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FUTURELINK DISTRIBUTION CORP.
SERVICE AGREEMENT
(PROVINCE OF ALBERTA)
Date: June 1, 1998
Client #: 980004
Between:
FUTURELINK DISTRIBUTION CORP.
No. 550, 603-7 Avenue SW
Calgary, AB
Canada T2P 2T5 (FutureLink)
And
JAWS TECHNOLOGIES INC
No. 380 - 7Avenue SW
Calgary, AB
Canada T2P 2T5 (Client)
Background to the Agreement
Client has agreed to rent computing services from FutureLink. The purpose of
this document is to set out the agreement for rental services between FutureLink
and the Client.
1. DEFINITIONS
1.1. SPECIFIC
As used in this Agreement the following words and phrases shall have the
following meanings respectively:
a) Agreement means this Agreement including schedules and addenda attached to
and forming an integral part of this Agreement, and any amendments made
pursuant to this Agreement.
b) Business Day means any day except a Saturday, a Sunday and any statutory
holiday observed in the Province of Alberta.
c) Rental services means the provision and support of work station computing
hardware, access to designated software and means the equipment that the
Client will be required to rent in order to effectively and efficiently
interface with the FutureLink designated server facility.
d) Currency means Canadian dollars ($).
e) Effective Date of the Agreement means the commencement date as defined in
Schedule A.
f) Minimum Term of the Agreement means the minimum number of months, as
specified in the "Lease"
g) Location means the location(s) specified in Schedule A where FutureLink
shall deliver the rental services.
h) Party refers to either FutureLink or the Client
1.2. INCORPORATION OF SCHEDULES
The following Schedules, annexed hereto, are incorporated in this Agreement and
deemed to be part hereof: Schedule A Equipment List and Location, Security,
Billing Rates, Service Provision, Application Support
2. SERVICES
2.1 RENTAL SERVICES
FutureLink agrees to provide rental services to the Client for the duration of
the minimum term of the agreement and thereafter as mutually renewed by the
Client and FutureLink.
2.2. INSTALLATION PLAN
FutureLink and the Client agree that activities called for are to be
accomplished prior to the effective date of rental services. The
responsibilities of both FutureLink and the Client are detailed in the
Installation Plan.
3. RESPONSIBILITY OF FUTURELINK
3.1. SERVICE COMMITMENT
FutureLink shall use all commercially reasonable efforts to meet or exceed the
services levels defined herein.
a) Reporting
FutureLink will provide the client with a monthly invoice summarizing the
provision of service including the provision of any client specific
enhancement upgrades.
b) System Integrity and Access
FutureLink will provide 24 hour service access. Further, FutureLink will
not perform routine maintenance that would interfere with access between
the hours of 7:00am and 7:00pm Mountain Time on Business Days.
c) Application Support
FutureLink will provide general application support for common business
applications as defined in Schedule A.
d) Security
Fire-walling for the security of client information held at the FutureLink
Central Server facility will be provided at the cost of FutureLink.
e) Customer Service
FutureLink's customer service help desk will be available 8:00 AM to 5:00
PM Mt on business days.
f) Service Reviews
FutureLink will conduct monthly service reviews with clients.
g) Service Standards
FutureLink will strive for a 95% access rate which means between 7:00am and
7:00pm FutureLink will attempt to provide network access . Access limited
by FutureLink hardware at the Client site will be rectified through the
provision of repaired or replacement equipment.
3.2 SUPPLY AND MAINTENANCE OF RENTAL EQUIPMENT
a) The Client will supply and maintain "client owned" equipment as outlined in
Schedule A.
b) FutureLink will supply, maintain and replace, as necessary, all user
equipment owned by FutureLink as detailed in
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Schedule A. Ownership title to all FutureLink owned rental equipment
provided under the terms of this Agreement shall remain with FutureLink.
4. RESPONSIBILITIES OF THE CLIENT
4.1. RENTAL PAYMENTS
a) The Client shall pay to FutureLink the monthly rental and service fees
outlined in Schedule A.
b) The Client is responsible for all facility wiring, connectivity
installation and monthly connectivity charges necessary to facilitate the
performance of FutureLink's services.
