Master Service Agreement    

This Master Service Agreement (the “Agreement”) is made as of X (the “Effective Date”) between

eSubnet Enterprises Incorporated,
with its principal place of business located at
120 Front St. East, Suite 202, Toronto, ON M5A 4L9
(“Service Provider”)

- and -

with its principal place of business located at
collectively shall hereinafter be called “the Parties” or singularly a “Party”.

WHERERAS, Purchaser desires to procure services from Service Provider (together the “Parties” to this Agreement, or “Party” in the singular) to design, build, service, maintain, secure and/or support their Information Communication Technologies,

WHEREAS, Service Provider desires to provide services to Purchaser to design, build, service, maintain, secure and/or support their Information Communication Technologies,

NOW THEREFORE IN CONSIDERATION OF the mutual covenants and terms contained herein and other good and valuable consideration, Service Provider and Purchaser agree as follows:

1. Definitions

"Confidential Information” is information not generally known that is obtained by one Party from the other. It includes information that is learned, discovered, developed, conceived, originated or prepared by a Party during the term of this Agreement. The term also includes information concerning the business or assets of a Party. It includes but is not limited to inventions, discoveries, and know-how; computer software code, designs, routines, algorithms, and structures; product information; research and development information; customer lists and other related information; financial data and information; business plans and processes; and any other information of the Parties that is shared, or that Party would know by virtue of the relationship is to be kept confidential, and is not limited to materials or information expressly identified as being confidential in nature.

Deliverable” shall mean, as applicable, all source code, object code, databases, data structure, database designs, database indices, modules, objects, classes, packages, in-line comments, user interfaces, design documents, test plans, scripts, software and in-house scripts prepared by or for Service Provider in order to implement the functions and requirements described in the related documentation and media procured or prepared by Service Provider for Purchaser, but expressly excludes the Service Provider’s own work product.

Out-of-Pocket Expenses” means any expense incurred by the Service Provider in relation to a Deliverable, such as but not limited to, printing costs, facsimile costs, courier costs, travel costs, and long distance telephone calls. Such expenses will be identified within the relevant Statement of Work or Work Request.

Service” means the services and deliverables provided by the Service Provider in relation to service, maintenance, security, support, development, design and/or consultancy work as described in the Statement of Work or Work Request.

Statement of Work” (“SOW”) means a written document in the form attached hereto as Schedule “A”, which shall include a description of the specific deliverable and/or service request as well as an estimate of fees and related costs.

Third Party Products” means any third-party hardware, services or software.

Work Request” means a written document in the form attached hereto as Schedule “B”, completed and submitted by Purchaser to Service Provider, which shall outline all changes and additions in respect of the Statement of Work as well as a description of the specific deliverable and/or service request.

2. Interpretation

2.1 In this Agreement, unless there is something in the subject matter or context inconsistent therewith:
(a) Words in the singular number include the plural and such words shall be construed to include the plural;
(b) Words in the plural include the singular and such words shall be construed to include the singular;
(c) Words importing the use of any gender shall include all genders where the context or party referred to so requires, and the rest of the sentence shall be construed as if the necessary grammatical and terminological changes had been made.

2.2 The following schedules shall form part of this Agreement and are expressly incorporated into this Agreement:
• Schedule “A” (Statement of Work/SOW); and
• Schedule “B” (Work Request);
• Schedule “C” (Services Contract).

3. Service Provider’s Services

Service Provider will service, maintain, support and/or develop the System according to the functionality, deadlines, deliverables and procedures set out in the Statement of Work and any relevant Work Request.

4. Work Request

The Parties may, from time to time, identify certain services, changes, or upgrades of the services or work provided by the Service Provider which are not within the scope of the Statement of Work. A Work Request (Schedule “B”) will be used for all such services and work. The Purchaser’s failure to use the proper form of document will not relieve it of any obligations hereunder where the services and work have been requested or approved in writing, and email shall be considered “in writing” for purposes of this provision.

5. Term of Agreement

5.1 The term of the Agreement shall be from the Effective Date to that date at which all services to be provided hereunder are completed or the Agreement has been terminated pursuant to the provisions herein.

5.2 Purchaser agrees that while the Agreement is in effect, Service Provider’s fees will reasonably increase once per calendar year, with 30 days prior written notice to Purchaser.

6. Termination

6.1 Each party may terminate this agreement, without cause and at its sole discretion, by giving at least thirty (30) days prior written notice to the other party, without any further obligation, cost, penalty or liability.

6.2 Upon notice of termination, Service Provider shall be paid for all outstanding amounts payable to the date of termination, upon the date of termination; failing which Service Provider may use any legal method of collection, the costs of which will be fully recoverable from Purchaser.

