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Exhibit 99.3
Jack F. Fitzmaurice, Esq. CSBN 061129
Darlene P. Palaganas, Esq. CSBN 203050
FITZMAURICE & DEMERGIAN
AN EXPENSE SHARING ASSOCIATION -
NOT A PARTNERSHIP OR JOINT ENDEAVOR
550 West "C" Street, Suite 990
San Diego, California 92101
619-239-3015 Office
Attorneys for Defendant
GREENLAND CORPORATION, a NEVADA
CORPORTATION
AMERICAN ARBITRATION ASSOCIATION
IN THE MATTER OF
GREENLAND CORPORATION, a Nevada Case No.:
Corporation
Claimant, DEMAND FOR ARBITRATION
vs.
SEREN SYSTEMS, INC. a California
Corporation
Respondent.
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COMES NOW Greenland Corporation, a Nevada corporation, and makes demand for
arbitration of dispute pursuant to paragraph 12., Binding Arbitration, of that
certain Consulting Agreement dated November 26, 1998 which provides as follows:
"12. Binding Arbitration
Any Controversy or claim arising out of or relating to this Agreement, or
any alleged breach thereof, will be settled by binding arbitration in
accordance with the Commercial Rules of the American Arbitration
Association. Such action shall be brought in San Diego
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County, California and judgment on the award rendered by the Arbitrator(s)
may be entered in any court having jurisdiction thereof. The prevailing
party in such action shall be entitled to recover reasonable attorney's
fees"
A copy of said agreement is attached hereto as Exhibit A.
BACKGROUND
1. Claimant Greenland Corporation (hereinafter "Claimant" or "Greenland")
engages in the business of the manufacture and sale of automatic banking
machines (hereinafter "ABM"). In addition thereto Greenland provides processing
of transactions engaged in by way of ABM equipments. ABM's are machines similar
in concept to automatic teller machines; i.e., ATM's, of the sort commonly in
use to dispense cash withdrawals from customer bank accounts throughout the
United States. ABM technology encompasses a machine having the capacity to
dispense cash, negotiate checks, issue money orders, accept payment of utility
bills and the like. Claimant is informed and believes that the demand for ABM
equipments and technology is on the verge of explosive growth and Greenland has
been working assiduously upon the development of both ABM hardware and ABM
software for more than two (2) years.
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2. Effective November 26, 1998 Greenland entered into the Agreement, a copy
of which is attached hereto as Exhibit A. The purpose of the agreement was to
employ Seren Systems, Inc. (hereinafter "Respondent" or "Seren") to perform the
tasks set out at Exhibit A to Exhibit A including, without limitation, the
backup and safekeeping of Claimant's software source codes, software design and
development, software design and evaluation, additional design and evaluation
anticipated for ABM technology and such other services as may reasonably be
requested by Greenland. Further, Seren agreed pursuant to paragraph 6 of Exhibit
A hereto that Greenland retained sole and exclusive right, title and ownership
of the APM technology and any new products, improvements, enhancements or the
like that result from the Agreement.
3. In November, 1999 the Agreement attached hereto as Exhibit A and which
had one (1) year term was completed in accord with its terms and the parties
thereto; i.e., Greenland and Seren, agreed to continue the contract under the
same terms and conditions except that the monthly compensation payable to Seren
thereunder was increased. From December, 1999 until the events described below
Seren performed the services described for Greenland and Greenland paid Seren
for said services on a monthly basis.
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4. Prior to June, 2000 Greenland entered into negotiations with Capital
One, a Virginia banking institution, with a view toward entering into a
contractual relationship whereby Capital One would utilize Greenland ABM's in
connection with banking transactions. To that end Capital One, with Greenland's
cooperation, engaged in a due diligence process pursuant to which
representatives of Capital One traveled to Respondent Seren's facilities to
acquaint themselves with Greenland's software development status.
5. During the course of Capital One's conference with Seren, Respondent
stated to Capital One that:
a) Greenland does NOT have an ownership or other interest in the ABM
software; and
b) Seren offered to make the ABM software developed under the Greenland
agreement available directly to Capital One in exchange for compensation
payable directly to Seren.