4.2. SITE ACCESS
a) The Client shall provide FutureLink and its employees, contractors and
agents physical access to client site premises as may be necessary for
FutureLink to perform its obligations under this Agreement. These
obligations include without limitation the installation of those components
of rental equipment that are to be placed on the Client's premises;
b) The Client shall arrange such security clearances as may be required in
order to provide such access;
c) In the event that the access required cannot be provided on a timely basis,
the Client shall waive compliance with the Installation Plan or service
commitments for the period that access is delayed;
d) The Client shall be responsible for satisfying all requirements imposed by
law or contract as it applies to service installation and for meeting any
landlord requirements. This includes any additional fees, design
submissions, installation approvals including but not limited to: Cabling
4.3. OPERATIONS
a) The Client agrees to not, through its own operations or otherwise, cause
disturbances, outages or any other actions which may affect FutureLink's
network or service program, or which may adversely affect FutureLink's
ability to deliver service.
b) The Client further agrees to provide sufficient advance notice of the
Client's intention to change, modify, or reconfigure components or elements
of the Client's computer environment which may affect FutureLink's network,
service standards, or rental equipment, or which may affect FutureLink's
ability to meet the service standards.
c) The Client is responsible for maintenance of the Client facilities and
operating environment (including without limitation cleanliness, humidity
etc.) in which FutureLink rental equipment is located. Should the Client
fail to provide such in its entirety or of a standard such that is
detrimental to the operation of the rental equipment, the Client shall
waive any non-compliance with Service Levels resulting from such and shall
make FutureLink harmless for any loss of service standards.
4.4. USE OF COMMUNICATIONS SERVICES
The rental services provided by FutureLink in accordance with the terms and
conditions of this Agreement are for the sole and exclusive use of the Client
for its internal business and operational use only. Any resale of the rental
services in whole or in part is strictly prohibited without the express written
permission of FutureLink.
4.5. INSURANCE
The equipment shall be at the risk of the Client. The Client shall protect and
insure, for the term of this agreement and any renewal period, at the Client's
expense insurance against property loss or damage to the equipment listed in
Schedule B including without limitations, loss by fire (including extended
coverage), theft, collision, injury or death and damage to property of others
and such other risks of loss. The value of insurance carried shall equal the
replacement value of the equipment listed in Schedule B.
5. TERM AND TERMINATION
5.1. TERM
The Agreement shall remain in effect for 36 months.
5.2. TERMINATION FOR CAUSE
a) Either Party may terminate this Agreement immediately upon an occurrence of
the following:
(i) A material breach by the other;
(ii) Insolvency or bankruptcy;
(iii) Assignment for the benefit of creditors;
(iv) Appointment of a receiver or trustee in bankruptcy; or
(v) Upon any proceeding in bankruptcy, receivership or liquidation being
instituted and continuing for thirty (30) days without being
dismissed.
b) For the purpose of this Subparagraph 5.2, a failure to achieve committed
service standards shall not be deemed a material breach of the Agreement
unless both (1) the actual service levels achieved are less than ninety
percent (90%) of the service standards for three consecutive months and (2)
such failure is caused by FutureLink.
c) Termination for cause by the client will result in the client assuming full
responsibility for the financing agreements signed by the Client with the
FutureLink assigned finance agent. All equipment, business data and
software owned by the Client as part of the finance and/or lease equipment
listing shall become the property of the Client.
6. LIABILITYAND INDEMNITY
6.1. LIMITATION OF LIABILITY
Except as provided in Subparagraph 6.3 and except in the case of use or
disclosure of Confidential Information contrary to paragraph 7 and except for
damages or losses caused by the failure of the other Party to comply with its
obligations under this Agreement, neither FutureLink nor the Client shall be
liable to the other in connection with any single event or series of related
events for any special, incidental, indirect or consequential loss or damage
including, but not limited to, lost profits, lost business revenue, lost or
damaged data, failure to realize expected savings, other commercial or economic
loss of any kind even if FutureLink or the Client Party has been advised of the
possibility of these losses or damages, and regardless of the form of action,
whether in contract or in tort including negligence or based upon any other
legal or equitable theory. Furthermore, in no event will FutureLink or the
Client, its employees, subcontractors and agents be liable for any losses and
damages if and to the extent caused by the other or its employees,
subcontractors and agents failure to perform its obligations under this
Agreement. Notwithstanding anything to the contrary in this Agreement, the
maximum liability of FutureLink to the Client, regardless of the cause or form
of action, shall be the amount paid to FutureLink by the Client under this
Agreement.
