THIS AGREEMENT made as of the 18th day of May, 1999
BETWEEN:
CALL CENTER LEARNING SOLUTIONS, INC.
an Arizona corporation
("CCLS")
OF THE FIRST PART,
- and -
INFOCAST CORPORATION
a Nevada corporation
("InfoCast")
OF THE SECOND PART.
BACKGROUND
CCLS is the owner of certain copyrights, trademarks, trade
names, trade secrets and other rights in and to certain call center course
materials listed in Schedule "A" (collectively, the "Underlying Intellectual
Property"). CCLS currently markets the course materials utilizing the Underlying
Intellectual Property to CCLS's existing clients.
InfoCast is in the business of designing and developing
electronic versions of content such as the Underlying Intellectual Property,
developing marketing and promotional materials, and providing technical support
for the electronic distribution of content.
CCLS and InfoCast have agreed to form a new corporation
("Newco") to be owned equally by CCLS and InfoCast. The purpose of Newco is to
develop, own and exploit the aforementioned courses as detailed in Schedule "A"
which will be converted to an electronic format capable of electronic
distribution (referred to hereafter as "Electronic Products"). Newco will engage
and draw upon CCLS' and InfoCast's resources to market, sell and distribute the
Electronic Products. CCLS will initially contribute to Newco:
(a) the exclusive rights:
(i) to convert the Underlying Intellectual Property in
the first five courses described in Schedule "A"
(Phase 1) to electronic format capable of electronic
distribution (Electronic Products), and
(ii) to sell, license or otherwise commercially exploit
the first five Electronic Products described in
Schedule "A" (Phase 1) by electronic distribution;
(b) subject matter expertise to support the conversion of the
Underlying Intellectual Property into the Electronic Products;
(c) access to the CCLS customer base as detailed in the Marketing
and Sales Plans and for a period of at least one year
leadership by CCLS in making sales of the Electronic Products;
(d) upon certain events occurring as detailed in section 2.5 of
this Agreement, the exclusive rights to convert and to
commercially exploit the balance of the Underlying
Intellectual Property listed in Schedule "A" under Phase 2 to
electronic format capable of electronic distribution.
InfoCast will initially contribute to Newco:
(a) the resources necessary to convert the Underlying Intellectual
Property in the first initial five courses described in
Schedule "B" to the Electronic Products;
(b) funding of the marketing and technical support efforts for the
Electronic Products during the initial "Six Month Period"
commencing on the date of execution of this Agreement and
ending six months thereafter;
(c) access to InfoCast's customer base as detailed in the
Marketing and Sales Plans;
(d) courseware development expertise to support the conversion of
the Underlying Intellectual Property into the Electronic
Products;
(e) access to InfoCast's Learning Management System ("LMS"), for
utilization with the Electronic Products; and
(f) funding the incorporation and organization of Newco and
ongoing corporate expenses for the initial Six Month Period.
AGREEMENT
In consideration of the mutual covenants and agreements
contained in this agreement and for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged and agreed, CCLS and InfoCast
hereby declare, covenant and agree as follows:
1. FORMATION OF NEWCO
1.1 InfoCast shall cause to be formed under the laws of the State
of Delaware, a new corporation to be called "Call Center Learning Solutions On
Line, Inc." ("Newco") or such other name as may be mutually agreed and
acceptable to applicable regulatory authorities.
1.2 The capitalization of Newco shall consist of 100 common
shares. Each of CCLS and InfoCast shall subscribe for and be issued 50 common
shares for US$1.00 per share.
1.3 Initially, the corporate records and accounting records of
Newco shall be maintained at the Toronto, Canada office of InfoCast at Suite
902, 1 Richmond Street West, Toronto, Ontario M5H 3W4.
1.4 The board of directors of Newco shall consist of four persons.
CCLS shall nominate two persons to the board of directors of Newco and InfoCast
shall nominate two persons. In the event of a deadlock of the Board of
Directors, either party may refer the subject matter of the deadlock to
arbitration.
2. OBLIGATIONS TO NEWCO
2.1 CCLS will initially contribute to Newco:
(a) the exclusive rights:
(i) to convert the Underlying Intellectual Property in
the first five courses described in Schedule "A"
Phase 1 to electronic format capable of electronic
distribution ("Electronic Products"), and
(ii) to sell, license or otherwise commercially exploit
the first five Electronic Products described in
Schedule "A" by electronic distribution;
(b) subject matter expertise ("SME") to support the conversion of
the Underlying Intellectual Property into all the Electronic
Products. The Subject Matter Expertise should demonstrate a
highly proficient level of understanding and comprehensive
knowledge pertaining to the subject matter of the course and
the competency requirement of call center personnel. The SME
should also demonstrate extensive training experience
pertaining to subject matter covered by the course. Subject
Matter Experts will interface with an instructional designer
to prepare course outlines and scripts;
(c) access to CCLS customer base as detailed in the Marketing and
Sales Plans and leadership for a period of at least one year
by CCLS in making sales of all the Electronic Products.
Leadership in this section contemplates a half time commitment
of CCLS' lead sales person, an identification of CCLS' client
who are candidates for the electronic products and sales
initiatives that include setting appointments, demonstrating
the electronic products and closing sales;
(d) upon certain events occurring as detailed in section 2.5 of
this Agreement, the exclusive rights to convert the balance of
the Underlying Intellectual Property to electronic format
capable of electronic distribution.
2.2 InfoCast will initially contribute to Newco:
(a) the resources necessary to convert the Underlying Intellectual
Property in the first initial five courses described in Schedule "A"
Phase 1 to the first five Electronic Products;
(b) funding of the marketing and technical support efforts for the first
five Electronic Products during the initial Six Month Period
commencing on the date of execution of this Agreement and ending six
months thereafter as detailed in Schedule "C";
(c) access to InfoCast's customer base as detailed in the Marketing and
Sales Plan;
(d) courseware development expertise to support the conversion of the
Underlying Intellectual Property into the first five Electronic
Products as set out in Schedule "A" and more clearly defined in
Schedule "B";
(e) access to InfoCast's Learning Management System ("LMS") which is
being developed concurrently with the conversion of the first five
Electronic Products and which will provide learner tracking and
reporting; and
(f) funding the incorporation and organization of Newco.