6. As a direct consequence and result of the statements made to Capital One
by Seren, Capital One terminated negotiations with Greenland and withdrew;
thereby destroying the Greenland-Capital One business relationship and
interfering with Greenland's prospective business advantage.
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7. During the course of the Capital One due diligence events, Claimant was
engaged in discussions with National Cash Register Corporation (hereinafter
"NCR"), a manufacturer of business machines and ATM devices, in connection with
arrangements whereby NCR would acquire, by way of license, purchase, or
otherwise, Greenland's ABM machines operating with Greenland's software as
developed pursuant to contract with Respondent Seren. In connection with such
discussions, NCR met with Seren to obtain data relative to Greenland software.
Seren stated to NCR that:
a) Greenland was in process of being sold to Capital One; and
b) Greenland had no interest in the ABM software developed by Seren; and
c) Seren, as owner of the ABM software developed under the Greenland
contract, was agreeable to making the same available to NCR for
compensation payable directly to Seren.
8. NCR, in reaction to the allegations of Seren, terminated its discussions
with Greenland. As a direct consequence and result of the statements made to NCR
by Seren, the Greenland-NCR business relationship was destroyed; thus
interfering with Greenland's prospective business advantage.
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9. Subsequent to the events described at paragraph 4 through 8 hereof
Claimant sought to create some basis upon which to go forward with Respondent so
as to perfect its systems and complete its business plans. Notwithstanding such
efforts Respondent continued to deny access to Claimants software properties,
made demands for additional monies and ultimately insisted upon the payment of
the sum of $25,000,000 to Respondent. This demand follows:
FIRST CLAIM
(Breach of Contract)
10. Claimant hereby repeats and realleges paragraphs 1 through 9 hereof as
though fully set forth herein.
11. Claimant has performed all of the obligations by it to be performed.
12. Respondent has breached its obligations to Claimant.
13. As a direct result of Respondent's breaches as set forth herein,
Claimant has been damaged in an amount of at least $450,000 together with such
other and further sums as may be proved at hearing in this matter.
14. As a direct and proximate result of Respondent Seren's breach of the
agreement attached hereto as Exhibit A, Claimant has been engaged to compel
legal counsel to protect its legal rights and to enforce its entitlements.
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Accordingly, Claimant is entitled to the award of its attorneys fees and costs
herein. Further, by reason of the application of the Commercial Arbitration
Rules of the American Arbitration Association, Claimant is entitled to the
recovery of the fees, costs and expenses occasioned by this action.
SECOND CLAIM
(Interference with Prospective Economic Advantage)
15. Claimant hereby repeats and realleges paragraphs 1 through 9 hereof as
though fully set forth herein.
16. As of June 1, 2000 the relationships between Capital One and NCR on the
one hand and Claimant Greenland on the other contained probable future economic
benefits and/or advantages for Greenland.
17. Respondent Seren had knowledge of the existence of the
Greenland-Capital One and Greenland-NCR relationships. Having such knowledge,
Respondent intentionally engaged in wrongful conduct as set forth in paragraphs
5 through 7 hereof in that Respondent made representations known by Seren at the
time made to be false and untrue for the purpose of interfering with and
disrupting said relationships.
18. As a direct result and consequence of Seren's conduct the
Greenland-Capital One and Greenland-NCR
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relationships were in fact interfered with, disrupted and destroyed; all to the
detriment of Claimant.
19. The wrongful conduct of Respondent as herein alleged caused damages to
Claimant in the amount of at least $450,000. Further, the conduct complained of
was despicable and/or malicious and engaged in with reckless disregard for the
consequences to Claimant. Accordingly, Claimant is entitled to punitive damages
in an amount to be determined at hearing.
THIRD CLAIM
(Misrepresentation)
20. Claimant hereby repeats and realleges paragraphs 1 through 9 hereof and
though fully set forth herein.
21. Respondent's statements as alleged at paragraphs 5 and 7 hereof
constituted representation's of material fact which were false at the time made
and known by Respondent to be false in light of the facts and circumstances then
obtaining.
22. Said representations were made by Respondent with the intention of
causing harm and damage to Greenland and were in fact the proximate cause of
such harm and damage.
23. By reason of the conduct of Respondent alleged herein Claimant has been
damaged in the amount of at least $450,000 and such other and further damages as
may be shown
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herein. In addition, the conduct complained of was despicable and malicious and
engaged in by Respondent with reckless disregard of the consequences to
Claimant.
