SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of
Securities Exchange Act of 1934
For Period ended March 31, 2000
Commission File Number 0-26839
WHITE ROCK ENTERPRISES, LTD.
(Exact name of registrant as specified in its charter)
NEVADA 88-0407246
(State of Incorporation) (I.R.S. Employer Identification No.)
2600 72ND STREET, URBANDALE, IOWA 50322
(Address of Principal Executive Offices) (Zip Code)
(515) 331-0560
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [_]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock at the latest practicable date.
As of March 31, 2000, the registrant had 7,856,000 shares of common stock, $.001
par value, issued and outstanding and remains obligated to issue an additional
(i) 10,000,000 shares of common stock, $.001 par value; and (ii) 10,000 shares
of convertible preferred stock which is convertible into 10,000,000 shares of
common stock, $.001 par value, on February 28, 2002; all of which are to be
issued pursuant to the merger of ISES Corporation with and into the Company.
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PART I FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
White Rock Enterprises, Ltd.
Balance Sheets (Unaudited)
March 31, 2000 and September 30, 1999
<TABLE>
<CAPTION>
March 31, September 30,
2000 1999
--------- -------------
<S> <C> <C>
Assets
Cash and cash equivalents $ 248,065 $ 22,102
Accounts receivable - trade 137,725 126,276
Other current assets 24,735 --
--------- ---------
Total current assets 410,525 148,378
Equipment, net of accumulated depreciation 23,868 20,140
--------- ---------
Total assets $ 434,393 $ 168,518
========= =========
Liabilities and Stockholders' Equity
Accounts payable $ 22,298 $ 87,613
Accrued payroll and related liabilities 17,553 85,554
Accrued interest payable -- 3,713
Deferred maintenance fees 28,061 4,968
Short-term notes payable -- 175,000
--------- ---------
Total current liabilities 67,912 356,848
Long-term debt 135,000 135,000
--------- ---------
Total liabilities 202,912 491,848
Stockholders' equity:
Common stock - $0.001 par value; 50,000,000 shares authorized; 17,856,000
shares (March 31, 2000) and 10,000,000 shares (September 30, 1999)
issued or committed to be issued (See Note 2) 17,856 10,000
Convertible preferred stock - $0.001 par value; 20,000,000 shares
authorized; 10,000 shares were committed to be issued at March 31, 2000
and September 30, 1999. Shares convert to common stock at a ratio of
1,000 shares of common for each share of convertible preferred stock on
February 28, 2002 (See Note 2) 10 10
Additional paid-in capital 749,548 (8,696)
Retained earnings (deficit) (535,933) (324,644)
--------- ---------
Total stockholders' equity (deficit) 231,481 (323,330)
--------- ---------
Total liabilities and stockholders' equity $ 434,393 $ 168,518
========= =========
</TABLE>
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White Rock Enterprises, Ltd.
Statements of Operations (Unaudited)
For the Three Months Ended March 31, 2000 and 1999 and for the Six Months Ended
March 31, 2000 and 1999
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
-------------------------------- --------------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue
Consulting $ 66,374 $ 90,024 $ 206,998 $ 289,345
Software license fees and maintenance 140,509 76,240 231,941 76,240
------------ ------------ ------------ ------------
Total revenue 206,883 166,264 438,939 365,585
Expenses
Payroll and related benefits 190,735 137,557 345,162 166,677
Software development and consulting 104,515 85,136 181,917 178,061
Travel 16,544 20,819 46,589 41,286
Administration 42,094 27,337 57,137 37,829
Depreciation 1,500 1,500 3,000 3,000
Interest 4,428 941 10,323 4,948
------------ ------------ ------------ ------------
Total expenses 359,816 273,290 644,128 431,801
------------ ------------ ------------ ------------
Loss before provision (benefit)
for income taxes (152,933) (107,026) (205,189) (66,216)
Provision (benefit) for income taxes -- -- -- --
------------ ------------ ------------ ------------
Net loss $ (152,933) $ (107,026) $ (205,189) $ (66,216)
============ ============ ============ ============
Earnings (loss) per share
Basic earnings (loss) per share $ (0.012) $ (0.011) $ (0.018) $ (0.007)
============ ============ ============ ============
Weighted average shares 12,385,956 10,000,000 11,179,868 10,000,000
============ ============ ============ ============
Diluted earnings (loss) per share $ (0.012) $ (0.011) $ (0.018) $ (0.007)
============ ============ ============ ============
Weighted average shares 12,385,956 10,000,000 11,179,868 10,000,000
============ ============ ============ ============
</TABLE>
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White Rock Enterprises, Ltd.
Statements of Cash Flows (Unaudited)
For the Six Months Ended March 31, 2000 and 1999
2000 1999
--------- ---------
Cash flows from operating activities
Net loss $(205,189) $ (66,216)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation 3,000 3,000
Deferred income 23,093 9,936
Changes in:
Accounts receivable, trade (11,449) (82,326)
Other current assets (14,735) --
Accounts payable and accrued expenses (137,029) 81,922
--------- ---------
Net cash used by operating activities (342,309)
(53,684)
Cash flows from investing activities
Purchases of equipment (6,728) (13,620)
Other assets (10,000) --
--------- ---------
Net cash used by investing activities (16,728) (13,620)
Cash flows from financing activities
Distributions to stockholders -- (5,000)
Repayment of notes payable (175,000) 55,000
Proceeds from issuance of common stock 760,000 --
--------- ---------
Net cash provided by financing activities 585,000 50,000
--------- ---------
Increase (decrease) in cash and cash equivalents 225,963 (17,304)
Cash and cash equivalents, beginning of period 22,102 33,756
--------- ---------
Cash and cash equivalents, end of period $ 248,065 $ 16,452
========= =========
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White Rock Enterprises, Ltd.
Notes to Financial Statements
For the Three Months Ended March 31, 2000 and
1999 and for the Six Months Ended March 31, 2000
and 1999
(Unaudited)
1. Basis of Presentation
These unaudited financial statements were prepared in accordance with
instructions for Form 10-QSB and therefore, do not include all disclosures
necessary for a complete presentation of the statements of financial
condition, operations and cash flows in accordance with generally accepted
accounting principles. However, in the opinion of management, all
adjustments for a fair presentation of the financial statements have been
included. Results for interim periods are not necessarily indicative of
results expected for the year.
These financial statements should be read in conjunction with the financial
statements and related notes, which are incorporated by reference in the
Company's Annual Report on Form 10-KSB for the year ended September 30,
1999 and also in conjunction with the Ises Corporation financial statements
incorporated by reference for the years ended December 31, 1999 and 1998 on
Form 8-K as amended.
2. Reverse Acquisition
Effective February 28, 2000, White Rock Enterprises, Ltd. (the Company)
merged with ISES Corporation (ISES), with the Company as the surviving
corporation. At the date of the merger, the Company was a "shell company"
as the Company had no assets or liabilities, had generated no revenues
since inception and had incurred total expenses of only $6,100 since its
inception on October 8, 1998. The merger transaction has been accounted for
as a reverse acquisition. In such a transaction, the operating enterprise
(ISES) is determined to be the acquiring enterprise for financial reporting
purposes. The historical financial statements of ISES are presented as the
historical financial statements of the combined enterprise. The equity of
ISES is presented as the equity of the combined enterprise, however, the
capital stock account of ISES is adjusted to reflect the par value of the
outstanding stock of the Company after giving effect to the number of
shares issued in merger. For periods prior to the merger, the equity of the
combined enterprise is the historical equity of ISES prior to the merger
retroactively restated to reflect the number of shares received in the
merger.
In connection with the merger, the Company provided for the issuance of
10,000,000 shares of common stock (which shares had not been released by
the transfer agent at March 31, 2000) and 10,000 shares of convertible
preferred stock (which shares also had not been released by the transfer
agent as of March 31, 2000) for 100% of the outstanding shares of ISES. The
convertible preferred stock automatically convert to 10,000,000 shares of
common stock on February 28, 2002. Also in connection with the merger, an
additional 2,200,000 shares of common stock
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were issued to others in exchange for locating the investment opportunity
and using their best efforts to raise $2,000,000 to fund the Company's
working capital needs and general corporate purposes.
The Company had 4,896,000 shares of Common Stock outstanding at the date of
the merger.
3. Earnings Per Share of Common Stock
Basic earnings per share are computed based on the weighted-average common
shares outstanding (plus shares committed to be issued) during the period.
Diluted earnings per share are computed by considering the weighted-average
common shares outstanding (plus shares committed to be issued) and dilutive
potential common shares as a result of conversion features of convertible
preferred stock and outstanding stock options. The effect of convertible
preferred stock and outstanding stock options were not used in the
calculation of diluted earnings per share as they were anti-dilutive during
the periods shown.
4. Stock Options
During the three months ended March 31, 2000, the Company issued employee
stock options for 75,000 shares of common stock. The options will be
exercisable in conformity with a stock option plan that the Company is
presently formulating. No options were exercised during the period.
5. Income Taxes
ISES, the acquired company, was an S corporation for income tax purposes
and as such, was not subject to federal income tax. Any taxable income or
loss generated by ISES flowed through the corporation to its stockholders.
White Rock Enterprises, Inc. had no significant taxable income or loss
prior to the merger. No provision for a tax benefit relating to losses
incurred subsequent to the merger date has been recorded due to substantial
uncertainty as to the ultimate realization of a tax benefit from the
losses.
6. Additional Issuance of Common Stock
During the quarter ended March 31, 2000, the Company also issued 760,000
shares of common stock in exchange for $760,000 in a private stock
placement.
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ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Forward-Looking Statements
The discussion in this Report on Form 10-QSB contains forward-looking statements
that have been made pursuant to the provisions of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are based on
current expectations, estimates and projections about the Company's business,
based on management's current beliefs and assumptions made by management. Words
such as "expects", "anticipates", "intends", "believes", "plans", "seeks",
"estimates" and similar expressions or variations of these words are intended to
identify such forward-looking statements. Additionally, statements that refer to
the Company's estimated or anticipated future results, sales or marketing
strategies, new product development or performance or other non-historical facts
are forward-looking and reflect the Company's current perspective based on
existing information. These statements are not guarantees of future performance
and are subject to certain risks, uncertainties and assumptions that are
difficult to predict. Therefore, actual results and outcomes may differ
materially from what is expressed or forecasted in any such forward-looking
statements. Such risks and uncertainties include those set forth herein below
under "Risk Factors That May Affect Future Results of Operations" as well as
previous public filings with the Securities and Exchange Commission. The Company
undertakes no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise.
Overview
White Rock Enterprises, Ltd. was founded in 1998. Since its inception, the
Company was in a development stage with boot drying equipment and had not
conducted any business activities or generated any revenues. Effective February
28, 2000 (the date of filing of a Certificate of Merger with the Nevada
Secretary of State), the Company merged with ISES Corporation with the Company
as the surviving corporation. ISES Corporation ("ISES") was an Iowa corporation
incorporated May 14, 1997 as a software product developer and software service
provider for in-flight entertainment systems (IFE) for passenger aircraft and
interactive set-top boxes (STB) for interactive television. Since its inception,
ISES Corporation's activities to date have consisted of:
- Developing the Airsoft Travel Kit software product which includes
destination information, language training, games and airline
information for IFE systems.
- Licensing and installing the Airsoft Travel Kit Games on international
and domestic airlines with IFE equipped aircraft.
- Providing interactive television set-top box manufacturers with
professional software design, programming and graphic design services.
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- Research and development strategies to productize ISES intellectual
property assets for interactive television.
- Contracting with interactive television suppliers to support
promotional efforts of their related products.
- Expanding its engineering, sales and marketing staff to address the
STB and IFE markets.
Management. Pursuant to the merger transaction the management team of ISES
Corporation became the Company's management team. These executives replaced all
previous Company executives with positions now being held by:
Rick Grewell (42) -- President and CEO
Steve Johnson (39) -- Vice President of Marketing
Antony Hoffman (38) -- Vice President of Research and Development
Mark Malinak (39) -- Vice President of Sales
The Company's directors are Messrs. Grewell, Johnson, Hoffman, Malinak and Dean
Davis (26).
Operations. The merged Company operates from the established ISES headquarters
located at 2600 72nd Street, Des Moines, Iowa 50322 and expects to move its
headquarters to 10641 Justin Drive, Urbandale, Iowa 50322 on or about May 22,
2000. The Company continues its SEC registration under White Rock Enterprises,
Ltd. and is traded on the over-the-counter bulletin board: OTCBB: WHTE.OB. In
addition to its offices in Des Moines, the Company has a sales office in Austin,
Texas and an affiliation with an engineering and graphic design office in
Toronto, Canada known as ISES Canada. The combined three offices develop and
market software products and services for IFE systems and STB for interactive
television created by ISES. The products are marketed and sold under the ISES
brand name. The Company has ceased all developments and operations of its boot
dryer product technologies and its license to use this technology was terminated
as a result of the merger.
The Company intends to select and operate under a new company name within the
next twelve (12) months to provide more definitive recognition in the STB, IFE
and equity markets. The Company will file all necessary SEC instruments and
disclose all required information on the Company's name and trading symbol
change in the future.
Products. The Company markets software applications for the IFE and interactive
television markets. Its Airsoft Travel Kit software targets IFE systems
manufactured by Rockwell Collins, Matsushita Avionics and Sony Trans Com. The
Travel Kit is comprised of digital information and entertainment software that
airline passengers can access from video displays at their passenger seats while
traveling. The complete Travel Kit consists of destination information, language
training and
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games and customized airline information. The package can be sold as a complete
package or as individual components. The Company has sold packages of Travel Kit
games that are currently flying on international, wide body aircraft. The
Company has licensed destination information and language training from Lonely
Planet Publishing based in Australia. Airsoft Travel Kit Games are created,
copyrighted, owned and licensed by the Company. The Company has also licensed
Tetris (R) game content from Blue Planet Software, San Francisco, California for
use in its In-Flight Tetris(TM) game for in-flight entertainment. The game suite
consists of 18 assorted board, card, arcade, children's games and games of
chance. The Company is porting these games to interactive television STBs
targeting interactive cable and telephone networks. The Company plans to broaden
its software product offering for both the interactive television market and IFE
markets. The Company's products are sold on a royalty based model that generates
revenue at the time of customer contract execution and provides annual revenues
for continued use of the software. IFE products have been sold to airlines and
to IFE equipment manufacturers. The Company intends to sell interactive
television software products to cable and telephone network operators and STB
manufacturers.
Services. The Company is staffed with software engineers experienced in software
design and programming for emerging embedded computer systems and digital
graphic artists experienced in graphical user interfaces and display for
consumer electronic applications. The Company has provided development services
to airlines, IFE equipment manufacturers and digital STB manufacturers to
support product development, promotion and deployment. The Company has
established and maintained a services relationship with Motorola's Multimedia
Systems Division supplying graphic and user interface design, software
programming and integration services in support of Motorola's StreamasterTM
digital STB architecture. Motorola Multimedia Systems Division is part of the
Imaging and Entertainment Solutions group within the Motorola Semiconductor
Products Sector (SPS).
Revenues. Through March 31, 2000, the Company's revenues were derived from
license fees and renewals of its Airsoft Travel Kit Games for the IFE market
software and engineering services provided to interactive television equipment
manufacturers and technology providers. The Company's IFE revenues were
comprised of two types: (i) license fees from airlines for Airsoft Travel Kit
Game products previously sold; and (ii) OEM initial product sales to IFE
equipment manufacturers for Airsoft Travel Kit Game products. Air France,
Airtours International and Rockwell Collins are currently using the Company's
software products on deployed IFE equipped aircraft. The Company also receives
engineering service fees from interactive television STB manufacturer Motorola
and technology provider Canal+ US Technologies. License fees, where the Company
does not anticipate incurring significant additional support costs, are
recognized at the time of sale. Maintenance fees from the Company's software
products are recognized (based on software license fee at time of license
commencement or renewal) ratably over the term of the maintenance contract.
Engineering service fees are recognized using the invoice amount for labor
hours. Fees from installation services are recognized as services are provided.
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The Company intends to derive the primary portion of its revenues through
Company software product sales. Revenue is collected on execution of the
software product license and is subject to renewal fees on each anniversary date
of the agreement thereafter. The Company plans to continue distributing products
directly to end users as well as to original equipment manufacturers (OEMs) who
bundle and resell the Company's products to end users. The Company intends to
continue deriving engineering service fee revenues from both end users and OEMs
as those activities represent an immediate revenue stream and presents the
Company with product licensing opportunities with the OEMs and their customers.
Cost of Revenues. The cost of product sales consist primarily of related costs
for research and development personnel to modify and integrate existing product
software for each customer. The majority of the Company's products have been
created and copyrighted by ISES. The Company has licensed In-Flight TetrisTM
from Blue Planet Software and incurs licensing costs for each copy inventoried
for or distributed to the IFE market. The Company has also licensed travel
information from Lonely Planet Publishing and incurs licensing costs for copies
distributed to the IFE market. Cost of services consist primarily of direct
engineering labor and materials associated with arrangements to provide
engineering services.
Research and Development. The Company's research and development expense
includes costs associated with its engineering and operations departments,
including personnel costs, allocated facilities-related expenses and payments to
third-party consultants. The Company expects research and development expenses
will increase in the future as additional personnel are hired to support
anticipated growth.
Sales and Marketing. The Company's sales and marketing expenses includes
salaries, commissions, travel related costs and promotional costs. The Company
expects its sales and marketing expenses to increase as the Company attempts to
promote awareness of the Company and its products through tradeshows,
conferences and direct marketing, establishing new facilities and hiring new
personnel. Sales and marketing expenses will also increase as the Company
develops and expands its relationships with third party technology providers.
General and Administrative. General and administrative expense includes
administrative and executive personnel costs, allocated facilities-related
expenses and other administrative costs. The Company expects that general and
administrative expense will increase in the future as the Company hires
additional personnel and incurs costs related to the anticipated growth in
business and cost of operating as a public company.
Results of Operations
Since the inception of ISES (now the Company), it has been engaged primarily in
the business of developing and licensing of ISES software products and providing
engineering software and graphic
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design services. Accordingly, historical results of operations are not
indicative of and should not be relied upon as an indicator of future
performance.
All revenue and the majority of the costs and expenses disclosed in this report
were generated by ISES Corporation. White Rock had no revenue prior to the
merger with ISES Corporation and minimal costs and expenses. As a result, the
consolidated comparative data represents the comparison of ISES revenue, costs
and expenses for the same period in the previous year.
Three Months Ended March 31, 2000 and 1999
Revenues
Total revenues increased 24% to $207,000 for the three months ended March 31,
2000, compared to $166,000 for the three months ended March 31, 1999. The
increase was related to an increase in product license revenues and license
updates. Product license fees represented 68% of revenues versus 32% for
engineering service fees. During the three months ended March 31, 2000,
transactions with Motorola, Airtours International and Rockwell Collins
accounted for 32%, 38% and 28%, respectively of the Company's total revenues.
Costs and Expenses
Total costs increased 32% to $360,000 for the three months ended March 31, 2000,
compared to $273,000 for the three months ended March 31, 1999. The increase was
related to payroll and related costs, added software development costs needed to
support increased business and anticipated future growth. The Company believes
that costs and expenses will continue to increase as it attempts to expand
operations (including product development) and sales and marketing efforts.
Payroll and Related Benefits. Payroll and related benefits increased 39% to
$191,000 for the three months ended March 31, 2000 from $138,000 for the three
months ended March 31, 1999 reflecting costs associated with the Company's
growth in sales and research and development expansion.
Software Development and Consulting. Software development and consulting costs
increased 23% to $105,000 for the three months ended March 31, 2000 from $85,000
for the three months ended March 31, 1999, reflecting an increase in third party
consulting.
Other Expenses. Other expenses increased 28% to $65,000 for the three months
ended March 31, 2000 from $51,000 for the three months ended March 31, 1999. The
increase is reflective of costs associated with the Company's growth.
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Six Months Ended March 31, 2000 and 1999
Revenues
Total revenues increased 20% to $439,000 for the six months ended March 31,
2000, compared to $366,000 for the six months ended March 31, 1999. The increase
was related to an increase in product license revenues and license updates.
Product license fees represented 53% of revenues versus 47% for engineering
service fees. During the six months ended March 31, 2000, transactions with
Motorola, Canal+U.S. Technologies, Airtours International and Rockwell Collins
accounted for 44%, 20%, 18% and 17%, respectively of the Company's total
revenues.