2.3 In order to ensure the development of quality courseware and
successful launches of the Electronic Products, both parties agree that
important input will be required from both CCLS and InfoCast and each party will
utilize its commercially reasonable efforts to attain the quality of products
and to meet the target completions contemplated in this contract.
2.4 The Electronic Products courseware will be developed according to
the Project Implementation Plan as set out as Schedule "B", with sign off
approvals required from both CCLS and InfoCast at regular, scheduled milestones.
2.5 On or before November 1, 1999 Newco shall have the right and
conditional obligation to convert the remaining six courses as detailed in
Schedule "A" (Phase 2) at InfoCast's sole expense. The resultant Electronic
Products shall be contributed to Newco absolutely. CCLS shall be obligated to
contribute to Newco absolutely the intellectual property contained in the
remaining six courses in the same manner as the aforementioned initial five
courses.
InfoCast's obligations under this section for the six remaining
courses are conditional upon Newco securing 20,000 unit sales at a price between
$50-$75 (U.S.) per unit by November 1, 1999. If these sales have not been
secured, InfoCast does not have any obligation to go forward on the conversion
of the remaining six courses.
InfoCast has the unfettered right however, to proceed with the
conversion of the six remaining courses in the event that the 20,000 unit sales
are not secured.
Should InfoCast decide to proceed with the conversion of the
remaining six courses, it will utilize its commercially reasonable efforts to
complete the conversion of the courses by May 1, 2000.
If InfoCast decides not to proceed with the conversion of the
remaining six courses then CCLS shall not be obligated to contribute its
intellectual property with respect to the remaining six courses. CCLS may
develop, convert and distribute these six courses thereafter as it deems fit in
its sole discretion. Newco shall have no surviving rights to these six
Electronic Products and Newco will cease to have any rights to a separate and
exclusive section on the DXL as contemplated in section 7.4. If only the first
five courses are developed by Newco as Electronic Products then InfoCast will
maintain these courses in a call center section of its DXL on a non-exclusive
basis.
3. ROLE OF NEWCO
3.1 The purpose of Newco shall be to develop, own and exploit the
Electronic Products.
3.2 Newco shall establish pricing for sales of Electronic Products to
generate optimum profits for Newco.
3.3 Newco will brand all Electronic Products for sale under the CCLS
brand.
3.4 InfoCast acknowledges and agrees that CCLS is the sole and exclusive
owner of all copyrights, trademarks, tradenames, trade secrets and other rights
in the Underlying Intellectual Property. InfoCast and CCLS acknowledge and agree
that Newco shall be the sole and exclusive owner of all copyrights, trademarks,
tradenames, trade secrets and other rights in the Electronic Products. This
Agreement gives InfoCast no rights in any such copyrights, trademarks,
tradenames, trade secrets and other rights in the Underlying Intellectual
Property and InfoCast shall never assert any rights therein; provided, however,
that (a) CCLS grants to Newco a non-royalty bearing license to reproduce the
trade names and trademarks of CCLS associated with the Underlying Intellectual
Property in connection with the Electronic Products in advertisements and other
promotional materials; and (b) Newco will reproduce on the Electronic Products
the tradenames and trademarks of CCLS associated with the Underlying
Intellectual Property. All components of the Electronic Products shall clearly
identify Newco as the owner of the copyrights thereof.
3.5 CCLS acknowledges and agrees that InfoCast is the sole and exclusive
owner of all copyrights, trademarks, trade secrets and other rights in software
applications and technology that will be utilized in the project. This Agreement
gives CCLS and Newco no rights in any of such copyrights, trademarks, trade
secrets or other rights that are incorporated in the software applications and
technology.
3.6 All sales shall be booked through Newco. CCLS and InfoCast shall be
entitled to charge Newco certain recoverable expenses as set out in Schedule "C"
for reimbursement which shall be accounted for through Newco.
3.7 Accounting records and functions shall be established and carried
out by InfoCast on behalf of Newco in accordance with generally accepted
accounting standards.
3.8 Both CCLS and InfoCast herein acknowledge that InfoCast and CCLS are
operating and developing a distance learning business and that nothing in this
Agreement will prevent InfoCast or CCLS from pursuing and developing other
distance learning initiatives as it sees fit from time to time.
3.9 InfoCast and CCLS shall not be required to devote all of its time or
business efforts to the affairs of Newco but shall devote so much of its time
and attention to Newco as is reasonably necessary and advisable to meet its
obligations under this Agreement. Except as otherwise expressly provided herein,
either party and any shareholder, officer, or director may engage in or possess
an interest in other business ventures of every nature and description,
independently or with others whether or not such ventures are competitive with
Newco.
3.10 InfoCast and CCLS agree that a dividend policy will be put into
place for Newco wherein quarterly distributions will be made to the
shareholders. The dividends will effectively distribute all profits while
leaving enough funding to keep Newco operational.
4. MARKETING AND SALES INITIATIVES
4.1 Newco intends to market and sell the Electronic Products both to
existing clients of CCLS and InfoCast and new clients developed by Newco, CCLS
and InfoCast. Newco will appoint CCLS and InfoCast as sales agents for the
Electronic Products. The parties shall pursue joint marketing and sales efforts
of the Electronic Products. The following steps will be designed and utilized.
(a) marketing plan and sales plan, each with mutual signoff to be
completed by June 15, 1999. CCLS and InfoCast acknowledge the
following marketing issues to be addressed (the following list is
non-exclusive): collateral materials, web page design, web page
interlinks, branding, publicity, sales strategy, client maintenance
strategy, pricing, positioning and effort priorities;
(b) beta site and system rollout management, including addressing such
beta issues as technology integration, Learning Management System
("LMS") integration and navigation integration and rollout issues
such as ongoing technology support and LMS monitoring;
(c) help desk including customer service and technical support shall be
established in conjunction with the sale and distribution of the
first course;
(d) development and drafting of a maintenance agreement to reflect a
maintenance policy, including considering free upgrades within
versions and costs for new versions (which are to be determined by
Newco); and
(e) a program to develop certification and accreditation alliances with
appropriate academic and industry organizations for the Electronic
Products.
