Software Development Agreement - 3DCityguide.com Inc. and Butterfly Software
SOFTWARE DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT (hereinafter called "Agreement") made this 15th day of September, 1999 by and between 3DCityguide.com, Inc., a Washington corporation (hereinafter called "3DCityguide", which term shall include 3DCityguide's subsidiaries and affiliates) and Butterfly Software, a British Columbia numbered company ("Butterfly"). WITNESSETH: WHEREAS, Butterfly has the development capacity to build custom visually interactive software products distributed in the CD ROM format; WHEREAS, 3DCityguide desires to produce a limited number of custom visually interactive CD ROM products for various metropolitan destinations throughout the world; WHEREAS, Butterfly desires to assist in the production of the CD ROM product by building custom visually interactive software products pursuant to the 3DCityguide specifications; WHEREAS, Butterfly has developed and possesses certain computer technology with reference to software development and visual animations (which together with all future developments thereof is collectively called "Butterfly Software Technology"), WHEREAS, Butterfly has the technology, capability and expertise to develop, create, design, manufacture, produce and provide certain visually interactive software technology; and WHEREAS, subject to the conditions and terms contained herein, Butterfly is willing and desirous to grant to 3DCityguide, and 3DCityguide desires to obtain from Butterfly an exclusive, assignable, transferable, license for the distribution, production, promotion, marketing and sale rights to the Butterfly Software Technology for 3DCityguide as incorporated into any Development Project; and WHEREAS, Butterfly and 3DCityguide have negotiated and agreed upon the following conditions and terms for a business relationship for the development, production, distribution, marketing, license and sale of the CD ROM product produced by any Development project incorporating Butterfly Software Technology . NOW, THEREFORE, for and in the consideration of Ten Dollars ($10.00) in hand paid each respective party to the other and other good/valuable considerations including, but not limited to, the covenants, conditions and terms hereof, the sufficiency and receipt of said good/valuable considerations being herewith acknowledged by the respective parties, Butterfly and 3DCityguide stipulate and agree as follows: <PAGE> 1. Recitals. The recitals set forth above are accurate, correct and true and are incorporated herein by this reference -------- describing specifically the understandings and intentions of the respective parties hereto. 2. Definitions. When used in this Agreement, the following terms shall have the meanings set forth next to the same as ----------- follows: (a) The term "Future Products" means the Butterfly Software Technology components, which are developed during the Term of this agreement in the field of visually interactive technology by Butterfly for sale and licensing. (c) The term "3DCityguide Builds" means a version of the Butterfly Software that has been customized by Butterfly for the sole and exclusive distribution, sale and/or use by 3DCityguide in its promotional/marketing opportunities, presentations, programs and/or projects in the visually interactive market and is encompassed in the specifications of a specific Development Project. (d) The term "3DCityguide Customers" means 3DCityguide's advertisers, suppliers, customers, sponsors and/or contacts. (e) The term "3DCityguide Site" means 3DCityguide's Internet site on the World Wide Web known as www.3DCityguide.com, www.chatvegas.com and any other domain names owned by 3DCityguide or any affiliate or subsidiary of the same (f) The term "Development Project" means a software product built by Butterfly for 3DCityguide pursuant to this Agreement which incorporates Butterfly Software Technology and which includes the development of any 3DCityguide Build. (g) The term "CD ROM" means a compact disk or any other type of medium for the delivery of software (h) The term "Master" means a Private Build CD ROM "Master Disc" created by Butterfly and suitable for use in the manufacturing, production and replication of Butterfly Software Technology as incorporated in a Development Project or any other 3DCityguide Build on CD ROM through subsequent replications thereof. (i) The term "Replicator" means a manufacturer and/or packager of CD ROMs containing Butterfly Software Technology that is ready for distribution to the public for lease or sale through 3DCityguide (j) The term "Start Date" means September 15, 1999. (k) The term "Supplemental Product" means any enhancement, upgrade, update or add-on to any 3DCityguide Build or Development Project. (l) The term "Territory" means North America, the United States, Canada and Mexico. 3. Butterfly's Right to Terminate. ------------------------------ (a) Butterfly may terminate this Agreement, in addition to any other remedies available to it, (i) if 3DCityguide has failed to perform or meet any material obligation, condition or term contained herein and failed to remedy the default within thirty (30) days after the receipt of written notice from Butterfly to that effect, or (ii) if 3DCityguide has failed to make any payment when payable and due under this Agreement to Butterfly within fifteen (15) days after the receipt of written notice from Butterfly to that effect. (b) Notwithstanding the foregoing, this Agreement shall be automatically terminated if 3DCityguide becomes bankrupt, involuntary, voluntary or adjudicated, or 3DCityguide shall cease to function as a going concern by suspending or discontinuing its business or ceases to distribute, market, license and/or sell Butterfly Software Technology for any reason except for periodic shutdowns in the ordinary course of business and interruptions caused by strike, labor dispute or any other events over which it has no control. (c) Butterfly's failure to resort to any remedy for breach hereunder shall not be deemed to be a waiver for any subsequent breach of this Agreement. 4. 3DCityguide's Right to Terminate. -------------------------------- (a) 3DCityguide may terminate this Agreement, in addition to any other remedies available to it if Butterfly has failed to perform or meet any material obligation, condition or term contained herein and failed to remedy the default within thirty (30) days after the receipt of written notice from 3DCityguide to that effect. (b) Notwithstanding the foregoing, this Agreement shall be automatically terminated if Butterfly becomes bankrupt, involuntary, voluntary or adjudicated, or at 3DCityguide's discretion may terminate if Butterfly shall cease to function as a going concern by suspending or discontinuing its business, ceases supply, development or support of the Butterfly Software Technology except for the decision to discontinue specific projects and periodic shutdowns in the ordinary course of business and interruptions caused by strike, labor dispute or any other events over which it has no control. (c) 3DCityguide's failure to resort to any remedy for breach hereunder shall not be deemed to be a waiver for any subsequent breach of this Agreement. 5. Grant of License Rights. Subject to the conditions and terms contained herein, during the Term of this Agreement, Butterfly grants to 3DCityguide a non-exclusive, transferable, assignable license, (with the right to sublicense), to manufacture, distribute, produce, advertise, market, promote and sell the Butterfly Software Technology in the Territory. 6. Butterfly Software Technology. The Butterfly Software Technology is a suite of visually interactive animation ----------------------------- technologies and associated graphical and informational user interfaces and related code, which may be improved and updated from time to time with technological and graphic advancements that incorporate as a part thereof certain respective features available to the user of the Butterfly Software Technology from time to time. 7. Butterfly License Terms. Butterfly shall deliver and provide to 3DCityguide the Butterfly Software Technology pursuant to the attached delivery schedule, Exhibit A. Notwithstanding anything herein to the contrary, all proprietary right, title and interest in and unto the foregoing Butterfly Software Technology, including the extension of those rights in the respective 3DCityguide Builds, shall remain the exclusive and sole proprietary property of Butterfly subject only to the rights to same granted to 3DCityguide herein. Consistent with the foregoing, Butterfly shall not make any sales or distribution to any party of any Butterfly Software Technology in or outside of the Territory other than 3DCityguide without first obtaining the 3DCityguide's consent, which 3DCityguide may grant in it's sole and absolute discretion. 8. Butterfly Compensation and Term of Agreement. In consideration of the Butterfly Software Technology, license rights -------------------------------------------- granted herein by Butterfly to 3DCityguide, 3DCityguide shall pay to Butterfly the following sums as described hereafter: (a) Cash. 3DCityguide shall pay to Butterfly monetary sums in accordance with Exhibit B attached hereto at an amount therein indicated . 9. 3DCityguide Builds and other Development Projects. Pursuant to the 3DCityguide Build Schedule and Specifications attached hereto as Exhibit C, Butterfly agrees to complete each 3DCityguide Build pursuant to the same and any additional Development Projects which may be agreed to from time to time by both parties. 