6.2. INTELLECTUAL PROPERTY RIGHTS INDEMNITY
FutureLink agrees to indemnify, defend and save harmless the Client from and
against any claims made upon the Client by any third party, in the event that
the use of rental services by FutureLink, as described in this Agreement,
infringes a third party's lawful rights in any valid patent, copyright, trade
secret, or other proprietary interest enforceable in Canada provided that:
a) FutureLink shall have sole conduct of the proceedings;
b) The Client has promptly notified FutureLink of all such claims and has not
made any admissions in respect of them;
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c) The Client provides FutureLink with reasonable assistance and authority in
connection with such claims; and
d) FutureLink, may, in its discretion and at its expense either procure for
the Client the right to continue to use the infringing item and/or modify
or replace the infringing item or, if neither option is commercially
practicable, remove the infringing item from the rental service.
This indemnity shall not apply to the extent that any infringement is caused or
contributed to by the Client, the connection of services to the FutureLink
network, the Client's corporation, operation or use of the rental equipment with
any other devices, data or programs not furnished by FutureLink or its
authorized subcontractors, or any modification by the Client of the Connectivity
Services that has not been authorized in writing by FutureLink.
7. CONFIDENTIALITY
7.1. CONFIDENTIAL INFORMATION
For the purposes of this Agreement, 'Confidential Information' shall include,
but is not limited to, business information concerning both FutureLink, the
Client and their clients, specifications, research, software, trade secrets,
discoveries, ideas, know-how, designs, drawings, flow charts, data, computer
programs, marketing plans, customer names and other technical, financial or
business information which is disclosed, whether orally, visually or in a
material form, to another in support of the activities provided for in this
Agreement. Any information of third persons disclosed in the course of
performing such activities shall be deemed to be the disclosing entity
information and such information shall be governed by the terms of this
Agreement. FutureLink and the Client acknowledge that any confidential
information disclosed is and shall remain the property of the entity that
disclosed the Confidential Information. All Confidential Information disclosed
in tangible form shall be marked by the disclosing entity with the word
'Confidential' or otherwise identified by an appropriate stamp or legend
indicating its confidential nature. All Confidential Information disclosed
orally or visually and identified by the disclosing Party as confidential when
disclosed shall be confirmed by the disclosing Party with a written summary of
such information within thirty (30) days following disclosure, and the written
summary shall be marked by the disclosing Party in the same manner described
above.
7.2. OBLIGATIONS OF CONFIDENTIALITY
FutureLink and the Client agree that they shall hold Confidential Information
exchanged under this Agreement in confidence and shall use the same solely for
the purpose of performing their obligations under this Agreement. FutureLink and
the Client further agree that they shall not disclose any Confidential
Information to anyone except those employees or contractors to whom such
disclosure is necessary for the purposes authorized herein. In the event such
Confidential Information must be disclosed by any Party to third persons for the
purpose of performing this Agreement, the disclosing Party shall, poor to
disclosure, obtain written consent from the Party that disclosed the
Confidential Information and obtain from the third person a written agreement
regarding confidentiality of the Confidential Information, the terms of which
shall be substantially the same as those contained herein. Notwithstanding the
foregoing, a Party may disclose Confidential Information to its professional
advisors without the written consent of the disclosing Party where, in the
opinion of the receiving Party, the advice of its professional advisors is
necessary to accomplish the objectives of this Agreement. Each Party shall use
not less than the same degree of care to avoid disclosure of Confidential
Information as it uses for its own confidential information of like importance
and, in any event, shall use a reasonable degree of care.
7.3. EXCLUSIONS
This Agreement shall not apply to information: (a) previously known to a Party
free of any obligation to keep it confidential; (b) that has been or is
subsequently made public by a Party that owns that information or by a third
Party who is under no obligation of confidence to any Party; (c) that is
independently developed by a Party or an affiliate without reference to or
knowledge of the other Party's Confidential Information; or, (d) that is
disclosed with the prior approval of the owner of the information. Any
combination of Confidential Information regarding, for example, products or
features of technology, shall not be deemed to be within the foregoing exception
merely because individual portions of such combination are disclosed or
separately known in the public domain or known by the receiving Party.
7.4. DISCLOSURE BY LAW
If the Confidential Information is requested by a government agency, a Party may
disclose the Confidential Information of another, provided that the disclosing
Party has obtained protective arrangements reasonably satisfactory to the owner;
provided further that if the governmental agency has jurisdiction to compel
production of the Confidential information and exercises that jurisdiction, the
request shall be treated as a demand for discovery. Notwithstanding the
foregoing, either Party may reveal such Confidential Information as may be
reasonably necessary to any regulatory authority having jurisdiction over it, or
its affiliates, for the purpose of analyzing the regulatory implications and
constraints that may apply to the business relationship and in order to obtain
such regulatory approvals as may be required. If a Party is involved in court
proceedings and is subject to a legally enforceable demand for discovery of
Confidential Information, that Party shall give written notice to the owner of
the Confidential information prior to disclosing the Confidential information,
and shall cooperate in seeking such reasonable protective arrangements as may be
requested by the owner. Nothing in this Subparagraph shall affect the duty of
any Party to take such action as it may deem advisable, including legal action,
to protect its Confidential Information.
