cure period shall not apply to licensee fees that are
past due which shall not require any prior written notice. In addition, CW may
immediately terminate this Agreement if SLM institutes or if any proceeding is
commenced against or affecting SLM;
a) seeking to adjudicate it a bankrupt or insolvent;
b) seeking liquidation, dissolution, winding up, reorganization,
arrangement, protection, relief or composition of it or any of its
property or debt;
c) making a proposal with respect to it under any law relating to
bankruptcy, insolvency, reorganization or compromise of debts or
other similar laws; or
d) seeking to appoint a receiver, trustee, agent, custodian or other
similar official for it or for part of its assets or property.
SLM acknowledges that CW's rights of termination in this Agreement are
reasonable in the circumstances and have been freely bargained by the parties.
In the event of any disagreement or dispute between the parties, SLM agrees that
in all events it can be compensated in damages and accordingly waives and agrees
to forego all applications for injunctive relief against CW in all
jurisdictions. SLM acknowledges and agrees that SLM shall have no claim against
CW for damages or otherwise as a result of or arising from the termination of
this Agreement.
Should SLM fail to make any payments required hereunder when due then, CW may
terminate this Agreement by providing written notice to SLM and declare all sums
due and to become due hereunder, immediately due and payable. The cure period
indicated above, shall not apply to past due Royalty payments. In addition, use
of any and all QBORGS shall be immediately removed from all SLM web sites.
8.3 FORCE MAJEURE. Neither party shall be liable to the other for failure or
delay in the performance of a required obligation if such failure or delay is
caused by strike, riot, fire, flood, natural disaster, or other similar cause
beyond such party's control, provided that such party gives prompt written
notice of such condition and resumes its performance as soon as possible, and
provided further that the other party may terminate this Agreement if such
condition continues for a period of one hundred eighty (180) days.
8.4 EFFECT OF TERMINATION.
8.4.1 TERMINATION FOR SLM DEFAULT. Upon termination of this Agreement
due to SLM's uncured breach or default of this Agreement;
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a) all SLM's rights to market and use the CW technology as set forth
in this Agreement shall cease;
b) SLM shall return to CW the CW technology that were provided by CW
to SLM in support of this Agreement;
c) SLM shall certify in writing that all archival or backup copies of
any CW technology have been deleted and destroyed;
d) SLM will continue to provide to CW quarterly reports pursuant and
to pay to CW any Royalties due in accordance with this Agreement
for a period of one (1) year following termination;
e) SLM may not add or develop any new QBORGS.
f) The CW Warrants as set forth in Schedule A shall be cancelled
Should SLM fail to pay any Royalties due, title to and ownership of all
QBORGS developed by SLM Clients shall revert to CW immediately.
8.4.2 EXPIRATION OF AGREEMENT. Upon expiration of this Agreement;
a) all SLM's rights to market and use the CW technology as set forth
in this Agreement shall cease;
b) except for existing CW inventory which contains SLM Products, all
CW's rights to use the SLM Products as set forth in this Agreement
shall cease:
c) SLM shall return to CW any CW technology that was provided by CW to
SLM in support of this Agreement;
d) SLM shall certify in writing that all archival or backup copies of
any CW technology has been deleted and destroyed;
e) SLM will continue to provide to CW quarterly reports pursuant and
to pay to CW any Royalties due in accordance with this Agreement
for a period of one (1) year following termination;
f) SLM may not add or develop any new QBORGS
g) CW may not add or develop any new CW products which include the SLM
Products.
Should SLM fail to pay any Royalties due, title to and ownership of all QBORGS
developed by SLM Clients shall revert to CW immediately.
The termination of this Agreement, or any license thereof shall not limit CW
from pursuing any other remedies available to it, including injunctive relief,
nor shall such termination relieve SLM's obligation to pay all Royalties that
have accrued or that SLM has agreed to pay under Schedule A or any or other
similar document under this Agreement.
8.5. SURVIVAL OF TERMS. The parties' rights and obligations under Sections 1,
Sections 6, 7, 8,. 9, 10 and subsection 2.9 and 2.11 shall survive termination
of this Agreement. In addition, the provisions of this Agreement that under a
commercially reasonable interpretation reveals that the parties likely would
have such provisions survive termination or expiration of this Agreement shall
survive to the extent necessary to fulfil the purpose of such provision.
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9. INDEMNITY, WARRANTIES, REMEDIES, LIMITATION OF LIABILITY
9.1 CW INFRINGEMENT INDEMNITY. CW will defend and indemnify SLM with respect to
amounts required to be paid to a third party from a claim that the CW technology
furnished and used within the scope of this Agreement infringe such third
party's United States or Canadian copyright or patent, provided that: (a) SLM
notifies CW in writing within seven (7) days of the claim; (b) CW has sole
control of the defense and all related settlement negotiations; and (c) SLM
provides CW with the assistance, information and authority necessary to perform
CW's obligations under this paragraph. Reasonable out-of-pocket expenses
incurred by SLM in providing such assistance will be reimbursed by CW.
CW shall have no liability for any claim of infringement based on: (a) use of a
superseded or altered release of the CW technology if the infringement would
have been avoided by the use of a current unaltered release of the CW technology
that CW provides to the SLM; or (b) the combination, operation or use of any CW
technology furnished under this Agreement with software, hardware or other
materials not furnished by CW if such infringement would have been avoided by
the use of the CW technology without such software, hardware or other materials.
In the event any CW technology are held or are believed by CW to infringe such
third party's United States or Canadian copyright or patent, CW shall have the
option, at its expense, to: (a) modify the CW technology to be non-infringing;
(b) obtain for SLM a license to continue using the CW technology; or (c)
terminate the license for the infringing CW technology and refund the license
fees paid for such CW technology, prorated over a five (5) year term from the
Effective Date. This Section 9.1 states CW's entire liability and SLM's
exclusive remedy for infringement.
9.2 SLM"S INFRINGEMENT INDEMNITY. SLM will defend and indemnify CW with respect
to amounts required to be paid to a third party from a claim that the SLM
Products furnished and used within the scope of this Agreement infringe such
third party's United States or Canadian copyright or patent, provided that: (a)
CW notifies SLM in writing within seven (7) days of the claim; (b) SLM has sole
control of the defense and all related settlement negotiations; and (c) CW
provides SLM with the assistance, information and authority necessary to perform
SLM's obligations under this paragraph. Reasonable out-of-pocket expenses
incurred by CW in providing such assistance will be reimbursed by SLM.
In the event the SLM Products are held or are believed by SLM to infringe such
third party's United States or Canadian copyright or patent, SLM shall, solely
at SLM's option, obtain for CW a license to continue using the SLM Products at
no cost to CW; or (c) terminate the license for the infringing SLM Products and
pay to CW an amount not to the cost to CW to rectify with it's customers the
withdrawal of the SLM Products.
9.3 SOFTWARE LICENSE AGREEMENT WARRANTIES. The only warranties that CW shall
make in connection with the CW technology shall be those set forth in the
applicable Software License Agreement and such warranties and all limitations in
respect of such warranties shall be deemed to be incorporated herein as if set
forth herein at length. SLM shall not make any warranty on CW's behalf.
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9.4 LIMITATION OF LIABILITY. IN NO OTHER EVENT, INCLUDING TERMINATION OF THIS
AGREEMENT, SHALL CW BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES, OR DAMAGES FOR LOSS OF PROFITS, WHETHER IN AN ACTION IN
CONTRACT OR TORT, EVEN THOUGH CW HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. CW'S LIABILITY FOR DAMAGES HEREUNDER SHALL IN NO EVENT EXCEED THE
AMOUNT OF FEES PAID BY SLM UNDER THIS AGREEMENT, AND IF SUCH DAMAGES RESULT FROM
SLM OR CLIENT'S USE OF THE CW TECHNOLOGY, SUCH LIABILITY SHALL BE LIMITED TO
LICENSE FEES PAID FOR THE RELEVANT CW TECHNOLOGY GIVING RISE TO THE LIABILITY,
PRORATED OVER A FIVE (5) YEAR TERM FROM THE EFFECTIVE DATE OF THIS AGREEMENT.
9.5 EQUITABLE RELIEF. SLM acknowledges that any breach of its obligations with
respect to proprietary rights of CW will cause CW irreparable injury for which
there are inadequate remedies at law and that CW shall be entitled to equitable
relief in addition to all other remedies available to it.