During the initial Six Month Period commencing on the date of
execution of this Agreement and ending six months thereafter, InfoCast shall
fund the marketing and sales efforts for the Electronic Products, the costs of
which are estimated and detailed in Schedule "D".
4.2 InfoCast will provide up to 5 days training for the three principals
of CCLS to ensure their personal fluency with Newco's Electronic Products and
services.
5. REVIEW AND AUDIT RIGHTS
5.1 Each of CCLS and InfoCast (the "Auditing Party") shall have the
right which right may be exercised at any time, during normal business hours and
upon ten (10) days' prior written notice, to audit the books and records of
Newco. The audit may be conducted by a representative of Auditing Party who may
either, at its election, audit the books and records at the offices of Newco or
require Newco to forward copies of the same to the representative's offices. The
costs of one audit per year shall be borne by Newco and the results should be
shared with each party. If more than one request for audit occurs during the
calendar year, the Auditing Party shall pay for such audit and the results shall
be shared with each party.
5.2 InfoCast and CCLS will have the right to electronically access and
review on a read only basis, the records and accounts of Newco for monitoring
purposes at any time.
6. CONVERSION AND DELIVERY
6.1 Subject to CCLS's timely input and adherence to the milestone
objectives of Schedule "B" as detailed in section 6.4., InfoCast will use its
commercially reasonable efforts to convert the Underlying Intellectual Property
into the Electronic Products according to the Project Implementation Plan set
out in Schedule "B". InfoCast shall use commercially reasonable efforts to
initially convert the course materials entitled "Customer Care and Call Handling
Skills for Call Center Agents" on or before July 21, 1999 and the remaining four
courses listed in Schedule "A" Phase 1 on or before September 30, 1999.
6.2 The parties acknowledge and agree to use their commercially
reasonable efforts to create top quality electronically deliverable courseware
for the call center market as described in "Recommended System Requirements" as
listed in "Schedule E".
6.3 The conversion of the Underlying Intellectual Property shall be
completed to a standard acceptable to both CCLS and InfoCast, each acting
reasonably. The benchmark for the quality of courseware development under this
Agreement will be the design document as mutually revised for the existing CD
Rom version of the CCLS course known as "Effective
Skills In Dealing With Customers and Situations". The Electronic Products will
have record and non-record visions.
6.4 During the conversion of the Underlying Intellectual Property of
each CCLS course into Electronic Products, InfoCast shall require CCLS to
contribute and CCLS shall contribute to Newco its SME in accordance with CCLS
SME participation in Schedule "B". CCLS shall review and approve the build of
the Electronic Products in accordance with the designated milestones in Schedule
"B" to ensure that the content build is on schedule and in keeping with the
quality standard and purpose of the Underlying Intellectual Property. CCLS
acknowledges that time shall be of the essence in reviewing and approving the
content build. CCLS shall use its commercially reasonable efforts to expedite
the review and approval process in order to permit InfoCast to complete
conversion as scheduled. CCLS and InfoCast acknowledge that the schedule for
conversion set out in Schedule "B" is crucial to the successful launch of the
Electronic Products.
6.5 CCLS agrees that InfoCast's ability to meet the aforementioned
schedule is also contingent upon CCLS delivering quality and detailed instructor
led material that includes outlines, behavioral objectives, teaching points,
specific examples and learner exercises.
6.6 Subject to section 2.5 of this Agreement, upon successful conversion
of the first five Electronic Products CCLS, InfoCast and Newco shall mutually
agree upon the schedule and implementation plan for the conversion of the course
materials for the remaining six courses.
6.7 If InfoCast goes forward with the completion of the last six courses
under clause 2.5 then CCLS shall have first right of refusal to develop
instructor led versions and to play the role of SME for the conversion of the
Electronic format for all new products agreed to be included in the "Call Center
Training" section of the DXL for Newco. InfoCast will also provide its resources
for design and conversion to Newco. Both parties will provide their services at
cost.
7. PROMOTIONAL DUTIES
7.1 Each party shall devote its commercially reasonable efforts to
advertise, promote and sell the Electronic Products, to protect the goodwill
created in the Electronic Products and to cooperate with the end-users of the
Electronic Products.
7.2 Neither party shall use any advertising or promotional materials to
promote the Electronic Products that have not been approved by Newco.
7.3 InfoCast acknowledges that CCLS is very active in selling the
courseware products utilizing the Underlying Intellectual Property. CCLS and
InfoCast will use their commercially reasonable efforts to support Newco sales
of the Electronic Products to existing clients of CCLS. InfoCast shall refer all
requests and leads for leader-led version of the Electronic Products to CCLS and
no commissions shall be paid to InfoCast. Similarly, CCLS shall refer all
requests and leads for virtual call center opportunities, IT outsourcing and
content conversion and delivery to InfoCast and no commission shall be paid to
CCLS. CCLS and
Newco however will be given the opportunity to sell all products in the InfoCast
DXL library subject to a reseller agreement to be negotiated.
7.4 All Newco promotional materials, electronic and written, will carry
a dedicated Call Center Training category. Only Newco Electronic Products will
be listed and marketed under this dedicated category. InfoCast agrees to create
a separate and exclusive section on Digital Exchange Library (the "DXL") that
will exclusively list the Electronic Products under the title "Call Center
Training".
7.5 InfoCast will set up a website for Newco with transparent links to
the InfoCast website and the DXL. InfoCast will set up transparent links from
the CCLS website to the InfoCast website and Newco website. InfoCast will
e-commerce enable the Newco website.
7.6 Each of CCLS and InfoCast shall provide to Newco, on a monthly
basis, the names and addresses of customers that have been approached as
determined by the Marketing and Sales Plans.
