TECHNOLOGY LICENSING AGREEMENT MADE AND ENTERED INTO IN ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇, ▇▇ THE 16TH DAY OF OCTOBER, 1997
BY AND BETWEEN: COMPOSITECH LTD., a body politic and corporate, duly
incorporated according to the laws of the State of Delaware,
having its head office and principal place of business in the
City of Hauppauge, State of New York,
(hereinafter referred to as the "Licensor")
PARTY OF THE FIRST PART
AND: LAMINES CTEK INC., a body politic and corporate, duly
incorporated according to the Canadian Business Corporations
Act, having its head office and principal place of business in
the City of Montreal, Province of Quebec,
(hereinafter referred to as the "Licensee")
PARTY OF THE SECOND PART
SECTION 1 - PREAMBLE
1.1 WHEREAS the Licensee wishes to build the Plant (as hereinafter defined) in
order to manufacture and sell Products (as hereinafter defined);
1.2 WHEREAS Licensor is the owner of the Patents (as hereinafter defined),
Copyrights (as hereinafter defined) and Technology (as hereinafter defined)
required to manufacture Equipment (as hereinafter defined) and to manufacture
and sell Products;
1.3 WHEREAS Licensor has agreed to grant to Licensee and Licensee wishes to
acquire from Licensor the right and license to use the Patents, Copyrights and
Technology to manufacture Products and to have manufactured, for its own use and
to assemble Equipment;
1.4 WHEREAS Licensor has also agreed to grant to Licensee and Licensee wishes to
acquire from Licensor the right and license to market, promote, advertise, sell,
distribute and merchandise Products in association with the Trade Marks (as
hereinafter defined).
NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
SECTION 2 - DEFINITIONS
2.1 Definitions. In this Agreement:
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2.1.1 "Affiliate" has the meaning ascribed thereto in the Canada Business
Corporations Act;
2.1.2 "Approval" has the meaning ascribed thereto in paragraph 4.3;
2.1.3 "Art" has the meaning ascribed thereto in paragraph 8.3.4;
2.1.4 "Asset Sale" has the meaning ascribed thereto in subsection 6.4;
2.1.5 "Confidential Information" of a Disclosing Party means (a) all concepts,
methods, procedures, inventions, know-how, secrets, data and other
information of the Disclosing Party, whether in written, printed,
electronic, unrecorded or any other form whatsoever, and whether known
now or developed during the Term of this Agreement, useful in the
development or exploitation of the Products or the Equipment, including
all documentation thereof, and (b) all business plans of the Disclosing
Party relating to the manufacturing, marketing or selling of the
Products, except for information that the Receiving Party can reasonably
demonstrate:
2.1.5.1 has become generally known to those in the printed wiring board
field other than through unauthorized disclosure by the Receiving Party;
2.1.5.2 is known to the Receiving Party prior to disclosure by the
Disclosing Party; or
2.1.5.3 has become available to the Receiving Party on a
non-confidential basis from a source other than the Disclosing Party.
2.1.6 "Copyrights" means in respect of the Technology, all the copyrights and
industrial designs and registrations thereof and applications therefor
and all renewals, modifications, developments and extensions thereto, as
well as all other copyrights and industrial designs in respect of the
Technology which may hereafter be issued to or acquired by Licensor or
for which the Licensor may have the right to grant licenses;
2.1.7 "Disclosing Party" has the meaning ascribed thereto at subsection 9.1;
2.1.8 "Equipment" means any machinery or equipment developed or patented by
the Licensor for the purpose of manufacturing the Products;
2.1.9 "Event of Default" has the meaning ascribed thereto at subsection 6.3;
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2.1.10 "Fairness Committee" has the meaning ascribed thereto in subsection
15.1;
2.1.11 "Fee Adjustment" has the meaning ascribed thereto in subsection 4.3;
2.1.12 "Intellectual Property" means the Patents, the Copyrights and the Trade
Marks;
2.1.13 "Integral Circuit" means laminates with integral circuits or printed
circuit boards with integral circuits as described by the following
claims or parts of such claims set forth in Licensor's patents Nos.
4,943,334, 5,037,691 and 5,478,421:
(i) claims 70-73 of U.S. Patent 4,943,334;
(ii)claims 16 and 26-30 of U.S. Patent No. 4,943,334, provided
that the conductive surface is in the form of a series of conductive
line traces etched or formed between two or more pads (hereinafter
called a "circuit") and further provided that the circuit is formed on
the tooling and transferred to the laminate or printed circuit board
during the molding process;
(iii) claims 7, 8, 36, 37, 42 and 43 of U.S. Patent No.
5,037,691, provided that the metal or metallic coating is in the form of
a circuit; and
(iv) claims 4, 5, 8-11, 50, 64 and 73 of U.S. Patent No.