DECLARATORY RELIEF
(Declaratory Relief)
24. Greenland realleges and incorporates herein by this reference
paragraphs 1 through 13 above.
25. By virtue of the foregoing, an actual controversy has arisen and now
exists between Greenland and Seren concerning their respective rights and
obligations arising out of the agreement attached as Exhibit A hereto.
Greenland contends that:
(1) the agreement was extended by the mutual agreement of Greenland and
Seren, including Greenland's express reservation of its rights of
ownership over all of the technology; and
(2) pursuant to the agreement, Greenland presently has and has always
maintained exclusive right, title and ownership in all of the ABM
technology and related software on which Seren has worked or provided
services pursuant to the written agreement referenced above, including
but not limited to, the software developed between November 26, 1998
and the present. Alternatively, Greenland contends that an implied in
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fact contract existed between Greenland and Seren, beginning on
November 27, 1999, the terms of which included Greenland's retention
of sole and exclusive right, title and ownership of all ABM technology
and related software created or improved by Seren, including but not
limited to the backend processing technology developed between
November 26, 1998 and the present.
26. Greenland is informed and believes that Seren disputes these
contentions, and that Seren actually maintains that the consulting Agreement
expired on November 26, 1999, extinguishing any ownership rights that Greenland
had in the technology after that date. Greenland is further informed and
believes that Seren contends it obtained all ownership rights Greenland had in
the technology simply because the written agreement only had a 12 month term,
even though the parties continued to perform their respective rights and
obligations under the contract, and even though Greenland has paid Seren more
than $1,500,000.00 for its services to date.
27. Greenland seeks a determination of its rights and obligations,
including a declaration that Greenland retain sole and exclusive rights, title
and ownership to the ABM software and technology, including but not limited to
the backend
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processing software, developed by Seren from and after November 26, 1998,
pursuant to the Agreement, to date.
28. A declaration is necessary and appropriate at this time under the
circumstances in order that Greenland may ascertain its rights of ownership over
the ABM software and technology developed without Seren's continued interference
with Greenland'S ability to conduct business. As set forth above, Greenland'S
ability to conduct business and enter into contracts regarding the technology
has already been severely impacted by Seren's wrongful claim of ownership in the
technology and active efforts to frustrate Greenland's contractual and other
relationships with prospective customers and/or purchasers of the ABM
technology. As a result Greenland has suffered loss of business and associated
revenues, and lost valuable opportunities.
WHEREFORE, Claimant prays for relief against Respondent as follows:
FIRST CLAIM
(Breach of Contract)
1. For damages in the amount of $450,000.00 together with such other and
further damages as the arbitrator may determine and award at hearing.
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2. Attorneys fees and costs together with such other and further relief as
the arbitrator may determine and award at hearing.
SECOND CLAIM
(Interference with Prospective Economic Advantage)
1. For damages in the amount of $450,000.00 together with such other and
further damages as the arbitrator may determine and award at hearing.
2. Punitive damages in an amount to be determined by the arbitrator at
hearing.
3. Attorneys fees and costs together with such other and further relief as
the arbitrator may determine and award at the hearing.
THIRD CLAIM
(Misrepresentation)
1. For damages in the amount of $450,000.00 together with such other and
further damages as the arbitrator may determine and award at the hearing.
2. Punitive damages in an amount to be determined by the arbitrator at the
hearing.
3. Attorneys fees and costs together with such other and further relief as
the arbitrator may determine and award at the hearing.
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FOURTH CLAIM
(Declaratory Relief)
1. For declaratory relief for determination of Greenland's rights and
obligations, including a declaration that Greenland retain sole and exclusive
rights, title and ownership to the ABM software and technology, including but
not limited to the backend processing software, developed by Seren from and
after November 26, 1998, pursuant to the Agreement, to date.
2. Attorneys fees and costs together with such other and further relief as
the arbitrator may determine and award at the hearing.
3. For such other and further relief as the arbitrator may determine is
just and appropriate.
Dated: FITZMAURICE & DEMERGIAN
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Jack F. Fitzmaurice, Esq.
Attorney for Claimant
GREENLAND CORPORATION
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