6.3 In the event that either Party:

(a) makes a general assignment for the benefit of creditors or becomes insolvent or files a voluntary petition in bankruptcy, petitions for or acquiesces in the appointment of any receiver, trustee or similar office to liquidate or conserve its business or any substantial part of its assets, commences under the laws of any jurisdiction proceedings relating to insolvency, bankruptcy, reorganization, readjustment of debt, dissolution, liquidation or any similar proceeding; or
(b) becomes the object of any proceeding of the type described above and such proceeding or action remains undismissed or unstayed for a period of sixty (60) days; or
(c) commits a material breach of this Agreement and such breach continues uncured for a period of ten (10) days following the receipt of a written notice from the non-defaulting Party,

then the non-defaulting Party may terminate this Agreement with immediate effect by written notice to the defaulting Party and subject to clause 6.2 above.

7. Rates and Expenses

Purchaser agrees to pay Service Provider the rates and any related or out- of-pocket costs provided in the SOW and/or Work Request, along with all applicable taxes.

8. Invoicing

The Service Provider will invoice the Purchaser monthly and payment is due upon receipt and a failure of prompt payment will be construed as a material breach of this Agreement. Interest will be charged on all overdue accounts at the non-compounded rate of 12% per annum.

9. Personnel

The Parties shall provide and dedicate the level and quality of staffing, project management and physical and personnel resources necessary to ensure the successful and timely completion of the Parties obligations in accordance with this Agreement.

10. Warranties, Representation and Covenants of Service Provider

Service Provider represents, warrants, covenants and agrees to the following:

10.1 The Service Provider warrants that all work will be performed in accordance with acceptable industry standards.

10.2 Service Provider has the full right, power and authority to enter into this Agreement and perform its obligations hereunder.

10.3 Service Provider is vendor neutral and does not warrant third-party products or services or their integration into the system for the purpose of achieving the desired result. Service Provider recommends that Purchaser initiate and establish a warranty agreement with the vendor(s)/service provider(s) of these products or services. Service Provider does not warrant that its work, or services, with respect to third-party products or services will not void, or negatively affect, third-party warranties or licenses and Purchaser assumes any and all risks, losses and liability whatsoever that may arise from Service Provider’s use of third-party products.

10.4 Service Provider shall continue to own all right, title and interest, including the intellectual property rights, in and to the services and deliverables provided to Purchaser where applicable.

10.5 Where Service Provider owns all right, title and interest in and to services and deliverables provided to Purchaser, Service Provider grants to Purchaser a perpetual, irrevocable, non-transferable, non-assignable, non-exclusive, royalty free, limited license to use eSubnet’s networking/service technology, where applicable, for the sole purpose of operating, maintaining or implementing the system under this Agreement.

10.6 Where Service Provider has no right, title or interest in and/or to a service or deliverables, Purchaser shall be governed by the relevant third party license and fully indemnifies Service Provider in regard to any liability for any direct or indirect, special, general, consequential, punitive or exemplary damages, or economic damages (including but not limited to damages for loss of current or future profits or revenues, loss of data, or loss of use), whether or not foreseeable and whether or not based on agreement, tort or warranty claims or otherwise arising from any performance or failure to perform under this Agreement.

11. Warranties, Representation and Covenants of Purchaser

11.1 Purchaser will provide a secure, locked, office space, if requested by the Service Provider, to facilitate the provision of services under this Agreement.

11.2 Purchaser covenants to keep Service Provider informed, in writing, of all changes and issues related to the software, configuration and performance of the system.

11.3 Purchaser warrants that it has the full right, power and authority to enter into this Agreement and perform its obligations under this Agreement.

12. Confidentiality of Information

12.1 The Parties acknowledge that certain information received or obtained from each other in the course of performing services is confidential information as defined herein. The Parties shall use its best efforts to keep in confidence and not disclose any of the other’s confidential information and will protect same against disclosure, misuse, espionage, loss or theft. The Parties will keep all confidential information confidential, and as required by law, unless compelled by law to disclose or prior written consent is obtained.

12.2 Notwithstanding termination, all confidentiality provisions herein survive and remain in full force and effect after termination of this Agreement.

12.3 These confidentiality provisions will not apply to any information that is or becomes public knowledge through no fault of either Party.

13. Non Solicitation/Non Employment

13.1 Purchaser agrees that it will not, directly or indirectly, employ or for purposes of employment, or otherwise engage in any way, any Service Provider employee or representative during the term of this Agreement; and further agrees not to do so for a twelve (12) month period after termination of this Agreement, such period commencing upon the effective date of termination.

13.2 A breach of this covenant will result in serious harm and damage to the Service Provider for which the Purchaser shall be fully liable, including all legal fees and related costs and damages that may flow from such breach. Purchaser further acknowledges that Service Provider would not enter into this Agreement but for the protection of this provision.