10. Additional Butterfly Software Technology. Butterfly may provide to 3DCityguide from time to time, at Butterfly's absolute and sole discretion, certain additional Butterfly Software Technology products not required to be licensed to 3DCityguide under this Agreement. Such additional software products shall be compensated as agreed to by the parties and paid upon delivery. 11. Goodwill of Trademark. --------------------- (a) Butterfly acknowledges the value of the goodwill associated with the Trademark and that the Trademark is distinctive and has acquired secondary meaning. Butterfly agrees, during the Term, and thereafter, never to challenge the rights of 3DCityguide or others in the Trademark. (b) Butterfly shall promptly comply on a prospective basis with all instructions and specifications from time to time communicated by Butterfly in connection with the use and display of the Trademark, not inconsistent with this Agreement. 12. Trademark Protection. Butterfly acknowledges that the trademarks, trade names and design marks ("Trademark") used by 3DCityguide and listed on Exhibit "D" attached hereto and incorporated herein by this reference are the proprietary and sole property of 3DCityguide or otherwise licensed to 3DCityguide for its use. Butterfly shall not use the Trademark(s), except in the normal course of advertising and marketing the Butterfly Software Technologies and shall appropriately designate the rights of the parties therein on such advertising and marketing materials. Upon termination of this Agreement, Butterfly shall immediately cease the use of any of 3DCityguide's proprietary trademarks, trade names, design marks or rights. (a) Butterfly agrees that it shall not, at any time: (i) apply for any registration of any trademark or other designation, which would adversely affect 3DCityguide's rights in the Trademark; (ii) file any document with any governmental authority or take any action which would adversely affect 3DCityguide's rights in the Trademark; (iii) use or authorize the use of any trademark, trade name or other designation identical with or confusingly similar to the Trademark; (iv) use or display the Trademark in a manner which might be confusing or deceptive or might injure the good will and reputation associated with the Trademark; or (v) otherwise commit any act, which would create a potential liability on the part of 3DCityguide or would adversely affect the goodwill and reputation of the Trademark. (b) 3DCityguide shall have the right, but not the obligation, to prosecute, defend and/or settle at its own cost and expense and in its sole discretion, all actions, proceedings and claims involving the Trademark, and to take any other action that it deems proper or necessary for the protection and preservation of its rights in the Trademark. In its sole option, 3DCityguide may take any action described above in its own name, and/or in the name of Butterfly, and Butterfly will cooperate fully therewith. All expenses of any action taken by 3DCityguide to protect its interests in the Trademark shall be borne by 3DCityguide, and all relief granted in connection therewith shall be solely for the account of 3DCityguide, except as described herein where Butterfly may participate in such action. In the event Butterfly determines, in its absolute and sole discretion, that it desires to participate with 3DCityguide in any action, proceeding and/or claim or to initiate it's own action to protect its interests in the 3DCityguide Builds which utilize the Trademark, then Butterfly shall proportionately bear its portion of the expenses related to same with 3DCityguide, and shall proportionately benefit in the relief granted in connection therewith as it relates to Butterfly's rights. Butterfly shall notify 3DCityguide promptly of any adverse, pending or threatened action in respect of the Trademark, and of any use by third parties that would or might tend to be adverse to the rights of 3DCityguide, if said action against the Trademark or adverse use of the Trademark becomes known to Butterfly. 13. Representations and Warranties. ------------------------------ (a) Butterfly represents and warrants to 3DCityguide: (i) that it is a British Columbia corporation, duly organized, validly existing and in good standing under the laws of said State; (ii) that it has the full right, power and authority to enter into and perform the obligations contemplated in this Agreement; (iii) that this Agreement constitutes a legal, valid and binding obligation of Butterfly, enforceable in accordance with its conditions and terms; and (iv) that neither Butterfly nor any of its shareholders, directors or officers is subject to, or a party to, any agreement, obligation, claim, action, order or judgment, in effect, pending or threatened, which would adversely affect or otherwise interfere with Butterfly's performance under this Agreement. (v) that the Butterfly Software Technology will function as specified in accordance with the specifications on Exhibits attached hereto. (b) 3DCityguide represents and warrants to Butterfly: (i) that it is a Washington corporation, duly organized, validly existing and in good standing under the laws of said State; (ii) that it has the full right, power and authority to enter into and perform the obligations contemplated in this Agreement; (iii) that this Agreement constitutes a legal, valid and binding obligation of 3DCityguide, enforceable in accordance with its conditions and terms; (iv) that neither 3DCityguide nor any of its shareholders, directors or officers is subject to, or a party to, any agreement, obligation, claim, action, order or judgment, in effect, pending or threatened, which would adversely affect or otherwise interfere with 3DCityguide's performance under this Agreement; and 14. Indemnification. --------------- (a) 3DCityguide hereby indemnifies Butterfly and holds Butterfly harmless and defends Butterfly from and against any and all claims, suits, losses, liabilities, causes of action, damages and costs (including reasonable attorneys' fees), or the settlement or avoidance thereof, arising out of any breach of 3DCityguide's representations and warranties or breach of this Agreement. For purposes of this subparagraph, "3DCityguide" shall include 3DCityguide's officers, directors, employees, agents, subsidiaries, parents and affiliates and partners. (b) Butterfly hereby indemnifies 3DCityguide and holds 3DCityguide harmless and defends 3DCityguide from and against any and all claims, suits, losses, liabilities, causes of action, damages and costs (including reasonable attorneys' fees), or the settlement or avoidance thereof, arising out of any breach of Butterfly's representations and warranties or breach of this Agreement. For purposes of this subparagraph, "Butterfly" shall include Butterfly's officers, directors, employees, agents, subsidiaries, parents and affiliates. (c) The provisions of this Section shall survive the termination or expiration of this Agreement 15. Non-Compete. Butterfly shall not develop, release, manufacture, distribute, license, sell, rent or lease to third parties or end users a directly or indirectly competing product to any 3DCityguide Build or Development Project during the Term of this Agreement (hereinafter called the "Non-Compete Period") without the written permission of 3DCityguide. For the purposes of this Section, "indirectly competing product" shall mean any software product which provides visual animations of any city, state or other geographical area or any software product whatsoever built for a competitor of 3DCityguide, as determined by the exercise of 3DCityguide's reasonable, good-faith judgment. 16. Butterfly Software Technology Ownership. --------------------------------------- (a) Code Ownership. 3DCityguide has developed and owns, or has the licensed rights to use, and has copyright and trademark rights thereto where applicable, all of the proprietary software in object code form and all modifications or additions to such code (hereinafter collectively called "Proprietary Code") as is incorporated at any time in the Butterfly Software Technology as part of a 3DCityguide Build or development project. The Proprietary Code may be expanded upon during the Term of this Agreement and shall remain under the exclusive ownership and control of 3DCityguide. Butterfly acknowledges that it has no right, title or interest in or unto the Proprietary Code. By execution hereof, Butterfly acknowledges and agrees that all property rights to the Proprietary Code shall remain the exclusive property of 3DCityguide, and to the extent possible under applicable law, Butterfly hereby assigns to 3DCityguide all of its right, title and interest, if any, in and unto the Proprietary Code (to secure 3DCityguide's ownership of the Proprietary Code which is integrally incorporated therein) and further Butterfly agrees to execute and deliver such instruments and take such other action as may be required and requested by 3DCityguide to carry out the assignment contemplated herein. 