Costs and Expenses
Total costs increased 49% to $644,000 for the six months ended March 31, 2000,
compared to $432,000 for the six months ended March 31, 1999. The increase was
related to merger administrative costs, sales commission costs and added
software development costs needed to support increased business and anticipated
future growth. The Company believes that costs and expenses will continue to
increase as it attempts to expand operations (including product development) and
sales and marketing efforts.
Payroll and Related Benefits. Payroll and related benefits increased 107% to
$345,000 for the six months ended March 31, 2000 from $167,000 for the six
months ended March 31, 1999 reflecting research and development, marketing and
administrative employee expansion in Des Moines, Iowa and establishing a sales
office in Austin, Texas.
Software Development and Consulting. Software Development and Consulting
expenses increased 2% to $182,000 for the six months ended March 31, 2000 from
$178,000 for the six months ended March 31, 1999.
Other Expenses. Other expenses increased 34% to $117,000 for the six months
ended March 31, 2000 from $87,000 for the six months ended March 31, 1999
reflecting costs associated with the Company's growth.
Liquidity and Capital Resources
The Company requires working capital to fund its operations. The Company expects
to continue to experience losses from operations and negative cash flows for at
least the next twelve month period. Effective February 28, 2000 (the date of
filing of a Certificate of Merger with the Nevada Secretary of State), the
Company merged with ISES Corporation with the Company as the surviving
corporation. The merger was arranged for the Company by Investment Capital
Corporation and Pursuit Capital LLC, venture capital firms located in
Scottsdale, Arizona in accordance with understandings these entities reached
with ISES Corporation to raise capital in private transactions.
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According to their agreement, these entities were to use their best efforts to
raise $2,000,000 to fund the Company's post-merger research and development,
marketing and overall expansion. Pursuant to and in consideration of this
arrangement and the identification of the potential merger as an investment
opportunity, the Company issued 2,200,000 shares of its $.001 par value per
share common stock to these entities and/or their designees. During the fiscal
quarter ended March 31, 2000 these entities conducted a private placement on
behalf of the Company and raised $760,000, the proceeds of which have been given
to the Company. For these funds, the Company issued an additional 760,000 shares
of its $.001 per share common stock. The understanding of the parties obligates
these venture capital entities to use their best efforts to provide additional
funding of $1,240,000 (without the issuance of any additional shares of stock by
the Company) not later than six months after the merger.
According to the terms of the merger, Dean R. Grewell, III and Palma Grewell are
still to receive, in the aggregate, 10,000,000 shares of the Company's $.001 par
value per share common stock and 10,000 shares of convertible preferred stock of
the Company (which shares are convertible into an additional 10,000,000 shares
of the Company's $.001 par value common stock) in consideration of the
cancellation of their shares of ISES Corporation pursuant to the merger. As of
March 31, 2000 those shares had not yet been issued.
The proceeds of the private placement and of the additional capital resources to
be provided by the venture capital firms are being and will be used for working
capital and general corporate purposes, including expansion of sales and
marketing efforts, increases in research and development activities, any
licensing and acquisition of new technologies and legal and accounting expense
incurred as a result of the merger and relating to the Company's ongoing
business.
Since incorporation, ISES has experienced various levels of losses and negative
cash flow from operations and notwithstanding the merger, expects to experience
negative cash flows in the foreseeable future. In addition, the Company may need
to raise additional capital and there can be no assurance the merged Company
will be able to obtain additional financing on favorable terms, if at all. If
additional capital cannot be obtained on acceptable terms, if and when needed,
the Company may not be able to further develop or enhance ISES products, take
advantage of future opportunities or respond to competitive pressures or
unanticipated requirements, any of which could have a material adverse effect on
the Company's business.
Year 2000 Compliance
The Company has tested its internally developed information technology and
non-information technology systems at the beginning of the Year 2000. Based on
such testing, the Company has not to date experienced any issues due to the "Y2K
Bug" and management believes that such systems are Year 2000 compliant.
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RISK FACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATIONS
In addition to the other risk factors contained herein and within other filings
with the Securities and Exchange Commission, the Company believes the following
additional risk factors should be taken into consideration in evaluating its
business:
The Company Expects to Incur Operating and Net Losses
The Company has a limited operating history, has incurred significant losses in
the past year and, at March 31, 2000, had an accumulated deficit of $536,000. To
date the Company has recognized growing revenue however, its ability to generate
revenue is subject to substantial uncertainty. The Company expects to incur
significant additional losses and continued negative cash flow from operations
in 2000 and it may never become profitable. The Company expects to incur
significant sales and marketing, research and development and general and
administrative expenses. The Company will need to generate significant revenues
to achieve profitability and positive operating cash flows. Even if
profitability and positive operating cash flow are achieved, the Company may not
be able to achieve, sustain or increase profitability or positive operating cash
flow on a quarterly or annual basis.
The Company's Limited Operating History and the Emerging Market for Interactive
Television and In-Flight Entertainment Systems Make Its Future Financial Results
Unpredictable
The Company's business and prospects depend on the development and market
acceptance of interactive television and the growth of aircraft in-flight
entertainment systems. The Company's future revenue prospects are subject to a
high degree of uncertainty. Currently, it derives revenues evenly from in-flight
entertainment software license fees and interactive television engineering
service fees. In the future, however, the Company intends to generate revenue
primarily from software license fees particularly in the emerging market of
interactive television while maintaining modest growth in the in-flight
entertainment market. The market for interactive television software is new,
unproven and subject to rapid technology change. This market may never develop
or may develop at a slower rate than anticipated. In addition, the Company's
success in marketing the Company as a supplier of interactive television
application software is dependent upon developing and maintaining relationships
with industry-leading computer and consumer electronics manufacturers, network
operators and Internet content providers. There is already competition in the
market to provide interactive television software. Companies such as Liberate,
Intellocity, Microsoft, and AOL have established a market presence and have
significantly greater financial, marketing and technical resources than the
Company. These companies who offer interactive television application software
may capture a larger portion of the market than the Company. Any failure to
establish relationships with interactive television equipment manufacturers and
network operators will have a material adverse effect on the Company's business
and prospects.
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The Company's Business is Dependent Upon the Successful Deployment of Digital
Set Top Boxes for Interactive Television and the In-Flight Entertainment Systems
Targeted by the Company
The Company's software products target specific interactive television and
in-flight entertainment systems and the opportunity to generate revenue can be
directly related to the number and the timing of systems deployed. It is the
Company's intent to pursue and support the most popular system platforms for
these markets. If the platforms targeted fail to establish significant and
timely deployment in the market it will have a material adverse effect on the
Company's business and prospects.
The Company Faces Competition from Companies with Significantly Greater
Financial, Marketing, and Technical Resources
The markets for interactive television and in-flight entertainment systems are
competitive. Companies that offer competing software applications and services
for interactive television include Liberate, Intellocity, Microsoft, AOL and
others. These entities each have a larger customer base, a greater number of
applications, and greater brand recognition, market presence and financial,
marketing and distribution resources than the Company. Other companies that
offer competing software applications and services for in-flight entertainment
include Nintendo, Infogrames, Tenzing, and Intergame some of which have a larger
customer base, a greater number of applications, and greater brand recognition,
market presence and financial, marketing and distribution resources than the
Company. As a result, the Company will have difficulty increasing the number of
design "wins" for its products and services.
The Company May Not Be Able to Respond to the Rapid Technological Change in the
Markets in Which It Competes
The Company currently participates in markets which are subject to:
o rapid technology change
o frequent product upgrades and enhancements
o changing customer requirements for new products and features and
o multiple, competing and evolving industry standards.
The introduction of the software applications targeting interactive television
and in-flight entertainment containing new technologies and the emergence of new
industry standards could render the Company's products less desirable or
obsolete. In particular, the Company expects that changes in the operating
system environment including client and server middleware will require it to
rapidly evolve and adapt its products to be competitive. As a result, the life
cycle of each release of the Company's products is difficult to estimate. To be
competitive, the Company will need to develop and release new products and
upgrades that respond to technological changes or evolving industry
14
<PAGE>
standards on a timely and cost-effective basis. There can be no assurance that
the Company will successfully develop and market these types of products and
upgrades or that the Company's products will achieve market acceptance. If the
Company fails to produce technologically competitive products in a timely and
cost-effective manner, its business and results of operations could suffer
materially.
Volatility of Stock Price
The market price of the Company's common stock is likely to fluctuate in the
future. The Company believes that various factors, including quarterly
fluctuations in results of operations, announcements of new products or partners
by the Company or by its competitors, changes in interactive television and
in-flight entertainment markets in general, or general economic, political and
market conditions may significantly affect the market price of its common stock
PART II OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS.
None.
ITEM 2: CHANGES IN SECURITIES AND USE OF PROCEEDS
In connection with the merger of ISES with and into the Company, the Acquisition
Agreement and Plan of Merger (previously filed as Exhibit 1.1 to the Company's
Current Report on Form 8-K filed March 1, 2000) provided for the issuance of (i)
10,000,000 shares of common stock (which shares had not yet been issued as of
March 31, 2000); and (ii) 10,000 shares of convertible preferred stock (which
shares also had not yet been issued as of March 31, 2000) which are
automatically convertible into 10,000,000 shares of common stock of the Company
two (2) years after the Closing Date of the Merger which was February 28, 2000.
An additional 2,200,000 shares of common stock were issued to various designees
of Investment Capital Corporation and Pursuit Capital, LLC in connection with
the merger, in exchange for the commitment of these entities to use their best
efforts to raise $2,000,000 to fund working capital needs and general corporate
purposes, including, but not limited to, expansion of sales and marketing
efforts, research and development activities, licensing of new technology and
payment of additional legal and accounting services occasioned by the merger of
the Company and ISES. These entities conducted a private placement of the
Company's $.001 par value common stock during the fiscal quarter ended March 31,
2000 and raised $760,000, in consideration of which the Company issued an
additional 760,000 shares of its common stock. These entities are to provide the
Company with an additional $1,240,000 in equity funding (without further
issuance of equity securities by the Company) not later than six months after
the merger.
15
<PAGE>
None of such shares of common stock or preferred stock was or will be registered
under the Securities Act of 1933, as amended.
ITEM 3: DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The merger was approved by the consent of the shareholders of ISES on February
10, 2000. Shareholder approval by the shareholders of the Company (a Nevada
corporation) was not required by the applicable provisions of Nevada law. The
Board of Directors of the Company did, however, approve the merger on February
10, 2000.
ITEM 5: OTHER INFORMATION
None
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
10.1 Consulting Agreement dated February 25, 1999 between ISES
Corporation and Trivia Mania
10.2 Copyright and Trademark License and Distribution Agreement dated
September 30, 1999 between The Tetris Company, L.L.C. and ISES
Corporation
10.3 License Agreement and Software Development Agreement dated as of
November 2, 1999 and November 22, 1999, respectively, between
CANAL+ and ISES Corporation
10.4 Investment Capital Corporation - Letter agreements dated January
18, 2000, February 9, 2000 and February 10, 2000 regarding Merger
of White Rock Enterprises Ltd. and Ises Corporation and
investment in merged company
10.5 Investment Capital Corporation - Memo regarding proposed new
capital structure of White Rock Enterprises, Ltd. reflecting the
merger
10.6 In-Flight Entertainment Software License Agreement dated March
31, 1999 between Airtours International Airways, Limited and ISES
Corporation
10.7 Content License Agreement dated November 15, 1999 between Lonely
Planet Publications Pty. Ltd. and ISES Corporation
16
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10.8 License and Distribution Agreement dated October 1, 1999 pursuant
to which ISES Corporation appoints Licensee-Rockwell Collins,
Inc. and End User-Air France
10.9 Software Development Agreement dated December 4, 1998 between
Motorola, Inc. and International Systems Entertainment Software,
Inc.
10.10 ISES Statement of Work for Motorola Application User Interfaces
(Exhibit C) dated June 25, 1999
10.11 Professional Services Agreement dated March 27, 2000 between
"Client" and Icon Laboratories and related Statement of Work
(b) A report on Form 8-K describing the merger of ISES Corporation with
and into White Rock Enterprises, Ltd. was filed on March 1, 2000. An
amendment to the Form 8-K filing will be filed in order to present
certain historical financial information.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WHITE ROCK ENTERPRISES, LTD.
Date: May 18, 2000 By: /s/
-------------------------------
Dean R. Grewell, III, President
17
Exhibit 10.1
CONSULTING AGREEMENT
THIS AGREEMENT is made as of February 25, 1999, between ISES CORPORATION, an
Iowa corporation with its principal offices located at 2600 72nd Street, Des
Moines, Iowa 50322, U.S.A. ("Company"), and Trivia Mania, residing at 4527 NW
20th, Gainesville, FL 32605 U.S.A. ("Consultant").
1. GENERAL
Subject to this Agreement, Company hereby hires Consultant, and Consultant
hereby agrees, to provide the research, design, development and/or other
consulting services described in the Project Schedules contemplated under
Section 3(b) (collectively, the "Services") to Company as its independent
contractor.
2. TERM
This Agreement will become effective, as of the date set forth above, upon
its execution by Company and Consultant and will expire on December 31, 2001,
unless extended or terminated pursuant to Section 8.
3. SERVICES
a. Best Efforts. Consultant will use its best efforts to perform all
Services in a timely and professional manner satisfactory to Company and in
accordance with Company's instructions. Consultant will not subcontract any of
the Services to a third person without Company's prior authorization.
b. Projects Schedules. Company and Consultant will execute a schedule
substantially similar to Exhibit A (the "Project Schedule") for each research,
design, development and/or other consulting project that Company wants
Consultant to undertake. Company and Consultant acknowledge that all Project
Schedules will form an integral part of this Agreement.
c. Location and Access. Consultant may perform the Services at Company's
premises, Consultant's premises or such other premises that Company and
Consultant may deem appropriate. Company will permit Consultant to have
reasonable access to Company's premises, personnel and computer equipment for
the purposes of performing the Services at Company's premises.
d. Records and Reports. Consultant will keep accurate records of its
activities under each Project Schedule. Company may periodically request
activity reports by Consultant that will be provided to Company in writing.
e. Insurance. Consultant will be solely responsible for obtaining and
maintaining appropriate insurance coverage for its activities under this
Agreement, including, but not limited to, comprehensive general liability
(bodily injury and property damage) insurance and professional liability
insurance. At Company's request, Consultant will provide Company with copies of
the certificates of insurance.
f. Rights Clearance. Consultant will be solely responsible for obtaining
all rights clearances with respect to all Deliverables created or provided by
Consultant to Company in connection with this Agreement.
g. Non-Compete. During the term of this Agreement and for a period of 12
months thereafter, Consultant agrees not to market trivia questions or any other
content produced for Company, directly to Company's customers including, but not
limited to, passenger airlines and consumer electronic manufacturers, unless
Company otherwise agrees.
<PAGE>
4. CONSIDERATION
a. Project Fees. In consideration for performing the Services, Company will
pay Consultant the fees that may be contemplated under the Project Schedules
(the "Project Fees"). Consultant acknowledges that, except as otherwise
contemplated under Section 4(b), the Project Fees constitute the entire
consideration that Consultant will be entitled to receive for performing this
Agreement.
b. Payment. Company will pay the Project Fees to Consultant according to
the applicable terms set forth in the Project Schedule.
c. Taxes. Consultant will be solely responsible for complying with all
federal, state, local and other tax laws and regulations applicable to payments
received from Company under this Agreement.
5. OWNERSHIP
Consultant acknowledges that Company will own all rights in any ideas,
concepts, inventions and techniques that Consultant may conceive or develop in
connection with the Services. Consultant hereby assigns to Company all worldwide
patents and patent rights, copyrights, trade secrets or other proprietary rights
in any work product that Consultant may create under this Agreement (the
"Deliverables"). During and after the term of this Agreement, Consultant will
execute the instruments that Company may reasonably request from time to time to
give full legal effect to this Section 5.
6. WARRANTY
Consultant represents and warrants that (i) Consultant has the knowledge,
experience and skill to provide the Services in a professional and timely
manner, (ii) the Deliverables will conform to the specifications contemplated
under the Project Schedules and (iii) the Services and Deliverables will not
infringe any patent, copyright, trade secret or other proprietary right of any
third person, including, without limitation, rights of privacy and personality.
Consultant will indemnify Company against all damages, losses, liability or
expense that Company may suffer or incur as the result of any breach of this
Section 6.
7. CONFIDENTIALITY
a. Information. Consultant acknowledges that (i) Consultant may have access
to certain of Company's confidential and proprietary information in connection
with this Agreement and (ii) the Deliverables will constitute confidential and
proprietary information of Company (collectively, the "Information"). Consultant
will take all reasonable precautions necessary to safeguard the confidentiality
of the Information, including (i) those required under this Section 7, (ii)
those taken by Consultant to protect its own confidential information and (iii)
those which Company may reasonably request from time to time.
b. Use and Disclosure. Consultant will use the Information solely to
perform the Services under this Agreement. Consultant will not disclose, in
whole or in part, the Information or Deliverables to any person, except to
Company and its designees. Consultant will not remove or deface any
confidentiality or proprietary notice that Company may have affixed to items of
Information disclosed to Consultant. Consultant will affix appropriate notices
to all Deliverables that identify the Deliverables as confidential and
proprietary information of Company.
c. Unauthorized Use or Disclosure. The parties acknowledge that any
unauthorized use or disclosure of the Information or Deliverables by Consultant
will cause irreparable damage to Company. If an unauthorized use or disclosure
occurs, Consultant will take, at its expense, all steps which are necessary to
recover the Information or Deliverable and to prevent its subsequent
unauthorized use or dissemination, including availing itself of actions for
seizure and injunctive
2
<PAGE>
relief. If Consultant fails to take these steps in a timely and adequate manner,
Company may take them at Consultant's expense.
d. Limitation. Consultant will have no confidentiality obligation with
respect to any portion of the Information that (i) Consultant independently
developed before receiving the Information from Company, (ii) Consultant
lawfully obtained from a third party under no obligation of confidentiality or
(iii) became available to the public other than as a result of an act or
omission of Consultant.
8. EXTENSION AND TERMINATION
a. Extension. Company and Consultant may extend the term of this Agreement
by mutual written agreement. In addition, Company may extend the term of this
Agreement by notifying Consultant of such intention at least 30 days before the
then-current expiration date.
b. Termination for Cause. Company may terminate this Agreement immediately
upon notice to Consultant, without judicial or arbitral notice or resolution and
without prejudice to any other remedies, if (i) Consultant breaches any of its
obligations hereunder and fails to remedy such breach to Company's satisfaction
within 10 days after Company demands its cure or (ii) Consultant becomes
insolvent or bankrupt, assigns all or a substantial part of its business or
assets for the benefit of creditors, permits the appointment of a receiver for
its business or assets, becomes subject to any legal proceeding relating to
insolvency, reorganization or the protection of creditors' rights or otherwise
ceases to conduct business in the normal course.
c. Termination for Convenience. Either party may terminate this Agreement,
without judicial or arbitral notice or resolution and without alleging just
cause, as of the end of any calendar month by the other party at least 30 days'
prior notice of termination.
d. Forfeiture. Termination by Consultant not due to Company's default, or
by Company as a result of Consultant's default, shall result in a forfeiture of
any or all deliverables by Consultant to Company under this Agreement.
9. CONSEQUENCES OF EXPIRATION OR TERMINATION
a. Delivery of Items. Upon the expiration or termination of this Agreement
for any reason, Company will promptly pay Consultant the Project Fees and
Reimbursable Expenses that may be due and outstanding, and Consultant will
immediately deliver to Company (i) all notebooks, documentation and other items
that contain, in whole or in part, the Information or Deliverables, and (ii) an
affidavit executed by Consultant stating that Consultant has not retained any
such items.
b. Pending Project Schedules. At Company's request, Consultant will
continue work under any Project Schedule that may remain unfinished as of the
expiration or termination of this Agreement. Under such circumstances,
Consultant will be entitled to retain the notebooks, documentation or other
items that Company may deem appropriate to complete the Project Schedule. Upon
completing the Project Schedule, Consultant will deliver all such items to
Company in accordance with Section 9(a).
c. Disclaimer. Upon the expiration of this Agreement or its termination in
accordance with Section 8(b) or 8(c), Consultant will not be entitled to receive
any payment or compensation for actual, consequential, indirect, special or
incidental damages, costs or expenses, whether foreseeable or unforeseeable
(including loss of profits, investments or good will) or Company's subsequent
use of the Deliverables.
d. Survival. The provisions of Sections 3(f), 3(g), 5, 6, 7, 9 and 15 will
survive the expiration of this Agreement or its termination for any reason.