5,478,421, provided that the metal or conductive surface is in the form
of a circuit and further provided that the circuit is formed on the
tooling and transferred to the laminate or printed circuit board during
the molding process;
2.1.14 "Investors" means Societe Innovatech du Grand Montreal, Industries Devma
Inc., Fonds de Solidarite des Travailleurs du Quebec (F.T.Q.) and Fonds
Regional de Solidarite Ile de Montreal;
2.1.15 "Joint Ventures" means any entity in which Licensor or any of its
Affiliates has an equity interest of at least 33 1/3%; however, the
parties shall not be deemed to be in a "Joint Venture" relationship with
one another for the purposes of this Agreement;
2.1.16 "Knowledge" - an individual will be deemed to have "Knowledge" of a
particular fact or other matter if:
2.1.16.1 such individual is actually aware of such fact or other
matter, or
2.1.16.2 a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the
course of conducting a reasonably comprehensive review of the
files, books and records of the Corporation.
A Person (other than an individual) will be deemed to have
"Knowledge" of a particular fact or other matter if any
individual who is serving as an officer of such Person has, or
at any prior time had, Knowledge of such fact or other matter;
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2.1.17 "Licensee Determination" has the meaning ascribed thereto at subsection
4.3;
2.1.18 "Licensee Fee Adjustment" has the meaning ascribed thereto at subsection
4.3;
2.1.19 "Licensee's Improvements" has the meaning ascribed thereto at subsection
5.2;
2.1.20 "Licensor Approval" has the meaning ascribed thereto at subsection 4.3;
2.1.21 "Licensor Determination" has the meaning ascribed thereto at subsection
4.3;
2.1.22 "Licensor Improvements" has the meaning ascribed thereto at subsection
5.1 hereof;
2.1.23 "Multi Layer Printed Circuit Boards" means the circuit boards defined in
one or more of claims 18-26 and 63-68 of U.S. Patent No. 5,037,691 or
the circuit boards produced using the process described in any of the
claims of U.S. Patents Nos. 5,376,326 and 5,512,224;
2.1.24 "Normal Capacity" means the Plant both manufacturing and shipping
2,475,000 square feet of Products during the same period of three (3)
consecutive months in response to firm orders received by the Licensee
in the normal course of business justifying the manufacturing of such
quantity of Products;
2.1.25 "North America" means Canada, the United States of America, Mexico and
the Caribbean Islands, including the Antilles and the Bahamas;
2.1.26 "Patents" means all the patents and patent applications relating to,
used in or useful in the development, manufacturing, marketing or
distribution of Products or relating to the Equipment, patents and
patent applications covering Licensor Improvements, any patents and
patent applications covering improvements, modifications, developments,
additions and alterations to the Technology, Equipment or Products by
any licensee of Licensor for which Licensor may have the right to grant
licenses to Licensee during the Term, as well as all other patents
relating to the Technology, Equipment or Products which may hereafter be
issued to or acquired by Licensor or for which Licensor may have the
right to grant licenses, provided that the "Patents" shall not include
the subject matter of (i) any claims of any patents or applications,
present or future, to the extent that they relate to Multi Layer Printed
Circuit Boards or Integral Circuits, and (ii) any patents or patent
applications or claims thereof which may be filed or issued in the
future, directed to subject matter different from that included in the
Patents;
2.1.27 "Person" means an individual, partnership, joint venture, trustee,
trust, corporation, division of a corporation, unincorporated
organization or other entity or a government, state or agency or
political subdivision thereof, and pronouns when they refer to a
Person have a similarly extended meaning;
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2.1.28 "Plant" means the manufacturing plant of Licensee to be situated in the
Montreal region;
2.1.29 "Products" means laminates for printed wiring boards and for all other
uses manufactured using the Patents, Copyrights and the Technology,
provided, however, that Multi Layer Printed Circuit Boards and Integral
Circuits shall not be deemed Products within the purview of this
Agreement;
2.1.30 "Proportion" means for North America for the first two twelve (12) month
periods commencing on the date hereof, a fraction, the numerator of
which shall be the annual planned Product manufacturing capacity of the
Plant and the denominator of which shall be the aggregate annual planned
Product manufacturing capacity of all plants (including the Plant) owned
or operated by Licensor or its Affiliates or any other Person licensed
(including Licensee) or otherwise authorized by Licensor or its
Affiliates to use the Intellectual Property and Technology and/or
manufacture or sell Products in North America;
2.1.31 "Purchaser" has the meaning ascribed thereto in subsection 6.4;
2.1.32 "Receiving Party" has the meaning ascribed thereto at paragraph 9.1.2;
2.1.33 "Representatives" has the meaning ascribed thereto at subsection 9.2;
2.1.34 "Sales Agency and Marketing Agreement" means the sales agency and
marketing agreement entered into between the parties hereto on the date
hereof;
2.1.35 "Sales Proportion" means (i) for North America commencing with the
twenty-fifth (25th) month following the date hereof and ending December
31, 2000 and in each fiscal year of Licensee thereafter, a fraction, the
numerator of which shall be the sales of Products in North America from
the Plant for the period in question, and the denominator of which shall
be the aggregate annual sales of Products in North America for the
