THIS AGREEMENT made as of this 24th day of September, 1998
BETWEEN:
SSA COUPON LTD., a company duly incorporated and validly existing
under the laws of British Columbia having its registered and
records offices at 1230B 0000 Xxxxxxxx, Xxxxxxx, Xxxxxxx
Xxxxxxxx, X0X 0X0
(the "Company")
OF THE FIRST PART
AND:
XXXX XXXXXXX XXXX, software programmer of 0000 0XX Xxxxxx, Xxxxx,
Xxxxxxx Xxxxxxxx, X0X 1 L5
("Xxxx")
OF THE SECOND PART
WHEREAS:
A. The Company was incorporated for the purpose of developing, exploiting
and marketing an internet web search engine and data base as an internet
portal (the "Project").
B. Xxxxxxx Xxxxxxx ("Xxxxxxx") was the originator of the concept has been
instrumental in developing the concept for the search engine and data base and
working with Xxxx on the Project.
C. The Company desires to retain Xxxx to continue his involvement with
programming for the Project and to co ordinate and oversee the development of
the software and the writing of the specifications in a consulting capacity with
the Company.
D. The Company desires to retain the services of Xxxx on a long term basis
in accordance with the term and conditions set forth in this Agreement.
WITNESSETH that in consideration of the premises herein contained and
subject to the terms and conditions hereinafter set out the parties hereto agree
as follows:
1. Xxxx shall serve the Company as its Chief of Programming to provide software
programming services to the Company and to render his services as set out herein
to the Company during the term of this Agreement and the Contractor hereby
accepts these terms and undertakes to perform all the duties and obligations
assumed by him hereunder.
2. Xxxx shall furnish the services required to assist with the development,
writing, testing, upgrading, and correction of computer programs and the writing
of specifications as may be requested of the Contractor by Xxxxxxx from time to
time and subject to such general policy
restrictions and such restrictions as to specific matters as may be established
by the Board of Directors of the Company.
3. Dana's duties shall include developing specifications for software programs,
writing, testing, correcting and otherwise generally developing software,
training persons in the use of software developed for the Project, backing up
software programs, inputting data to data bases, and other general computer
operation and programming services and shall perform all other duties related
thereto as are generally provided by a computer programmer subject always to the
instructions and directives of the management of the Company.
4. The term of this Agreement shall be for a term of five years from the date
first above written and shall continue and shall not be terminated by the
Company for any reason or cause whatsoever and the said term shall be
automatically renewed for successive terms of two years each unless terminated
by Xxxx at any time on two months notice or unless the Company shall deliver to
Xxxx written notice of the termination of this Agreement at least six calendar
months prior to the expiration of the original term of five years or prior to
the expiration of any successive two year term then in force. If the Company
shall cancel this Agreement at the end of the said five year term or at the end
of any successive two year term then in force, the Company shall pay to Xxxx, on
the termination of this Agreement as provided herein, the sum of $500,000.00
forthwith upon such termination.