8. GENERAL
8.1. DISPUTE RESOLUTION
a) If during their course of work in progress, either Party has cause to
believe that the other Party is not fulfilling its obligations under the
terms of this Agreement or a Party raises a dispute relating to the
validity, construction, meaning, performance or effect of this Agreement or
the rights and obligations of FutureLink or the Client or any matter
arising out of or connected with this Agreement, then the dissatisfied
Party shall give written notice to the other Party of its objections and
the reasons therefor. FutureLink's C.O.O. shall consult with the Client's
designate in an effort to reach a mutual agreement to overcome the
objections. In the event that mutual agreement cannot be reached within a
time period that is satisfactory to the Party raising the issue under
consideration, that Party may refer the dispute to FutureLink's President,
and FutureLink's C.O.O. for resolution of the dispute. FutureLink's C.O.O.
and FutureLink's President shall meet as soon as is reasonably possible
after a dispute is referred to it, giving due regard to the nature and
impact of the issue under consideration.
b) Except as provided elsewhere in this Agreement, any controversy, dispute,
or claim that is of a fundamental nature in relation to this Agreement
(including the question whether any
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particular matter is eligible for arbitration hereunder) which cannot be
resolved in the manner set forth in paragraph (a) above, shall, at the
written request of one Party to the other not less than sixty (60) days in
advance of submittal to arbitration, be settled by arbitration in
accordance with the Arbitration Act S.A. 1991, c.43.1 or any statutory
modification or re-enactment thereof, (the "Act") by one arbitrator
appointed in accordance with the Act. The arbitrator shall sit in Calgary,
Alberta.
c) The Client and FutureLink shall continue the performance of their
respective obligations during the resolution of any dispute or
disagreement, including during any period of arbitration, unless and until
this Agreement is terminated or expires in accordance with its terms and
conditions. The determination resulting from the arbitration process shall
be final and binding upon the parties to the arbitration. Accordingly,
there shall be no right of appeal from the award of the arbitrator.
d) The costs of the arbitration shall be borne by the Client and FutureLink as
may be specified in the arbitrator's decision.
e) Notwithstanding anything else in this Subparagraph 8.1, where the
arbitrator conducts a resolution or otherwise receives evidence from a
Party to the arbitration or their respective employees, agents, consultants
or advisors, such evidence shall be treated as Confidential Information of
the Party on whose behalf the evidence is presented and the Advisors shall
enter into a form of non-disclosure agreement in a form acceptable to the
disclosing Party as a pre-condition to receiving, reviewing or auditing any
Confidential Information of the disclosing Party in the arbitration.
f) If a Party desires a remedy that an arbitrator is unable by law to provide,
that matter shall be excluded from arbitration. The following additional
matters shall also be excluded from arbitration:
(i) A decision by either Party to terminate this Agreement pursuant to
Paragraph 5;
(ii) Any law suit involving third parties;
(iii) Intellectual property claims whether initiated by third parties or by
FutureLink or the Client, or
(iv) Any actions arising from an alleged breach of Paragraph 7, Confidentiality.
8.2. ENTIRE AGREEMENT
This Agreement sets forth the entire agreement between FutureLink and the
Client. This Agreement supersedes all prior understandings and communications
between FutureLink and the Client whether oral or written.
8.3. ASSIGNMENT
a) This Agreement shall be binding upon and inure to the benefit of FutureLink
and the Client and their respective successors and permitted assigns. This
Agreement may be assigned in whole or in part by FutureLink without the
prior written consent of the Client.
b) Any permitted assignment of this Agreement shall be conditional upon
reciprocal provision to this Agreement:
(i) A true copy of the assignment agreement, and
(ii) An agreement and undertaking from the assignee to be directly bound by the
provisions of this Agreement and not to further assign its rights hereunder
without complying with the provisions of this Subparagraph 8.3.
8.4. FORCE MAJEURE
Notwithstanding any other provision of this Agreement, if by reason of Force
Majeure, any Party is wholly or part unable to perform certain of its
obligations under this Agreement it shall be relieved of those obligations to
the extent, and for the period, that it is affected by Force Majeure, provided
that the affected Party gives the other Party prompt notice of such inability
and nature, cause and expected duration of the Force Majeure. The Party affected
by Force Majeure shall use all reasonable efforts to remedy the situation and
remove, so far as possible and with reasonable dispatch, the cause of its
inability to perform, provided that there shall be no obligation on a Party so
affected to such labor disputes or to test or to refrain from testing the
validity of any order, regulation or law in any court having jurisdiction.