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10. INDEPENDENT PARTIES
Company and Consultant are independent parties. Nothing in this Agreement
will be construed to make Consultant an agent, employee, joint venturer, partner
or legal representative of Company. Consultant will neither have nor represent
itself to have any authority to bind Company to any obligation.
11. NOTICES
Any notice or approval required or permitted under this Agreement will be
given in writing and will be sent by telefax, courier or mail, postage prepaid,
to the address specified below or to any other address that may be designated by
prior notice. Any notice or approval delivered by telefax (with answer back)
will be deemed to have been received the day it is sent. Any notice or approval
sent by courier will be deemed received one day after its date of posting. Any
notice or approval sent by mail will be deemed to have been received on the 5th
business day after its date of posting.
If to Company:
ISES CORPORATION
2600 72nd Street
Des Moines, Iowa 50322
U.S.A
Attn: Steve Johnson
Telephone: (515) 331-0560
Telefax: (515) 331-3901
Email: [email protected]
If to Consultant:
Trivia Mania
4527 NW 20th
Gainesville, FL 32605
U.S.A.
Attn: Mike Dupee or Zana Holley
Telephone: 352-335-2257
Telefax: 352-336-8305
Email: [email protected]
12. ASSIGNMENT
Consultant may not assign, delegate or otherwise transfer this Agreement or
any of its rights or obligations hereunder without Company's prior approval. Any
attempt to do so without Company's approval will be void. Company may assign
this Agreement or any of its rights or obligations hereunder, upon notice to
Consultant, to a related or unrelated person in connection with a sale,
consolidation or other reorganization of Company's business, in whole or in
part.
4
<PAGE>
13. WAIVER, AMENDMENT OR MODIFICATION
Any waiver, amendment or other modification of this Agreement or its
Exhibits will not be effective unless in writing and signed by the party against
whom enforcement is sought.
14. SEVERABILITY
If any provision of this Agreement is held to be unenforceable, this
holding will not affect the validity of the other provisions of this Agreement,
unless Company deems the unenforceable provision to be essential to this
Agreement, in which case Company may terminate this Agreement, effective
immediately upon notice to Consultant.
15. GOVERNING LAW
This Agreement will be governed by and interpreted in accordance with the
laws of the State of Iowa, U.S.A. Any controversy or dispute will be submitted
to the state or federal courts for Polk County, Iowa, U.S.A., to whose
jurisdiction the parties hereby submit themselves.
16. ENTIRE AGREEMENT
This Agreement and its Exhibits constitute the complete and exclusive
statement of the terms, conditions and representations of the agreement between
Company and Consultant with respect to the Services and Deliverables and
supersedes all other agreements with respect to the subject matter hereof. Any
research, design, development and/or other consulting services that Consultant
may have performed for Company or its related parties before the execution of
this Agreement will be governed by the terms hereof.
IN WITNESS WHEREOF, Consultant executes this Agreement, and Company causes
this Agreement to be executed by its duly authorized representative, on the
dates specified below.
ISES Corporation Trivia Mania
("Company") ("Consultant")
By: /s/ By: /s/
Name: Steven L. Johnson Name: Michael Dupee
Title: VP of MKTG Title: Owner
Date: 3-15-99 Date: 3-7-99
5
<PAGE>
EXHIBIT A
Project Schedule
THIS PROJECT SCHEDULE is made as of February ____, 1999, between ISES
Corporation ("Company"), and Trivia Mania, Inc. ("Consultant"), pursuant to the
Consulting Agreement that Company and Consultant executed as of February ____,
1999, and of which this Project Schedule forms an integral part.
1. Objective:
Consultant is to research factual trivia information and create
entertaining questions and answers to be delivered to ISES Corporation. The
trivia questions and answers are to target a mass consumer audience of mixed
gender, age and nationality.
2. Methodology:
ISES has defined subject categories and the corresponding number of
questions per subject that Consultant is to create and deliver. The Consultant
is responsible for assuring that the questions and answers have correct English
spelling and correct English grammar.
3. Deliverables:
Consultant will provide [Confidential treatment has been requested for this
portion of this Exhibit] sets of questions with to ISES[Confidential treatment
has been requested for this portion of this Exhibit]. The questions will cover
six topics identified below with corresponding number of questions per topic.
Consultant will supply five (5) answers per question. Up to 5% of the questions
can be True/False requiring only two answers per question.
Delivery Delivery
Subject Question Type #1 #2
------------------------------------------------------------------------
History
[Confidential treatment has been requested
Sports
for this portion of this Exhibit]
Culture
Science and Technology
Entertainment
Geography
Totals
Topic examples per subject:
History: Politics, human interest, education, business, exploration,
weather
Sports: Soccer, rugby, Olympics, chess, basketball, football, baseball,
hockey, golf, etc.
Lifestyles: Language, names, food, religion, festivals
Science and Technology: Computers, mathematics, chemistry, physics,
consumer electronics, etc.
6
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Entertainment: Music, movies, theatre, games
Geography: Mountains, deserts, bodies of water, cities, etc.
Questions and answers are to be delivered as an attached Microsoft Word 95
or 97 file attached via Email to the ISES contact. One hard copy of the
questions is also to be provided via Fax, post or courier on the delivery date.
4. Schedule:
Each [Confidential treatment has been requested for this portion of this
Exhibit] question set deliverable will be supplied to ISES on the following
dates:
1st Question set: March 1, 1999 by 10 AM CST
2nd Question set: March 15, 1999 by 10 AM CST
5. Acceptance Criteria:
Deliverables must comply with the definitions of Section 1, 2 and 3 of this
Exhibit A. ISES reserves the right to reject any trivia question on the basis of
suitability to ISES target audience. ISES will notify Consultant on any
rejection and Consultant will be allowed 5 business days to submit replacements
for any rejected questions. ISES will inform Content Supplier within one week
from the time it receives each question set on acceptance.
6. Project Fees and Payment Terms:
[Confidential treatment has been requested for this portion of this
Exhibit]
IN WITNESS WHEREOF, Company and Consultant cause this Project Schedule to be
duly executed below.
ISES Corporation Trivia Mania, Inc.
("Company") ("Consultant")
By: /s/ By: /s/
Name: Steven L. Johnson Name: Michael Dupee
Title: VP of MKTG Title: Owner
Date: 3-15-99 Date: 3-7-99
7
<PAGE>
EXHIBIT B Project Schedule
THIS PROJECT SCHEDULE is made as of October 25, 1999, between ISES
Corporation ("Company"), and Trivia Mania, Inc. ("Consultant"), pursuant to the
Consulting Agreement that Company and Consultant executed as of February 25,
1999, and of which this Project Schedule forms an integral part.
1. Objective:
Content Provider is to translate trivia questions supplied to ISES on March
15, 1999 as well as to translate game help files as provided by ISES.
Content Provider is to provide questions and help text in the French,
German, Spanish and Portuguese language.
2. Deliverables:
Content Provider will provide [Confidential treatment has been requested
for this portion of this Exhibit] sets of questions and answers translated
in the four languages. Content Provider will provide 10 game help texts and
game language screen languages translated in the four languages.
Questions and answers are to be delivered via Email to the ISES contact.
The text shall be delivered in a ASCII text file.
3. Schedule:
All four [Confidential treatment has been requested for this portion of
this Exhibit] question sets (French, Spanish, German and Portuguese) shall
be supplied to ISES on November 8, 1999 by 9 AM CST.
4. Acceptance Criteria:
Content must comply with the content scope, definitions and topics defined
Sections 1 of this Agreement. ISES reserves the right to reject
translations on accuracy and on the basis of suitability to ISES target
customers. ISES will notify Content Provider on all rejections and Content
Provider will be allowed 5 business days to submit replacements for
rejected translations.
5. Project Fees and Payment Terms:
ISES will pay Content Provider the following for translations into the four
languages:
[Confidential treatment has been requested for this portion of this
Exhibit]
ISES will notify Content Supplier within one week on rejection or
acceptance of the translations.
IN WITNESS WHEREOF, Company and Consultant cause this Project Schedule to be
duly executed below.
ISES Corporation Trivia Mania, Inc.
("Company") ("Consultant")
By: /s/ By: /s/
Name: Rick Grewell Name: Michael Dupee
Title: President Title: President, Trivia Mania
Date: 10/25/99 Date: 10/25/99
8
Exhibit 10.2
COVER SHEET
to
COPYRIGHT AND TRADEMARK LICENSE
AND DISTRIBUTION AGREEMENT, dated as of
September 30, 1999 between Licensor (defined below)
and Licensee (defined below)
(this cover sheet, together with such
Agreement, collectively, this "Agreement")
"IN-FLIGHT TETRIS"
1. LICENSOR: THE TETRIS COMPANY, L.L.C., a Delaware limited liability
company whose registered address in 103 Foulk Road,
Suite 202, Wilmington, Delaware 19803, USA.
2. LICENSEE: ISES CORPORATION, an Iowa Corporation, with offices at
2600 72nd Street, Suite C, Des Moines, Iowa 50322, USA.
3. Effective Date: September 30, 1999.
4. Licensed Title: "IN-FLIGHT TETRIS"
5. Licensed
System: In-Flight Entertainment System
6. Adapted Game: The game program created and/or adapted by Licensee
under license from Licensor to permit play of the Game
(as defined herein) on the licensed System only.
7. Licensed
Territory: Air Flights
8. Compensation: In consideration of the rights granted herein, Licensee
shall pay Licensor as follows:
(a) Royalty Payments. Licensee shall pay to Licensor royalties of
[Confidential treatment has been requested for this portion of
this Exhibit] for each Unity (defined herein) of the Adapted Game
that has been installed or which, pursuant to one or more
executed agreements, is to be installed by Licensee or any
sublicense of Licensee. No costs incurred in the manufacture,
sale, advertisement, shipment or distribution of the Adapted Game
shall be deducted.
<PAGE>
(b) Advance Royalty. Licensee shall pay to Licensor, as an advance
against the Royalties described in paragraph 8(a) of this Cover
Sheet, [Confidential treatment has been requested for this
portion of this Exhibit] Such Advance Royalty payment is not
refundable under any circumstances and constitutes a minimum
guaranteed royalty to be paid to Licensor by Licensee during the
terms of this Agreement for the rights granted to Licensee
hereunder. The advance royalty described herein shall be credited
against all continuing royalty payments due hereunder by Licensee
to Licensor until the advance is exhausted.
(c) Minimum Volume Guarantee. Licensee guarantees that by the first
anniversary of the Effective Date [Confidential treatment has
been requested for this portion of this Exhibit].
(d) Payment Account. All payments to Licensor by Licensee shall be
made by wire transfer in U.S. Dollars into Licensor's bank
account, at Key Bank, 201 South Warren Street, Syracuse, New York
13202, Account Number 320900052400, Routing Number (ABA No.):
0213000777. All expenses connected with transferring the payments
shall be borne by the Licensee.
9. Term: Unless terminated earlier in accordance with the
provisions set forth herein, this Agreement shall remain
in effect for one (1) year from the date of execution
hereof and shall be automatically renewed for up to an
additional three (3) one (1) year terms, unless (a)
Licensee has ceased distribution of the Adapted Game, or
(b) either party notifies the other party, in writing,
at least sixty (60) days prior to the end of any such
term, of such party's intention that the same be
terminated.
10. Licensor's
Representative: BLUE PLANET SOFTWARE, INC., a Hawaii corporation with
its business and post office address located at P.O. Box
1809, Keaau, HI 96749, is the exclusive representative
of Licensor for the purposes of this Agreement.
LICENSEE SHALL COORDINATE ANY AND ALL REQUIRED APPROVALS
THROUGH LICENSOR'S REPRESENTATIVE. LICENSOR'S
REPRESENTATIVE IS TO RECEIVE COPIES OF ALL
COMMUNICATIONS BETWEEN THE PARTIES.
11. Notices: All notices required or permitted to be given under this
Agreement shall be deemed given upon receipt from
express air courier services or upon transmission by
electronic mail, facsimile, receipt confirmed, or one
(1) month after being sent by certified mail, return
receipt requested, or upon personal delivery, to the
address set forth below, or to such other addresses as
the parties shall notify each other of from time to
time.
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<PAGE>
If to Licensor: THE TETRIS COMPANY, L.L.C
103 Foulk Road, Suite 202
Wilmington, Delaware 19803
USA
cc: Henk B. Rogers
By Mail: Blue Planet Software, Inc.
P.O. Box 1809
Keaau, HI 96749
USA
Fax: (808) 966-6306
E-mail: [email protected]
By express mail
(courier services): Blue Planet Software, Inc.
17-196 Meaulu Street
Keaau, HI 96749
USA
Telephone: (818) 966-7225
All matters pertaining to product management/licensing shall be sent as follows:
Edward Rogers, Product manager
Blue Planet Software, Inc.
77 Geary Street, Suite 500
San Francisco, CA 94108
USA
Telephone: (415) 788-5550, Ext. 525
Fax: (415) 477-0616
All matters pertaining to product/marketing approvals shall be sent as follows:
Marketing Manager
Blue Planet Software, Inc.
77 Geary Street, Suite 500
San Francisco, CA 94108
USA
Telephone: (415) 788-5550
Fax: (415) 477-0616
- 3 -
<PAGE>
cc: Nikolai E. Belikov
c/o LeBoeuf, Lamb, Greene & MacRae, L.L.P.
Nikitsky Pereulok, 5
123007 Moscow
Russian Federation
Fax: 7-095-737-50-50
cc: John I. Huhs, Esq.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019
USA
Telephone: (212) 424-8182
Fax: (212) 424-8500
If to Licensee: Dean R. Grewell III
ISES Corporation
2600 72nd Street, Suite C
Des Moines, Iowa 50322
USA
Telephone: (515) 331-0560
Fax: (515) 331-3901
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COPYRIGHT AND TRADEMARK LICENSE
AND DISTRIBUTION AGREEMENT
"IN-FLIGHT TETRIS"
This Copyright and Trademark License and Distribution Agreement is made and
entered into as of this 1st day of August, 1999 (the "Effective Date"), by and
between Licensor and Licensee (as such terms are defined in the cover sheet to
which this Agreement is attached).
RECITALS
WHEREAS, Licensor holds the exclusive right and license to use, display and
exploit the trademark "Tetris," used alone or in combination with a design or
logo or other terminology on all countries of the world where the trademark
"Tetris" has been registered in its name.
WHEREAS, Licensor holds the exclusive right and license to use and exploit
the copyright for a certain computer software game known as "Tetris" in all
countries of the world that are members of, and pursuant to the terms of, the
applicable international copyright conventions.
WHEREAS, Licensee desires to license, on a limited, non-exclusive basis
only, the trademark, copyright and certain other rights incident to the game
known as "Tetris," pursuant to the terms, conditions and limitations contained
herein.
NOW, THEREFORE, in light of the foregoing, and in consideration of the
mutual covenants and conditions herein set forth, the parties agree as follows:
1. INCORPORATION OF COVER SHEET
The terms and provisions (including, without limitation, capitalized terms
defined therein) of the Cover Sheet (the "Cover Sheet") to which this
Agreement is attached are hereby incorporated herein by reference and made
a part of this Agreement.
2. DEFINITIONS
"Game" shall mean the Original Game known as "TETRIS."
"Licensed Properties" shall mean the Game, the Adapted Game, the Tetris
logo, and any programs, software, design script, audiovisual works, source
and object codes therefor, and Licensor's trademarks, copyrights and other
rights related thereto.
"Sublicense," as used herein, refers to a sublicense, approved in writing
by Licensor, from Licensee to a third party, of a portion of the rights
granted in this Agreement.
<PAGE>
"Unit" shall mean one software copy of the Adapted Game that is operated in
conjunction with the Licensed System.
3. GRANT OF RIGHTS
Under the terms and conditions of this Agreement, Licensor hereby grants to
Licensee a non-exclusive right and license to:
(a) Create the Adapted Game.
(b) Manufacture, use, sell, reproduce, market and distribute the Adapted
Games in the Licensed Territory. Only Licensee shall publish the
Adapted Game, unless Licensee has received approval to grant a
sublicense to publish the Adapted Game under Section 6 hereof.
(c) Use and display the names "TETRIS" and "IN-FLIGHT TETRIS" in the
manufacture, use, sale, marketing and distribution of the Adapted Game
pursuant to Section 3(b) hereof.
4. RECORDS AND PAYMENT
4.1 Payment Deadline. Licensee shall make royalty payments to Licensor for
sales in such Licensed Territory on a quarterly basis within thirty
(30) days after the last day of each calendar quarter
4.2 Delay of Royalty Payment. In case of delay of a royalty payment due to
Licensor beyond such thirty (30) day period, Licensee will pay to the
Licensor, as liquidated damages, interest on such unpaid amount
calculated at a rate per annum of twenty-one percent (21%) for actual
days elapsed between the date such amount is due and the date so paid
(subject to any applicable usury restrictions).
4.3 Quarterly Royalty Report. Within thirty (30) days after the end of
each calendar quarter, Licensee shall furnish to Licensor written
reports separately setting forth the number of Units sold by Licensee
and any Sublicensees of Licensee, the monetary amount of sales by
Licensee and its Sublicensees during each quarter, and the amount due
to Licensor. However, the first royalty report shall cover the time
period between the signing of this Agreement and the end of the then
current calendar quarter. Royalties paid for the Units that are
returned by Licensee's customers may be credited against future
royalty payments.
4.4 Taxes. Licensee is hereby authorized by Licensor to withhold and make
payment of, on behalf and for the benefit of Licensor, all taxes,
duties or levies the withholding of which may from time to time be
required by the government of certain countries, or any agencies
thereof, on the royalties due Licensor under this Agreement. Such
taxes,
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<PAGE>
duties or levies shall be deducted from payments due Licensor, and
Licensee shall, not later than fourteen (14) business days after
Licensee's receipt for all such payments made by them on behalf of and
for the benefit of Licensor sufficient for Licensor to obtain a tax
credit from the tax authorities in the country to which the royalty
was paid. Any delay by Licensee in providing such tax receipts to
Licensor shall require Licensee to pay Licensor the liquidated damages
set forth in Section 4.2 based on the royalty amount involved.
4.5 Records. In conjunction with this Agreement, Licensee shall keep and
maintain full and accurate books and records during the terms of this
Agreement and for two (2) years thereafter. These books and records
shall include, but not be limited to:
(a) The number of Units of the Adapted Game produced by Licensee and,
if applicable, its Sublicensees;
(b) The number of Units of the Adapted Game sold by Licensee and, if
applicable, its Sublicensees;
(c) The number of Units of the Adapted Game returned to Licensee and,
if applicable, its Sublicensees, for credit or exchange; and
(d) The total sales amounts of the Adapted Game, including any
amounts received or entitled to be received by Licensee, and
including total sales by and amounts received or entitled to be
received by Licensee from any Sublicensee of Licensee.
Such documentation shall be in sufficient detail to enable the
payments due Licensor to be determined and to permit Licensor to audit
such books and records. Licensee shall also require its Sublicensees,
if applicable, to maintain books and records with the information
listed herein, to permit inspection of such books and records on the
same terms as set forth in Section 4.6 herein, and to provide
statements to Licensee setting forth the above information for their
respective sales, which records are to be preserved by Licensee as
part of the books and records to b kept as provided herein.
4.6 Audit. For the purpose of verifying the correctness of the royalties
paid or to be paid by Licensee, Licensor may, not more than once each
six (6) month period and once within one (1) year following any
breach, expiration or termination of this Agreement, retain on
independent certified public accountant to audit those business
records of Licensee that relate to the sale, shipment, distribution
and approved sublicense, if any, of the Adapted Game, provided that
Licensor givens fifteen (15) days written notice prior to an audit
following a breach and further provided that all audits are conducted
during regular business hours and on Licensee's premises. If any audit
uncovers a shortfall in royalties owed to Licensor, Licensee shall
immediately pay such shortfall to Licensor plus liquidated damages
pursuant to Section 4.2 hereof on the amount
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<PAGE>
past due. if such shortfall exceeds five percent (5%) o the royalties paid
to Licensor during the royalty period(s) in which the shortfall occurred,
Licensee shall, in addition, immediately reimburse Licensor the reasonable
costs of the audit, including, without limitation, accountants and
attorneys fees.
5. REVERSION OF RIGHTS
Any sublicense granted under Sections 2.3 and 6 shall provide for automatic
termination upon the earlier of the expiration or termination of this
Agreement, or twelve (12) months after Licensee and its Sublicensees have
discontinued distribution of the Adapted Game. Upon the expiration or
termination of this Agreement, all rights granted by Licensor herein shall
automatically revert to Licensor, subject to the provisions of Section 12
hereof.
6. SUBLICENSES
In the event that it is necessary for Licensee to grant a sublicense to
enable it to maximize sales of the Adapted Game, Licensee shall required
approval thereof by Licensor by sending a notice of request to Licensor
along with a copy of the proposed sublicense agreement and all information
about the proposed sublicense that may be relevant to Licensor's evaluation
thereof. Licensor's consent, disapproval or request for additional
information shall be provided in writing. Each approved sublicense
agreement shall provide that the Sublicensee expressly accepts all of
Licensee's non-monetary obligations under this Agreement. Licensor shall be
provided with a copy of each sublicense agreement as executed, which shall
not deviate in any material respect from the proposed draft approved by
Licensor. The grant of sublicenses hereunder shall not change any
obligations of Licensee hereunder. Consent will not be granted for a third
party to publish the Adapted Game. All referenced to and obligations of
Licensee in this Agreement shall be deemed applicable to Sublicensees of
Licensee. Any agreements with sublicensees not appointed in accordance with
the provisions for this Section shall be deemed null and void. Licensee
shall be responsible for enforcing its Sublicensees' compliance with all
the provisions hereof. Licensee shall indemnify Licensor and hold it
harmless from any against any and all losses, damages, costs and expenses,
including attorneys fees, arising out of any claims by Licensee's
sublicensees against Licensor based on this Agreement or a sublicense.
Notwithstanding the foregoing, and without limitation thereof, the Licensee
may enter into distributorship agreements for the distribution of the
Adapted Game published by Licensee.
7. QUALITY AND APPROVAL OF ADAPTED GAME
7.1 Quality. Each and every Adapted Game shall meet the Licensor's
standard of quality as determined solely by the Licensor. Licensee
shall not sell or distribute any Adapted Game unless and until the
same has been submitted to and approved in writing by the Licensor.
Licensee shall not knowingly violate any laws or government standards
in the manufacture or sale of the Adapted Game.
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<PAGE>
7.2 Approval by Licensor. Licensee shall promptly provide to Licensor
copies of the Adapted Game in a format mutually agreed upon and any
and all creative packaging, marketing and promotional materials for
the Adapted Game prior to dissemination. Licensor may specify in
writing specific objections it may have to such materials and specify
specific changes required. Licensor shall not unreasonably delay the
review or evaluation procedures for the Adapted Games or delay or
withhold the approval and acceptance of the Adapted Game and all other
materials submitted by Licensee.
7.3 Inspection by Licensor. Licensor shall have the absolute and
unqualified right, at any time, to request samples of and inspect the
Adapted Game (including any promotional materials) to ensure they meet
Licensor's standard of quality.
8. RIGHTS
8.1 Ownership. Licensee acknowledged that Licensor and Licensor's
licensors have the exclusive right, title and interest in the Game and
the Adapted Game, including all copyrights thereto, and to the
trademarks "TETRIS" and "IN-FLIGHT TETRIS," and all rights thereto,
and it agreed that it will not at any time do or cause to be done any
act or thing contesting or in any way impairing or intending to impair
any part of such right, title and interest of Licensor and Licensor's
licensors. Other than as provided in this Agreement, Licensee shall
not in any manner represent that it has any ownership or interest in
the Game. Notwithstanding anything to the contrary contained herein,
the Licensor acknowledges that any and all animated or other type of
characters appearing in or around the Adapted Game, as well as all
original music and other original elements (collectively the
"Licensee's Original Elements") incorporated into the Adapted Game by
Licensee, or that otherwise appear on any packaging for the Adapted
Game (other than the Tetris logo and other Licensed properties),
including the source code and all object code containing and
displaying the Licensee's Original Elements, shall remain the property
of Licensee and its licensors, when displayed separately from the
Adapted Game. Licensee acknowledges that the source code and the
object code for the Adapted Game containing and displaying the Game
and the other Licensed Properties shall remain the property of
Licensor and the Licensor's licensors.
Nothing contained herein shall be construed as an assignment or grant
of any right, title or interest in or to the Game or the Adapted Game,
or the trademarks "TETRIS" and "IN-FLIGHT TETRIS," or the goodwill
attached thereto, it being specifically understood that all rights
with respect thereto are reserved by Licensor. Licensee recognizes
that the licensed Properties communicate to the public a reputation
for high standards of quality and service. Licensee shall not use the
Licensed Properties in connection with any illegal, illicit or immoral
activity, or in any manner that would be inconsistent with or damaging
to Licensor's name and reputation.
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<PAGE>
8.2 Trademarks
(a) Licensee agrees to affix or apply to all Adapted Games offered
for sale pursuant to this License Agreement, on all disks or
other media, initial screen displays packages, written
advertisements, promotional items and other materials, the
trademark "IN-FLIGHT TETRIS" and a trademark notice in the form
set forth in Appendix A hereto.
(b) Licensee agrees not to use the trademarks "TETRIS," "IN-FLIGHT
TETRIS" or any name confusingly similar thereto in any way except
in connection with the Adapted Game or in the promotion thereof,
except that fair reference may be made to "TETRIS" and "IN-FLIGHT
TETRIS" in informational materials about Licensee or its
business, provided that such reference is in the same type-face
as the surrounding text, and provided that "(R)" follows each
reference to "TETRIS" and a "(TM)" follows each reference to
"IN-FLIGHT TETRIS" unless Licensor gives its written consent to
any other use.
(c) Nothing contained in this Agreement shall in any way be deemed to
apply to any trademarks held by Licensor other than the marks
"TETRIS" "IN-FLIGHT TETRIS." Licensor expressly retains the
exclusive right in and to all of its trademarks as against
Licensee and any other persons.
(d) Licensee agrees that it has or will acquire no right in
Licensor's trademarks, or in the trademarks "TETRIS" or
"IN-FLIGHT TETRIS," by virtue of its performance under this
Agreement, except for the limited rights of use as provided by
this Agreement. nothing in this Agreement shall limit Licensee's
rights in any names or marks created or used by Licensee in
connection with marketing the Adapted Game. Licensee agrees not
to use marks or names that infringe any of Licensor's rights in
any marks or names.
9. REPRESENTATIONS AND WARRANTIES
9.1 Authorization. Each party hereby represents and warrants to the other
that it is duly existing under applicable laws, is duly authorized to
execute this Agreement, has taken all proper corporate action
necessary to render this Agreement binding and enforceable and has
full powers and authorities to enter into this Agreement and to
perform its obligations under this Agreement. Each party further
represents and warrants to the other that its proper authorized
agents, officers and/or directors have reviewed, understood, approved
and ratified this Agreement, including all of its terms and
conditions, and that its duly authorized representatives have executed
this Agreement.
9.2 Rights. Licensor hereby represents and warrants: (a) that it has the
sole right to grant licenses in and to the Adapted Game (except for
all portions of the Adapted Game not originating from the Original
Game known as "TETRIS" and developed or acquired
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<PAGE>
by Licensee) throughout the Licensed Territory; (b) that it has not
assigned or impaired the Adapted game (except for all portions of the
Adapted Game not originating from the Original Game known as "TETRIS"
and developed or acquired by Licensee); (c) that it has not licensed
the Adapted Game to any third party for use on the Licensed System in
the Licensed Territory; (d) that it has the sole and exclusive rights
to grant each and every right herein granted; and (e) that the Adapted
Game (except for all portions of the Adapted Game not originating from
the Original Game known as "TETRIS" and developed or acquired by
Licensee) does not infringe any rights of third parties.
9.3 No Infringement of Third Parties. Licensee and/or its Sublicensee(s)
represent and warrant that all portions of the Adapted Game not
originating from the Original Game known as "TETRIS" and developed or
acquired by Licensee and/or its Sublicensee(s) shall not infringe any
rights of any third parties.
9.4 Exceptions. Licensor's representations and warranties in Section 9.2
shall not apply: (a) in countries where Licensor's licensors do not
possess a registration of the trademark "TETRIS" in the trademark
class including the Licensed System and the Adapted game; and (b) in
countries that are not members of the applicable international
copyright conventions.
9.5 Mutual Indemnification. Each party hereby agrees to indemnify and hold
the other party harmless against any and all losses, claims, damages,
liabilities, costs and expenses, including legal expenses and
reasonable attorneys fees, arising out of any breach by such party of
any obligation, representation or warranty in this Agreement.
9.6 Infringement by Adapted Game. If any claim is asserted against
Licensor or Licensee alleging that the Adapted Game constitutes an
infringement of another's alleged rights, then the party with
knowledge of such a claim shall promptly notify the other party.
Licensor has the initial right to defend such an action at its own
expense. If Licensor chooses not to defend, Licensee may, at its
option, defend the action at its own expense. Each party shall give
the other reasonable assistance and cooperation in any such legal
action.
10. INFRINGEMENT
10.1 Notice. Licensee shall notify Licensor immediately of any infringement
or counterfeit of the Licensed Properties that becomes known to
Licensee. Licensor shall advise Licensee in writing within thirty (30)
days of receipt of notice thereof whether Licensor desires to proceed
with respect to each such infringement or counterfeit at Licensor's
own expense.
10.2 Prosecution of Infringement Claims. If Licensor chooses to proceed, it
shall bear the costs and expenses thereof and retain all recoveries.
Licensee agrees to cooperate fully with Licensor in the prosecution of
any infringement claims and, at Licensor's
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expense, will supply Licensor with such documents and other
information as it may reasonably request. All recoveries obtained by
Licensor in such action shall be retained by Licensor.
10.3 Option of Licensee to Prosecute. If Licensor chooses not to proceed or
does not respond within the thirty (30) day period, Licensee shall
have the right to prosecute any infringement of the Adapted game
occurring in the Licensed Territory, provided that Licensee shall
notify Licensor of its intention to bring any action at least fifteen
(15) days before bringing the action. Licensee shall bear the costs
and expenses of prosecuting the action. All recoveries obtained by
Licensee in such action shall be retained by Licensee. Licensor agrees
to cooperate fully with Licensee in the prosecution of any
infringement claims and, at Licensee's expense, will supply Licensee
with all documents and other information as it may reasonably request
as reasonably necessary to the action.
11. TERM AND TERMINATION: SURVIVAL
11.1 Bases for Termination.
(a) Material Breach. Either party may terminate this Agreement
immediately if the other party commits a material breach of this
Agreement and fails to remedy the breach within sixty (60) days
after written notice of such breach is given by the first party,
specifying in writing such breach and, if possible, detailing
steps necessary to cure the breach.
(b) Bankruptcy/Insolvency. If either party becomes insolvent, files a
voluntary petition for bankruptcy or ceases to do business, the
other party, at its option, may terminate this Agreement upon
thirty (30) days' notice.
(c) Discontinuance of Distributions. This Agreement shall terminate
automatically twelve (12) months after Licensee and its
Sublicensees have discontinued distribution of the Adapted Game.
11.2 Licensed Properties. Upon the expiration or termination of this
Agreement, Licensee:
(a) Will cease all use of the Licensed Properties;
(b) Will not disclose to any third party any aspects of the licensed
Properties not publicly known or available to third parties; and
(c) Will return, without making any copies, any and all writings,
drawings, models, data and other materials and things to Licensor
that constitute or relate to or disclose any aspects of the
Licensed Properties that are not publicly known and that were
provided by Licensor directly or indirectly to Licensee.
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<PAGE>
However, Licensee may continue to use the Licensed Properties in
connection with the sale of Adapted Games on hand at the
expiration or termination of this Agreement as specified in
Section 12.2.
11.3 Survival of Certain Provisions. Paragraphs 8, 10 and 11 of Cover
Sheet, and Sections 4, 5, 8, 9, 10, 11, 12, 13 and 14 shall, in
accordance with their terms, survive the termination of this
Agreement.
12. DISPOSAL OF INVENTORY
12.1 Inventory Report. Upon the expiration or termination of this
Agreement, Licensee shall provide Licensor within thirty (30) days
thereof an itemized statement specifying the quantity of Adapted Games
on hand.
12.2 Inventory Disposal. Upon the expiration or termination of this
Agreement, other than by default by Licensee, Licensee shall have a
period of one hundred eighty (180) days ("Initial Inventory Disposal
Period") following such expiration to sell any unsold Adapted Games.
Within thirty (30) days after the end of such Initial Inventory
Disposal Period, Licensee shall provide Licensor with a second,
itemized statement specifying the quantity of unsold Adapted Games
still on hand. Within thirty (30) days after receipt of such second
report, Licensor shall notify Licensee of its desired disposition of
the Adapted Games still on hand, which shall be one of the following:
(a) that the Adapted Games are to be destroyed by Licensee within
thirty (30) days of such notification; or (b) that Licensee shall be
given an additional ninety (90) days ("Final Inventory Disposal
Period") in which to sell such Adapted Games still on hand. If any
Adapted Games still remain on hand at the end of such additional
ninety (90) day period, such Adapted Games shall be destroyed by
Licensee within thirty (30) days of the end of such Final Inventory
Disposal Period. All provisions of this Agreement shall apply to the
Adapted Games sold during the Initial and Final Inventory Disposal
Periods.
12.3 Continuation of Agreement. Except to permit the sale of Adapted Games
on hand at the expiration or termination of this Agreement, the
Initial and Final Inventory Disposal Periods are not to be considered
as extensions of the term of this Agreement. However, as set forth in
Sections 11.3, 12.1 and 12.2 herein, Licensee may continue to use the
Licensed Properties in connection with the sale of the Adapted Games
during the Initial and Final Inventory Disposal Periods.
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<PAGE>
13. PROPRIETARY INFORMATION
13.1 Proprietary Information. Licensor and Licensee acknowledge that all
the following information constitutes confidential and proprietary
information of the party who discloses it ("Proprietary Information"):
(a) Any information disclosing any of the business practices of the
disclosing party, including, without limitation, customer lists,
pricing and marketing practices, licensing revenue, and
relationships with customers;
(b) Any information embodied in software code, which is delivered by
one party to the other in connection with this Agreement;
(c) The Licensed Properties, to the extent not publicly known; and
(d) All of the terms and conditions of this Agreement.
13.2 Confidentiality. Each party acknowledges that the Proprietary
Information has been delivered to it by the disclosing party only for
the limited purposes set forth hereunder, and that the unauthorized
disclosure of any of the Proprietary Information will harm the
disclosing party. Each party will keep all Proprietary Information
confidential, will not disclose it or permit it to be disclosed in any
form to any person or entity other than as permitted hereunder, and
will use every reasonable effort to ensure that its employees, agents
and other third parties to whom access to the Proprietary Information
is given respect the obligations of confidentiality set forth herein.
All obligations of confidentiality will survive the expiration or
termination of this Agreement. Upon expiration or termination of this
Agreement, and upon written request by the disclosing party, the
receiving party will return to the disclosing party all writings,
drawings, models, data and other materials, constituting or relating
to the Proprietary Information obtained from said disclosing party.
This does not apply to information otherwise publicly available or
obtained independently of the relationship created by this Agreement.
13.3 Remedies. Each party acknowledges and agrees that disclosure or
unauthorized use of the Proprietary Information of the disclosing
party by the receiving party, its employees, agents and contractors,
would cause the disclosing party irreparable harm for which its
remedies at law will be inadequate; and the disclosing party will have
the right, in addition to any other remedies available to it, to seek
immediate injunctive relief to enjoin any breach or threatened breach
of the receiving party's obligations of confidentiality set forth in
this Section 13.
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<PAGE>
14. GENERAL PROVISIONS
14.1 Governing Law. This Agreement shall be governed by, subject to and
construed under the laws of the State of New York, USA, without regard
to such state's conflicts of laws rules. Unless waived by Licensor in
writing for the particular instance, the sole jurisdiction and venue
for actions related to the subject matter hereof shall be the U.S.
Federal District Court for the Eastern District of New York.
14.2 Damage Limitation. Neither party shall be liable to the other for any
indirect, special, consequential or incidental damages, whether such
claims arise in tort or contract, even if such party shall have been
advised of the possibility of such damages.
14.3 Waiver. No waiver of any right, obligation or default shall be
implied, but must be in writing, signed by the party against whom the
waiver is sought to be enforced. One or more waivers of any right,
obligation or default shall not be construed as a waiver of any
subsequent right, obligation or default.
14.4 Entire Agreement. This Agreement constitutes the entire Agreement
between the parties relating to the subject matter thereof. All prior
negotiations, representations, agreements and understandings are
superseded by this Agreement. Neither party shall be bound by any
definition, condition, warranty, representation, modification, consent
or waiver other than as expressly stated herein unless it is set forth
in writing executed by the party to be bound.
14.5 Assignment. It is expressly understood that this Agreement shall be
freely assignable and transferable by Licensor subject to written
notification to Licensee of such assignment or transfer. It is further
understood that the license granted herein is personal in nature and,
without the written consent of Licensor, shall not be assignable to a
third party by any action of Licensee or by operation of law, and any
attempt by Licensee to so assign this Agreement without such consent
shall be null and void and shall terminate this Agreement.
14.6 Force Majeure. The obligations of Licensee and Licensor hereunder,
except for the payment of royalties, are subject to and contingent
upon the absence of interferences or interruptions, such as strikes,
riots, war, invasion, fire, explosion, accident, earthquakes, delays
in carriers, acts of God and all other delays beyond the parties'
reasonable control, and any interference with an obligation of either
of the parties by any such reason shall not be deemed a breach
thereof.
14.7 No Joint Venture. The parties, by this Agreement, do not intend to
create a partnership, principal/agent, master/servant or joint venture
relationship, and nothing in this Agreement shall be construed as
creating such a relationship between the parties. Neither party nor
its agents or employees are the representatives of the other
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party for any purpose except as expressly set forth in this Agreement,
and neither party has the power or authority as agent, employee or any
other capacity to represent, act for, bind or otherwise create or
assume any obligation on behalf of the other party for any purpose
whatsoever.
IN WITNESS WHEREOF, this Agreement was executed by the parties as of
the day and year first above written.
THE TETRIS COMPANY, L.L.C. (Licensor)
By: /s/
-------------------------------
Maryann S. Huhs
Managing Director
ISES CORPORATION (Licensee)
By: /s/
-------------------------------
Dean R. Grewell III
President
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APPENDIX A
The full Copyright and Trademark Notice for In-Flight Tetris:
Tetris(R); (C)Elorg 1987
In-Flight Tetris(TM); (C)Elorg 1999
Tetris Logo by Roger Dean; (C)The Tetris Company 1997
All Rights Reserved
Original Concept & Design by Alexey Pajitnov
Tetris(R) and In-Flight Tetris(TM) licensed to The Tetris Company and
sublicensed to ISES Corporation
The short Copyright and Trademark notice for In-Flight Tetris:
Tetris(R); (C)Elorg 1987. In-Flight Tetris(TM); (C)Elorg 1999
Tetris Logo by Roger Dean; (C)The Tetris Company 1997
All Rights Reserved
In addition, Licensee shall ensure that the Tetris logo, which logo shall
be provided by Licensor to Licensee separately, appears in a prominent
place on all packaging for the Adapted Game.
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Exhibit 10.3
LICENSE AGREEMENT
This Agreement is made and entered into as of November 2, 1999,
("Commencement Date") by and between CANAL+, a French societe anonyme organized
under the laws of France, whose registered office is at 85/89, Quai Andre
Citroen, France, ("CANAL+")
and
ISES Corporation, an Iowa based company organized under the laws of Iowa,
USA, whose registered office is at 2600 72nd St., Suite C, Des Moines, IA 50322,
U.S.A., "Customer"),
collectively referred as the "Parties".
WHEREAS, CANAL+ has developed a digital interactive TV operating
environment and products called STUDIO + to provide application developers with
means to offer applications on digital interactive TV networks licensed by
CANAL+ under the MEDIAHIGHWAY technology, such applications using the JAVA(1)
programming language, and
WHEREAS, Customer as an application developer desires a license to make use
of certain software of CANAL+, desires to purchase from CANAL+ certain hardware
decoder with embedded specific debugging software as well as an STB simulator
(hereafter "Hardware"), and desires to receive from CANAL+ technical support
associated to the software.
Based on the foregoing and for the consideration stated herein, the Parties
agree as follows:
ARTICLE 1 - DEFINITIONS
1.1. "Designated Site" means Customers location specified in Exhibit A, which
shall be the location of the designated Licenses Software.
1.2. "Designated Equipment" means the minimum hardware configuration specified
in Exhibit A onto which the Licenses Software will be installed by
Customer.
1.3. "Licensed Software" means the beta version software specified in Exhibit A
currently available on DAT or CDROM, installed on the Designated Equipment
and its documentation.
1.4. "Deliverables" means the Hardware as containing the embedded specific
debugging software and Licensed Software specified in Exhibit A which are
provided by CANAL+ to Customer.
- ----------
(1) JAVA is a registered trademark of SUN MICROSYSTEMS INC.
<PAGE>
1.5. "Licensed Operator" means these operators duly licensed by CANAL+ under
CANAL+ interactive technology called MEDIAHIGHWAY.
1.6. "Update" means a modification of the Licensed Software that:
(i) improves the manner in which the Licensed Software performs existing
functions; or
(ii) corrects defects in the Licenses Software.
1.7. "Upgrades" means a modification of the Licenses Software that enables the
Licenses Software to provide services or functions it could not previously
provide.
ARTICLE 2 - LICENSE AND PURCHASE
2.1. The Hardware included in STUDIO + is sold to Customer, and Customer may use
or dispose of it as it sees fit. The Licensed Software is licensed to
Customer subject to the terms hereof.
The prices related to the Hardware and to the Licenses Software are set
forth in Exhibit B.
2.2. CANAL+ reserves the right to change the prices stated in Exhibit B. In that
case, these changes will not affect material and software already purchased
or licensed. These changes shall solely affect any add-ons Deliverables to
the Exhibit A or any new license agreement between Customer and CANAL+.
ARTICLE 3 - GRANT OF LICENSE
3.1. Subject to the conditions herein, CANAL+ hereby grants to Customer a
non-transferable, non-exclusive, limited license to use the Licensed
Software in machine readable form only on the Designated Equipment, or in
an embedded form in the Hardware, at the Designated Site to create
interactive applications to be offered by Customer solely to Licensed
Operators. No license is granted for use of the Licenses Software on other
equipment or hardware than the Designated Equipment or Hardware, or for any
other purpose. No license, right or interest in any trademark, trade name
or service mark of CANAL+ or any third party from whom CANAL+ may have
acquired license rights is granted under this Agreement.
3.2. This Agreement, the Licensed Software and any other information provided by
CANAL+ to Customer and any licenses and rights granted hereunder, may not
be sold, leased, copied, assigned, sublicensed or otherwise transferred, in
whole or in part, by Customer.
3.3. Customer shall not alter, modify, or adapt the Licensed Software or the
software embedded in the Hardware, including but not limited to,
translating, decompiling, disassembling, or creating derivative works.
- 2 -
<PAGE>
3.4. Customer recognizes and agrees that the applications developed from the
Licensed Software have to be validated by the Licensed Operator prior to
any broadcast.
ARTICLE 4 - DELIVERY, INSTALLATION AND RISK OF LOSS
4.1. CANAL+ shall deliver the Deliverables directly to Customer or to a common
carrier, FOB the CANAL+ office. CANAL+ assumes all risks of losses or
damage until delivery of the Deliverables to Customer or a common carrier,
whichever shall occur first.
4.2. Customer shall be solely responsible for installation of the Licensed
Software at the Designated Site, bearing in mind however that Customer
shall request from CANAL+ the unique identifier unlocking the access to the
Licensed Software.
ARTICLE 5 - SOFTWARE SUPPORT
5.1. Licensed Software support, available to Customer upon termination of the
warranty period, shall be as follows:
5.1.1. Licensed Software support shall include, exclusively:
(i) corrective maintenance on defects and errors discovered in the
Licensed Software;
(ii) updates to the Licensed Software.
5.1.2. Customer shall promptly identify, document and give CANAL+ notice of
each discovered defect or error necessitating support services.
5.2. CANAL+'s obligation to provide support hereunder is expressly limited to
the above description.
5.3. CANAL+ shall own any Upgrades to the Licensed Software. Any such Upgrades
shall be subject to separate financial terms and conditions.
5.4. A Support line shall be available during the office hours of 09:00 hours to
17:00 hours, local French time, Mondays to Fridays (inclusive), except
normal business holidays observed by CANAL+.
5.5. The financial terms and conditions of support are set forth in Exhibit B.
- 3 -
<PAGE>
ARTICLE 6 - TERM AND TERMINATION
6.1. This Agreement shall commence on the Commencement Date and shall remain in
force for a period of ninety (90) days from execution hereof, unless
terminated in accordance with the provisions of this Article 6.
6.2. CANAL+ may terminate this Agreement upon immediate written notice, if
Customer fails to comply with any material term or condition hereof.
Customer may terminate this Agreement by returning the Licensed Software to
CANAL+.
6.3. CANAL+ may terminate this Agreement upon written notice in the event that
Customer is adjudicated bankrupt, files a voluntary petition in bankruptcy,
makes an assignment for benefit of creditors or becomes unable to meet its
obligations in the normal course of business as they fall due.
6.4. Upon the expiration of this Agreement for any reason, Customer shall
immediately terminate use of the Licensed Software, and unless Customer
purchases the Licensed Software within five (5) days, return it and any
copies to CANAL+. In no event shall Customer be entitled to a refund of any
monies paid under this Agreement upon termination of this Agreement.
ARTICLE 7 - CONFIDENTIALITY OF PROPRIETARY INFORMATION
7.1. Customer acknowledges that CANAL+ may disclose to Customer certain
information, inventions, know how and trade secret ("Proprietary
Information") concerning the Licensed Software that is confidential to
CANAL+. All such Proprietary Information shall remain the sole propriety of
CANAL+, whether or not marked as such by CANAL+, and Customer shall have no
interest in or rights with respect to such Proprietary Information.
Customer shall not reproduce, duplicate, distribute, disclose or otherwise
disseminate the Proprietary Information to anyone; provided, however, that
Customer may disclose the Proprietary Information to those employees of
Customer who have a "need to know" for purposes of this Agreement, and
provided further that Customer shall be able to maintain a backup or
archival copy of the Licensed Software during the term of this Agreement.
7.2. The Licensed Software constitutes a valuable asset of CANAL+ and is to be
considered Proprietary Information.
7.3. Customer shall protect and maintain the confidentiality of the Proprietary
Information in at least the same manner it does for its own critical
proprietary information.
7.4. Customer shall notify and inform its employees having access to the
Proprietary Information of Customer's limitations, duties and obligations
regarding non-disclosure and copying of the
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<PAGE>
Proprietary Information. Proprietary Information shall be used only by
employees of Customer and only at the Designated Site.
7.5. Notwithstanding any provisions herein concerning non-disclosure and non-use
of the Proprietary Information, Customer shall have no obligation for
disclosure or use of any such information which Customer can prove: (a) was
already known to Customer prior to its disclosure by CANAL+, (b) is or
become publicly known through non wrongful act of Customer, (c) is received
from a third party without similar restriction and without breach of this
Agreement, or (d) was independently developed by Customer.
7.6. Notwithstanding any termination pursuant to Article 6, the obligations set
forth in this Article shall survive this Agreement for a period of ten (10)
years.
ARTICLE 8 - WARRANTY AND DISCLAIMER OF WARRANTIES
8.1. CANAL+ warrants that the Hardware and the Licensed Software will
substantially conform to the documentation, provided that it is used on the
Designated Equipment, and or the Hardware, and with the operating system
for which it was designed. CANAL+ also warrants that the optical or digital
media on which the Licensed Software is distributed and the documentation
are free from defects in materials and workmanship. These warranties extend
only to Customer as the original licensee. CANAL+ will replace defective
media or documentation or correct substantial software errors at no charge,
provided Customer returns it within ninety (90) days of delivery. If CANAL+
is unable to replace defective media or documentation or correct
substantial software errors, CANAL+ will refund the license fee of the
defective product only. These are the sole remedies for any breach of
warranty.
8.2. Other than specifically set forth in section 8.1 above, CANAL+ disclaims
all warranties, express or implied, including all implied warranties or
merchantability and fitness for a particular purpose or non-infringement,
except as specified in this Agreement or where such disclaimers are held to
be legally invalid. The Parties explicitly agree that, unless specifically
referred to in this Agreement as a guarantee or warranty, no oral or
written statement and nothing in this Agreement descriptions or any of the
attached pages shall be construed or relied upon as an express or implied
warranty.
ARTICLE 9 - LIMITATION OF LIABILITY
IN NO EVENT WILL CANAL+ BE LIABLE FOR ANY LOST REVENUE, PROFIT OR DATA, OR FOR
SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES HOWEVER CAUSED
AND REGARDLESS OF THE THEORY OF LIABILITY ARISING OUT OF USE OR INABILITY TO USE
THE LICENSED SOFTWARE, SERVICES OR MATERIALS PROVIDED UNDER THIS AGREEMENT, EVEN
IF CANAL+ HAS BEEN ADVISED OF THE
- 5 -
<PAGE>
POSSIBILITY OF SUCH DAMAGES. In no event shall CANAL+'s liability to Customer
(whether in contract, tort (including negligence) or otherwise) exceed the
license fees charged by CANAL+ for Licensed Software.
ARTICLE 10 - EXPORTING RESTRICTIONS
Customer shall not export the Licensed Software from the country of the
Designated Site without prior written permission of CANAL+.
ARTICLE 11 - MISCELLANEOUS
11.1.If any term or provision of this Agreement is found to be invalid under
any applicable statute or rule of law, then, that provision shall be
severed herefrom and the rest of this Agreement shall remain in full force
and effect.
11.2.This Agreement constitutes and expresses the entire agreement and
understanding between the Parties and supersede all previous
communications, representations or agreements, whether written or oral,
with respect to the subject matter thereof.
11.3.This Agreement may not be modified, amended, rescinded, canceled or
waived, in whole or part, except by a written instrument signed by
authorized representatives of both Parties.
11.4.This Agreement is made under and shall be governed by and construed in
accordance with the French law. In case of any disagreement that could not
be settled on an amicable basis, first, the Courts of Paris, France
(Tribunal de Grande Instance) shall have exclusive jurisdiction.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives, in two original copies, one for each
Party.
CANAL+, S.A. [CUSTOMER]
By: Francois CARAYOL By: /s/
--------------------------
Name: /s/ Name: Dean R. Grewell III
-------------------------------
Title: Chief Executive Officer Title: President
CANAL+ TECHNOLOGIES ISES Corporation
Date: 22 November 1999 Date: November 2, 1999
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<PAGE>
EXHIBITS TO THE APPLICATION DEVELOPMENT KIT
LICENSE AGREEMENT
===================
EXHIBIT A
Description of deliverables
- - Designated Site(s):
ISES Corporation
2600 - 72nd Street
Suite C
Des Moines, IA 50322
ISES Corporation
263 Adelaide St. West
Suite 204
Toronto, Ontario M5H1Y3
Canada
- - Designated Equipment:
o Windows NT based PC
- - Deliverables:
o Philips/MediaOne Set Top Box
o Studio+ Hardware Key
<TABLE>
<CAPTION>
==============================================================================================================
Designation "Hardware" "Licensed Software" Quantity
==============================================================================================================
<S> <C> <C> <C>
Philips MediaOne Set Studio+, Beta Version 2
Top Box
Studio+ Hardware
Key
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT B
Fees and financial arrangements
No Charge - Beta Test Version of Licensed Software and Hardware Deliverables to
be returned at the conclusion of this project.
Licensed Software Support
A yearly 15% of the Total Price, payable in advance at the end of the warranty
period and upon each anniversary date thereafter.
<PAGE>
SOFTWARE DEVELOPMENT AGREEMENT
This Agreement, effective as of the date of the last signature hereto, is
entered into between CANAL+ S.A., a French corporation hereby represented by
CANAL+ U.S. Technologies, a division of CANAL+ U.S., having its office located
at 20230 Stevens Creek Blvd., Cupertino, CA 95014, (CANAL+), and International
Systems Entertainment Software, Inc. having an office located at 2600 72nd
Street, Suite C, Des Moines, Iowa 50322 (ISES). ISES and CANAL+ may be referred
to herein as a Party or Parties as the case may require.
WHEREAS, CANAL+ desires to use the software development capabilities of ISES to
perform software development services, and
WHEREAS, ISES desires to and is capable of providing the software development
services using the STUDIO+ tool licensed to ISES by CANAL+ under a separate
agreement.
NOW THEREFORE, the parties agree as follows:
Section 1 - Definitions
As used in this Agreement, the following terms shall have the following
meanings:
1.1 Development Services shall mean the development to CANAL+'s MEDIAHIGHWAY
application development environment as well as other services provided to CANAL+
by ISES from time to time during the term of this Agreement. All such
Development Services shall be further defined, in writing in the Statement of
Work.
1.2 Statement of Work shall mean the written plan detailing the Development
Services attached hereto as Exhibit B which shall be amended from time to time
as additional Development Services are required.
1.3 Developed Software shall mean any software developed by ISES as outlined in
the Statement of Work and its Amendments.
Section 2 - Development Program
2.1 ISES agrees to provide the necessary personnel, facilities and material, and
will exert its best efforts to perform the Development Services in accordance
with a Statement of Work and any Amendments thereto. Any Development Services
will be performed within the time period specified in the Statement of Work and
its Amendments. ISES will begin performing Development Services and will
complete such Development Services within the time and monetary limitations
specified in the applicable Statement of Work or Purchase Order, as the case
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<PAGE>
may be. If in the course of performing Development Services, ISES determines
that it will be unable to complete such Development Services within the time
specified, ISES will notify CANAL+ of such determination in writing as soon as
possible. The Statement of Work shall be activated upon the issuance of a
Purchase Order by CANAL+.
2.2 Upon CANAL+'s request, and during normal business hours, a CANAL+
representative shall be permitted to visit ISES' facilities to review the
progress of the development of the Development Services during the term of this
Agreement.
2.3 Changes to the Statement of Work.
2.3.1 CANAL+ may request changes to an existing Statement of Work during
the course of the project. If such changes materially impact ISES schedules or
require additional engineering effort or re-work, then the parties agree to
negotiate terms for such additional work in good faith.
2.3.2 Change requests shall be made in writing, supported with sufficient
detail and require written approval of both parties.
2.4 Neither this Agreement nor any purchase order shall limit CANAL+'s right to
perform itself or to select others to perform the same or similar services or
work for any reason.
2.5 ISES shall not allow any employee or agent to perform any Development
Services who has not signed a "Confidentiality and Non-Disclosure Agreement",
attached hereto as Exhibit A.
Section 3 - Compensation
3.1 As full compensation for the work performed pursuant to this Agreement, and
delivery of the Developed Software within the terms contained in Exhibit B,
CANAL+ agrees to pay ISES such amounts specified in Exhibit B and CANAL+'s
Purchase Orders for such Development Services as are actually performed by ISES
and accepted by CANAL+.
3.2 On a monthly basis or within the payment terms contained in Exhibit B, ISES
shall forward to CANAL+ a detailed invoice outlining time spent and the nature
of the work performed. CANAL+ shall remit payment to the address first stated
above.
3.3 ISES shall submit all invoices to CANAL+'s Procurement department at
mutually agreed intervals, and CANAL+ shall pay ISES within thirty (30) days
after receipt of invoices. All invoices and supporting documentation will be
sent by ISES to CANAL+ at CANAL+ U.S. Technologies, 20230 Stevens Creek Blvd.,
Cupertino, CA 95014, Attn: Procurement department, with a copy to the individual
named in 12.8 to receive notices on behalf of CANAL+.
2
<PAGE>
3.4 ISES agrees to pay and to be solely responsible for all city, state, and/or
federal unemployment insurance premiums, worker's compensation insurance
premiums, income taxes, social security taxes, and any other employment-related
taxes incurred as a result of the performance of Development Services by ISES,
and to be responsible for all obligations, reports, and timely notifications
relating to such matters. CANAL+ will have no obligation to pay or withhold any
sums for such taxes or unemployment insurance on any amounts due ISES.
3.5 All costs and expenses, including specifically, but not limited to, travel
and commuting expenses, which are incurred by ISES in connection with the
performance of the Development Services shall be borne by ISES, except only such
costs and expenses, if any, which CANAL+ has agreed in writing or in any
Statement of Work to reimburse ISES.
3.6 Rates extended to CANAL+ hereunder shall not be more than the price to any
other similarly situated customer of ISES and any percentage discount to CANAL+
hereunder shall not be less favorable to CANAL+ than the percentage discount
granted to any other similarly situated customer of ISES.
3.7 [Confidential treatment has been requested for this portion of this
Exhibit]
Section 4 - Acceptance
4.1 CANAL+'s acceptance of any Developed Software will be based upon CANAL+'s
verification that the Developed Software meets the requirements outlined in a
Statement of Work. Such acceptance by CANAL+ shall not be unreasonably withheld.
4.2 CANAL+ agrees to notify ISES, in writing, of its acceptance or rejection, as
the case may be, of the Developed Software within Thirty (30) days following the
delivery of the Developed Software outlined in the Statement of Work
4.3 If CANAL+ rejects any Developed Software within the time set forth in
Section 4.2 because of a defect or failure to meet the requirements outlined in
the Statement of Work, then CANAL+ shall furnish a written statement describing
the defect. ISES will then correct such defect, at its expense, as soon as best
efforts will allow, but in any event not later than thirty (30) days after the
receipt of CANAL+'s statement of a defect. ISES shall re-submit the corrected
Developed Software to CANAL+ for acceptance. This process will be repeated until
acceptance is reached, or until CANAL+ and ISES mutually agree on an alternate
course of action.
4.4 In the absence of CANAL+'s express rejection within the time set forth in
section 4.2 above, the Developed Software shall be deemed to have been accepted
by CANAL+.
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<PAGE>
Section 5 - Confidentiality
ISES agrees that, for the duration and scope of this Agreement, treatment of
Confidential Information will governed by the Mutual Confidentiality and
Non-Disclosure Agreement executed by CANAL+ and ISES, an executed copy of which
is attached hereto as Exhibit A.
Section 6 - Intellectual Property
All right, title and interest in patents, copyrights and confidential
information owned by ISES prior to commencement of the Development Services and
used in the performance of this Agreement are and will remain the sole property
of ISES. All right, title and interest in patents, copyrights and confidential
information owned by CANAL+ prior to commencement of the Development Services
and provided to ISES for performance under this Agreement are and shall remain
the sole property of CANAL+. No licenses under any such intellectual property
rights of either Party are implied unless otherwise expressly stated herein.
Section 7 - License
7.1 All right, title, and interest in the Developed Software shall belong to
ISES. ISES shall be free to license such Developed Software to any operator
licensed by CANAL+ under the MediaHighway technology. Such license shall be
subject to payment of the fee in accordance with the terms of Section 3.7 above.
7.2 ISES hereby grants to CANAL+, a non-exclusive, royalty-free, world-wide
right and license to copy, use, modify and internally distribute copies of the
Developed Software for internal use and public demonstration. No rights of
distribution outside of CANAL+, licensing or sublicensing are granted. Any
modifications to the Developed Software made by CANAL+ remain the property of
CANAL+.
7.3 Upon termination of this Agreement ISES agrees to promptly deliver to a
proper CANAL+ representative all documents and other records which relate to the
business activities of CANAL+, and all other materials and badges which belong
to CANAL+, including any hardware platforms or software tools provided by CANAL+
to ISES.
Section 8 - Records and Access
ISES agrees to permit duly authorized representatives of CANAL+ at all
reasonable times to inspect and have access to such books, records, and
documentation in ISES' possession and control which directly relate to the
performance of services for CANAL+, for the purpose of auditing and verifying
the performance of or charges for services.
4
<PAGE>
Section 9 - Term and Termination
9.1 Unless otherwise terminated as provided herein, this Agreement shall become
effective as of the last signature affixed hereto and shall continue in full
force and effect until terminated as provided herein.
9.2 CANAL+ has the right, upon giving thirty (30) days written notice, to
terminate this Agreement at any time. If CANAL+ elects to terminate this
Agreement, payment to ISES for work performed up to the date of receipt of
notice, shall be for time actually worked through the date of receipt of any
termination notice. ISES shall supply any partially completed work and/or
completed work at that time and return all materials furnished by CANAL+ under
this Agreement, including all Confidential Information. Following return of any
such materials CANAL+ will make any outstanding payments due to ISES under the
provisions of this Agreement.
9.3 This Agreement may be terminated, in whole or in part, at the option of the
party having such right as provided herein, by written notice upon the happening
of any of the following events stated below:
9.3.1 Either party may terminate this Agreement if the other party becomes
insolvent, admits in writing its inability to pay its debts as they mature,
makes an assignment for the benefit of creditors, or if a petition under the
Bankruptcy Act is filed by or against such other party.
9.3.2 Either Party if that other Party fails substantially to perform any
material covenant, obligation, representation or warranty and by it or to be
performed hereunder provided, however, that no termination may be effected
hereunder unless the terminating Party delivers to the other Party written
notice informing the other Party of any alleged default. Termination is
effective if such default is not cured within thirty (30) days after receipt of
such notice.
Section 10 - Warranties/Indemnity/Limitation of Liability
10.1 ISES warrants that all materials provided to CANAL+: (i) shall comply with
the requirements of pertinent specifications, drawings, and samples; (ii) shall
perform substantially as described in the attached Statement of Work for 90 days
after delivery, and (iii) will not infringe upon or violate any U.S. patent,
copyright, trademark, trade secret or other proprietary right of ISES or a third
party. ISES further warrants that all work will be performed by careful,
efficient, and qualified workers, and in the best and most workmanlike manner,
and that the work will conform to the applicable requirements and
specifications. Materials not in conformity with these warranties may, (1) be
promptly corrected or replaced, or if not practicable, (2) be returned for
refund, less depreciation based on a 5-year straight line depreciation schedule
or (3) be retained at an equitable discount. All returns, replacements, and
corrections shall be at ISES' expense, including all labor, materials,
installation, repair, service, transportation, and other charges. No replacement
of defective or nonconforming materials returned to ISES shall be made unless
5
<PAGE>
specified by CANAL+ in writing. CANAL+ acknowledges that this paragraph sets
forth CANAL+'s exclusive remedy, and ISES's exclusive liability, for any breach
of warranty or other duty related to the quality of the Development Services.
10.2 ISES expressly warrants and represents that the Developed Software supplied
to CANAL+ will be free from errors caused by the failure of such products to
accurately process data that includes or references the year 2000 or greater.
Section 11 - Indemnity
11.1 ISES agrees to defend at its expense any suits that may be brought against
CANAL+ arising out of its internal use and/or demonstration of the Developed
Software, and based upon a claim that the Developed Software furnished hereunder
infringes a U.S. patent or copyright and to pay any costs and damages awarded in
any such suit, provided that ISES is notified promptly in writing of the suit
and, at ISES' request and at its expense, is given control of the suit and all
requested reasonable assistance fore defense of same. If the use or sale of the
Developed Software furnished hereunder is enjoined as a result of such suit,
then ISES, at CANAL+'s option and at no expense to CANAL+, shall
11.1.1 obtain for CANAL+ the right to use and demonstrate the Developed
Software; or
11.1.2 substitute equivalent software acceptable to CANAL+ and extend this
indemnity thereto; or
11.1.3 if Section 11.2.1 and 11.12.2 are not feasible, return to CANAL+ the
monies paid to ISES under section 3, less depreciation based on a 5-year
straight line depreciation schedule for the period that the Developed
Software was not usable, and terminate this Agreement without further
obligations on the part of ISES.
11.2 The indemnity in 11.1 does not extend to any suit based upon any
infringement or alleged infringement of any patent or copyright by the
combination of the Developed Software furnished by ISES with other elements if
such infringement would have been avoided by the use of the Developed Software
alone, nor does it extend to any infringement directly caused by ISES'
compliance with CANAL+'s specification, or any suit directly caused by
modification of the Developed Software by CANAL+ pursuant to Section 7.2 . The
foregoing states the entire liability of ISES for patent and copyright
infringement.
11.3 Should such an action be the direct result of the use by ISES of
specifications remitted by CANAL+, CANAL+ shall assist ISES in the defense of
such suit, provided that CANAL+ is notified promptly in writing of the suit. The
costs for such assistance shall not exceed the amount of the development costs
paid by CANAL+ hereunder. The foregoing states the entire liability of CANAL+
for patent or copyright infringement.
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<PAGE>
11.4 EXCEPTING THE INDEMNITIES PROVIDED IN SECTIONS 11.1 AND 11.3, UNDER NO
CIRCUMSTANCES, SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES ARISING IN ANY WAY OUT OF THIS AGREEMENT HOWEVER CAUSED,
(WHETHER ARISING UNDER A THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE); OR
OTHERWISE), INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOST PROFITS, LOSS OF
DATA, OR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES.
Section 12 - General Provisions
12.1 Entire Agreement. This Agreement, including the Appendices attached hereto
and made a part hereof, constitutes the entire understanding between the parties
relating to the subject matter hereof. This Agreement supersedes and repeals all
previous negotiations and/or understandings between the parties relating to the
subject matter of this Agreement.
12.2 Modification. This Agreement may not be amended or modified in any respect
unless approved in writing and signed by duly authorize officers of the
respective parties.
12.3 Governing Law. This Agreement and its performance shall be governed by,
subject to, and construed in accordance with the laws of the State of New York.
12.4 Export Provision. Each Party agrees that it will not in any form export,
reexport, resell, ship, or divert or cause to be exported, reexported, resold,
shipped or diverted, directly or indirectly, any product or technical data or
software furnished hereunder, or the direct product of such technical data or
software which the United States Government or any agency thereof at the time of
export or reexport requires an export license or other governmental approval
without first obtaining such license or approval.
12.5 Compliance with Law. Both parties agree to comply fully with all United
States and any other relevant jurisdictions' laws, codes and regulation
applicable to the business that each transacts, including, but not limited to
export control, product labeling and marking. Any Party failing too comply with
the terms of this provision agrees to indemnify and hold the other Party
harmless for all resulting liability or damages.
12.6 Force Majeure. In the event that either Party is unable to perform any of
its obligations or to enjoy any of its benefits because of natural disaster,
actions of governmental bodies, the Party affected shall give immediate notice
to the other party and shall do everything possible to resume performance.
Delays in delivery caused by natural disaster, actions of governmental bodies
not the fault of the affected Party shall automatically extend the delivery date
for a period equal to the duration of that event.
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<PAGE>
12.7 Nondisclosure of Terms. Neither Party shall disclose any of the terms and
conditions of this Agreement to any third party without the prior consent of the
other Party.
12.8 Notice. Notice hereunder shall be deemed to have been sufficiently given
when delivered in writing by certified mail return receipt requested by either
Party to the other directed to:
CANAL+: ISES:
Eric Miller Rick Grewell
CANAL+ U.S. Technologies International Systems and
20230 Stevens Creek Blvd. Entertainment Software, Inc
Cupertino, CA 95014 2600 72nd Street, Suite C
Des Moines, Iowa 50322
Either Party may change its address by a notice given to the other Party in the
manner set forth above.
12.9 Security/Safety. Representatives and personnel of each Party, during the
time they are present on the premises of the other Party, shall be subject to
all rules and regulation prevailing on such premises. Each Party shall be
responsible for the payment of all compensation and expenses, unless otherwise
specified in this Agreement, of its respective representatives and personnel.
None of the representatives or personnel of either Party shall be considered for
any reason to be an employee of the other party.
12.10 Survival. The terms, provision, representations and warranties contained
in Sections 5, 6, 7, 10, 11 and 12 shall survive expiration or termination of
this Agreement.
12.11 Independent Contractors. The Parties acknowledge that their performance
under this Agreement is as independent contractors and that neither party is
authorized to act as the agent or representative of the other. Nothing contained
herein, or done in pursuance of this Agreement shall constitute the Parties as
entering upon a joint venture or shall constitute either Party hereto the agent
for the other Party for any purpose or in any sense whatsoever.
12.12 Assignment. This Agreement may not be transferred or assigned, by
operation of law or otherwise, by either Party without the prior written consent
of the other Party.
12.13 Dispute Resolution. CANAL+ and ISES agree that they shall attempt to
settle any claim or controversy arising out of this Agreement through
consultation and negotiation in the spirit of mutual friendship and cooperation.
If any such attempt should fail, then the dispute shall first be submitted to a
mutually acceptable neutral advisor for initial fact finding and mediation.
Neither party shall unreasonably withhold acceptance of such an advisor, and
selection of such an advisor shall be made within forty-five (45) days after
written notice by one of the parties for such fact finding and mediation. The
cost of such fact finding and mediation, and of any other subsequent alternative
dispute resolution agreed upon by the parties, shall be shared equally by CANAL+
and ISES. Any dispute which the parties cannot so resolve between themselves in
good faith within
8
<PAGE>
six (6) months of the date of the initial demand by either party for such fact
finding shall be finally determined by a court within the state of New York .
12.14 Captions. All captions and descriptive headings used in this Agreement are
for convenience of reference only and are not to be used in interpreting the
obligations of the parties under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date of the last signature hereto.
CANAL+ , S.A. International Systems and
Entertainment Software
By: FRANCOIS CARYOL By: /s/
--------------------------------
Name: /s/ Name: DEAN R. GREWELL III
----------------------------
Title: CEO, CANAL+ TECHNOLOGIES Title: PRESIDENT, ISES
CORPORATION
Date: 22/11/99 Date: November 3, 1999
9
Exhibit 10.4
Investment Capital Corporation
7373 E. Doubletree Ranch Road, Suite 200
Scottsdale, AZ 85258
(480) 767-7178 Fax: (480) 767-6179
From the Desk of ...
Terry W. Neild
January 18, 2000
Rick Grewell
Isis Corporation
2600 - 72nd Street
Suite C
Des Moines, IA 50322
Dear Rick:
Proposed new structure of Ises Corporation
----------------------------------
It was indeed a pleasure meeting you and all your guys a few days ago. We
get offered a lot of deals as you can imagine, but few have the quality of
bright idea's that you have.
As explained in our meeting, we only invest in business's that we can take
public. That is our exit strategy. However, we will get you to the position
where you will be at the next level to do a much larger financing, possibly in
the Twenty Million Dollar range.
We will provide you initially with Five Hundred Thousand Dollars
($500,000), and commit to a further $1,500,000 bringing you a total of Two
Million Dollars ($2,000,000). For this investment we will end up with
approximately 26-27% of your Company.
If this is acceptable I will advance $50,000 personally (to be sent to your
office by FedEx) today.
If you wish to proceed, please sign below and let's get this process
started.
ISES AND INVESTMENT CAPITAL CORP. Regards,
AGREE THAT THE INITIAL $50,000 Investment Capital Corporation
ADVANCE SHOULD BE CONSIDERED /s/
A LOAN UNTIL BOTH PARTIES AGREE Terry W. Neild
ON MUTUALLY ACCEPTABLE FINAL TERMS.
Accepted on the 20 day of January, 2000
by:
/s/
Rick Grewell, President
Ises Corporation
<PAGE>
Investment Capital Corporation
7373 E. Doubletree Ranch Road, Suite 200
Scottsdale, AZ 85258
(480) 767-7178 Fax: (480) 767-6179
From the Desk of ...
Terry W. Neild
February 9, 2000
Isis Corporation
2600 - 72nd Street
Suite C
Des Moines, IA 50322
Attention: Rick Grewell
Dear Rick:
White Rock Enterprises Ltd. & Ises Corporation
This will confirm our agreement, that for the percentage ownership in the
merged Company, our Group will initially fund Seven Hundred Fifty Thousand
Dollars ($750,000.00), and then over the next three to four months fund a
further One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00) for a
total investment of Two Million Dollars ($2,000,000.00).
We look forward to creating a very successful Ises Corporation and growing
with it. I know you will have plenty of news forthcoming, which is required to
keep the Public market's informed and happy. At some point soon you will have to
decide on a name change that makes sense for your business.
Yours truly,
Investment Capital Corporation Pursuit Capital, L.L.C.
/S/ /S/
Terry W. Neild Lance Mullins
President & C.E.O. President
<PAGE>
Investment Capital Corporation
7373 E. Doubletree Ranch Road, Suite 200
Scottsdale, AZ 85258
(480) 767-7178 Fax: (480) 767-6179
From the Desk of ...
Terry W. Neild
February 10, 2000
Isis Corporation
2600 - 72nd Street, Suite C
Des Moines, IA 50322
Attention: Rick Grewell
Dear Rick:
White Rock Enterprises Ltd. & Ises Corporation
As discussed this morning, our Group, namely Pursuit Capital, L.L.C. and
Regency Group Limited will arrange for funding of an initial Seven Hundred Fifty
Thousand Dollars $750,000.00, which we expect to be completed within three weeks
at the latest. $500,000.00 will come upon signing of the merger agreement. We
will fund an additional One Million Two Hundred Fifty Thousand Dollars
($1,250,000) no later than six months (6) from the date of the merger agreement.
1.) Shareholder calls will be monitored by Pursuit Capital and affiliates hired
by Pursuit Capital;
2.) Our Group to provide media programs, magazines, newspaper, etc. in relation
to financial media;
3.) Ises will be responsible for hiring Business Wire, to do press releases;
4.) All press releases will be reviewed by Pursuit Capital LLC before
dissemination. Pursuit Capital will not prepare any press releases, and
nothing will be released to the Public without the express consent of Ises
Corporation management.
Yours truly,
Pursuit Capital, L.L.C. Investment Capital Corporation
/S/ /S/
Lance Mullins Terry W. Neild (for Regency Group Limited)
President President & C.E.O.
Exhibit 10.5
Investment Capital Corporation
7373 E. Doubletree Ranch Road, Suite 200
Scottsdale, AZ 85258
(480) 767-7178 Fax: (480) 767-6179
From the Desk of ...
Terry W. Neild
February 3, 2000
Don Stoecklein
Sperry Young & Stoecklein
1850 East Flamingo Road
Suite 111
Las Vegas, NV 89119
Dear Don:
Re: Merger of White Rock Enterprises Ltd. &
Ises Corporation
---------------------------------------
White Rock Enterprises Ltd. currently has 4,896,000 shares outstanding.
White Rock Enterprises Ltd. will acquire Ises Corporation by the issuance of
(fully-diluted) Twenty-Two Million shares (22,000,000) as follows:
Rick Grewell & partners
Preferred Stock convertible into 10,000,000 shares
Restricted 144 shares 10,000,000 "
Pursuit Capital LLC 1,000,000 "
Regency Group Limited, Inc. 1,000,000 "
----------
Total 22,000,000 "
Original stock including float 4,896,000 "
----------
Total stock issued after merger (fully-diluted) 26,896,000 "
Stock to be issued for Private Placement 750,000
----------
27,646,000 shares
Exhibit 10.6
ISES CORPORATION
2600 72nd Street, Suite C
Des Moines, Iowa 50322
Tel: (515) 331-0560 Fax: (515) 331-3901
("ISES")
IN-FLIGHT ENTERTAINMENT SOFTWARE LICENSE AGREEMENT
Customer: Airtours International Airways, Limited
Parkway One Parkway Business Center, 300 Princess Road
Manchester M147QU UK
Tel: 44 161 232 6651 Fax: 44 161 232 6613
Contact: Julie Irving/In-flight Product Director
This Agreement, effective as of March 31, 1999, is entered into between ISES
Corporation, having an office located at 2600 72nd St., Des Moines, IA 50322,
(ISES), and Airtours International Airways, Limited having an office located at
Parkway One Parkway Business Center, 300 Princess Road, Manchester M147QU, UK,
(Airtours). ISES hereby grants Customer, and Customer hereby accepts from ISES,
a non-exclusive and non-transferable right to use the computer programs
described in Section 1 below (the "Products") on the designated hardware
described in Section 2 below (the "Designated Hardware"), for the term specified
herein, subject to the terms and conditions specified below.
GENERAL TERMS AND CONDITIONS
1. PRODUCTS
"Products" means (i) the machine-readable object code version of the computer
programs described in the Product schedule, whether embedded on disc, tape or
other media, for use on the computer platform specified in the Product Schedule
(the "Software"), (ii) the published user manuals and documentation that ISES
makes generally available for the Software (the "Documentation"), (iii) the
fixes, updates, upgrades or new versions of the Software or Documentation that
ISES may provide to Customer under this Agreement (the "Enhancements") and (iv)
any copy of the Software, Documentation or Enhancements. Nothing in this
Agreement will entitle Customer to receive the source code of the Software or
Enhancements, in whole or in part.
2. DESIGNATED HARDWARE
"designated Hardware" means the hardware equipment installed in the designated
aircraft, each as specified in the Project Schedule. Customer may use the
Products as described in Section 3 only on the Designated Hardware while it
possesses and operates the Designated Hardware. Any other use or transfer of the
Products will require ISES's prior approval, which (i) shall not be unreasonably
withheld or delayed and (ii) may be subject to additional charges should any
revision to the Products be required as a result of the alternative use or
transfer.
3. USE
Customer may use the Products only in and for Customer's own internal purposes
in providing in-flight entertainment to its passengers and to the passengers of
any other airline which (i) is operated by a company within the Airtours Plc
group of companies (a "Group Company"), (ii) has contracted a majority of its
seat capacity to a Group Company, or (iii) has contracted to carry the majority
of the customers of any Group Company and (iv) providing that Customer or its
parent company at all times has legal control over each Group Company. Customer
will not permit any other person to use the Products, whether on a time-sharing
or other multiple user arrangement. Customer may install the Software or
Enhancements on a network or other multiuser
<PAGE>
computer system specified in the Product Schedule and use the Designated
Hardware to provide file services to Customer's in-flight entertainment
consoles, up to the number of aircraft specified in the project schedule.
Customer may make a reasonable number of back-up archival copies of the Software
and Enhancements. Customer will reproduce all confidentiality and proprietary
notices on each of these copies and maintain an accurate record of the location
of each of these copies. Customer will not otherwise copy, translate, modify,
adapt, decompile, disassemble or reverse engineer the Products, except as and to
the extent expressly authorized by applicable law or with the prior approval of
ISES.
4. PAYMENT
(a) License Fee. Customer will pay to ISES the License Fee specified in the
Product Schedule and by the date specified in the Product Schedule. The License
Fee is based upon the right to access the Products on up to a maximum of four
(4) A330 aircraft. Any increase in usage may be subject to additional charges.
All amounts specified in the Product Schedule are exclusive of any applicable
use, sales, service, property or other taxes or contributions, which Customer
will pay in addition to the amount due and payable. If, under local law or
applicable treaty, Customer is required to withhold any tax on such payments,
then the amount of the payment will be automatically increased to totally offset
such tax, so that the amount actually remitted to ISES, net of all taxes, equals
the amount invoiced or otherwise due. If ISES shall be entitled to receive a
credit against or remission for any such tax, ISES shall reimburse Customer with
such amount as ISES shall reasonably certify to be the proportion of such credit
or remission as will leave ISES (after such reimbursement) in no worse position
than it would have been had there been no such deduction or withholding. Such
reimbursement shall be made forthwith upon ISES certifying that the amount o
such credit or remission has been received by it. Customer will promptly furnish
ISES with the official receipt of payment of these taxes to the appropriate
taxing authority. Except for amounts disputed in good faith, any amount not paid
when due will accrue interest at the rate of 1.5% per month. Customer will pay
such interest when remitting the principal amount to ISES.
(b) Renewal. The License Fee shall remain fixed for the first two years.
Thereafter, the parties may by mutual agreement vary the License Fee with effect
from the second anniversary of the commencement of the Rental Term as stipulated
in the Product Schedule by a percentage not to exceed fifteen percent (15%) per
year from the date of this agreement.
5. SHIPMENT
ISES will, at its own cost, ship the Products from its distribution center to a
mutually agreed third party in the United States, subject to delays beyond
ISES's control. Should Customer desire shipment outside of the United States,
then ISES will select the method of shipment for Customer's account and obtain
all licenses required to export the Products from the country of origin.
Customer shall pay or reimburse ISES for the cost of shipment of the Products to
the port of entry at Customer's country of domicile. Customer will (i) obtain
all licenses required to import the Products into its country of domicile, (ii)
clear the Products through local customs and (iii) pay all customs duties and
other charges assessed on such importations, if applicable. Risk of loss will
pass to Customer upon arrival of the products at the port of entry in Customer's
country of domicile.
6. MAINTENANCE AND SUPPORT
(a) Maintenance. During the warranty period specified in Section 7(a), ISES will
provide Customer, at no additional charge, with the fixes and updates that ISES
may make generally available as part of its standard maintenance services (the
"Updates"). Required Maintenance provides Updates for the remainder of the Term
(as defined in Section 12(a)) after the Warranty Period (the "Maintenance
Period") and is paid to ISES annually in advance. The Required Maintenance Fee
is specified in the Product Schedule.
(b) "Hot-Line" Support. During the Warranty Period and any Maintenance Period
for which Customer has paid, ISES will provide Customer, at no additional
charge, with advice, consultation and assistance to use the Product and diagnose
and correct problems that Customer may encounter (the "Hot-Line Support"). ISES
will offer the Hot-Line Support remotely by telephone, fax or other electronic
communication during
2
<PAGE>
its normal business hours. Customer will bear all telephone and other expenses
that it may incur in connection with the "Hot-Line" Support. ISES may offer
on-site support to Customer at additional charges.
(c) Limitation. The Updates will not include any upgrade or new version of the
Products that ISES decides, in its sole discretion, to make generally available
to its customer base as a separately priced item. This Section will not be
interpreted to require ISES to (i) develop and release Enhancements or (ii)
customize the Enhancements to operate in conjunction with any Customer
Modification or otherwise satisfy Customers' particular requests. If an
Enhancement replaces the prior version of the Product, Customer will destroy
such prior version upon installing the Enhancement.
7. WARRANTIES AND REMEDIES
(a) Limited Warranty. ISES warrants that (i) the Software will conform to ISES's
published specifications in effect on the date of delivery, (ii) the Software
will perform substantially as described in the accompanying Documentation for
the earlier of (x) 180 days from delivery to the Product integrator mutually
agreed to by the parties and (y) 90 days after Customer's in-aircraft deployment
of the Product, and (iii) from the date of delivery of the Products by ISES
until December 31, 2000, the Products will record, store, process and present
calendar dates falling on or after December 31, 1999 in the same manner and with
substantially the same functionality as such Products record, store, process and
present calendar dates falling before December 31, 1999, (iv) it will perform
any maintenance and support services pursuant to Section 6 with reasonable care
and skill. Customer acknowledges that (i) the Products may not satisfy all of
Customer's requirements, (ii) the use of the Products may not be uninterrupted
or error-free and (iii) this limited warranty will not apply in case of any
Customer Modifications. Customer further acknowledges that (i) the License Fee
and other charges contemplated under this Agreement are based on the limited
warranty, disclaimers and limitation of liability specified in Sections 7, 8 and
9 and (ii) such charges would be substantially higher if any of these provisions
were unenforceable.
(b) Remedies. In case of breach of warranty or any other duty related to the
quality of the Products, ISES or its representative will, at its own cost
promptly correct or replace any defective Software or, in the event of a failure
by ISES to do so, pay to Customer such costs as it may reasonably incur in
correcting such defects as mutually agreed upon or, if not practicable, ISES
will accept the return of the defective Software and refund to Customer (i) the
amount actually paid to ISES for the defective Software, less depreciation based
on a 5-year straight line depreciation schedule, and (ii) a pro rata share of
any maintenance fees that Customer actually paid to ISES for the period that
such Software was not usable. Customer acknowledges that this Paragraph sets
forth Customer's exclusive remedy, and ISES's exclusive liability, for any
breach of warranty or other duty related to the quality of the Products.
(c) Limitations. The warranty provided in this Section 7 will not apply to the
extent that the breach of warranty or Product defect is not brought to the
attention of ISES during the applicable warranty period or arises as a result of
(i) failure to properly install or use the Product in accordance with its
documentation, (ii) failure of the operating environment or hardware failure,
(iii) modification of the Products other than by ISES, (iv) failure to promptly
install an Update Provided to the Customer by ISES that would have eliminated
the defect, (v) use of the Products with ambiguous date related data or in a
Year 2000 non-compliance operating environment or (vi) the combination of the
Products with other items not provided by ISES, but only if the breach would not
have occurred from use of the Product alone with the Designated Hardware
existing as of the date of this Agreement.
(d) Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, ALL WARRANTIES,
CONDITIONS, REPRESENTATIONS, INDEMNITIES AND GUARANTEES WITH RESPECT TO THE
PRODUCTS, WHETHER EXPRESS OR IMPLIED, ARISING BY LAW, CUSTOM, PRIOR ORAL OR
WRITTEN STATEMENTS BY ISES, ITS AGENTS OR OTHERWISE (INCLUDING, BUT NOT LIMITED
TO ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSES,
SATISFACTORY
3
<PAGE>
QUALITY AND NON-INFRINGEMENT) ARE HEREBY OVERRIDDEN, EXLCUEED AND DISCLAIMED.
8. INDEMNITY
(a) Indemnity. If an action is brought against Customer claiming that a Product
infringes a presently issued U.S. patent, or a copyright or trade secret, ISES
will defend Customer at ISES's expense and, subject to this Section and Section
9 pay the damages and costs finally awarded against Customer in the infringement
action, but only if (i) Customer notifies ISES promptly upon learning that the
claim might be asserted, (ii) ISES has sole control over the defense of the
claim and any negotiation for its settlement or compromise provided, however,
that ISES shall consult with Customer with respect to any decision that
materially affect's Customer's rights of use with respect to the Products and
(iii) Customer provides ISES with full cooperation in the investigation, defense
and settlement of such claim as ISES may reasonably require, providing that
Customer shall be reimbursed all of its reasonable out of pocket expenses
incurred as a result.
(b) Alternative Remedy. If a claim described in Section 8(a) may be or has been
asserted, Customer will permit ISES, at ISES's option and expense, to (i)
procure the right to continue using the Product, (ii) replace or modify the
Product to eliminate the infringement while providing functionally equivalent
performance or only if the remedies specified in (i) and (ii) are unavailable to
ISES on commercially reasonable terms, (iii) accept the return of the Product
and refund to Customer the amount actually paid to ISES for such Product, less
depreciation based on a 5-year straight-line depreciation schedule and a pro
rata share of any maintenance fees that Customer actually paid to ISES for the
period that such Product was not usable.
(c) Limitation. ISES shall have no indemnity obligation to Customer under this
Section if the infringement claim results from (i) a correction or modification
of the Product not provided by ISES, such as a Customer Modification, (ii) the
failure to promptly install an Update provided to Customer by ISES or (iii) the
combination of the Product with other items not provided by ISES, unless the
infringement would have occurred from use of the Product alone.
9. NO CONSEQUENTIAL DAMAGES
UNDER NO CIRCUMSTANCES WILL ISES OR ITS LICENSORS BE LIABLE FOR ANY
CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL DAMAGES OR LOST
PROFITS, WHETHER FORESEEABLE OR UNFORESEEABLE, BASED ON CUSTOMER'S CLAIMS OR
THOSE OF ITS PASSENGERS (INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR LOSS OF DATA,
GOODWILL, USE OF MONEY OR USE OF THE PRODUCTS, INTERRUPTION IN USE OR
AVAILABILITY OF DATA, STOPPAGE OF OTHER WORK OR IMPAIRMENT OF OTHER ASSETS OR
EQUIPMENT), ARISING OUT OF BREACH OR FAILURE OF EXPRESS OR IMPLIED WARRANTY,
BREACH OF CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT OR
OTHERWISE. IN NO EVENT WILL THE AGGREGATE LIABILITY WHICH ISES OR ITS LICENSORS
MAY INCUR IN ANY ACTION OR PROCEEDING EXCEED THE TOTAL AMOUNT ACTUALLY PAID BY
CUSTOMER FOR THE SPECIFIC PRODUCT THAT DIRECTLY CAUSED THE DAMAGE. THIS SECTION
WILL NOT APPLY ONLY WHEN AND TO THE EXTENT THAT APPLICABLE LAW SPECIFICALLY
REQUIRES LIABILITY, DESPITE THE FOREGOING EXCLUSION AND LIMITATION.
10. OWNERSHIP
All trademarks, service marks, patents, copyrights, trade secrets and other
proprietary rights in or related to the Products are and will remain the
exclusive property of ISES or its licensors, whether or not specifically
recognized or perfected under applicable law. Customer will not take any action
that jeopardizes ISES's or its licensor's proprietary rights or acquire any
right in the Products, except the limited use rights specified in Section 3.
ISES or its licensor will own all rights in any copy, translation, modification,
adaptation or derivation of the Products, including any Customer Modification or
other improvement or development of the Products. Customer will obtain, at
ISES's reasonable request and expense, the execution of any instrument that may
be appropriate to assign these
4
<PAGE>
rights to ISES or its designee or perfect these rights in ISES's or its
licensor's name.
11. CONFIDENTIALITY
(a) Confidentiality. Customer acknowledges that the Products incorporate
confidential and proprietary information developed or acquired by or licensed to
ISES. Customer will take all reasonable precautions necessary to safeguard the
confidentiality of the Products, including (i) those taken by Customer to
protect Customer's own confidential information and (ii) those which ISES or its
authorized representative may reasonably request from time to time. Customer
will not allow the removal or defacement of any confidentiality or proprietary
notice placed on the Products. The placement of copyright notices on these items
will not constitute publication or otherwise impair their confidential nature.
(b) Disclosure. Customer will not disclose, in whole or in part, any item of the
Products that has been designated as confidential to any individual, entity or
other person, except (i) to those of Customer's employees or consultants who (x)
require access for Customer's authorized use of the Products and (y) agree to
comply with the use and non-disclosure restrictions applicable to the Products
under this Agreement or (ii) pursuant to the order of a court of competent
jurisdiction or of any regulatory body to whose authority Customer is required
to submit; provided that Customer will have first given prior notice of such
order to ISES, if practicable, and afforded ISES the opportunity to apply for a
protective order or to otherwise limit the disclosure. Customer shall cause any
employee or consultant who has access to the source code of the Software to
expressly acknowledge its confidential and proprietary nature. Customer
acknowledges that any unauthorized use or disclosure of the Products may cause
irreparable damage to ISES, its licensors and ISES. If an unauthorized use or
disclosure occurs, Customer will immediately notify ISES and take, at Customer's
expense, all steps which may be available to recover the Products and to prevent
their subsequent unauthorized use or dissemination.
(c) Limitation. Customer will have no confidentiality obligation with respect to
any portion of the Products that (i) customer knew or independently developed
before receiving the products under this Agreement, (ii) Customer lawfully
obtained from a third party under no confidentiality obligation or (iii) became
available to the public other than as a result of any act or omission by
Customer or any of customer's employees or consultants.
12. TERM AND TERMINATION
(a) Term. This agreement will become effective as of March 31, 1999 and shall
continue in effect for 36 months of commencement of the Rental Term unless (i)
Customer provides ISES with 90 days written notice of its intention to
terminate, such notice to expire only on the first or any subsequent anniversary
of the effective date or unless (ii) terminated pursuant to Section 12(b) or
(c).
(b) Termination for Convenience. Customer may terminate this Agreement, without
right to refund, by notifying ISES of such termination.
(c) Termination for Cause. Either party may terminate this Agreement,
immediately upon notice to the other party and without judicial or
administrative resolution, if the other party or any of its employees or agents
breach any term or condition hereof and such breach is not cured within 60 days
after receipt of notice specifying the breach and demanding its cure; provided,
however, that a cure period shall be applicable to a breach of Sections 10 or 11
only if such breach is, in the non-breaching party's opinion, reasonably capable
of cure. This Agreement will terminate automatically if either party becomes
insolvent or enters into bankruptcy, suspension of payments, moratorium,
reorganization or any other proceeding that relates to insolvency or protection
of creditors' rights granted to Customer hereunder will cease, and Customer will
promptly (i) purge the Software and Enhancements from the Designated Hardware
and all of Customer's other computer systems, storage media and other files,
(ii) destroy the Products and all copies thereof and (iii) deliver to ISES a
letter signed by an officer of Customer which certifies that Customer has
complied with these termination obligations. Upon termination of this Agreement
by Customer pursuant to Section 12(C), ISES shall refund to Customer the
pro-rated amount of the then-paid license fee or maintenance fee for the
remaining term of the Agreement. The
5
<PAGE>
provisions of Sections 7, 8, 9, 10 and 11 will survive the termination of this
Agreement.
13. INSPECTION
During the term of this Agreement, ISES or its representative may, upon
reasonable prior notice to Customer, inspect the files, computer processors,
equipment, aircraft and facilities of Customer during normal working hours to
verify Customer's compliance with this Agreement. While conducting such
inspection, ISES or its representative will be entitled to copy any item that
Customer may possess in violation of this Agreement.
14. ASSIGNMENT
Customer shall not assign, delegate or otherwise transfer this Agreement or any
of its rights or obligations hereunder without Isis's prior approval.
15. EXPORT CONTROLS
Customer acknowledges that the Products and all related technical information,
documents and materials are subject to export controls under the U.S. Export
Administration Regulations. Customer will (i) comply strictly with all legal
requirements established under these controls, (ii) cooperate fully with ISES in
any official or unofficial audit or inspection that relates to these controls
and (iii) not export, re-export, divert or transfer, directly or indirectly, any
such item or direct products thereof to Cuba, Iran, Iraq, Libya, North Korea,
Sudan, Syria or any country that is embargoed by Executive order, unless
Customer has obtained the prior written authorization of ISES and the U.S.
Commerce Department. Upon notice to Customer, ISES may modify this list to
conform to changes in the U.S. Export Administration Regulations.
16. MISCELLANEOUS
All notices or approvals required or permitted under this Agreement must be
given in writing. Any waiver or modification of this Agreement will not be
effective unless executed in writing and signed by the parties. This Agreement
will bind the parties' successors-in-interest. This Agreement will be governed
by and interpreted in accordance with the laws of the State of New York, U.S.A.
The parties hereby exclude application of the U.N. Convention on Contracts for
the International Sales of Goods from this Agreement and any transaction between
them related thereto. If any provision of this Agreement is held to be
unenforceable, in whole or in part, such holding will not affect the validity of
the other provisions of this Agreement, unless either party in good faith deems
the unenforceable provision to be essential, in which case such party may
terminate this Agreement effective immediately upon notice other party. Any
press release or other public statement regarding this Agreement shall be
mutually agreed to between the parties. Either party may use the other's name in
its advertising collateral, subject to the prior approval of the other party,
which shall not be unreasonably withheld or delayed. This Agreement constitutes
the complete and entire statement of all conditions and representations of the
agreement between ISES and Customer with respect to its subject matter and
supersedes all prior writings or understandings.
6
<PAGE>
THIS AGREEMENT IS NOT EFFECTIVE UNTIL SIGNED ON BEHALF OF BOTH PARTIES.
ISES Corporation Airtours International Airways, Limited
2600 72nd Street, Suite C Parkway One Parkway Business Center
Des Moines, IA 50322 300 Princess Road
Tel: (515) 331-0560 Manchester, M147QU UK
Fax: (515) 331-3901 Tel: 44 161 232 6651
Fax: 44 161 231 6613
("ISES") ("Customer")
By: /S/ By: /S/
----------------------- -------------------------------
(Signature) (Signature)
Name: Dean Richard Grewell Name: Julie Irving
Title: President Title: In-flight Product Director
Date: June 21, 1999 Date: 22nd April 1999
PRODUCT SCHEDULE
Software: ISES Games package includes the following 10 games:
1. Solitaire
2. Backgammon
3. Matchboxes
4. Hangman
5. Trivia
6. Mr. Sneaky
7. Chinese Solitaire
8. Iron Curtain
9. Gold digger
10. Noughts and Crosses
Computer Platform: Rockwell Collins TES Core D
Designated Hardware (S/N): Rockwell Collins TES
Designated Aircraft: Airbus A330
Maximum Number of Aircraft: 4
License Fee: [Confidential treatment has been requested for this portion of this
Exhibit]
Installation Fee for additional ISES Games to be added/removed from initial ISES
Game package: [Confidential treatment has been requested for this portion of
this Exhibit]
7
<PAGE>
Required Maintenance Fee: [Confidential treatment has been requested for this
portion of this Exhibit]
Payment Due By: Net 30 Days
Game Availability: Air Tours has access to all ISES developed Games
approved for Rockwell Collins TES that are publicly available. The bundling
of additional games for Airtours is subject to the availability of the
Airtours rack at Rockwell Collins. It is the responsibility of Airtours to
bear any additional costs that Rockwell Collins may require for a new
software bundle and its integration. ISES will negotiate in good faith with
Airtours for non-ISES developed games.
Rental Term: The rental term of this agreement will begin on the earlier of
180 days from the initial installation of the Product at Rockwell
Collins on the Airtours rack (3/8/99 installation) or upon delivery of
the first aircraft. Airtours will provide written notice to ISES of
the aircraft delivery date within 30 days of the actual delivery.
8
Exhibit 10.7
Lonely Planet Publications
CONTENT LICENSE AGREEMENT
BETWEEN
Lonely Planet Publications Pty. Ltd,
192 Burwood Rd., Hawthorn, Vic. 3122, AUSTRALIA
(LONELY PLANET)
and
ISES Corporation
2600 72nd Street
Des Moines, Iowa 50322
United States of America
(the LICENSEE)
AGREEMENT
This agreement is dated November 15, 1999 and is between LONELY PLANET and the
LICENSEE.
Recitals
The LICENSEE seeks permission to reproduce literary and artistic works in
respect of which LONELY PLANET is the copyright owner or exclusive licensee,
details of which are contained in Schedule A ("the Works"), for inclusion in the
LICENSEE'S software products for digital Inflight Entertainment systems, details
of which are contained in Schedule B ("the Services"), on the terms and
conditions set out hereunder.
LONELY PLANET and the LICENSEE agree as follows:
1. Grant of Rights
1.1. LONELY PLANET hereby grants to the LICENSEE the world-wide right for the
term of this Agreement to reproduce, transmit, distribute and display the Works
in English or other languages as may be required, and as can be produced by
LONELY PLANET, as part of the Services for digital Inflight Entertainment
systems. Save as expressly provided, the LICENSEE agrees to make no other use of
the Works. [Confidential treatment has been requested for this portion of this
Exhibit]
1.2 LONELY PLANET reserves the right to withdraw use of the Works on the
Services, where the Services contains content which in the reasonable opinion of
LONELY PLANET may be damaging to the standing or reputation of LONELY PLANET.
The LICENSEE shall consult with LONELY
<PAGE>
PLANET prior to the use of the Works on the Services in a way that the LICENSEE
ought reasonably apprehend may be contrary to the terms of this clause.
1.3 LONELY PLANET will provide to the LICENSEE the Works (and updates of the
Works) in a form and format, and according to a time schedule, as the parties
shall agree upon. LONELY PLANET will use its best efforts to ensure that the
Works are accurate and up to date.
1.4 The LICENSEE may not make any alteration to the content of the Works without
consultation with LONELY PLANET prior to publication. The LICENSEE shall correct
any errors in the version of the Works as used on the Services, as requested by
LONELY PLANET.
1.5 The LICENSEE may only make use of the LONELY PLANET trade marks referred to
in Schedule C ("the LONELY PLANET trade marks"). Whenever use is made of the
LONELY PLANET trade marks outside of the Works, the LICENSEE shall obtain the
express approval of LONELY PLANET with respect to the presentation of pages
bearing the LONELY PLANET trade marks.
1.6 The LICENSEE shall clearly identify all of the text part of the Works with a
copyright notice to include - "(C)1999 Lonely Planet Publications Pty. Ltd. All
rights reserved".
1.7 The licensee shall clearly identify all of the photographic part of the
Works with a copyright notice to include - "(C)The name of the photographer.
Lonely Planet Images".
1.8 Save as referred to in clause 1.9 herein, LONELY PLANET warrants that it is
entitled to grant the rights herein in the Works, and hereby indemnifies the
LICENSEE for any damage arising from any breach of such warranty, save that such
warranty will be automatically deemed void in the event of the LICENSEE making
use of the Works in any manner contrary to the terms of this Agreement.
1.9 In respect of any readers' feedback included in the Works, and identified as
such by LONELY PLANET, LONELY PLANET warrants only that it believes that it is
entitled to grant the rights in the Works granted herein. LONELY PLANET
otherwise makes no warranty or representation of any kind with respect to such
readers' feedback.
2.0 The parties disclaim and hereby waive any moral rights to which they might
otherwise be entitled with respect to the publication of the Works on the
Services.
2. LICENSEE Obligations
2.1 The LICENSEE shall ensure that the Works are published on the Services, and
are available to airlines deploying digital in-flight entertainment systems
supported by LICENSEE, during the full term of this Agreement, and that airlines
are able to access the Works under LICENSEE's standard commercial terms and
conditions
2.2 The LICENSEE undertakes to maintain the operation of the Services, and to
inform LONELY PLANET in the event that Licensee ceases to provide the Works on
the Services to airlines.
2
<PAGE>
2.3 The LICENSEE shall promptly inform LONELY PLANET of any claims made of any
description concerning the accuracy or publication of the Works or any other
claim of legal liability concerning the Works.
2.4 The LICENSEE agrees to comply with all reasonable requests of LONELY PLANET,
arising from any claims of legal liability, concerning the continued use of the
Works, including withdrawing the Works, or any part thereof, from use on the
Services.
2.5 The LICENSEE agrees to promote the use of the Works by it on the Services by
making prominent reference to the Works and the LONELY PLANET name and logo (in
a form to be agreed) on the Services.
2.6 The LICENSEE shall publish any disclaimer required by LONELY PLANET to be
published in conjunction with the Works on the Services.
3. Marketing and Promotions
3.1 The LICENSEE will have the sole right to sell advertising in conjunction
with the use of the Works on the Services, subject to the provisions of clause
1.2 herein.
3.2 Both parties agree that all copyright, logos, trade marks, symbols and
corporate identifiers (collectively, "Intellectual Property Rights") of the
other party shall remain the exclusive property of that party. Neither party
shall take any action or make any claim or use of the Intellectual Property
Rights which infringes, jeopardizes, undermines or reduces the value of, or in
any way dilutes or is contrary to the proper management and/or protection of,
the other party's ownership of its own Intellectual Property Rights.
4. Payment Terms
4.1. The LICENSEE agrees to make the following payments to LONELY PLANET after
LICENSEE distributes the Works to an airline for use with a digital Inflight
Entertainment system:
[Confidential treatment has been requested for this portion of this Exhibit]
Payment amounts are in U.S. Dollars and will be paid at the end of the quarter
following airline deployment of the Works. Payments by LICENSEE to LONELY PLANET
shall not exceed [Confidential treatment has been requested for this portion of
this Exhibit] per year.
4.2 The LICENSEE shall be responsible for all taxes or payments to any
government agencies of any description due in respect of remitting such
royalties to LONELY PLANET, the cost of such taxes or payments to be borne by
the LICENSEE.
4.3 The LICENSEE shall maintain accurate records of all revenues and payments
due in connection with the performance of this Agreement for a period not less
than two (2) years following the expiration
3
<PAGE>
or termination of this Agreement. Upon thirty (30) days prior written notice,
LONELY PLANET shall have the right once each calendar quarter, at its own
expense and during normal business hours, to inspect and audit the portions of
the books and records of the LICENSEE which are relevant to verify the
performance of the LICENSEE pursuant to this Agreement. If the audit reveals an
underpayment in excess of ten (10) percent, the commercially reasonable cost of
the audit shall be borne entirely by the LICENSEE, and paid on demand.
5. Term and Termination
5.1 This Agreement shall be for a term of three years, unless terminated by
either party in accordance with the terms herein. This agreement shall be
exclusive for the first year of the term and non-exclusive for the remaining
years unless otherwise agreed to in writing by both parties.
5.2 Save as provided in clauses 5.4, either party may terminate this Agreement
upon thirty (30) days prior written notice to the other party if such other
party breaches any material term of this Agreement, unless such breach is cured
within such thirty (30) day period.
5.3 This Agreement shall automatically terminate upon an order being made to
wind up or liquidate the LICENSEE, or appointing a receiver or administrator for
the LICENSEE, or otherwise declaring the LICENSEE to be bankrupt or insolvent,
or upon the LICENSEE applying for the voluntary winding up or liquidation of the
LICENSEE or otherwise to be declared bankrupt or insolvent, or for the
appointment of a receiver or administrator for the LICENSEE.
5.4 Upon termination or expiration of this Agreement for any reason (i) the
LICENSEE shall immediately pay to LONELY PLANET the full amount of all sums due
under this Agreement (including royalties calculated up to the date of
termination); (ii) the LICENSEE shall immediately cease making any use
whatsoever of the Works, LONELY PLANET trade marks and any other Intellectual
Property Rights of LONELY PLANET; (iii) the LICENSEE shall delete or destroy all
LONELY PLANET pages and all data and files relating thereto from its files and
records, including all copies of the Works, whether in print or electronic form;
(iv) the parties shall remove all special links made from their respective web
sites to the web site of the other party.
6. Liability
6.1. Save in respect of clause 1.8 herein, LONELY PLANET shall not be liable to
the LICENSEE for any damage of any description whatsoever, including any
consequential, special or indirect damages, occasioned in any way by reason of
the publication of the Works by the LICENSEE or other parties or otherwise by
reason of the terms of this Agreement.
6.2 If an action is brought against LICENSEE claiming that the Works infringes a
presently issued patent, or a copyright or trade secret, LONELY PLANET will
defend LICENSEE at LONELY PLANET's expense and, subject to this Section, pay the
damages and costs finally awarded against LICENSEE in the infringement action,
but only if (i) LICENSEE notifies LONELY PLANET promptly upon learning that the
claim might be asserted, (ii) LONELY PLANET has sole control over the defense of
the claim and any negotiation for its settlement or compromise and (iii)
LICENSEE provides LONELY PLANET with full cooperation in the investigation,
defense and settlement of such claim as
4
<PAGE>
LONELY PLANET may reasonably require, providing that LICENSEE shall be
reimbursed all of its reasonable out of pocket expenses incurred as a result.
7. Disclaimer of Warranty
7.1. Save for clause 1.8 herein, both parties expressly disclaim any warranties,
express or implied, including without limitation any implied warranties of
merchantability and fitness for intended use.
8. Confidentiality
8.1. The terms and conditions of this Agreement shall be kept confidential by
LONELY PLANET and the LICENSEE and shall not be disclosed to any third party.
9. Miscellaneous
9.1. The relationship between the LICENSEE and LONELY PLANET will be that of
independent contractors, and none of the parties nor any of their respective
officers, agents or employees will be held or construed by the LICENSEE or
LONELY PLANET to be partners, joint venturers, fiduciaries, employees or agents
of the other.
9.2. The parties hereto agree that the law applicable to this Agreement shall be
the law in force in the State of New York, United States of America for the time
being unless otherwise expressly agreed. If any difference shall arise between
the LICENSEE and LONELY PLANET in relation to the interpretation of or in any
way touching the meaning of this Agreement or the rights or liabilities of the
parties hereto, the same shall be referred to arbitration in accordance with the
Commercial Arbitration Act or other law applicable to such arbitration in force
for the time being in the State of New York, United States of America.
9.3. Neither party may transfer in any way the rights granted herein, including
grant any assignment or license in respect of such rights, without the prior
written consent of the other party, which shall not be unreasonably withheld.
9.4 This Agreement contains the entire agreement between the parties relating to
the subject matter hereof, and supersedes any previous agreement concerning such
subject matter between the parties, including any oral agreement, and may not be
amended or modified except in writing as mutually agreed by the parties.
9.5 If any provision of this Agreement is held unenforceable, such provision
shall be deleted only to the extent necessary to make it enforceable, and the
other provisions of this Agreement will remain in full force and effect.
9.6 The Schedules to this Agreement are incorporated into this Agreement and
form a part of the Agreement.
5
<PAGE>
9.7 No waiver of a breach of any provision of this Agreement by either party
shall constitute a waiver of any subsequent breach of the same or any other
provision hereof, and no waiver shall be effective unless made in writing and
signed by a duly authorized representative of the waiving party.
9.8 All notices required to be given hereunder shall be given by certified mail,
and addressed to the attention of the below-mentioned persons.
In witness whereof, the LICENSEE and LONELY PLANET have executed this Agreement
as of the date first written above.
LONELY PLANET PUBLICATIONS PTY. LTD. THE LICENSEE
By: /s/ By: /s/
Name: Virginie Boone Name: Dean Grewell
Title: Web Publishing Manager Title: President
6
<PAGE>
SCHEDULES
SCHEDULE A
Details of the Works
SCHEDULE B
Details of LICENSEE Services
SCHEDULE C
LONELY PLANET Trade Marks
7
<PAGE>
SCHEDULES
SCHEDULE A
Details of the Works
Lonely Planet destination profiles, including text, maps and, when available,
photographs or any other Lonely Planet mutually agreed upon by both parties.
Text shall be supplied as SGML files, photographs as jpgs, and maps as gif files
or other formats deemed necessary by both parties.
8
<PAGE>
SCHEDULE B
Details of LICENSEE Services
Destination software of the Airsoft(TM) Travel Kit for in-flight entertainment
systems.
9
<PAGE>
SCHEDULE C
LONELY PLANET Trade Marks
The Lonely Planet content will reside on a co-branded page which will contain
the logos of both LICENSEE and LONELY PLANET in equal prominence
Lonely Planet
Lonely Planet logos:
10
Agreement No. 35E137777
Date: October 1, 1999
Exhibit 10.8
ISES Corporation
LICENSE AND DISTRIBUTION AGREEMENT
ISES Corporation has appointed the entity named below as the Licensee
("Licensee") on the terms and conditions set forth in the attached License and
Distribution Agreement.
Licensee: Rockwell Collins, Inc.
2001 West Mission Boulevard
Pomona, CA 91766-1020
Phone: (909) 868-6165
Fax: (909) 868-1252
End User: Air France, 45 rue de Paris, F-95747 Roissy CDG cedex, Paris,
France
Territory: Worldwide
Term: [Confidential treatment has been requested for the remaining
portion of this Exhibit]
Confidential
Motorola/ISES SDA
Signature Copy
Confidential Exhibit 10.9
SOFTWARE DEVELOPMENT AGREEMENT
This Agreement, effective as of the date of the last signature hereto, is
entered into between Motorola, Inc., having an office located at 6501 William
Cannon Drive West, Austin, Texas 78735-8598, (Motorola), and International
Systems Entertainment Software, Inc. having an office located at 1032 54th
Street W. Des Moines Iowa, (ISES). ISES and Motorola may be referred to herein
as a Party or Parties as the case may require.
WHEREAS, Motorola desires to use the software development capabilities of ISES
to perform software development services, and
WHEREAS, ISES desires to and is capable of providing the software development
services.
NOW THEREFORE, the parties agree as follows:
[Confidential treatment has been requested for the remaining portion of this
Exhibit]
ISES Statement of Work for Motorola [LOGO]
Exhibit 10.10
Exhibit C
ISES Statement of Work for Motorola Application User Interfaces June 25, 1999
Tony Hoffman
Project Manager
ISES, Corp.
2600 72nd St., Suite C
Des Moines, IA 50322
Tel (515)331-0560
Fax (515)331-3901
email:[email protected]
[Confidential treatment has been requested for the remaining portion of this
Exhibit]
Motorola/ISES SDA
Signature Copy
Exhibit 10.11
PROFESSIONAL SERVICES AGREEEMNT
This Professional Services Agreement dated 3-27-00, (the "Agreement") is between
ISES Corp. (Which together with its parent, affiliates and subsidiaries is
herein called "client"), and Icon Laboratories, Inc., a Florida corporation with
offices at 3636 Westown Parkway, Suite 101, West Des Moines, IA 50266
("Consultant").
In consideration to the mutual promises, covenants and conditions contained
herein, and for other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, Client and Consultant agree as
follows:
1. Statement of Work
Consultant shall, from time to time, perform services specified on
individual Statements of Work ("SOW") which shall reference this Agreement
and shall be deemed a part hereof. The parties agree that time is of the
essence to this Agreement and to these Statements of Work. To be valid,
Statements of Work must be executed by Client and Consultant.
2. Cost and Payment
Client shall pay Consultant compensation according to the provisions of
each Statement of Work attached hereto. Unless otherwise specified, if
payment is based on an hourly rate, any periods of work of less than an
hour will be computed on a pro rata basis to the nearest half hour. When
travel has been approved in writing prior to the time the expense is
incurred, Client will reimburse Consultant for travel expenses. Client
shall make payment to Consultant within thirty (30) days after receipt by
Client of Consultant's invoices and any supporting documentation, if
requested. A 1.5% per month late fee will be added to all late invoices.
Each invoice submitted by Consultant will provide complete supporting
detail, including names(s) of person(s) who performed the services, dates
of services, hours or days worked and billing rates.
3. Confidentiality/Non-Disclosure and Publicity
a. Consultant agrees during the term of this Agreement and any Statements
of Work executed hereunder and thereafter to hold in confidence and
not to directly or indirectly reveal, report, publish, disclose or
transfer any Confidential Information to any person or entity, or
utilize any Confidential Information for any purpose except in the
course of the undersigned's work for Client. For purposes of this
Agreement, "Confidential Information" shall mean information or
material that is i) proprietary and/or confidential to Client; ii)
designated as Confidential Information and provided to Consultant by
Client; or iii) developed by Consultant for Client, of which the
undersigned obtained knowledge or access through or as a result of
Consultant's relationship with Client, including, but not limited to
any Confidential Information obtained from Client, prior to entering
into this Agreement. Confidential Information shall also include any
information which Client obtains from another party and which Client
treats as proprietary or designates as Confidential Information,
whether or not owned or developed by Client. Information publicly
known that is generally employed by trade at or after the time the
undersigned first learns of such information, or generic information
or knowledge which the undersigned would have learned in the course of
similar employment or
<PAGE>
work elsewhere in the trade, shall not be deemed part of the
Confidential Information. At the termination of this Agreement, or any
Statement of Work executed hereunder, Consultant shall return all
Confidential Information related to the terminated project or, at
Client's option, destroy the Confidential Information and provide
Client with proof of such destruction.
b. The parties shall maintain the terms of this Agreement and any
Statements of Work executed hereunder in confidence and neither party
may originate any publicity, news release or other public announcement
relating to this Agreement or any Statement of Work without first
obtaining the other party's prior written consent, except as otherwise
required by law or governmental regulation (in which event reasonable
prior notice shall be given to the other party).
4. Ownership of Work Product
All discoveries, designs, information, ideas, artwork, and training
materials (including, but not limited to any leader's guide, student
guides, overheads, software, posters, and video tapes) developed by
Consultant as a result of performance of services hereunder, and/or
through the use of any of the Confidential Information or Client's
equipment or facilities ("Work Product") shall be transmitted only to
Client, is work made for hire, as provided by the United States
Copyright Act, and shall become the exclusive property of Client and
shall be regarded by Consultant as Confidential Information and subject
to the foregoing provisions. Consultant may not use such Work Product
for any other purpose without the express written consent of Client.
The foregoing restriction on use shall not apply to materials developed
by Consultant outside of the services provided hereunder and without
use of the Work Product or its derivatives.
5. Independent Contractor
The relationship of Consultant and Client shall be that of independent
contractors. Neither party, nor their agents or employees, shall be deemed
to be the agent or employee of the other. Neither party shall have the
right to bind the other, transact any business in the other's name or on
its behalf or incur any liability for or on behalf of the other.
Each party shall comply with all applicable federal, state and local wage
and tax laws relating to such party and shall be solely responsible for
paying all wages to its employees and agents, for obtaining insurance for
its employees and agents and for withholding and paying all applicable
federal, state, and social security taxes, unemployment taxes and any
similar taxes on behalf of its employees and agents.
6. Termination
a. Either party may immediately terminate this Agreement and/or any
associated Statement of Work without cause by giving the other party
thirty (30) days prior written notice.
b. For Cause--If Consultant fails to make any delivery in accordance with
the agreed delivery date or schedule or otherwise fails to observe or
comply with any of the other instructions, terms, conditions, or
warranties applicable to this Agreement, or fails to make progress so
as to endanger performance of this Agreement, or in the event of any
proceedings by or against Consultant in bankruptcy or insolvency or
appointment of a receiver or trustee or any assignment for the benefit
of creditors, Client may, in addition to any other right or remedy
provided by this Agreement or by law, terminate all or any part of
this Agreement by telegraphic or other written
<PAGE>
notice to Consultant without any liability by Client to Consultant on
account thereof. In the event of termination for cause, Client may
produce or purchase, or otherwise acquire articles elsewhere on such
terms or in such manner as Client may deem appropriate.
c. Upon termination of this Agreement and/or any associated Statement of
Work, Consultant shall promptly return to Client, all Client's
property in its possession, including, but not limited to keys,
badges, access cards, documentation, software and disks, and shall
turn over to Client all Work Product prepared as of the effective
termination date and for which Client has paid.
d. In the event of termination, Client's obligation shall be limited to
paying Consultant for work authorized by Client and performed
satisfactorily prior to the effective date of termination.
e. Termination shall not effect Consultant's obligations under Sections
2,3,4,10,11.
7. Waiver/Amendment/Modification
No waiver, amendment or modification of any provision hereof or of a
Statement of Work shall be effective unless in writing and signed by the
party against whom such waiver, amendment or modification is sought to be
enforced. No failure to delay by either party in exercising any right,
power or remedy hereunder shall operate as a waiver of any such right,
power or remedy.
8. Notice
All notices, demands or consents required or permitted hereunder shall be
in writing and shall be delivered by overnight delivery, facsimile (with
confirmation copy by mail) or telex, or mailed to the respective parties at
the addresses first set forty above or at such other address as shall have
been given to the other party in writing for the purposes of this clause.
Notices to Consultant shall be sent to the attention of Alan Grau, Icon
Laboratories, Inc. 3636 Westown Parkway, Suite 101, West Des Moines, Iowa
50266. Notice to Client shall be sent to Steve Johnson, ISES Corporation,
2600 72nd Street, Suite C, Des Moines, IA 50322. Such notices and other
communications shall be deemed effective upon the earliest to occur of (i)
actual delivery, (ii) five days after mailing, addressed and postage
prepaid, return receipt requested, as aforesaid, (iii) one (1) business day
after transmission by overnight delivery, or (iv) the day of receipt where
receipt has been confirmed.
9. Severability
In the event that any one or more of the provisions contained herein shall
for any reason be held to be unenforceable or illegal in any respect, this
Agreement shall then be construed as if such unenforceable provision or
provisions had never be contained herein.
10. Jurisdiction/Choice of Law
The parties agree to submit to the jurisdiction of the State of Iowa and
further agree that this Agreement shall be construed and enforced in
accordance with the laws of the State of Iowa excluding its conflicts of
law principles.
11. Solicitation of Employment
Consultant may not solicit or hire any individuals who have been employed
by Client or any
<PAGE>
of its affiliates during the 12-month period preceding such solicitation
and/or hiring. Client may not solicit or hire any individuals who have been
employed by Consultant or any of its affiliates during the 12-month period
preceding such solicitation and/or hiring.
12. Right of Assignment
Only Client may assign this Agreement. Such assignment may be to an
entity which acquires, directly or indirectly, substantially all of its
assets or merges with it, or any parent or subsidiary of such party,
provided that the acquiring or merging entity or such parent or
subsidiary agrees to be bound by all terms and conditions of this
Agreement. Subject to the above, this Agreement shall be binding upon
and inure to the benefit of the successors and assigns of the parties
hereto.
13. Complete Agreement/Conflicting Terms
a. Each party acknowledges that it has read this Agreement and agrees to
be bound by its terms and further agrees that it is the complete and
exclusive statement of the agreement and understanding between the
parties, which supersedes all previous understandings, negotiations,
and proposals, whether oral or written.
b. If there is a conflict between the terms and conditions of this
Agreement and those of any associated Statement of Work that has been
signed by both parties, the Statement of Work shall control.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the day and year first above
written. This Agreement shall not be binding until it is signed by both parties.
CLIENT ICON Laboratories, Inc.
By: /s/ By: /s/
Name: Rick Grewell Name: Alan L. Grau
Title: President Title: President
Date: 3/27/00 Date: 3-27-00
<PAGE>
STATEMENT OF WORK
AGREEMENT NO: ISES 01
March 13, 2000
[Confidential treatment has been requested for the remaining portion of this
Exhibit]