7.7 InfoCast and CCLS shall provide assistance to Newco to promote,
market, sell and distribute the Electronic Products and InfoCast shall provide
Newco with technical support for the Electronic Products including presale, sale
(including e-commerce solutions) and post sales activities. During the initial
six month period after the execution of this Agreement, InfoCast shall provide
such assistance to Newco at no cost to Newco. Thereafter, InfoCast and CCLS
shall be entitled to charge Newco for the provision of such assistance on a cost
recovery basis as set out in Schedule "C".
7.8 InfoCast shall use its commercially reasonable efforts to introduce
one of the Electronic Products in the initial submission to College Boreal for
approval and inclusion in the College Boreal/AT&T Canada Learning Partner
Program curriculum. InfoCast shall use similar efforts to introduce three of the
Electronic Products in a subsequent submission to College Boreal for approval
and inclusion in the College Boreal/AT&T Canada Learning Partner Program
curriculum. CCLS and InfoCast acknowledge that inclusion in the College Boreal
curriculum of any course is at the sole discretion of College Boreal and AT&T
Canada. If any CCLS courses are included in this College Boreal/AT&T curriculum,
CCLS and Newco herein acknowledge and agree that all pricing policies, marketing
decisions, promotional materials and business activities shall be solely
determined and developed by InfoCast, AT&T and College Boreal in their sole and
unfettered discretion. Newco shall set the price at which the Electronic
Products are offered to AT&T Canada, College Boreal and Infocast.
8. INTELLECTUAL PROPERTY
8.1 CCLS and InfoCast acknowledge and agree that the value of the
Electronic Products and the resultant ability of CCLS and InfoCast to
commercially exploit the Electronic Products will be based in part upon the
quality, scope and breadth of the content of the Electronic Products. Each of
CCLS and InfoCast agree that they shall use their commercially reasonable
efforts to do all such things as may be necessary or desirable to ensure that
the Electronic Products are top quality. CCLS and InfoCast acknowledge that in
order to ensure that the
Electronic Products are top quality, Newco may be required to acquire and/or
develop similar, compatible or competing content products for the call center
market and CCLS and InfoCast agree to use their commercially reasonable efforts
to ensure that such steps as are necessary are taken to develop and maintain the
Electronic Products as top quality courseware for the call center market.
8.2 CCLS and InfoCast acknowledge that the Underlying Intellectual
Property and the Electronic Products including, without limitation, all source
codes, whether reduced to written form, contained on disks or other media,
consist of proprietary and confidential information. Each of CCLS and InfoCast
recognize and acknowledge that in the course of fulfilling their respective
obligations under this Agreement and commercially exploiting the Electronic
Products, they will be significantly responsible for maintaining and enhancing
the goodwill of each other with customers, potential customers and new
customers. Each of CCLS and InfoCast shall use commercially reasonable efforts
to preserve their respective goodwill.
8.3 Each party shall immediately notify the other party of (i) any
legal, governmental or other official investigation of or proceeding involving
the Electronic Products or (ii) of the existence of any infringement claim or
any other claim that has been or could be asserted by or against Licensor with
respect to its trademarks or other intellectual property.
8.4 Each party shall have sole responsibility for (and bear the cost of)
insuring that the Electronic Products as marketed and used by such party are in
compliance with the laws and regulations of any governmental body with
jurisdiction and that all necessary permits and licenses are procured.
8.5 Newco shall market, promote, and use the Electronic Products under
the tradenames and trademarks incorporating the tradenames and trademarks of
CCLS.
9. REPRESENTATIONS, WARRANTIES
AND COVENANTS OF INFOCAST
InfoCast hereby represents, warrants, covenants and agrees as
follows:
9.1 InfoCast is a corporation, duly organized, validly existing and in
good standing under the laws of Nevada. InfoCast has full power to carry on its
business as it is now conducted, under any applicable laws. InfoCast is or will
be qualified to do business in all jurisdictions where it conducts business.
9.2 This Agreement has been adopted and its execution and delivery by
InfoCast have been duly authorized and no further action is necessary on the
part of InfoCast to make this Agreement valid and binding upon InfoCast.
9.3 The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby do not conflict with, or result in a breach
of, or constitute a default under, or result in the acceleration of any
indebtedness under, or result in the creation or imposition of any lien or
charge under, any agreement or instrument to which InfoCast is a party or by
which InfoCast may be bound, nor does such action violate any statute, law, rule
or regulation nor any order, writ, injunction or decree of any court or
governmental authority binding upon or affecting InfoCast.
9.4 No consent of any third party is required to be obtained by InfoCast
in order to consummate the transaction contemplated by this Agreement or to
enable InfoCast to perform InfoCast's obligations hereunder.
9.5 There are no actions, suits, claims, investigations or legal or
administrative or arbitration proceedings pending, or to the best of InfoCast's
knowledge, threatened against InfoCast or any of its assets: (i) which involve
an agency, dealer, distributorship or other type of representation of a third
party; or (ii) which, if adversely determined, might have a materially adverse
effect on the validity or enforceability of this Agreement or on the financial
condition or capability of InfoCast to perform hereunder.
9.6 InfoCast is familiar with the contents and purposes of the Foreign
Corrupt Practices Act, ("FCPA") of the United States. InfoCast has not and shall
not make, in the performance of its obligations hereunder, any payments, loans
or gifts or promises or offers of payments, loans or gifts of money or anything
of value, directly or indirectly: (i) to or for the use or benefit of any
official, officer, employee or representative of any foreign government or any
agency or instrumentality thereof; (ii) to any foreign political party of any
official, officer, employee representative or candidate thereof, or (ii) to any
other person, if InfoCast knows or has reason to know that any part of such
payment, loan or gift will, directly or indirectly, be given or paid to any such
governmental official, officer, employee or representative or candidate thereof.
If requested by CCLS, InfoCast shall provide to CCLS duly executed affidavits,
in form and substance satisfactory to CCLS, of all of its officers, directors,
shareholders and employees who may assist InfoCast in the performance of its
obligations under this Agreement, each such affidavit shall affirm that InfoCast
has informed the affiant of InfoCast's obligation to abide by the FCPA and that
affiant shall abide by the provisions of the FCPA.