'Force Majeure' shall mean an event, the cause of which is beyond the reasonable
control of the Party affected thereby and which could not reasonably have been
foreseen and provided against, including, without limitation, acts of God,
strikes, Lockouts or other labor or industrial disturbances, accidents, fires,
explosions, weather conditions materially preventing or impeding work, inability
to secure fuel, power, materials, contractors or labor, mechanical breakdown,
failure of equipment or machinery, delays in transportation, wars, civil
commotion, sabotage, applicable legislation and regulations thereunder,
interruptions by government or court orders and future orders (lawful or
otherwise) of any regulatory body of competent jurisdiction but shall not
include financial difficulty.
8.5. NOTICES
All notices, consents, invoices or other communications, other than day to day
communications, provided for under this Agreement shall be in writing and shall
be deemed to be sufficiently given if delivered by overnight courier, in which
case the notice shall be deemed to have been received two (2) Business Days
after the sending thereof, or if delivered by hand to a representative of such
Party, in which case the notice shall be deemed to have been received on the
date of delivery thereof, or if sent by telecopier to such Party, in which case
the notice shall be deemed to have been received on the Business Day (in the
locality of the addressee) on the sending thereof. Unless notice of change of
address has been given in the manner provided in this Subparagraph 8.5, notices
shall be addressed as follows:
FUTURELINK DISTRIBUTION CORPORATION
Suite #550 - 603 7th Avenue SW
Calgary, Alberta T2P 2T5
Attention: C.O.O.
Phone: (403) 543-5511
Fax: (403) 543-5510
CLIENT
JAWS TECHNOLOGIES INC.
#380 - 603 7TH Ave SW
Calgary, Alberta
T2P 2T5
Attention: Mitch Tarr
VP Marketing
Phone: (403) 505-5055
Fax: (403) 508-5058
8.6. WAIVER
No indulgence or forbearance by any Party hereunder shall be deemed to
constitute a waiver of its rights to insist on performance in full and in a
timely manner of all covenants of the other Party hereunder and any such waiver,
in order to be binding upon a Party, must be express and in writing and signed
by such Party and then such waiver shall be effective only in the specific
instance and for the purpose for which it is given. No waiver of any term,
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condition or covenant by any Party shall be deemed to be a waiver by such Party
of its rights to require full and timely compliance with the same term,
condition or covenant thereafter, or with any other term, covenant or condition
of this Agreement at any time.
8.7. AMENDMENT OR MODIFICATION
This Agreement may not be amended except by written instrument signed by
FutureLink and the Client.
8.8. SURVIVAL
The terms of this Agreement which, by their nature, extend beyond the term of
this Agreement shall survive any termination or expiration of this Agreement.
8.9. AUTHORITY
Each Party has full power and authority to enter into and perform this Agreement
and the person signing this Agreement on behalf of each Party has been properly
authorized and empowered to enter into this Agreement. Each Party further
acknowledges that it has read this Agreement, understands it, and agrees to be
bound by it.
8.10. LEGAL COSTS
Each Party shall bear its own costs incurred in connection with the preparation
and negotiation of this Agreement. In the event it is necessary for FutureLink
to seek a determination or enforcement of its rights under this Agreement by
arbitration in any court of competent jurisdiction, FutureLink shall recover
from the client, in addition to any and all other remedies awarded by such
court, its legal fees and court costs on a solicitor client basis, including
such fees and costs on appeal.
8.11. GOVERNING LAW
This Agreement shall be governed and interpreted abiding to the laws of the
Province of Alberta. Venue and jurisdiction shall be in Alberta. In witness
whereof FutureLink and the Client have executed this Agreement under the hand of
its officer duly authorized in that regard.
8.12 RULES AND REGULATIONS
The Client shall at all times use the rental services in accordance with the
usage rules and policies established by FutureLink from time to time and
communicated to the Client in writing. Any failure by the Client to comply with
said rules and policies, which is not remedied to the satisfaction of FutureLink
within 48 hours (or such shorter time period as may be reasonable in the
circumstances) of notice of such failure to comply, shall be deemed to be a
material breach of this Agreement.
FUTURELINK DISTRIBUTION CORP.
Dated: Per:
Title:
JAWS TECHNOLOGIES INC.
Dated: Per:
Title: