THIS AGREEMENT ("Agreement") is made on this 15th day of June, 2001
BETWEEN: INTERNET VIP, Inc. a company duly constituted under the laws of
the State of Delaware, and, having its head office at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇, (hereinafter referred
to as "IVIP")
AND: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, businessman, having an office at ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇,▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇, businessman, having an
office at ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇, (together,
hereinafter referred to as the "Consultants")
WHEREAS, IVIP is in the business of selling long distance services through
pre-paid telephone cards, using equipment supplied by Ericsson and is in need of
specialized software functioning on, and interfacing with, said equipment;
AND,
WHEREAS, the Consultants are experienced businessman and project managers, and
are capable and willing to undertake and pay for all necessary steps to
establish, staff, equip, operate, develop and implement to fulfill IVIP's
requirements,
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1: DEFINITIONS
In this Agreement, unless the context otherwise requires:
1.1 Agreement - means this agreement dated as of the date hereof, as
well as any rider, amendment, modification or intervention which
might be made or added thereto in writing, with mutual consent of
the parties; the Agreement is also sometimes designated by the
expressions "hereof", "herein" and "hereunder";
1.2 Facilities - means the office space, lighting, air conditioning,
electric power, computers, telecommunications, and office equipment
required for the accommodation and operation of commercial
establishment(s) to develop, test and implement the Project.
1.3 Software - means the software system that permits IVIP and its
clients to, among other features:
(a) produce billing records for pre- and post-paid customers
from Ericsson usage records; and
(b) activate PINs on telephone cards and automatic payment,
via the Internet.
(c) And all the accompanying software modules.
1.4 Project - means the totality of developing, testing, implementing,
installing, and documenting of the Software and the training of
IVIP personnel and/or clients of IVIP on the usage and maintenance
of the Software.
1.5 Project Personnel - means any persons engaged by the Consultants
for the specific purpose of developing and implementing the
Project.
1
ARTICLE 2: RESPONSIBILITIES OF IVIP
2.1 IVIP shall provide within thirty (30) days of the signing of this
agreement
(a) Detailed specifications of the Software.
(b) Detailed documentation on the hardware of the Ericsson 1.6
gateways currently in use by IVIP.
(c) Description of all Databases and interfacing software
utilized by the Ericsson 1.6 system.
(d) Detailed documentation covering billing platforms currently
in use by IVIP.
2.2 IVIP shall designate a software engineer to be available on a full
time basis to work with the Project Personnel.
2.3 Sign off on all timelines and project business plans.
ARTICLE 3: RESPONSIBILITIES and DELIVERABLES of the Consultants
3.1 Within thirty (30) days of receipt from IVIP of all required
documentation, provide a project business plan and time lines for
completion, to be approved by IVIP.
3.2 To provide, and maintain the Facilities.
3.3 Pay for all expenses generally related to operating a business project
as contemplated herein.
3.4 Purchase all computer and office equipment as needed for the Project.
3.5 Engage and pay for all necessary Project Personnel.
3.6 Obtain all necessary governmental and other approvals,
certificates, and authorizations necessary to allow the operation
of the contemplated enterprise.
3.7 Install the Software system at IVIP's Montreal hub or elsewhere, as
designated by IVIP.
3.8 Provide detailed documentation of the Software for maintenance
purposes.
3.9 Provide a comprehensive and user-friendly operating manual for the
end-users.
3.10 Provide post installation maintenance and support for the Software for
a period of at least six months.
3.11 Train, as necessary, IVIP personnel, both in the operations and
maintenance of the Software.
3.12 Provide post installation, training support for IVIP's clients, for
a period of up to three months, as requested by IVIP.
3.13 Pay for all travel and related expenses, to provide above mentioned
goods and services.
2
ARTICLE 4: GENERAL SPECIFICATIONS OF THE SOFTWARE
4.1 The Software (billing platform, subsystem) should provide:
(a) billing capabilities, (both pre-paid and post paid), standard
in the industry, coupled with a relatively flexible
report generator.
(b) modules for database management of the billing system.
(c) Seam-less interface with Ericsson usage records and
databases, and with the current billing software used by IVIP.
4.2 The Software (Internet Activation, subsystem) should provide:
(a) The ability to activate and refresh PIN codes for pre-paid
cards by clients, through Internet connections to IVIP's
customer database.
(b) Automatic debit of client's Master Card/Visa account and
credit of IVIP's Master Card/Visa account upon PIN activation.
(c) Client management and reporting of his PIN codes within IVIP's
database.
(d) Standard firewalls and security issues.
ARTICLE 5: INTELLECTUAL PROPERTY, LICENSING, TERMINATION OF THE AGREEMENT
5.1 The Software developed herein shall remain the Intellectual
Property of the Consultants, but they shall provide a comprehensive
license for UNLIMITED use by IVIP.
5.2 The aforementioned license shall be for perpetuity, but
exclusive to IVIP for only two (2) years
following the signing of this Agreement.