9.7 Neither this Agreement nor the Electronic Products must be notified
to, approved by or registered with, any governmental body, agency or
instrumentality in any jurisdiction.
9.8 To the best of InfoCast's knowledge, this Agreement does not have to
be executed in any language other than the English language in order to become
effective or to be enforceable.
9.9 To the best of InfoCast's knowledge, InfoCast has the capacity under
the applicable laws to agree to the choice of law and the choice of forum set
forth in this Agreement and such choices are enforceable against InfoCast under
the applicable laws.
9.10 To the best of InfoCast's knowledge, nothing in this Agreement
violates the fundamental public policy of any application jurisdiction.
9.11 Each of the representations and warranties set forth in this Section
shall survive the execution of this Agreement.
10. REPRESENTATIONS, WARRANTIES
AND COVENANTS OF CCLS
CCLS hereby represents, warrants, covenants and agrees as follows:
10.1 CCLS is a corporation, duly organized, validly existing and in good
standing under the laws of the State of Arizona. CCLS has full power to carry on
its business as it is now conducted, and to own the Underlying Intellectual
Property under applicable state and federal law. CCLS is or will be qualified to
do business in all jurisdictions where it conducts business.
10.2 This Agreement has been adopted and its execution and delivery by
CCLS have been duly authorized and no further corporate action is necessary on
the part of CCLS to make this Agreement valid and binding upon CCLS.
10.3 The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby do not conflict with, or result in a breach
of, or constitute a default under, or result in the acceleration of any
indebtedness under, or result in the creation or imposition of any lien or
charge under, any agreement or instrument to which CCLS is a party or by which
CCLS may be bound, nor does such action violate any statute, law, rule or
regulation or any order, writ, injunction or decree of any court of governmental
authority binding upon or affecting CCLS.
10.4 No consent of any third party or any state or federal governmental
agency is required to be obtained by CCLS in order to consummate the transaction
contemplated by this Agreement or to enable CCLS to perform CCLS's obligations
hereunder.
10.5 There are no actions, suits, claims, investigations or legal or
administrative or arbitration proceedings pending, or to the best of CCLS's
knowledge, threatened against CCLS or any of its assets: (i) which involve an
agency, dealer, distributorship or other type of representation of a third
party; or (ii) which, if adversely determined, might have a materially adverse
effect on the validity or enforceability of this Agreement or on the financial
condition or capability of Licensee to perform hereunder.
10.6 CCLS is familiar with the contents and purposes of the Foreign
Corrupt Practices Act, ("FCPA") of the United States. CCLS has not and shall not
make, in the performance of its obligations hereunder, any payments, loans or
gifts or promises or offers of payments, loans or gifts of money or anything of
value, directly or indirectly: (i) to or for the use or benefit of any official,
officer, employee or representative of any foreign government or any agency or
instrumentality thereof; (ii) to any foreign political party of any official,
officer, employee representative or candidate thereof, or (ii) to any other
person, if CCLS knows or has reason to know that any part of such payment, loan
or gift will, directly or indirectly, be given or paid to any such governmental
official, officer, employee or representative or candidate thereof. If requested
by InfoCast, CCLS shall provide to InfoCast duly executed affidavits, in form
and substance satisfactory to InfoCast, of all of its officers, directors,
shareholders and employees who may assist CCLS in the performance of its
obligations under this Agreement, each such affidavit shall affirm that CCLS has
informed the affiant of CCLS's obligation to abide by the FCPA and that affiant
shall abide by the provisions of the FCPA.
10.7 Neither this Agreement nor the Underlying Intellectual Property must
be notified to, approved by or registered with, any governmental body, agency or
instrumentality in any jurisdiction.
10.8 To the best of CCLS's knowledge, this Agreement does not have to be
executed in any language other than the English language in order to become
effective or to be enforceable.
10.9 To the best of CCLS's knowledge, CCLS has the capacity under the
applicable laws to agree to the choice of law and the choice of forum set forth
in this Agreement and such choices are enforceable against CCLS under the
applicable laws.
10.10 To the best of CCLS's knowledge, nothing in this Agreement violates
the fundamental public policy of any application jurisdiction.
10.11 Each of the representations and warranties set forth in this Section
shall survive the execution of this Agreement.
11. INDEMNITY
11.1 InfoCast does hereby agree to defend indemnify and hold CCLS
harmless from and against any cost, damage, liability, responsibility or
obligation, including, without limitation, reasonable attorney's fees, incurred
in connection with, as a result of or arising out of: (i) a breach by InfoCast
of any of the representations, warranties, covenants or obligations of InfoCast
contained in this Agreement; or (ii) third party claims arising from any
negligent act or inaction or willful misconduct of InfoCast, its agents and
employees.
11.2 CCLS does hereby indemnify and hold InfoCast harmless from and
against any cost, damage, liability, responsibility or obligation, including,
without limitation, reasonable attorney's fees, incurred in connection with, as
a result of or arising out of: (i) a breach by CCLS of any of the
representations, warranties, covenants or obligations of CCLS contained in this
Agreement; or (ii) third party claims arising from any negligent act or inaction
or willful misconduct of CCLS, its agents and employees.
12. ARBITRATION
12.1 If any dispute or controversy shall occur between the parties hereto
relating to the interpretation or implementation of any of the provisions of
this Agreement, such dispute shall be resolved by arbitration. Such arbitration
shall be conducted by a panel of three (3) arbitrators. Each party shall appoint
a single arbitrator and those two arbitrators shall appoint a third independent
arbitrator by agreement between those two arbitrators or, in default of
agreement, such arbitrator shall be appointed by a Judge of appropriate
jurisdiction in the State of Delaware upon the application of any of the said
parties and such Judge shall be entitled to act as such arbitrator, if he so
desires. Any such arbitration shall be held in the State of Delaware. The
procedure to be followed shall be agreed by the arbitrators appointed by the
parties or, in default of agreement, determined by the third arbitrator. The
arbitrators shall have the power to proceed with the arbitration and to deliver
their award, which shall be determined by a majority decision, notwithstanding
the default by any party in respect of any procedural order made by the
arbitrators. The arbitration shall proceed in accordance with the provision of
applicable arbitration laws of the State of Delaware. The majority decision
arrived at by the arbitrators shall be final and binding and no appeal shall lie
therefrom. Judgement upon the award rendered by the arbitrators may be entered
in any court having jurisdiction. Travel and lodging expenses for all parties
shall be charged to Newco.
13. RIGHT OF FIRST REFUSAL
13.1 Each of CCLS and InfoCast hereby grants to the other, upon the terms
and conditions set out herein, a right of first refusal in respect of the common
shares of Newco held by them.
13.2 In the event that either CCLS or InfoCast (the "Vendor") receives
from a third party, acting as principal and dealing at arm's length with the
Vendor, a bona fide written offer (the "Offer") to purchase from the Vendor all
or some of the common shares of Newco held by the Vendor (the "Shares") and the
Offer is acceptable to the Vendor, then CCLS shall, prior to accepting the
Offer, deliver to the other party (the "Rightholder") a notice of the Offer
setting forth the terms thereof, including the name and address of the offeror
and the number, price and other terms and conditions of the Offer.
13.3 In the event that the Vendor wishes to sell all or some of the
Shares then the Vendor shall, prior to offering to sell the Shares, deliver to
the Rightholder a notice setting forth the terms in which the Vendor wishes to
sell the Shares, including the number, price and other terms and condition.
13.4 In either case, such notice shall be deemed to be an invitation to
the Rightholder to purchase from the Vendor all of the Shares that are the
subject of the offer or the number of shares which the Vendor wishes to sell as
the case may be, on the terms and conditions specified in the offer. Within
seven (7) days following the giving notice to the Rightholder, the Rightholder
may by written notice to the Vendor elect to purchase from the Vendor all but
not less than all of the Shares subject of the Offer or the number of Shares
which the Vendor wishes to sell, as the case may be, on the terms and conditions
specified in the notice to the Rightholder. Upon receipt by the Vendor of such
notice, there shall be constituted between the Vendor and the Rightholder a
binding agreement of purchase and sale in respect of such Shares at the same
price and upon the same terms and conditions as specified in the notice to the
Rightholder.
13.5 In the event that the Vendor has not received the response from the
Rightholder within seven (7) days, the Vendor shall so inform the Rightholder
and shall be at liberty to accept the Offer or sell the Shares in the number, at
the price and upon terms and conditions no more favourable to the purchaser than
those specified in the notice.
13.6 In the event that the Vendor does not sell all of the Shares subject
of the notice within a 30 day period from the date of notifying the Rightholder
of an Offer or of the Vendor's wish to sell the Shares, the Vendor shall lose
its right sell such Shares and the provisions of this Agreement shall thereupon
once again be applicable.
13.7 The purchase by the Rightholder and the sale by the Vendor of any
Shares shall be completed at the offices of the Vendor at 10:00 o'clock in the
forenoon on the 7th Business Day after the date the Vendor gives notice to the
RightHolder of an Offer or its wish to sell the Shares, at which time the
Rightholder shall pay by cash or certified cheque payable to or to the order of
the Vendor, the aggregate purchase price for the Shares then being purchased and
the Vendor shall deliver certificates representing the Shares then being
purchased either duly endorsed in blank for transfer or registered in the name
of the Rightholder.
14. EVENTS OF DEFAULT
14.1 An Event of Default shall be deemed to occur with respect to a party
to this Agreement (the "Defaulting Party") if:
(a) such party makes an assignment for the benefit of creditors or a
proposal under the United States Bankruptcy Code or is declared
bankrupt or becomes insolvent; or
(b) any trustee in bankruptcy, liquidator or other office with similar
powers is appointed for such party or for all or any material part
of its property.
14.2 In addition to any rights or remedies that may be available to them,
if an Event of Default shall occur with respect to a party, then while the Event
of Default is continuing the other party who is not then the Defaulting Party
(the "Non-Defaulting Party") shall be entitled to purchase the common shares of
Newco held by the Defaulting Party.
14.3 In the event the Non-Defaulting Party wishes to purchase the common
shares of Newco held by the Defaulting Party, the Non-Defaulting Party shall
notify the Defaulting Party and Newco, in writing, of the date and time of
closing which date shall be within a period of 30 days after the giving of such
notice, on which date the purchase of the common shares of Newco shall take
place, which time and date are hereafter respectively called the "Time of
Closing" and the "Date of Closing".
14.4 The purchase price (the "Purchase Price") per share to be paid for
any common shares of Newco purchased pursuant to this section 14 shall be the
cost of acquisition of the Defaulting Party of the common shares of Newco to be
purchased as detailed in Section 1.2.
14.5 The Purchase Price in respect of the purchase and sale to be
effected pursuant to this section 14 shall be payable on the Date of Closing in
cash or by certified cheque made payable to or to the order of the Vendor.
14.6 The closing of the purchase and sale to be effected pursuant to this
section 14 shall be at the head office of Newco at the Time of Closing on the
Date of Closing.
15. TERMINATION
15.1 If either CCLS or InfoCast wishes to terminate its business
association with the other party, it may do so under this section. The party
desiring the termination of the association (hereinafter referred to as the
"Initiating Party") shall serve written notice of its desire to terminate upon
the other party (hereinafter referred to as the "Receiving Party") and the
notice shall include an "Offer to Purchase" of all the shares of Newco held by
the Receiving Party.
15.2 The termination process shall result in a sale of all of the shares
held by either party to the other party which represents a 50% ownership sale of
Newco by one party to the other party. Newco shall continue to hold all the
intellectual property contemplated under this Agreement and to be entitled to
all the rights contemplated under this Agreement. The party that sells its share
of Newco to the other party shall forfeit all rights to the property and
business of Newco.