period in question from all plants (including the Plant) and in the
event that a plant in North America has not made any sales, the planned
Product manufacturing capacity of such plant for the period in question,
owned or operated by Licensor or its Affiliates or any other Person
licensed (including Licensee) or otherwise authorized by Licensor or its
Affiliates to use the Intellectual Property and Technology and/or
manufacture or sell Products in North America from such plant in North
America multiplied by the weighted average selling price of all Products
sold in North America for the period in question ("North American Sales
Proportion") and (ii) for each country outside of North America in each
fiscal year, a fraction, the numerator of which shall be the annual
sales of Products in such country
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from the Plant and the denominator of which shall be the aggregate
annual sales of Products in such country from all plants (including the
Plant) and in the event that a plant in such country has not made any
sales, the annual planned Product manufacturing capacity of such plant,
owned or operated by Licensor or its Affiliates or any other Person
licensed (including Licensee) or otherwise authorized to use the
Intellectual Property and Technology and/or to manufacture or sell
Products in such country from such plant in such country multiplied by
the weighted average selling price of all Products sold in such country
for the period in question (the "Country Sales Proportion"). For the
purposes of subsection 11.2 hereof only, Sales Proportion, North
American Sales Proportion and Country Sales Proportion shall be based on
the twelve (12) month period following the issuance or registration of
the Patent, Copyrights or Trade ▇▇▇▇. For the purposes of this
definition, sales shall be calculated on an "Ex-Works" basis net of any
tariff, customs duties and penalties, sales and value added taxes, user
fees, service fees, packaging costs, freight costs and transportation
insurance costs, transloading costs and all other costs associated with
deliveries, damage allowances, rebates, returns and volume incentives
and any other costs, duties and fees which should be excluded to allow
the sales to be calculated on an "Ex-Works" basis as provided in the
1990 Incoterms of the International Chamber of Commerce;
2.1.36 "Shareholders Agreement" means the shareholders agreement entered into
on the date hereof among all the holders of shares of Licensee;
2.1.37 "Share Sale" has the meaning ascribed thereto in subsection 6.4;
2.1.38 "Technical Services Agreement" means the services agreement entered into
on the date hereof between Licensor and Licensee;
2.1.39 "Technology" means information, technical knowledge, know-how,
processes, procedures, devices, jigs, fixtures, machines, methods,
inventions, software and trade secrets now known and which may become
known to Licensor during the Term (except technology that may be
disclosed to Licensor in the future by another licensee of Licensor
which Licensor is legally prohibited from disclosing to Licensee) (i)
relating to, used in or useful in the development, manufacture,
marketing or distribution of Products or (ii) relating to the Equipment;
2.1.40 "Term" has the meaning ascribed thereto in subsection 6.1 hereof;
2.1.41 "Territory" means the world;
2.1.42 "Trade Marks" means all trade marks, whether or not registered, that
Licensor may own or have the right to use anywhere in the Territory in
relation to Products.
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SECTION 3 - GRANT OF LICENSE
3.1 Grant of License. Subject to the terms and conditions hereof, Licensor
hereby grants to Licensee, the latter hereby accepting,
3.1.1 the right and license to manufacture Products at the Plant using the
Patents, Copyrights and Technology,
3.1.2 subject to subsection 3.3, the non-exclusive right and license to have
Equipment manufactured (and to assemble such Equipment) solely for its
own use in the Plant, for the manufacture of Products, using the
Patents, Copyrights and Technology,
3.1.3 subject to subsection 3.4, until the Plant operates at Normal Capacity,
the right and license, exclusive except as to Licensor, to manufacture,
market, promote, advertise, sell, distribute and merchandise Products in
North America, and the non-exclusive right and license to market,
promote, advertise, sell, distribute and merchandise Products
manufactured pursuant to paragraph 3.1.1 throughout the Territory,
3.1.4 subject to subsection 3.4, once the Plant shall have operated at Normal
Capacity, the non-exclusive right and licence to market, promote,
advertise, sell, distribute and merchandise Products throughout the
Territory, provided, however, that (i) Licensor shall not have any right
to grant to any Person any license which impairs the rights granted to
Licensee and; (ii) if the Plant ceases to operate at Normal Capacity at
any time, Licensor's right to grant to any Person any non- exclusive
right or license to market, promote, advertise, sell, distribute or
merchandise Products in North America is subject to Licensor maintaining
the Plant at a capacity no lower than any other plant in North America
owned by Licensor, any of its Affiliates or any entity in which the
Licensor or any of its Affiliates has an equity interest of at least
33 1/3%,
3.1.5 the right and license, subject to Licensee fulfilling its obligations
set forth in Section 8 hereof, to market, promote, advertise, sell,
distribute and merchandise Products in association with the Trade Marks
throughout the Territory, provided that as long as the Sales Agency and
Marketing Agreement is in force, Licensor shall be entitled to designate
the Trade Marks which Licensee may use in respect of the Products.