10. GENERAL TERMS AND CONDITIONS
10.1 CONFIDENTIAL INFORMATION.
10.1.1 DEFINITION. As used in this Agreement, the term "Confidential
Information" shall include but not be limited to any information that has
economic value to the party and which are not known to the general public at
large and that includes, but is not limited to trade secrets, video technology,
knowledge concerning each parties products, marketing strategy, customer
accounts, service requirements and information concerning research development
and marketing of each party" products and/or services.
10.1.2 GENERAL. Each party shall treat as confidential all "Confidential
Information" of the other party, shall not use such Confidential Information
except as expressly set forth herein or otherwise authorized in writing, shall
implement reasonable procedures to prohibit the disclosure, unauthorized
duplication, misuse or removal of the other party's Confidential Information and
shall not disclose such Confidential Information to any third party except as
may be necessary and required in connection with the rights and obligations of
such party under this Agreement, and subject to confidentiality and nonuse
obligations at least as protective as those set forth herein. Without limiting
the foregoing, each of the parties shall use at least the same procedures and
degree of care which it uses to prevent the disclosure of its own confidential
information of like importance to prevent the disclosure of Confidential
Information disclosed to it by the other party under this Agreement, but in no
event less than reasonable care. The parties further agree to keep confidential
the terms and conditions of this Agreement. Each parties Confidential
Information shall remain the sole and exclusive property of that party.
10.1.3 EXCEPTIONS. Notwithstanding the above, neither party shall have
liability to the other with regard to any Confidential Information of the other
which: (i) was generally known and available in the public domain at the time it
was disclosed or becomes generally known and available in the public domain
through no fault of the receiver; (ii) was known to the receiver at the time of
disclosure as shown by the files of the receiver in existence at the time of
disclosure; (iii) is disclosed with the prior written approval of the discloser;
(iv) was independently
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developed by the receiver without any use of the discloser's Confidential
Information; or (v) becomes known to the receiver from a source other than the
discloser without breach of this Agreement by the receiver and otherwise not in
violation of the discloser's rights.
10.1.4 REMEDIES. If either party breaches any of its obligations with
respect to confidentiality and unauthorized use of Confidential Information
hereunder, the other party shall be entitled to seek equitable relief to protect
its interest therein, including but not limited to injunctive relief, as well as
money damages.
10.2 COPYRIGHTS. The CW technology is copyrighted by Cyberworld and SLM shall
not modify the copyright notices on the CW technology. CW shall not modify any
copyright notices on any SLM Products.
10.3 TRADEMARKS. "CYBERWORLD", "CYBERHOME", "QBORG", and "Emerchandiser", are
the trademarks of CW and SLM shall have no rights in such marks except as
expressly set forth herein and as specified in writing from time to time. SLM's
use of CW's trademarks shall be in accordance with CW's trademark policies and
procedures in effect from time-to-time. SLM agrees not to use the trademark
"CYBERWORLD" or "QBORG" or any ▇▇▇▇ beginning or ending with the words
"CYBERWORLD," "CYBERHOME," "QBORG" or any other ▇▇▇▇ likely to cause confusion
with the trademark "CYBERWORLD", "CYBERHOME" or "QBORG" or as any portion of the
SLM's tradename, or trademark for any other products or services of SLM. SLM
shall have the right to use the trademark "CYBERWORLD, "CYBERWORLD" or "QBORG"
and other CW trademarks solely to refer to CYBERWORLD's products and/or
services.
SLM agrees with respect to each registered trademark of CW, to include in each
advertisement, brochure, or other such use of the trademark, the trademark
symbol "circle R" and the following statement:
CYBERWORLD is a registered trademark of CYBERWORLD International Corporation,
Mississauga, Ontario
Unless otherwise notified in writing by CW, the SLM agrees, with respect to
every other trademark of CW, to include in each advertisement, brochure, or
other such use of the trademark, the symbol "TM" and the following statement:
Before publishing or disseminating any advertisement, press release or
promotional materials bearing one or more trademarks of CW, the SLM agrees to
deliver a sample of the advertisement, press release or promotional materials to
CW for prior approval, and such approval shall not be unreasonably withheld.
Should CW notify SLM that the use of the CW trademark is inappropriate, SLM will
not publish or otherwise disseminate the advertisement, press release or
promotional materials until they have been modified to CW's satisfaction.