5.3 In the event that either party materially or repeatedly defaults in
the performance of any of its duties or obligations under this
Agreement and, within thirty (30) days after written notice is
given to the defaulting party specifying the default, (i) such
default is not substantially cured, or (ii) the defaulting party
does not obtain the approval of the other party to a plan to remedy
the default, then the party not in default may terminate this
Agreement by giving written notice to the defaulting party.
5.4 If either party becomes or is declared insolvent or bankrupt, is
the subject of any proceedings relating to its liquidation,
insolvency or for the appointment of a receiver or similar officer
for it, makes a general assignment for the benefit of all or
substantially all of it creditors, or enters into an agreement for
the composition, extension or readjustment of all or substantially
all of its obligations, then the other party, within the conditions
of applicable law, may immediately terminate this Agreement by
giving written notice.
ARTICLE 6: CONFIDENTIALITY
6.1 During the term of this Agreement, and for a period of three (3)
years after the expiration of the term of this Agreement,
proprietary or confidential information ("Information") of any kind
pertaining to both parties' businesses, and all written material
marked by ether party as "Confidential" or "Proprietary" shall be
treated by the other party as secret and confidential and accorded
3
the same protection as the parties give to their own Information of
a similar nature. Verbally disclosed information which is to be
treated as confidential or proprietary by a party shall be
confirmed as such in writing by the party within thirty (30) days
of such disclosure.
6.2 Notwithstanding the foregoing, confidential Information does not
include information which:
o has been published or is otherwise readily available to the
public other than by breach of this Agreement;
o has been rightfully received by the receiving party from a
third party without breach of any confidentiality obligations;
o has been independently developed by the receiving party's
personnel without access to, or use of, the other party's
Confidential Information;
o was known to the receiving party prior to its first receipt
from the other party and which the receiving party has documented
prior to the date hereof; or
o is required to be disclosed by law whether under an order of a
court or government, tribunal or other legal process. In such
cases, the receiving party must immediately notify the other
party of the disclosure requirement, in order to allow the other
party a reasonable opportunity to obtain a court order to protect
its rights, or otherwise to protect the confidential nature of
the Confidential Information.
ARTICLE 7: FEES and CHARGES
7.1 The parties agree that the activities undertaken the goods and
services provided to IVIP shall be valued at Six hundred thousand
dollars ($600,000), and is to be paid by the issuance of two
million four hundred thousand (2,400,000) common shares (the
"Shares") of IVIP to the Consultants, to be shared equally by the
Consultants.
7.2 Issuance and delivery of the Shares shall be within thirty
(30) days of the signing date of this Agreement and the Company
shall deliver to the Consultants:
(i) the certificate or certificates evidencing the Shares to be
issued to the Consultants and the respective dates registered in
the names of the Consultants; and
(ii) evidence that the Shares have been registered on Form S-8 to
be filed with the U.S. Securities and Exchange Commission, upon
issuance of the Shares to the Consultants, registering for resale
thereof.
7.3 All charges and amounts in this agreement are stated in legal
currency of the United States of America.
ARTICLE 8: TAXES
8.1 IVIP shall assume responsibility for, and hold the Consultants
harmless from all taxes, duties, or similar liabilities arising
under this Agreement, under any present or future tax laws,
except for the personal income tax of the Consultants.
4
ARTICLE 9: LIABILITY, INDEMNITY, WARRANTIES, AND INSURANCE
9.1 IVIP shall indemnify the Consultants and hold them harmless against
and in respect to any and all claims, damages, losses, costs,
expenses, obligations, liabilities, actions, suits, including
without limitation, interest and penalties, reasonable attorneys'
fees and costs and all amounts paid in settlement of any claim,
action or suit that may be asserted against IVIP or the Consultants
or that IVIP or the Consultants shall incur or suffer, that arise
out of, result from or relate to: (a) the non-fulfillment of any
agreement, covenant or obligation of IVIP in connection with this
Agreement; (b) any breach of any representation or warranty made by
IVIP hereunder; (c) any claim of any nature whatsoever brought by
any third person or entity who may suffer damages of any sort as a
direct or indirect result of IVIP's activities pursuant to the
Agreement relating to or in connection with, or any claims of
infringement that arise out of, result from or relate to any use or
misuse of the facilities and equipment in connection with the
implementation of the Project.
9.2 The Consultants warrant that they will perform their obligations
under this Agreement in a professional and workmanlike manner. In
the event the Consultants are liable to IVIP on account of the
Consultants' performance or nonperformance of their obligations
under this Agreement, whether arising by negligence or otherwise,
(i) the amount of damages recoverable against the Consultant for
all events, act or omissions will not exceed in the aggregate the
Charges paid by IVIP for the last twelve (12) months and (ii) in
no event will the Consultant be responsible for any indirect,
consequential, incidental or punitive damages of any party,
including third parties, or for lost profits. In connection with
the conduct of any litigation with third parties relating to any
liability of the Consultant to IVIP or to such third parties, the
Consultant will have all rights to accept or reject settlement
offers and to participate in such litigation. IVIP and the
Consultant expressly acknowledge that the limitations contained
in this Section have been the subject of active and complete
negotiation between the parties and represent the parties'
agreement.