17. Disclaimer. THE WARRANTIES IN THIS AGREEMENT REPLACE ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY LOSS OF PROFITS OR OTHER INCIVISUALLY INTERACTIVE OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY PERFORMANCE OR NONPERFORMANCE HEREUNDER, EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 18. Master Delivery and Acceptance. ------------------------------ (a) Butterfly will develop and provide to 3DCityguide the Butterfly Software Technology (i.e., 3DCityguide Build One - 3DCityguide Build Ten) in the form of a Master developed in accordance with the specifications for same (hereinafter called "Specifications"), which Specifications shall be mutually acceptable to Butterfly and 3DCityguide but developed in 3DCityguide's absolute and sole discretion relative to the appropriate software considerations for same. In accordance with the Specifications, Butterfly shall provide and deliver to 3DCityguide the Master for 3DCityguide Build One pursuant to the attached exhibits. Subsequent Masters for the additional Butterfly Software Technology for 3DCityguide (i.e., 3DCityguide Build Two - 3DCityguide Build Ten) shall be provided and delivered to 3DCityguide by Butterfly throughout the Term . In the event that 3DCityguide requests that Butterfly create further Butterfly Software Technology thereafter for 3DCityguide's use, 3DCityguide will gather all of the necessary Feature information and material and forward an order for same to Butterfly to determine whether Butterfly desires to develop and create same including the consideration that Butterfly will receive for such additional development. In the event that Butterfly determines that it desires to develop and create the additional Butterfly Software Technology for 3DCityguide, then Butterfly will develop same in accordance with the Specifications relating to the new development software and will provide to 3DCityguide a timetable for the delivery of same. Notwithstanding anything herein to the contrary, Butterfly shall have a period of fifteen (15) days within which to determine whether Butterfly will undertake and accept an assignment from 3DCityguide to develop and create additional Butterfly Software Technology for 3DCityguide including the consideration and determinations relative to same. Butterfly shall agree to use its best efforts to modify the 3DCityguide Builds during the first year of the Term to the satisfaction of 3DCityguide and shall use its best efforts to provide 3DCityguide with at least as many additional 3DCityguide Builds each year and thereafter throughout the course of the Term as are required by exhibits attached hereto together with any reasonable modifications to the same by 3DCityguide which to not materially change the nature of the 3DCityguide Build, in the sole reasonable discretion of Butterfly. Butterfly also agrees to upgrade the 3DCityguide Builds whenever the Butterfly Software Technology is upgraded at no additional cost to 3DCityguide, should 3DCityguide so desire. (b) Butterfly agrees to provide 3DCityguide Build testing subject to further independent examination and testing by third parties of 3DCityguide's choosing. Butterfly shall advise 3DCityguide in writing that it has completed its testing program and shall submit the respective 3DCityguide Build to 3DCityguide for independent testing if 3DCityguide so desires. After the delivery of each respective 3DCityguide Build (hereinafter called "Delivered Product"), 3DCityguide shall evaluate the Delivered Product and shall submit a written acceptance or rejection of same within ten (10) days of its submission for consideration. In the event that 3DCityguide does not issue a written acceptance or rejection within the ten (10) day period described herein, then 3DCityguide's silence shall be consider acceptance for purposes of accepting the Delivered Product under this Agreement. (c) In addition to the 3DCityguide Build "Master" which Butterfly will deliver to 3DCityguide, Butterfly will retain an additional "Master" of each respective 3DCityguide Build at its offices. 24. Export Control. This Agreement is made subject to any applicable regulation, restrictions or orders on the export from the United States of America of control of commodities, technical data or of information concerning such technical data, which might be imposed from time to time by the United States of America. 3DCityguide will not export, indirectly or directly, any of the 3DCityguide Builds or other Butterfly Software Technology to any country for which the United States of America or any agency thereof requires governmental approval at the time of export without first obtaining an export license or requires the existence of an export license for same, and further subject to the requirement that 3DCityguide must be able to export the 3DCityguide Builds to said country in accordance with this Agreement's conditions and terms. 25. Shipment of Masters. Butterfly will ship the respective 3DCityguide Build "Masters" to 3DCityguide, or if ------------------- 3DCityguide desires to its Replicator designated through written instruction to Butterfly, and will utilize the shipment carrier and method instructed by 3DCityguide in its order to arrange for the shipment of the respective Master and will insure same during such shipment. Such shipment from Butterfly to 3DCityguide shall be from Butterfly's place of business to 3DCityguide or 3DCityguide's Replicator and all shipping, freight, tax and insurance charges therefore shall be 3DCityguide's responsibility. Risk of loss of the respective Master shall be 3DCityguide's risk after Butterfly has delivered the respective Master to the appropriate carrier for shipment. 