SLM shall not market the CW technology in any way that implies that the CW
technology is the proprietary product of SLM or of any party other than CW.
10.4 RELATIONSHIPS BETWEEN PARTIES. In all matters relating to this Agreement,
SLM will act as an independent contractor. Neither party will represent that it
has any authority to assume or
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create any obligation, express or implied, on behalf of the other party, nor to
represent the other party as agent, employee, franchisee, or in any other
capacity.
10.5 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns. SLM
may not assign or otherwise transfer any rights under this Agreement without
CW's prior written consent.
10.6 NOTICE. All notices, including notices of address change, required to be
sent hereunder shall be in writing and when sent in writing shall be deemed to
have been given when delivered by courier service or mailed by first class mail
to the SLM to the address listed in the recital above or to the CW address in
Mississauga, Ontario, as applicable.
10.7 GOVERNING LAW/JURISDICTION. This Agreement, and all matters arising out of
or relating to this Agreement, shall be governed by the laws of the Province of
Ontario, Canada and shall apply regardless of any conflict of laws provisions.
This Agreement will not be governed by the United Nations Convention of
Contracts for the International Sale of Goods, the application of which is
expressly excluded. In event of any dispute between the parties hereto, the
parties will attempt in good faith to agree on the rights of the respective
parties concerning such dispute. If no such agreement can be reached within
thirty (30) days after good faith negotiation, either party may demand mediation
of the matter. If no such agreement can be reached within thirty (30) days after
good faith mediation, the parties may proceed legal action within the courts.
The parties agree that any legal action or proceeding relating to this Agreement
shall be instituted in any provincial or federal court in the Province of
Ontario. CW and SLM agree to submit to the jurisdiction of, and agree that venue
is proper in, the aforesaid courts in any such legal action or proceeding.
10.8 SEVERABILITY. In the event any provision of this Agreement is held to be
invalid or unenforceable, the remaining provisions of this Agreement will remain
in full force and effect.
10.9 EXPORT. SLM agrees to comply fully with all relevant export laws and
regulations of the United States and Canada to assure that neither the CW
technology, nor any direct product thereof, are exported, directly or
indirectly, in violation of United States and/or Canadian law.
10.10 NON-SOLICITATION. During the term of this Agreement, the CW and SLM shall
not solicit or assist any third party to solicit any employee of the other party
to become an officer, director, employee or agent of any corporation of such
third party, or otherwise entice away from the employment of the other company
any employee of that company.
10.11 WAIVER. The waiver by either party of any default or breach of this
agreement shall not constitute a waiver of any other or subsequent default or
breach.
10.12 PRESS RELEASES: CW may use the SLM name in a press release disclosing the
parties and the nature of this Agreement and in advertising re CYBERWORLD
disclosing SLM's name and Clients name, in each case with the prior written
approval of the SLM, such approval not to be unreasonably withheld.
10.13 ENTIRE AGREEMENT. This Agreement and the attached Schedules constitutes
the complete agreement between the parties and supersedes all prior or
contemporaneous agreements or representations, written or oral, concerning the
subject matter of this Agreement. This
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Agreement may not be modified or amended except in writing signed by a duly
authorized representative of each party; no other act, document, usage or custom
shall be deemed to amend or modify this Agreement.
This Agreement may be executed in any number of counterparts, each of which
shall be an original and all of which shall constitute together but one of the
same document. All terms and conditions of any SLM purchase order or other
ordering document hall be superseded by the terms and conditions of this
Agreement and shall be of no force and effect unless CW specifically agrees to
any such terms and conditions in writing.
IN WITNESS WHEREOF the parties have executed this Agreement.
CYBERWORLD SLM
_/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------- -----------------------------------
Signature Signature
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------- -----------------------------------
Name (typed or printed) Name (typed or printed)
President Vice President-Finance
---------------------------------- -----------------------------------
Title Title
November 14, 1999 November , 1999
---------------------------------- -----------------------------------
Date Date
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SCHEDULE A
FEES AND ROYALTIES
1. PROGRAMS LICENSE FEES
In accordance with Section 6 of the Agreement, SLM shall provide to CW as
consideration for the rights granted herein, to SLM 25,000 shares of SLM common
stock which shall be equal to an amount for the license fee and all software
maintenance over the term of the Agreement. Such stock is to be registered in
the next group of SLM stock registered and shall have full piggyback rights as
relates to any SLM common stock registered between the Effective Date of this
Agreement and the date the stock granted to CW is registered.