15.3 The written notice contemplated under this section shall include a
proposal for an independent third party (hereinafter referred to as the
"Valuator") that shall determine the selling price of the shares of Newco held
by each party. The proposal shall name either the auditors of Newco, a major
accounting firm or an independent certified valuating firm as a proposed
independent Valuator of the Newco business. Within seven days from the receipt
of this notice the Receiving Party shall either accept the named independent
Valuator or shall counter propose another Valuator from the aforementioned list.
15.4 Should there be a counterproposal the Initiating Party shall have
five business days to accept or reject the independent Valuator. If no consensus
can be reached as to a Valuator, then the matter shall be referred to
Arbitration and the Arbitrator shall select an independent Valuator and the
decision as to the Valuator shall be final.
15.5 The selling price of all of either parties shares or 50% of Newco
shall be calculated as follows: 100% of "Out of Pocket Costs" of the selling
party plus 50% of the "Going Concern Value" of Newco.
15.6 "Out of Pocket Costs" shall be defined as all direct costs incurred
by either party in the advancement of Newco's business from the date of this
Agreement henceforth but shall not include costs that have been reimbursed to
the party by Newco. In the case of InfoCast the list shall include but not be
limited to all development and conversion costs, marketing and sales costs and
salaries of InfoCast employees directly attributable to the support of Newco.
For greater clarity the budgeted InfoCast costs through the next six months and
including the conversion of the eleven courses is approximately $1.0 million
(USD). In the case of CCLS the list shall include but not be limited to SME
costs, marketing and sales costs and salaries of CCLS employees directly
attributable to the support of Newco. Additionally the contributed Underlying
Intellectual Property shall be calculated into the out of pocket costs and shall
have a deemed value of $65,000 (USD) per course. The billing rate for CCLS
executives for the above shall be US$150 per hour.
15.7 Going Concern Value shall be defined as the greater of $6,000,000
(USD) or an amount calculated as present value of discounted future cash flows
utilizing conservative growth assumptions, a discount rate of 10% and a five (5)
year time horizon or business life.
15.8 The Valuator shall seek independent input from both parties as to
each party's views with respect to Going Concern Value and Out of Pocket Costs.
The Valuator shall share with each party the input of the other party only after
all information has been received from both parties and each party shall have
the opportunity to comment to the Valuator on the opinion of the other party.
The Valuator shall, after consideration of all the information, fix the price
for the Going Concern Value as described in section 15.7 above. With respect to
each party's Out of Pocket Costs the Valuator may disallow or modify any costs
that the Valuator determines were not incurred either reasonably or in direct
advancement of Newco business. The Valuator shall make his determinations within
thirty (30) days of being appointed and his decisions shall be final.
15.9 The Receiving Party shall have seven (7) days from receipt of the
Valuator's report to decide whether to accept the Offer to Purchase from the
Initiating Party and to sell its share of Newco. If the Receiving Party does
accept the Offer to Purchase the sale shall be finalized within forty-five (45)
business days. If the Receiving Party does not accept the Offer to Purchase then
the Receiving Party shall purchase the Initiating Party's share of Newco and the
sale shall be finalized within forty five (45) days.
16. MISCELLANEOUS
16.1 Whenever used in this Agreement, words importing the singular number
only shall include the plural, and vice versa, and words importing the masculine
gender shall include the feminine gender.
16.2 Time shall be of the essence in all matters pertaining to this
Agreement.
16.3 All dollar amounts expressed herein refer to lawful currency of the
United States of America.
16.4 Any notice, document or other communication required or permitted by
this Agreement to be given by a party hereto shall be in writing and is
sufficiently given if delivered personally, or if transmitted by any form of
telecommunication (which is tested prior to transmission, confirms to the sender
the receipt of the entire transmission by the recipient and reproduces a
complete written version of the transmission at the point of reception) to such
party addressed as follows:
(a) to Call Center Learning Solutions, Inc., at:
17263 E. Paradise Park Drive
Phoenix, Arizona 85032
email: cclsi@att.net
egreene2@ix.netcom.com
Facsimile: (925) 516 - 2519
(b) to InfoCast Canada Corporation, at:
Suite 902
1 Richmond Street West
Toronto, Ontario
M5H 3W4
email: jhines@InfoCast-corp.com
Facsimile: (416) 867-1679
Notice transmitted by a form of recorded telecommunication must be
accompanied by personal delivery. Notice transmitted by a form of recorded
telecommunication during normal business hours on a business day (9:00 a.m. to
5:00 p.m. local time at the place of receipt) shall be deemed to have been given
on the day of transmission or, in the case of notice transmitted outside of
normal business hours shall be deemed to have been given on the first business
day after the day of transmission. Notice delivered personally shall be deemed
to have been given on the day it was delivered. Any party may from time to time
notify the others in the manner provided herein of any change of address which
thereafter, until changed by like notice, shall be the address of such party for
all purposes hereof.
16.5 The parties agree to execute and deliver to each other such further
instruments and other written assurances and to do or cause to be done such
further acts or things as may be necessary or convenient to carry out and give
effect to the intent of this Agreement or as any of the parties may reasonably
request in order to carry out the transactions contemplated herein.
16.6 The insertion of headings and the division of this Agreement into
articles, sections, paragraphs, clauses or schedules are for convenience of
reference only and shall not affect or be utilized in the construction or the
interpretation hereof.
16.7 This Agreement shall be construed, interpreted and the rights of the
Parties determined in accordance with the laws, other than the conflicts of laws
rules, of the State of Delaware and the laws of the United States of America
applicable therein and shall be treated in all respects as a Delaware contract.
The Parties hereby irrevocably attorn on a non-exclusive basis to the
jurisdiction of the courts of the State of Delaware.
16.8 Unless otherwise stated, a reference herein to a numbered or
lettered article, paragraph, clause or schedule refers to the article,
paragraph, clause or schedule bearing that number or letter in this Agreement. A
reference to "this Agreement", "hereof", "hereunder", "herein" or words of
similar meaning, means this Agreement including the schedules hereto, together
with any amendments thereof, and not any particular clause, subclause, section,
subsection or paragraph or other portion hereof.