5. During the original term of this Agreement and successive renewal terms
thereof, the Company shall pay to Xxxx as a consulting fee, commensurate with
the net earnings of the Company (calculated without deducting as an expense, any
fees, bonuses or other amounts paid to Dana, Maurice, Xxxxxxx X. Xxxxxx, or any
other director, officer, or executive of the Company), amounts calculated as
follows:
(a) commencing on October 1st 1998 and continuing until the
Company has net quarterly earnings of $250,000 calculated in
accordance with generally accepted accounting principals
("GAAP"), $6,000 per month in two installments of $3,000 each
on the 1st and 15th day of each and every month until the
month immediately following the first calendar quarter in
which the Company had net quarterly earnings of $250,000 as
aforesaid and provided that until such time as the Company has
money available to make such payments, the amounts shall be
recorded in the books of the Company as a debt owing to Xxxx
to be paid as soon as the Company has money available and
provided that,
(b) from the 1st of the month immediately following the first
calendar quarter that the Company has net quarterly earnings
of $250,000 calculated in accordance with GAAP as aforesaid
and continuing until the month immediately following the first
calendar quarter in which the Company has net quarterly
earnings of $500,000 calculated in accordance with GAAP, the
Company will pay to Xxxx, in lieu of the $6,000 per month,
$8,000 per month in two installments of $4,000 each on the 1st
and 15th days of each and every month and provided that,
(c) from the 1st of the month immediately following the first
calendar quarter that the Company has net quarterly earnings
of $500,000 calculated in accordance with
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GAAP as aforesaid until the month immediately following the
first calendar quarter in which the Company has net quarterly
earnings of $1,000,000 calculated in accordance with GAAP, the
Company will pay to Xxxx, in lieu of the $8,000 per month,
$12,000 per month in two installments of $6,000 each on the
1st and 15th days of each and every month and provided that,
(d) from the 1st of the month immediately following the first
calendar quarter that the Company has net quarterly earnings
of $1,000,000 calculated in accordance with GAAP as aforesaid
until the month immediately following the first calendar
quarter in which the Company has net quarterly earnings of
$3,000,000 calculated in accordance with GAAP, the Company
will pay to Xxxx, in lieu of the $12,000 per month, $16,000
per month in two installments of $8,000 each on the 1st and
15th days of each and every month and provided that,
(e) from the 1st of the month immediately following the first
calendar quarter that the Company has net quarterly earnings
of $3,000,000 calculated in accordance with GAAP as aforesaid
until the month immediately following the first calendar
quarter in which the Company has net quarterly earnings of
$6,000,000 calculated in accordance with GAAP, the Company
will pay to Xxxx, in lieu of the $16,000 per month, $24,000
per month in two installments of $12,000 each on the 1st and
15th days of each and every month and provided that,
(f) from and after the first of the month immediately following
the first calendar quarter that the Company has net quarterly
earnings of $6,000,000 calculated in accordance with GAAP as
aforesaid, the Company will pay to Xxxx, in lieu of the
$24,000 per month, $44,000 per month in two installments of
$22,000 each on the lst and 15th days of each and every month.
Such compensation shall be reviewed from time to time by the board of
directors, no less than annually, and may be increased as the board of directors
in their discretion may decide. The above compensation is in addition to any
bonuses, stock options or shareholders dividends that Xxxx xxx receive in the
discretion of the Board of Directors of the Company.
6. Xxxx shall devote at least 20 hours per week of his working time, attention
and ability to the business and affairs of the Company unless otherwise
consented to in writing by the Board of Directors and shall use his best efforts
to promote the interests of same.
7. During the initial term or any successive term hereof Xxxx shall be entitled
to be away vacation of eight weeks during each year, such vacation to be taken
at such time or times as the Board of Directors of the Company may agree.
8. Xxxx shall be reimbursed for all travelling and other expenses properly
incurred by him in connection with his duties hereunder and for all such
expenses shall furnish to the Company, as appropriate, statements and vouchers
as and when required.
9. Xxxx shall submit oral or written reports in such form and to such persons as
the Board of Directors of the Company may from time to time direct.