3.2 Sublicenses. Licensee shall not have any right to grant sublicenses
hereunder.
3.3 Equipment Manufacturing. In connection with the rights granted to the
Licensee pursuant to paragraph 3.1.2 hereof, Licensee shall be entitled to
contract with any responsible and reputable suppliers and/or manufacturers, in
connection with the manufacture of Equipment,
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which Equipment shall be delivered to and used solely by Licensee at Licensee's
Plant. Licensee shall prior to so contracting notify Licensor in writing of the
name of such supplier and/or manufacturer. In the event that Licensor does not
advise Licensee within twenty (20) days of receipt of Licensee's notice that it
believes, acting reasonably, that such supplier and/or manufacturer is not
responsible or reputable, then Licensor shall be deemed to have accepted such
supplier and/or manufacturer. Licensee shall consult with Licensor in order to
establish such procedures as the parties will agree upon, acting reasonably, as
will assure that the Technology is adequately protected against misappropriation
or misuse by any such supplier or manufacturer. If Licensor notifies Licensee
within the twenty (20) day period that it believes, acting reasonably, that such
supplier and/or manufacturer is not responsible or reputable, then Licensee
shall either (i) not contract with such supplier and/or manufacturer without
again following the procedure set forth in this subsection 3.3, or (ii) contest
the determination of Licensor and submit the matter to the Fairness Committee
and Arbitration, if necessary, who shall make the determination.
3.4 Importation of Products into North America. Licensor hereby agrees that
neither it nor its Affiliates or Joint Ventures shall, anywhere in North
America, market, promote, advertise, sell, distribute or merchandise, directly
or indirectly, products manufactured outside North America and which are the
same or similar to the Products manufactured at the Plant, and Licensor and its
Affiliates and Joint Ventures hereby further agree that they shall include in
any license or sub-license granted to any Person a provision prohibiting such
licensee or sub-licensee from marketing, promoting, advertising, selling,
distributing or merchandising anywhere in North America, products manufactured
outside North America and which are the same or similar to the Products
manufactured at the Plant (and enforce such provision in the event of any breach
thereof by any such licensee or sublicensee, to the extent reasonable), except
if (i) such marketing, promotion, advertising, sale, distribution or
merchandising is directly effected through the Licensor, acting as agent or
principal; and (ii) a customer of Licensor, its Affiliates or Joint Ventures or
such licensee or sub-licensee has expressly requested that such products be
manufactured by a specific plant situated outside North America, after such
customer has been informed by Licensor, its Affiliates or Joint Ventures or such
licensee or sublicensee, that Licensee is an authorized supplier of such
products in North America, and Licensee has a reciprocal right to market,
promote, advertise, sell, distribute and merchandise Products from the Plant in
such territory or territories outside North America from where the Person who
owns such specific plant is authorized to market, promote, advertise, sell,
distribute and merchandise products which are the same or similar to the
Products manufactured at the Plant.
3.5 Immunity. The rights and licenses granted to Licensee pursuant to this
Section 3 shall include the right to pass on immunity under the Patents to any
user or purchaser of Products manufactured or sold by Licensee in accordance
with this Agreement, as to all reasonably intended uses of the Products.
3.6 Multi Layer Printed Circuit Boards or Integral Circuits. In the event that
Licensor wishes to grant any licenses in respect of Multi Layer Printed Circuit
Boards or Integral Circuits in the Territory, it shall negotiate in good faith
with Licensee for the granting of such
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licenses to Licensee, it being understood that Licensor shall be entitled to
negotiate with others at the same time.
3.7 Rights of Licensor Outside of North America. Licensee hereby acknowledges
and confirms that insofar as the license rights granted to it pursuant to
subsection 3.1 hereof are concerned, its Territory shall exclude (i) the
exclusive territory contemplated in the license agreement between HT Troplast AG
(successor of ▇▇▇▇ Troisdorf AG) and Licensor dated June 22, 1990 and (ii) any
other territory outside of North America for which Licensor grants any exclusive
license rights in connection with the Patents and the Technology, the whole
subject to any reciprocal rights, if any, granted to Licensee pursuant to
paragraph (ii) of subsection 3.4 hereof;
SECTION 4 - LICENSOR'S OBLIGATIONS
4.1 Licensor's Initial Obligations. Concurrently with the execution of this
Agreement, Licensor shall disclose to Licensee the Technology and provide
Licensee with copies of the documents set forth in Schedule annexed hereto.