26. Support. Butterfly and 3DCityguide agree that support for the 3DCityguide Builds shall utilize the Internet, E-mail and telephone resources to provide reasonable support consistent with and the terms and conditions as described in Exhibit E attached hereto and incorporated herein by this reference and shall include at least two visits to the 3DCityguide offices of 3DCityguide by Butterfly personnel per Term year of this Agreement, the reasonable business travel expenses of which shall be borne by 3DCityguide. 27. Relationship. Nothing herein contained shall be construed to place 3DCityguide and Butterfly in a relationship as partners, joint ventures, employer and employee, or principal and agent, respectively, and neither 3DCityguide nor Butterfly shall have the power to bind or obligate the other party in any manner whatsoever. 28. Assignment. Neither Butterfly nor 3DCityguide shall sublicense, transfer or assign any rights herein granted, except (upon prior written notice to 3DCityguide) to Butterfly's subsidiaries, affiliates or parents, or to 3DCityguide's subsidiaries, affiliates or parents, without obtaining the other respective party's prior written approval, which approval shall not unreasonably be withheld or delayed, and, if granted, shall be conditioned upon the sublicense's, transferee's, or assignee's agreement in writing to abide by the same obligations, conditions and terms applicable to the respective parties hereto. 29. Notices. All notices, approvals and other communications provided for in this Agreement shall be made in writing and delivered personally or by certified or registered mail, return receipt requested, postage prepaid, to the parties at their addresses set forth below, or to such address as either party may specify by like written notice to the other and shall be deemed given when received. Failure to accept certified or registered mail shall be deemed a receipt thereof within ten (10) days after the first notice of delivery of the certified or registered mail. Any entity may change its address as designated herein by giving notice thereof. If to 3DCityguide: 4620 S. Arville Street Suite A, Las Vegas, NV, USA 89103 If to Butterfly: #302 - 343 Railway Street, Vancouver, BC, Canada V6A 1A4 or such other address either party from time to time specify in writing to the other. 30. Confidentiality. Butterfly and 3DCityguide agree that the conditions and terms of this Agreement shall be deemed confidential information between the respective parties. Each respective party expressly undertakes to retain in confidence and to require its directors, officers, employees, representatives and agents to retain in confidence all information between the respective parties that the disclosing party has identified as being confidential and/or proprietary or which, by the nature of the circumstances surrounding the disclosure, should in good faith be treated as confidential and/or proprietary. Without limiting the foregoing, all of the conditions and terms of this Agreement shall be considered confidential and shall not be disclosed (except to either respective party's prospective acquisition partners, accountants, attorneys, advisors and consultants, including financial institutions and sources and potential financing entities, together with such foregoing entities' directors, officers, employees, representatives and agents, on a need to know basis and provided that such parties are bound by the conditions and terms of this non-disclosure section) without the prior written consent of the other respective party, except that the respective parties may disclose confidential information as required by governmental entity or court of law with the power to compel such disclosure but only after giving the other respective party an opportunity and due notice to defend against the disclosure requirement. The respective parties stipulate and agree that upon expiration or termination of this Agreement, each respective party will return to the other respective party all specifications, memorandums, blue prints, drawings, designs, devices, documents, notes and any other material containing or disclosing any confidential and/or proprietary information of the other respective party. The respective parties may mutually agree in writing that rather than returning all said documentation, the possessing party of such documentation shall destroy the confidential and/or proprietary information in its possession in accordance with this section. Neither respective party will retain any such documentation relating to confidential and/or proprietary information without the other respective party's prior written approval thereof. 