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10. Xxxx confirms that all of his programming work has been done as a work for
hire and the copyright and all moral and other rights in any programming
performed on the Project belongs to the Company and Xxxx confirms that he has
transferred all right, title and interest that he may have in the intellectual
property of the Project to the Company and Xxxx shall not, without the consent
of the Board of Directors of the Company, either during the continuance of this
Agreement or at any time thereafter disclose the private affairs or any secrets
of the Company to any person other than the Directors or Senior Officers of the
Company and shall not use for his own purposes or for any purpose other than
those of the Company such information he may now have or may hereafter acquire
in relation to the business or affairs of the Company. For greater clarity, Xxxx
acknowledges that the Company shall be entitled to, and shall own, solely and
exclusively, all the results and proceeds of Dana's services and all rights of
every kind therein and, without limiting the generality of the foregoing, the
Company will own all intellectual property rights in any work performed by Xxxx
on the Project before this Agreement was entered in to or performed pursuant to
this Agreement including the intellectual property in any and all works created
by the Company based in whole or in part on the software written or programmed
by Xxxx, including any modifications, adaptations, transformations, revisions,
improvements, enhancements, translations or variations of the such software. For
the purpose of this Agreement, intellectual property rights shall mean:
(a) All rights, title and interests in all copyright and, moral
rights in the software expressed in any material form
whatsoever;
(b) All rights, title and interests in all confidential
information and trade secret rights arising under the common
law, provincial law, federal law and laws of foreign countries
and related to proprietary and confidential information
embodied in the software or otherwise arising in the Project;
(c) All rights, title and interests in all trademark and trade
name rights under the common law, provincial law, federal law
and laws of foreign countries relating to the software or the
Project; and
(d) All rights, title and interest in any and all inventions
embodied in the software including all modifications,
enhancements and improvements thereto whether or not
patentable
11. Xxxx shall not, without the prior written consent of the Board of Directors
of the Company during the term of this Agreement and for a period of two years
after the termination of this Agreement either individually or in partnership or
in conjunction with any person or persons, association, syndicate, company or
corporation as principal, agent, major shareholder or in any other manner
whatsoever act in conflict with, carry on or be engaged in or be concerned with
or interested in or advise or permit his name to be used or employed by any
person or persons, firm, association, syndicate, company or corporation engaged
in or concerned with or interested in a project similar to the Project or any of
the businesses carried on by the Company during the term of this Agreement..
12. If Xxxx shall, by reason of illness or mental or physical disability or
incapacity, fail for six months in the aggregate in any calendar year, to be
available for consulting hereunder the
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Company may, by three months' notice in writing to Xxxx, terminate this
Agreement, in which event this Agreement (except paragraphs 10 and 11 hereof,
which paragraphs shall continue in force) shall be wholly determined upon the
expiration of the said period of two months and the Company's further obligation
to pay compensation to Xxxx under paragraph 5 and Dana's obligation to render
services hereunder shall terminate as of the said termination date.
13. The relationship of the parties is as contractor and contractee and not as
employer and employee and nothing herein contained shall be deemed to constitute
an employer-employee relationship or a partnership between, or a joint venture
by, the parties and neither party shall hold itself out contrary to the terms of
this paragraph by any means whatsoever. Neither party shall be bound by or
become liable for any representation, commitment, act or omission whatsoever of
the other contrary to the provisions hereof.
14. The provisions of this Agreement shall enure to the benefit of and be
binding upon the legal personal representative of Xxxx and the successors and
assigns of the Company respectively.
15. If any covenant or provision herein is determined to be void or
unenforceable in whole or in part it shall not be deemed to affect or impair the
validity of any other covenant or provision hereof.
16. The parties acknowledge that it is their intent to take the Project public
either by licensing the technology to, or vending the Company or the shares in
the Company into a company ("Newco") that is listed, or intends to become
listed, on a recognized stock exchange or is trading, or intends to be traded,
on the over the counter market, and the Company covenants that any such license
or vending it will be conditional on Newco assuming the obligations hereunder
and the Company will assign this Agreement to Newco on the licensing or vend in
and will ensure that Newco assumes the Company's obligations to Xxxx hereunder.
After such a licensing or vend in, the net earnings referred to in paragraph 5
shall be the consolidated earnings of the Company and Newco. This paragraph will
apply, mutatis mutandis, if it is decided that Newco will not be the public
company but shall sell the shares or the Project to another company that is
listed, or intends to become listed, on a recognized stock exchange or is
trading, or intends to be traded, on the over the counter market.
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IN WITNESS WHEREOF the parties hereto have hereunto set their hands and
seals the day and year first above written.
THE CORPORATE SEAL of )
SSA COUPON LTD. was hereunto )
affixed in the presence of )
) c/s
/s/ Xxxxxxx Xxxxxx, Pres. )
-------------------------------
)
)
SIGNED, SEALED AND DELIVERED )
by XXXX XXXX )
in the presence of: )
)
/s/ Xxxxxxx Xxxxxxx )
------------------------------- )
Name )
) /s/ Xxxx Xxxxxxx Xxxx
) ------------------------
401-1310 Caribo St. ) Xxxx Xxxxxxx Xxxx
------------------------------------
Address New Westminster )
)
)
Occupation )
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