Thereafter, Licensor shall from time to time upon the request of Licensee
promptly provide Licensee with copies of all other existing documents, records,
drawings, plans and writings in connection with the Technology. Such Technology
and the services to be furnished by Licensor pursuant to the Technical Services
Agreement shall enable Licensee to benefit fully from the rights and licenses
granted to it pursuant to this Agreement.
4.2 Technical Services Agreement. In addition to the obligations of Licensor set
forth herein, Licensor shall furnish to Licensee certain services in accordance
with the Technical Services Agreement.
4.3 Planned Manufacturing Capacity. Licensor shall be obliged to promptly inform
Licensee in writing of the planned manufacturing capacity in square feet of
Products in all plants owned or operated by Licensor or its Affiliates or any
other Person licensed or otherwise authorized by Licensor or its Affiliates to
use the Intellectual Property and the Technology and/or manufacture or sell
Products in North America or outside of North America, if applicable, and of any
change thereto (the "Licensor Determination"). The board of directors of
Licensee shall then decide whether or not to approve such Licensor
Determination. In the event that such board of directors approves of same in
writing within 10 days of being informed by Licensor thereof (the "Approval"),
then the parties shall determine any adjustment to the fees and costs provided
in Section 11 hereof already paid by Licensee for the period in question and the
manner in which same is to be acquitted (the "Fee Adjustment"). In the event
that the parties cannot agree on the Fee Adjustment within 10 days of the
Approval, then the parties shall submit this matter to the Fairness Committee
pursuant to Section 15 hereof. However, in the event that such board of
directors does not approve of the Licensor Determination within 10 days of being
informed by Licensor thereof, then the parties shall submit the Licensor
Determination as well as the Fee Adjustment to the Fairness Committee pursuant
to Section 15 hereof.
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The board of directors of Licensee shall be obliged to promptly inform
Licensor in writing of the planned manufacturing capacity in square feet of
Products in the Plant and of any change thereto (the "Licensee Determination").
Licensor shall then decide whether or not to approve such Licensee
Determination. In the event that Licensor approves of same in writing within 10
days of being informed by Licensee thereof (the "Licensor Approval"), then the
parties shall determine any adjustment to the fees and costs provided in Section
11 hereof already paid by Licensee for the period in question and the manner in
which same is to be acquitted (the "Licensee Fee Adjustment"). In the event that
(i) the parties cannot agree on the Licensee Fee Adjustment within 10 days of
the Licensor Approval, or (ii) the board of directors of Licensee cannot advise
Licensor in writing of the Licensee Determination within ten (10) days of being
requested in writing to do so by Licensor, then the parties shall submit this
matter to the Fairness Committee pursuant to Section 15 hereof. However, in the
event that Licensor does not approve of the Licensee Determination within 10
days of being informed by the board of directors of Licensee thereof, then the
parties shall submit the determination of the Licensee Determination as well as
the Licensee Fee Adjustment to the Fairness Committee pursuant to Section 15
hereof.
For the first two twelve (12) month periods following the date hereof, the
parties hereby agree that the estimated planned manufacturing capacity of the
Plant is 9 900 000 square feet of Products per twelve (12) month period and the
estimated planned manufacturing capacity of the Licensor's plant situated in
Long Island, New York is 4 950 000 square feet of Products per twelve (12) month
period, the whole subject to the provisions of the first two paragraphs of this
subsection 4.3.
SECTION 5 - DEVELOPMENTS AND IMPROVEMENTS
5.1 Improvements by Licensor. The parties hereby agree that should any
improvements, modifications, developments, additions and alterations be made to
the Technology, Equipment or Products by or on behalf of Licensor, its agents,
employees, consultants or representatives at any time (the "Licensor
Improvements"), then the legal rights therein shall be the exclusive property of
Licensor. Licensor shall promptly furnish Licensee with details of all Licensor
Improvements and upon the request of Licensee promptly provide Licensee with
copies of all documents, records, drawings, plans and writings in connection
with the Licensor Improvements which exist at that time. Such Licensor
Improvements together with the services to be furnished by Licensor pursuant to
the Technical Services Agreement shall enable Licensee to make use of them for
the purposes provided for in this Agreement. All Licensor Improvements shall be
deemed licensed to Licensee hereunder for the purposes set forth in this
Agreement without any compensation therefor and shall be deemed to form part of
the Intellectual Property or Technology for the purposes of this Agreement.
5.2 Improvements by Licensee. The parties hereby agree that the legal rights
with respect to any improvements, modifications, developments, additions and
alterations made to the Technology, Equipment or Products by or on behalf of
Licensee, its agents, employees, consultants or representatives at any time
shall be the exclusive property of Licensee (the
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"Licensee's Improvements"). Licensee shall promptly furnish Licensor with
details of all Licensee's Improvements and upon the request of Licensor promptly
provide Licensor with copies of all documents, records, drawings, plans and
writings in connection with Licensee's Improvements which exist at that time.