2. DIGITAL MEDIA FEES
Providing, SLM creates, produces and distributes Digital Media at its own
expense for promotion of the SLM web sites and/or web properties developed
pursuant to this Agreement, and providing such Digital Media do not produce any
Gross Revenue, as defined in the Agreement, such distribution shall be royalty
free.
Should SLM receive payments, directly or indirectly, relating to the creation,
production, and / or distribution of any Digital Media that involves the use or
display of the CW Programs in any way, SLM shall pay to CW a royalty of 5% of
the total of such payments.
3. ROYALTIES (EXCLUDING ADVERTISING AND/OR SPONSORSHIP ROYALTIES)
In accordance with Section 6 of the Agreement, SLM shall pay to CW a 5% royalty
based upon the gross value of the consideration that SLM receives in any form,
specifically excluding any advertising or sponsorship fees, such as but not
limited to licensing fees, digital media fees, consulting fees, software
development, 3D mail, rents, commissions or any other kind of consideration
and/or fees, etc. that result directly or indirectly from the use of the CW
technology by SLM. Royalties shall be calculated upon the gross value of each
Client transaction with SLM, including without limitation, the value of
applicable taxes.
4. ADVERTISING AND/OR SPONSORSHIP FEES
Should the CW technology be used for revenue producing SLM or Client advertising
and/or Client sponsorship, including without limitation any advertising or
sponsorship on Digital Media either directly or indirectly, SLM agrees to pay to
CW a royalty of the total consideration received by SLM from Clients measured
against the number of "unique" SLM Browsers registered off the SLM website
("Users") EACH year by Clients as follows:
1-50,000 15% 150,001 - 200,000: 12%
50,001 -100,000: 14% 200,001 - 250,000: 11%
100,001-150,000: 13% 250,001 - 300,000: 10%
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Such Users shall be cumulative annually only and shall not accumulate from year
to year. SLM shall provide written quarterly reports as to the number of such
Users and the royalty rate for the subsequent quarter shall be in accordance
with the number of Users reported.
"Unique" Users shall mean one valid Client name/address. Should a Client
download the SLM Browsers and register more than once, such Client shall only be
counted for the first download.
5. CW WARRANTS
In accordance with Section 2.7 of the Agreement, CW shall make available to SLM
500,000 warrant options under the following terms and conditions:
250,000 warrants at US $ 1.00 per unit
and 250,000 warrants at US $ 2.00 per unit
CW, following execution of this agreement, will provide to SLM a formal warrant
agreement that will confirm the terms and conditions of the warrants. Nominally,
these warrants will have a five year term, commencing from the date of execution
of this agreement and, provided the agreement is in good standing, can be
exercised by SLM at the end of the five years or sooner. These warrant options
must be exercised in the event that a liquidation event takes places within CW.
CW agrees to provide to SLM written notification, delivered by courier to SLM
offices of CW's intent to execute a liquidation event, such as an IPO, merger or
acquisition of all or substantially all of CW's assets. SLM shall have the right
to exercise any and all outstanding warrant options within ten (10) working days
from receipt of such notification. Should SLM fail to exercise such options
within the ten (10) day period, such options shall revert back to CW.
SLM must exercise these warrant options on or before November 14, 2004. Should
SLM fail to exercise such options on or before November 14, 2004, such options
shall revert back to CW. This agreement must be in good standing for SLM to be
able to exercise these warrants. Should this agreement be terminated, all
warrants not exercised will revert back to CW. Should this agreement not be in
good standing SLM will not have the right to exercise these warrant options
until the contract is returned to a good standing status.
6. PROFESSIONAL SERVICES FEES
SL shall pay to CW $250 per hour for design and development or supervisory
personnel or $150 per hour for content development personnel. CW reserves the
right to increase Professional Services Fees not to exceed 5% per year
7. CURRENCY
In the event that SLM charges a Client in a currency other than the US$ then CW
will be paid its fees and/or Royalties in US $ calculated at the accepted
conversion rate on the day that the transaction took place. The US $ equivalent
shall not be less than then the minimums quoted herein.