31. Mediation/Arbitration. Any controversy, claim, misunderstanding, cause of action, matter in question, breach or disagreement arising out of, or relating to, this Agreement (hereinafter called "Dispute") shall be decided by mediation or arbitration as follows: (a) Mediation: The party seeking resolution of a Dispute (hereinafter called "Complaining Party") shall provide the other party (hereinafter called "Responding Party") with written notice describing the Dispute and requesting mediation (hereinafter called "Mediation Notice") thereof including the naming therein of its proposed mediator. Within ten (10) calendar days of the delivery date of Mediation Notice, the respective parties shall appoint a mutually acceptable mediator (hereinafter called "Mediator") to resolve the Dispute. Within a reasonable period of time thereafter, not to exceed ten (10) calendar days after appointing the Mediator, the respective parties in controversy ("Dispute") shall submit their respective cases to the Mediator who shall hear the evidence and render a final decision thereon within three (3) calendar days after the close of the evidence. The respective parties agree that the mediation of the Dispute shall take place in Bellingham, Washington or such other location mutually acceptable to the respective parties, and shall be governed by Washington law. Any decision or award rendered by the Mediator, and acceptable to the respective parties, shall be final and judgment thereon may be entered in accordance with applicable law in any Court having jurisdiction thereof. If the Mediator shall demand compensation for its services prior to mediation, then Complaining Party and Responding Party shall pay said Mediator expenses on a fifty-fifty (50-50) basis in advance of the mediation. The substantially prevailing party in mediation shall be entitled to recover all expenses and costs of mediation including its reasonable attorney's fees and any advanced Mediator's expenses from the non-prevailing party. (b) Arbitration: In the event the respective parties do not select a mutually acceptable mediator within ten (10) calendar days of Mediation Notice, the Complaining Party shall notify the Responding Party in writing of its demand to arbitrate, and shall designate in such notice (hereinafter called "Arbitration Notice") the name of its arbitrator. Within ten (10) calendar days of the delivery date of Arbitration Notice, Responding Party shall select its arbitrator. Within twenty (20) calendar days of the delivery date of Arbitration Notice, the two (2) arbitrators so selected shall appoint a third arbitrator (third arbitrator hereinafter called "The Arbitrator"). Within thirty (30) calendar days of the delivery date of Arbitration Notice the respective parties in controversy ("Dispute") shall submit their respective cases to the panel of Arbitrators who shall hear the evidence and render a final decision thereon within three (3) calendar days after the close of the evidence. The respective parties agree that the arbitration shall take place in Seattle, Washington or such other location mutually acceptable to the respective parties, and shall be governed by Washington law in accordance with the American Arbitration Association regulations and rules except as otherwise supplemented, modified or amended herein. The Arbitrator shall be empowered to take such procedural and discovery actions as the Arbitrator deems appropriate, to the same extent as a court acting pursuant to the Federal Rules of Civil Procedure. Any decision or award rendered by the Arbitrator shall be final and judgment thereon may be entered in accordance with applicable law in any court having jurisdiction thereof. If the Arbitrator shall demand compensation for their services prior to arbitration, then Complaining Party and Responding Party shall pay said Arbitrators' expenses on a fifty-fifty (50-50) basis in advance of the arbitration. The substantially prevailing party in arbitration shall be entitled to recover all expenses and costs of arbitration including its reasonable attorney's fees and any advanced Arbitrators' expenses from the non-prevailing party. (c) Equitable Remedy. Notwithstanding this Agreement's conditions and terms relating to mediation and/or arbitration of Disputes, the respective parties acknowledge and agree that breach of certain of the covenants, conditions and terms of this Agreement, such as a breach creating irreparable harm, would have an inadequate remedy at law, and may not be adequately remedied by damages, and further consent and agree that temporary and/or permanent injunctive and other relief may be sought and pursued to prevent irreparable harm to either respective party for breach of this Agreement's covenants, conditions and terms without waiving the right to seek actual damages thereafter. 