16.9 Unless otherwise specifically noted, all dollar amounts expressed
herein refer to lawful currency of the United States of America.
16.10 This Agreement (including the Schedules hereto) sets forth the
entire agreement among the parties hereto pertaining to the specific subject
matter hereof and replaces and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written of the parties hereto, and
there are no warranties, representations or other agreements, whether oral or
written, express or implied, statutory or otherwise, between the parties hereto
in connection with the subject matter hereof except as specifically set forth
herein. No supplement, modification, waiver or termination of this Agreement
shall be binding unless executed in writing by the party to be bound thereby.
16.11 No delay or failure of any party in exercising any right or remedy
hereunder and no partial exercise of any such right or remedy shall be deemed to
constitute a waiver of such right or remedy or any other rights or remedies of
such party hereunder. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provisions (whether or not
similar) nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided. Any consent by a party to or any waiver by a party of any
breach of any provision of this Agreement shall not constitute a consent to or
waiver of any subsequent, further or other breach of the provisions of this
Agreement.
16.12 Each of the provisions of this Agreement (and each part of each such
provision) is severable from every other provision hereof (and every other part
thereof). In the event that any provision (or part thereof) contained in this
Agreement or the application thereof to any circumstance shall be invalid,
illegal or unenforceable, in whole or in part, in any jurisdiction and to any
extent:
(a) the validity, legality or enforceability of such
provision (or such part thereof) in any other
jurisdiction and of the remaining provisions contained
in this Agreement (or the remaining parts of such
provision, as the case may be) shall not in any way be
affected or impaired thereby;
(b) the application of such provision (or such part thereof)
to circumstances other than those as to which it is held
invalid, illegal or unenforceable shall not in any way
be affected or impaired thereby;
(c) such provision (or such part thereof) shall be severed
from this Agreement and ineffective to the extent of
such invalidity, illegality or unenforceability in such
jurisdiction and in such circumstances; and
(d) the remaining provisions of this Agreement (or the
remaining parts of such provision, as the case may be)
shall nevertheless remain in full force and effect.
16.13 This Agreement may be executed by the parties hereto in separate
counterparts or duplicates each of which when so executed and delivered shall be
an original, but all such counterparts or duplicates shall together constitute
one and the same instrument.
16.14 In respect of this Agreement, no party is the partner or agent of
any of the other parties. No representations shall be made or acts taken by any
of the parties which could establish any apparent relationship or partnership or
agency and no party shall be bound in any manner whatsoever by any agreements,
warranties or representations made by any other party to any other Person with
respect to the action of any other party.
16.15 This Agreement shall be binding upon and shall enure to the benefit
of the parties hereto and their respective heirs, executors, administrators,
successors, assigns and legal representatives. This Agreement may only be
assigned upon the prior written consent of the parties hereto, which consent
shall not be unreasonably withheld.
16.16 (a) If either of the parties shall be prevented or delayed
from performing any of the obligations on its part to be
performed hereunder or under any agreements related
hereto, by reason of acts of God, strike, threat of
imminent strike, lockout or other labour disturbance,
action of the elements, lightning, storm, fire, flood,
interruption or delay in transportation, war,
insurrection, mob violence, blockade, riot, explosion,
law, rule, order or regulation of any duly constituted
court or governmental authority, unavoidable casualties,
shortage of labour, equipment or materials, plant
breakdown, dispute by a third party as to the parties'
ownership rights to or interests in the Underlying
Intellectual Property or any other disabling cause,
without regard to the foregoing enumeration, beyond the
control of the party so affected or which cannot be
overcome by the means normally employed in performance,
then and in every such event (each an "Intervening
Event"), any such failure to perform shall not be deemed
to be a breach of this Agreement but performance of any of
the aforesaid obligations shall be suspended during such
period of disability (or in the case of a dispute by a
third party as to the ownership rights to or interests in
the Underlying Intellectual Property, between the
commencement of proceedings in such a dispute and ten days
after the resolution of any such proceedings in a court or
arena of final resort from which no appeal can be taken by
any party involved therein) and the period of all such
delays resulting from an Intervening Event shall be
excluded in computing the time within which anything
required or permitted by such party to be done is to be
done hereunder, it being understood and agreed that the
time within which anything is to be done hereunder shall
be extended by the total period of all such delays and all
dates subsequent to the termination of such Intervening
Event shall be adjusted accordingly.
(b) A party relying on the provisions of this Section will
take all reasonable steps to eliminate any Intervening
Event and, if possible, will perform its obligations under
this Agreement as far as practical, but nothing herein
will require such party to settle or adjust any labour
dispute or to question or to test the validity of any law,
rule, order or regulation of any duly constituted court or
governmental authority or to complete its obligations
under this Agreement if an Intervening Event renders
completion impossible.
(c) A party relying on the provisions of this Section shall
give notice to the other party forthwith upon the
occurrence of the Intervening Event and forthwith after
the end of the period of delay when such Intervening
Event has been eliminated or rectified.
(d) Nothing herein contained shall entitle any party to
invoke the provisions of this Section by reason of such
party's failure or inability to fulfil its financial
commitments or contributions under this Agreement.
16.17 All payments to be made to any party hereunder may be made by cheque
or draft mailed or delivered to such party at its address for notice purposes as
provided herein, or for the account of such party at such bank or banks in the
United States of America as such party may designate from time to time by
written notice. Such bank or banks shall be deemed the agent of the designating
party for the purposes of receiving, collecting and receipting such payment.
16.18 This Agreement may be executed by the parties hereto in separate
counterparts or duplicates each of which when so executed and delivered shall be
an original, but all such counterparts or duplicates shall together constitute
one and the same instrument.
IN WITNESS WHEREOF the parties hereto have duly executed this
Agreement.
CALL CENTER LEARNING SOLUTIONS, INC.
Per: /s/ Janet M. Edwards
-------------------------
INFOCAST CORPORATION
Per: /s/ A.T. Griffis
-------------------------