13.3 Notwithstanding termination, all non solicitation/non employment provisions herein survive and remain in full force and effect after termination of this Agreement.

14. Survival of Terms

For greater clarity, the provisions of this Agreement which by their nature extend beyond the termination of this Agreement will survive its termination or expiration.

15. Data Back-Up/Restore

Unless otherwise contained in the SOW, Purchaser is solely responsible for ensuring all its data is properly backed-up. Purchaser agrees that Service Provider shall not have any liability whatsoever for any claim, loss, damages or cost whatsoever associated with a failed back-up or restore system.

16. System Authorization

Purchaser warrants that it has ownership of, or sufficient right to, the system, which permits Service Provider to perform the work contracted for hereunder and pursuant to the SOW or Work Request.

17. Limitation of Liability


Purchaser further acknowledges and agrees that in no event will eSubnet indemnities be liable for any direct or indirect, special, general, consequential, punitive or exemplary damages, or economic damages (including but not limited to damages for loss of current or future profits or revenues, loss of data, or loss of use), whether or not foreseeable and whether or not based on agreement, tort or warranty claims or otherwise arising from any performance or failure to perform under this Agreement.

18. Notice

18.1 Any written notice to be given hereunder shall be sufficiently given if served personally on either Party, if sent by prepaid registered mail, if delivered by courier, sent by facsimile or sent by email, to the following address:

(a) eSubnet at:
        eSubnet Enterprises Inc.
        120 Front St. East
        Suite 202
        Toronto, ON M5A 4L9
        Attention: R. Danielli

        Fax (416) 203-1223
        email address

(b) [Name of Purchaser, etc. as above]

18.2 The effective date of receipt of written notice to be given hereunder will be the date received by the addressee or, if notice is sent by facsimile or email, the date received shall be deemed to be the day notice was sent.

19. Amendment

Except as provided for in this Agreement, no amendment of any provision of this Agreement is binding unless it is in writing and signed by each party hereto.

20. Execution of Agreement

This agreement can be executed and delivered in any number of counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together constitute one and the same instrument. “Delivered” can be by way of registered mail, facsimile or email.

21. Governing Law

This Agreement will be governed in all respects by the law of Ontario and the laws of Canada applicable therein. The court of Ontario shall have exclusive jurisdiction to entertain any action or proceeding brought by the parties in connection with this Agreement.

22. Severability and Waiver

22.1 If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction for any reason, the offending provision will be severed but the remaining provisions will continue in full force.

22.2 The waiver by either party of a breach of any provision of this Agreement will not operate or be interpreted as a waiver of any other, or any subsequent, breach.

23. Relationship of Parties

The relationship between the Parties is in the nature of independent contractors. Nothing in this Agreement shall be construed to create a principal-agent, partnership, joint venture, or employer-employee relationship and neither Party has the power to act for or bind the other Party.

24. Force Majeure

24.1 Neither Party shall be responsible for its failure to perform or delay in performance hereunder due to causes beyond its control and not occasioned by its fault, negligence, including without limitation, acts of God, fire, theft, flood, war, riot, embargo, or acts of civil or military authorities.

24.2 In the event of such failure or delay, such Party shall immediately advise the other Party of any actual or anticipated delay in the performance of its obligations hereunder and provide particulars on the cause and expected duration of the delay, which shall be updated at least verbally at regular intervals.

24.3 In the event the condition that has given rise to the delay or failure to perform cannot be removed by the non-performing Party within a period of thirty (30) days, then the other Party, after consultations, shall have the right to terminate this Agreement without further obligations or liability to the non-performing Party, subject to a notice in writing to that effect given thirty (30) days prior to termination.

25. Headings

The section headings herein are for the convenience of the Parties and shall not be given any legal effect or otherwise affect the interpretation of this Agreement.

26. Agreement Non Assignable

Neither this Agreement nor any of the rights or obligations of Purchaser or Service Provider shall be assigned in whole or in part, whether by operation of law or otherwise by Purchaser and Service Provider, as the case may be, without the written consent of the other Party.

27. Entire Agreement

This Agreement contains the entire understanding between the Parties. This agreement supersedes all prior agreements, understandings, negotiations and discussions, oral and written, between the Parties.

Dated this the             day of             20__

IN WITNESS WHEREOF the Parties have caused this Agreement to be executed by their duly authorized representatives as of the date first above written.

Richard Danielli
eSubnet Enterprises Inc.
________________________ ________________________
Witness (signature)                     Print Name

Purchaser (Print name below)

________________________ ________________________
Witness (signature)                     Print Name

Published July 2009

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