SERVICES AGREEMENT

1. Application Service Provider Services

2.   

Customer’s Responsibilities

          (1)  In connection with the Services to be provided by the Application Service Provider hereunder, Customer agrees to provide the Application Service Provider with the following: 

(a)      

necessary access to and control of Customer’s networks, servers, facilities and IT personnel as required for the Application Service Provider to provide the Services;

(b)      

necessary application licences for all of Customer’s software, hardware and Customer Information Technology (including third party software) that is to be hosted and managed by the Application Service Provider; and

(c)      

installation and delivery at Customer site to be completed in accordance with this Agreement including Customer computer equipment and other hardware required to perform the Services required.

(d)      

Customer shall provide the Application Service Provider with a detailed network diagram and documentation prior to installation of any hardware.

         (2)   Asset tags. Equipment provided by the Application Service Provider or third-party vendors in connection with the Services, and not owned by Customer must be tagged by Customer upon delivery to reflect property of the Application Service Provider. Customers agreeto store or install any such equipment in a secure location and at all times know the whereabouts of the equipment. The Application Service Provider will biannually send a list of equipment to be verified, signed and returned to the Application Service Provider within ten (10) days of receipt.

         (3)  Authorization and security issues . The person(s) authorized by Customer to order new Services, change existing Services or terminate Services on behalf of Customer (and Customer’s employees and affiliates) is (are) designated in Appendix B. The designated person(s) may delegate the authority to order new services, change existing services, or terminate the Services to other individuals within Customer’s organization. Customer shall notify the Application Service Provider immediately in writing of any such changes. For purposes of this Agreement, notification by facsimile shall be considered as written notification of delegation of authority followed by original via United States Post.  

        (4)  Customer and Application Service Provider shall assign and maintain security levels for the different locations and entities within each of the Customer’s and Application Service Provider’s organization. Implementation of such security levels shall be done by the Application Service Provider in co-operation with Customer. 

        (5)  Customer and Application Service Provider agree to establish non-disclosure, security, and IT discipline agreements with their employees of Assignees. Each party shall have no liability for any breaches of such non-disclosure, security or IT discipline agreements by employees of the other party or their respective assignees. 

      (6)  The Customer grants to the Application Service Provider, for the purposes of this agreement and subject to the terms and conditions of this agreement, a non-exclusive, non-transferable license without the consent in writing of the Customer, to use the trade names or marks currently used or subsequently used by the Company from time to time, during the term or any extension of this agreement.

3. Fees and Payment Terms

      (1)   The Application Service Provider estimates the installation, and system start-up at the Application Service Provider’s or any Assignee’s data centre to be approximately 15 days.

      (2)   During the Term as defined in Section 9, fees payable by Customer will be Fifty Thousand ($50,000) per month payable on the last day of each month during the term or any renewal term hereof. The Application Service Provider agrees that the foregoing fees shall be fixed during the Inital Term and will be renegotiated upon conclusion of the Inital Term. If contract is terminated, the remaining balance of contract, based upon the Inital Term, is immediately payable to the Application Service Provider.

      (3)  The Customer will be invoiced monthly. Services beginning after the first day of the month will be invoiced on a pro-rated basis for the first calendar month in which they receive the Services. All amounts invoiced for Services rendered by the Application Service Provider are due net at the end of the month in the month in which the invoiced services are dated. All invoiced amounts that remain unpaid after the thirty (30) day period shall accrue interest at the current prime rate from time to time until paid in full, including the payment of all accrued interest. Customer agrees that it shall pay all invoices in a timely manner. Customer’s failure to pay outstanding invoices in a timely manner for a period of three (3) consecutive months shall constitute a breach of this Agreement for purposes of Section 9 hereof.

4. Timely Performance and Co-operation

5. Independent Contractor Status

6.   Representations and Warranties; Limitations of Liabilities

     (1)   Customer represents and warrants to the Application Service Provider that:

     (a)  

it has all corporate authority to enter into and perform its obligations under this Agreement;

(b)     

it is the owner or authorized licensee of the Customer Content and has the sole and absolute right to permit the Application Service Provider access to the Customer Content and Customer Information Technology so as to enable the Application Service Provider to perform the Services contracted for herein.

(c)      

it is expressly and exclusively responsible for managing its own business.

(2)      

The Application Service Provider represents and warrants to Customer that:

(a)     

The Application Service Provider typically achieves 99.7% application availability to its customers. For every hour below 99% the Application Service Provider will provide an hour credit of service applied to the specific end user. Application availability is defined as application delivery to the router on the Customer’s premises. The Application Service Provider is not responsible for any outage at the Customer premises including internal network (“LAN”), local infrastructure or facilities. The determination of down-time is based on Customer notification to the Application Service Provider’s technical support centre during Working Hours.

(b)     

In the event viruses are detected in Customer’s local client environment managed by the Application Service Provider, the Application Service Provider may be required to secure the systems by denying access to infected users. If the virus infection is traced back to Customer, Customer will be invoiced according to the current price list for remedying the virus.

(c)     

The Application Service Provider has all corporate authority to enter into and perform its obligations under this Agreement.

(d)      

For the systems and software being used by the Customer in the performance of the Services, excluding Customer owned/leased software, the Application Service Provider owns the rights to its systems and either owns or is licensed to use, and during the term of this Agreement will continue to own or be licensed to use, in the manner contemplated by this Agreement, any software used in the provision of the Services to Customer. The Application Service Provider hereby agrees to indemnify and hold Customer harmless from any and all claims, lawsuits, liabilities, expenses, costs, damages and fees arising from or in connection with Application Service Provider’s violation of this warranty. Furthermore, and without limiting the rights of Customer under Section 9, if the Application Service Provider is in violation of this warranty, the Application Service Provider will, prior to the termination of this Agreement and pursuant to Section 9, either procure the right to use the