Licensee shall furnish to Licensor, on substantially the same terms and
conditions (including price) as the services furnished by Licensor to Licensee
pursuant to the Technical Services Agreement, such services as will enable
Licensor to make use of Licensee's Improvements to the same extent as Licensee
and, subject to subsection 5.3 hereof, to sublicense its use to Licensor's other
licensees. All Licensee's Improvements shall be deemed exclusively licensed to
Licensor for the Territory without any compensation therefor, subject to the
rights of Licensee to make use of Licensee's Improvements in the same manner as
provided in Section 3 hereof. Licensor shall cooperate fully with and assist
Licensee in obtaining, at Licensee's expense, patents, copyrights, industrial
designs, trademarks and other intellectual property registration with respect to
Licensee's Improvements. Licensor shall reimburse Licensee for a portion of such
expenses and for that purpose the provisions of subsections 11.1 and 11.2 hereof
in respect of the reimbursement by Licensee shall apply mutatis mutandis to
Licensor. In the event Licensee declines for any reason to seek patent
protection for any of Licensee's Improvements, or declines to seek such
protection in all jurisdictions, or decides to cease maintaining any patent in
force, then it shall promptly notify Licensor to afford Licensor the opportunity
to seek or maintain patent protection therefor and in such event the rights
therein shall belong to Licensor, subject to a license to Licensee as set forth
in Section 3 hereof and subject to cost sharing in accordance with subsections
11.1 and 11.2 hereof.
5.3 Limitation on Rights of Licensor to Licensee's Improvements. Notwithstanding
subsection 5.2 hereof, Licensor shall not be entitled to make Licensee's
Improvements available to any licensee of Licensor unless such licensee has
permitted its improvements to the Technology, Equipment and Products to be made
available to Licensee without any compensation therefor payable by Licensee.
SECTION 6 - TERM AND EVENT OF DEFAULT
6.1 Term. Subject to the terms and conditions hereof, the term of this Agreement
is ninety-nine (99) years (the "Term") commencing on the date first mentioned
hereinabove.
6.2 Termination of Agreement. If an Event of Default occurs with respect to
either party, the non-defaulting party shall have the right to terminate this
Agreement immediately upon written notice to the defaulting party.
6.3 Definition of Event of Default. As used herein, "Event of Default" means,
with respect to either party, the occurrence of any of the following events:
6.3.1 such party commits an act of bankruptcy, makes an assignment for the
benefit of its creditors or otherwise takes advantage of or shelter
under any legislation for the protection of debtors; or
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6.3.2 such party is declared bankrupt or a receiver is appointed in respect of
such party or a substantial portion of its property; or
6.3.3 such party is dissolved, liquidated or wound-up; or
6.3.4 such party fails to perform any of its material obligations under the
provisions of this Agreement and such failure is not remedied within
thirty (30) days of receipt of a written notice to that effect received
from the other party.
6.4 Sale of Assets or Shares of Licensee. Notwithstanding any provision of this
Agreement, in the event that (a) Licensee sells all or substantially all of its
assets to any Person (the "Purchaser") (the "Asset Sale"), or (b) seventy-five
percent (75%) or more of the issued and outstanding voting shares of Licensee
are sold to any Person other than any of the Investors (the "Share Sale"),
Licensor may terminate this Agreement only if the Licensor provides the
Purchaser or Licensee (in the event of a Share Sale) at the time of such Asset
Sale or Share Sale, subject to the Purchaser's or Licensee's acceptance, a new
technology licensing agreement identical in all material respects to this
Agreement, with the exceptions that such new agreement shall provide (i) that
any improvements, modifications, developments, additions and alterations to be
made to the Intellectual Property, Technology, Equipment or Products by the
Purchaser or by Licensee (in the event of a Share Sale) shall be promptly
disclosed to and shall be the exclusive property of Licensor, and shall form
part of the Intellectual Property and Technology licensed to Purchaser or
Licensee (in the event of a Share Sale); (ii) that Licensee's Improvements
assigned to Licensor pursuant to subsection 6.5 hereof, shall form part of the
Intellectual Property and Technology licensed to Purchaser or Licensee (in the
event of a Share Sale); (iii) for the payment to Licensor of royalties on gross
sales of Products at a reasonable royalty, such royalty to be determined in
accordance with the then applicable rules of law under which a United States
court would determine a reasonable royalty pursuant to 35 U.S. Code ss. 284 or
any applicable successor provision; and (iv) for a term equal to the unexpired
portion of the Term. In the event that Licensor does not offer to the Purchaser
or Licensee (in the event of a Share Sale) such new agreement as provided for
herein, then this Agreement shall continue in full force and effect in favour of
the Purchaser or Licensee (in the event of a Share Sale).