9.3 Subject to Articles 9.1 and 9.2 hereof, both Parties shall be
responsible for damage to, or loss of their own property, both real
and personal, and that each shall be responsible for insuring his
own property, with an insurance policy providing extended coverage,
including but not limited to perils of fire together with insurance
against flood, theft, vandalism, malicious mischief, sprinkler
leakage and damage, and boiler and pressure vessel insurance. The
Consultants will also subscribe to and maintain additional
insurance covering damages for up to $5,000,000 to third party
equipment and personnel caused by the use of the office and related
equipment and any other insurance coverage that would seem
appropriate in the context of this Agreement. The Consultants shall
furnish IVIP, upon request to such effect, with certificates of
insurance evidencing such coverage.
ARTICLE 10: EXCUSABLE DELAY
10.1 If either party is unable to perform any of its obligations
hereunder due to Force Majeure, the failure to perform by such
party shall not constitute a basis for termination or default under
this Agreement provided that notice thereof is given to the other
party within seven (7) days after the party becomes aware of such
event. IVIP shall not be required to make any payment to the
Consultant pursuant to Article 7 during the period of the
5
Consultant's inability, as a result of an event of Force Majeure,
to provide the Services and Facilities.
10.2 For the purposes of this Agreement, Force Majeure shall be
understood to be any cause beyond the reasonable control of the
non-performing party and without its fault or negligence and
includes, without limiting the generality of the foregoing, acts of
God or of a public enemy, acts of any Government or any State or
Territory, or any agency thereof, in its sovereign capacity, fires,
floods, epidemic, quarantine restrictions, unusually severe weather
conditions, extraordinary vehicle traffic conditions, or mechanical
malfunctions
ARTICLE 11: NOTICES
Any notice or communication under this Agreement shall be in
writing and shall be hand delivered, given by fax or sent by
registered mail return receipt requested, postage prepaid, to the
other party's designated representative, receiving such
communication at the address specified herein, or such other
address or person as either party may in the future specify to the
other party. Such notice shall be deemed to be received upon
delivery or, by fax, on the next business day following
transmission provided electronic evidence of transmission is
produced at point of origin or, if mailed, on the fourth business
day following the date of mailing.
If to The Consultants:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇,▇▇ ▇▇▇▇▇
and
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to IVIP:
Internet VIP, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: General Counsel
ARTICLE 12: MISCELLANEOUS
11.1 Neither party may assign or transfer all or any part of its rights
under this Agreement, without the prior written consent of the
other, except when assigning all of their rights and obligations to
any legal entity controlling, controlled by, or under common
control with it, but with thirty (30) days' prior notice to the
other party.
11.2 The Consultants shall establish the Facilities either in the
Toronto and Montreal Metropolitan regions only.
6
11.3 The Consultants can assign this Agreement or any obligations
hereunder to a third party. If any obligations of the Consultants
are assigned to a subcontractor, the Consultants will remain
responsible for such obligations under this Agreement.
11.4 This Agreement is not intended to create, nor shall it be construed
to be, a joint venture, association, partnership, franchise, or
other form of business relationship. Neither party shall have, nor
hold itself out as having, any right, power or authority to assume,
create, or incur any expenses, liability, or obligation on behalf
of the other party, except as expressly provided herein.
11.5 If any provision of this Agreement is held invalid, illegal or
unenforceable in any respect, such provision shall be treated as
severed, leaving the remaining provisions unimpaired, provided that
such does not materially prejudice either party in their respective
rights and obligations contained in the valid terms, covenants, or
conditions.
11.6 There are no intended third party beneficiaries to this Agreement.
11.7 The failure of either party to require the performance of any of
the terms of this Agreement or the waiver by either party of any
default under this Agreement shall not prevent a subsequent
enforcement of such term, nor be deemed a waiver of any subsequent
breach.
11.8 This Agreement may not be modified, supplemented, or amended or
default hereunder waived except upon the execution and delivery of
a written agreement signed by the authorized representative of each
party.
11.9 Both parties represent and warrant that each has the full authority
to perform its obligations under this Agreement and that the person
executing this Agreement has the authority to bind it.
11.10 This Agreement shall be governed by and construed in accordance
with the laws of the Province of Quebec and the applicable federal
laws of Canada therein, and the parties irrevocably submit to the
jurisdiction of the courts of the Province of Quebec, city of
Montreal.
11.11 The Parties have requested that this Agreement and all documents
and communications pursuant to or in connection with this Agreement
be drawn up in the English language. Les Parties ont requis que
cette Convention ainsi que tous documents ou communications en
vertu de cette Convention ou s'y rapportant, soient rediges en
langue anglaise.
11.12 This Agreement constitutes the final and full terms of
understanding between the parties and supersedes all previous
agreements, understandings, negotiations, and promises, whether
written or oral, between the parties with respect to the subject
matter hereof.
7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the day and year set forth below.
INTERNET VIP, INC. Consultants
---------------------------- -----------------------------------------
Signature Signature(s)
▇▇▇▇ ▇▇▇▇▇, Chairman ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ ▇▇▇▇▇▇
---------------------------- -----------------------------------------
Date Date