32. Miscellaneous. ------------- (a) Legal Representation. Each party to this Agreement has been represented by counsel in the negotiation of this Agreement and accordingly, no provision of this Agreement shall be construed against a party due to the fact that it or its counsel drafted, dictated or modified this Agreement or any condition or term thereof. (b) Further Instruments. Each party hereto shall, from time to time, execute and deliver such further ------------------- instruments as any other party or parties or its counsel may reasonably request to effectuate the intent of this Agreement. (c) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, if and when applicable. (d) Survival of Representations and Warranties. The respective representations, warranties and agreements of the respective parties to this Agreement and contained in this Agreement shall survive and remain in effect. (e) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. Wherever possible, each provision, condition and term of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law; but if any provision, condition or term of this Agreement, or any documentation executed and delivered hereto, shall be prohibited by or invalid under such applicable law, then such provision, condition or term shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision, condition or term or the remaining provisions, conditions and terms of this Agreement or any documentation executed and delivered pursuant hereto. (f) Section Headings. The section headings inserted in this Agreement are for convenience only and are not intended to, and shall not be construed to, limit, enlarge or affect the scope or intent of this Agreement, nor the meaning of any provision, condition or term hereof. (g) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same document. (h) Entire Agreement. This Agreement contains the entire Agreement between the respective parties hereto and supersedes any and all prior agreements and understandings between the parties hereto relating to the subject matter hereof. No statement or representation of the respective parties hereto, their agents or employees, made outside of this Agreement, and not contained herein, shall form any part hereof or bind any party hereto. This Agreement shall not be supplemented, amended or modified except by written instrument signed by the respective parties hereto. (i) Attorneys' Fees and Costs: In any Dispute arising out of or pertaining to this Agreement, the prevailing party, or substantially prevailing party in multiple claims as the case may be, shall be entitled to an award of its attorneys' fees and costs after a finally sustained determination or decision, whether incurred before, after or during mediation, arbitration, trial, or upon any appellate level. (j) Time: Time is of the essence of this Agreement. When any time period specified herein falls upon a Saturday, ---- Sunday or legal holiday, the time period shall be extended to 5:00 P.M. on the next ensuing business day. (k). Relationship. Nothing herein contained shall be construed to place Butterfly and 3DCityguide in a relationship as co-Butterfly, partners, joint ventures, employer and employee, or principal and agent, respectively, and neither 3DCityguide nor the Butterfly shall have the power to bind or obligate the other party in any manner whatsoever. (l). Notices. All notices, approvals and other communications provided for in this Agreement shall be made in writing and delivered personally or by certified or registered mail, return receipt requested, postage prepaid, to the parties at such address as either party may specify by like written notice to the other and shall be deemed given when received. Failure to accept certified or registered mail shall be deemed a receipt thereof within ten (10) days after the first notice of delivery of the certified or registered mail. Any entity may change its address as designated herein by giving notice thereof as provided herein. (m). Representations. Butterfly represent, covenant and warrant that they are the sole owners and copyright holders of their respective works, that they have the proper authority to enter into this Agreement and to grant the License and agree to indemnify 3DCityguide for any breach of this representation. IN WITNESS WHEREOF, the undersigned respective parties have caused this Agreement to be executed in their names the day and year first above written. On behalf of 3DCityguide.com, Inc. 3DCityguide.com, Inc. a Washington corporation By: /s/ Matthew Brooks Title: Secretary and Director On behalf of Butterfly Software, Inc. Butterfly Software, Inc. a British Columbia corporation By: /s/ Anis Jessa Title: President