6.5 Assignment of Licensee's Improvements. In the event that this Agreement is
terminated following the Asset Sale or Share Sale or at the end of the Term or
for any other reason whatsoever, without exception, the Licensee shall assign
all its rights to the Licensee's Improvements to Licensor for an aggregate price
of one dollar (1$) and shall forthwith furnish to Licensor a detailed
description of all such Licensee Improvements and the underlying Technology that
has not previously been disclosed to Licensor. Licensee agrees at Licensor's
expense to sign all documents and do all things as may be necessary in the
opinion of Licensor's counsel to give effect to such assignment.
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SECTION 7 - EFFECT OF TERMINATION OR EXPIRATION OF THE TERM
7.1 Effect of Termination. Upon the termination of this Agreement for any reason
whatsoever or the expiration of the term of this Agreement:
7.1.1 all rights of the parties hereunder shall cease immediately;
7.1.2 all amounts owing by one party to the other shall immediately become due
and payable;
7.1.3 subject to paragraph 7.1.4 hereof, Licensee shall forthwith deliver to
Licensor all forms, documents and materials relating to Products or
Equipment which are the property of Licensor without retaining any copy
thereof, as well as all promotional and advertising materials,
instruction sheets, documents and other items bearing any of the Trade
Marks, unless a new technology licensing agreement is entered into as
provided for in subsection 6.4 hereof;
7.1.4 Licensee shall have the right to distribute and sell its remaining
inventory of Products and raw materials, in the ordinary course of
business and pursuant to instructions received from Licensor, unless a
new technology licensing agreement is entered into as provided for in
subsection 6.4 hereof;
7.1.5 Licensor shall be entitled, at its option exercisable by written
notice given to Licensee within thirty (30) days following such
termination or expiration, to purchase all or any of the Equipment
owned by Licensee, at a price equal to Licensee's depreciated cost
therefor, unless a new technology licensing agreement is entered into
as provided for in subsection 6.4 hereof. Upon exercise of such
option, Licensee shall, within ten (10) days of its receipt of such
notice, deliver the purchased Equipment to Licensor and Licensor shall
pay the purchase price therefor upon receipt of same. Should Licensor
not purchase all of Licensee's Equipment, Licensee shall have the
right to sell same to any Person.
The parties agree to sign all documents and do all things as may be
necessary to give effect to the foregoing provisions. Licensor shall be
entitled to set off all amounts owing to it by Licensee against the
purchase price for the Equipment under paragraph 7.1.5 hereof.
7.2 Surviving provisions. Termination of this Agreement for any reason
whatsoever or the expiration of the term of this Agreement shall not release any
party from any of its obligations which remain unfulfilled at such time or
release any party from those obligations which survive such termination or
expiration, including, but not limited to, the obligations set forth in Section
9.
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SECTION 8 - TRADE MARKS AND QUALITY CONTROL
8.1 Rights and Ownership in Trade Marks. Neither this Agreement nor the
operations of Licensee hereunder shall in any way give or be deemed to give
Licensee any interest in the Trade Marks, except for its right and license to
use the Trade Marks in accordance with the terms hereof. Licensee agrees that
each of the Trade Marks and the goodwill symbolized thereby is the sole and
exclusive property of Licensor and nothing in this Agreement shall prohibit or
curtail in any manner Licensor's right to use, directly or indirectly the Trade
Marks. All goodwill resulting from Licensee's use of the Trade Marks shall inure
solely to the benefit of Licensor.
8.2 No action by Licensee. Licensee agrees that it has no power or right to and
shall not during the term of this Agreement or thereafter take any action which
might invalidate the Trade Marks or impair any rights of Licensor therein or
create any rights adverse to those of Licensor therein or attempt to register
the Trade Marks anywhere in the Territory.
8.3 Use of Trade Marks
8.3.1 As long as the Sales Agency and Marketing Agreement is in force,
Licensee shall not use any Trade Marks on any Products other than those
Trade Marks designated by Licensor;
8.3.2 Licensee agrees that it will use the Trade Marks only in connection with
the Products and will label, package and advertise the Products only in
such manner as to preserve at all times all rights of Licensor in the
Trade Marks;
8.3.3 Licensor shall provide to Licensee from time to time information
regarding the use of the Trade Marks, including the typeface,
configuration and orientation of the Trade Marks, specifications and
restrictions on the size, colour and backgrounds for the Trade Marks,
and Licensee shall use the Trade Marks only in the manner so specified;
8.3.4 Licensee shall submit all original mechanical art (the "Art") for all
labels, packaging, advertisements, promotional materials and other
materials used in connection with the sale of the Products which bear
any Trade ▇▇▇▇ to Licensor for approval prior to the use of the Art,
which approval shall not be unreasonably withheld or unduly delayed. In
the event that Licensor does not notify Licensee in writing of its
disapproval of same within thirty (30) days of its receipt of the Art,
the Art shall be deemed to be approved by Licensor;
8.3.5 Licensee shall not change or modify any part of the Art without the
written approval of Licensor, which approval shall not be unreasonably
withheld or unduly delayed. In the event that Licensor does not advise
Licensee in writing that it
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disapproves of such change or modification within ten (10) days of
receipt thereof, Licensor shall be deemed to have accepted such change
or modification;
8.3.6 Licensee shall forward to Licensor, at Licensee's expense, such
representative samples of the labels, packaging, advertisements and
promotional and other materials used in connection with the sale of the
Products in which any of the Trade Marks appear once a year or at such
other times as Licensor may reasonably request, in order to verify that
the Trade Marks are being used in accordance with the terms of this
Agreement;
8.3.7 Each label, package, advertisement, item or promotional or other
material used in connection with the sale of the Products which bears
any Trade ▇▇▇▇ shall contain the following legend:
"[the particular Trade Marks
used]"(R) are Trade Marks of
Compositech Ltd. and are used by
[Licensee's Name] under License."
