ON SCHEDULE 5.3.2.
FOR DISPUTED ACCOUNTS INCLUDED ON SCHEDULE 5.3.2 BLOCKADE AND PROGINET WILL HAVE
THEIR RESPECTIVE AUDITORS EVALUATE THESE TRANSACTIONS TO DETERMINE IF THEY CAN
BE RECOGNIZED AS SOFTWARE REVENUE AND/OR MAINTENANCE REVENUE FOR BLOCKADE'S
FISCAL YEAR ENDED SEPTEMBER 30, 2004.
IF BOTH AUDIT FIRMS AGREE ON THE TREATMENT, THEN THEIR DECISION IS FINAL.
IF
BOTH PARTIES DISAGREE THEN THE VALUE OF THE TRANSACTION WILL BE REDUCED BY 50%.
ALL SUCH MONIES, IF ANY, WILL THEN RESULT IN AN ADJUSTMENT TO THE PURCHASE PRICE
PER THE FORMULA IN SECTION 5.
5.4
WITHIN THIRTY (30) DAYS FOLLOWING THE 12 MONTH PERIOD SUBSEQUENT TO THE
EFFECTIVE DATE AND FOR A SUBSEQUENT TWO TWELVE MONTH PERIODS, , PROGINET SHALL
FURNISH BLOCKADE WITH A STATEMENT FOR EACH SUCH PERIOD, DISCLOSING ALL REVENUES
DERIVED FROM THE SOFTWARE DURING SUCH PERIOD CERTIFIED BY AN OFFICER OF
PROGINET.
SUCH REVENUES SHALL BE SEGREGATED FOR EACH OF SOFTWARE SALES,
MAINTENANCE REVENUES, VASCO TOKEN REVENUES (MINUS COGS)AND PROFESSIONAL SERVICES
REVENUES RELATED TO THE SOFTWARE.
5.5
BLOCKADE WILL PROVIDE SPACE TO PROGINET PER THE TERMS OF SECTION 8.3
HEREIN.
PROGINET WILL COMPENSATE BLOCKADE AT A FIXED COST OF $3,000 (CANADIAN)
PER MONTH.
5.6
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN ALL AMOUNTS WHICH
BECOME DUE TO BLOCKADE PURSUANT TO THE TERMS HEREOF SHALL BEAR INTEREST FROM
THEIR RESPECTIVE DUE DATE AT AN ANNUAL RATE OF INTEREST EQUAL TO TWELVE PERCENT
(12%), IF NOT PAID WITHIN 15 DAYS OF DUE DATE.
5.7
PROGINET SHALL KEEP ACCURATE AND COMPLETE BOOKS AND RECORDS RELATING TO
THE ASSIGNMENT IN ORDER THAT THE AMOUNTS PAYABLE HEREUNDER MAY BE ACCURATELY
DETERMINED AND THE STATEMENTS FURNISHED BY PROGINET HEREUNDER VERIFIED.
SUCH
BOOKS AND RECORDS SHALL BE MADE AVAILABLE TO BLOCKADE NO MORE THAN THREE (3)
TIMES DURING THE THREE (3) YEARS PERIOD IMMEDIATELY FOLLOWING THE EFFECTIVE DATE
UPON REASONABLE NOTICE AND AT REASONABLE TIMES DURING SUCH PERIOD FOR INSPECTION
AND/ OR AUDIT BY ANY DULY AUTHORIZED REPRESENTATIVES OF BLOCKADE.
WHENEVER ANY
SUCH INSPECTION AND/OR AUDITS DISCLOSES AN UNDERSTATEMENT, IN EXCESS OF TEN
PERCENT (10%), OF THE PAYMENTS DUE BY PROGINET HEREUNDER, ALL REASONABLE
EXPENSES IN CONNECTION WITH SUCH INSPECTION AND/OR AUDIT SHALL BE PAID BY
PROGINET TO BLOCKADE ON DEMAND.
IN ADDITION, PROGINET SHALL IMMEDIATELY PAY TO
BLOCKADE ALL AMOUNTS DUE AND UNPAID HEREUNDER IN THE EVENT OF ANY
UNDERSTATEMENT, TOGETHER WITH INTEREST THEREON AT THE RATE SET FORTH IN SECTION
5.6 HEREOF, WITHOUT PREJUDICE TO ANY RIGHTS WHICH BLOCKADE MAY HAVE IN THE
CIRCUMSTANCES.
WITHIN NINETY (90) DAYS AFTER THE END OF THE FIRST ANNIVERSARY
OF THE EFFECTIVE DATE, PROGINET SHALL SUBMIT TO BLOCKADE A DETAILED STATEMENT
PREPARED BY PROGINET AT PROGINET'S COST (AND, IF REASONABLY REQUESTED BY
BLOCKADE, CONFIRMED BY PROGINET'S INDEPENDENT PUBLIC ACCOUNTANTS) CERTIFYING THE
REVENUES SPECIFIED IN SECTION 5.2, FOR SUCH CALENDAR YEAR.
5.8
BLOCKADE'S RECEIPT OF ANY STATEMENT FURNISHED PURSUANT HERETO OR ITS
ACCEPTANCE OF ANY SUM PAID HEREUNDER SHALL NOT CONSTITUTE A WAIVER OF EITHER
PARTY'S OBLIGATIONS OR EITHER PARTY'S RIGHTS HEREUNDER OR AT LAW.
5.9
BLOCKADE ACKNOWLEDGES