or such other legend, inscriptions and markings thereon as Licensor may
request;
8.3.8 Licensee shall not use the Trade Marks or any similar ▇▇▇▇, name or logo
to identify its business or any product (other than Products) that
Licensee manufactures or sells;
8.3.9 Licensee shall use the Trade Marks, only as depicted in their respective
registrations or applications for registration or as prescribed by
Licensor.
8.4 Quality Control
8.4.1 Licensee shall submit a sufficient number of specimens of each Product
(as shall be agreed upon between Licensor and Licensee) which
incorporates or is to be sold under any of the Trade Marks to Licensor
for approval prior to the introduction into the market and use of such
Product, which approval shall not be unreasonably withheld or unduly
delayed. In the event that Licensor does not advise Licensee in writing
that it disapproves of such Product which incorporates or is to be sold
under any of the Trade Marks within thirty (30) days of its receipt
thereof, Licensor shall be deemed to have accepted same;
8.4.2 Licensee shall maintain the quality of each of the Products which
incorporates any of the Trade Marks in strict conformity with the
standards and specifications for the Product furnished by Licensor from
time to time and the specimens of the Product submitted to Licensor, as
provided in paragraph 8.4.1 above, and shall not make any alteration or
modification thereof without the written consent of
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Licensor, which consent shall not be unreasonably withheld or unduly
delayed, except to comply with changes required by applicable law. In
the event that Licensor does not advise Licensee in writing that it
disapproves of such alterations or modifications within ten (10) days of
receipt thereof, Licensor shall be deemed to have accepted such
alteration or modification;
8.4.3 Licensee shall forward to Licensor, at Licensee's expense, such
representative samples of the Products which incorporate or are to be
sold under any of the Trade Marks as Licensor may reasonably request
from time to time in order to verify that the Products which incorporate
or are to be sold under any of the Trade Marks are being made according
to the then-applicable standards and specifications furnished to
Licensee by Licensor. Licensor shall have the right to conduct such
inspections as to the quality of the Products which incorporate or are
sold under any of the Trade Marks, at Licensee's Plant, as it may deem
reasonably necessary from time to time and upon reasonable notice to
Licensee.
8.5 Non-Respect of Use of Trade Marks and Quality Control. Notwithstanding any
provision of this Agreement, in the event that Licensee uses any of the Trade
Marks in contravention of subsections 8.3 hereof or does not respect the quality
control provisions set forth in subsection 8.4 hereof, the only recourse
available to Licensor shall be to prohibit Licensee from using such Trade ▇▇▇▇.
Licensor shall furnish to Licensee and Licensee shall put in use any reasonable
systems necessary to control the quality of the Products which incorporate or
are to be sold under any of the Trade Marks.
8.6 Delivery of Documents. Licensee shall execute and deliver such documents,
applications and other writings and do such things as may be requested by
Licensor in order to confirm Licensor's ownership of the Trade Marks, maintain
the validity of same and obtain, maintain or renew any registration thereof. The
expenses to confirm Licensor's ownership of the Trade Marks shall be borne by
Licensor. The expenses to maintain the validity of the Trade Marks and to
obtain, maintain or renew any registration thereof shall be borne in the manner
provided for in subsections 11.1 and 11.2 hereof. Failure to obtain or maintain
registration of any of the Trade Marks, anywhere in the Territory shall not
constitute a breach of the terms hereof by Licensor.
SECTION 9 - CONFIDENTIAL INFORMATION
9.1 Confidential Information. Each party hereby acknowledges that it may receive
Confidential Information from the other party (the "Disclosing Party"). Each
party hereby acknowledges, accepts and agrees that:
9.1.1 the Confidential Information designated as such in the manner provided
for in this Section 9 is non-public and confidential and shall at all
times remain the property of the Disclosing Party;
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9.1.2 the disclosure by the Disclosing Party of the Confidential Information
to the other party (the "Receiving Party") is for the sole purpose of
enabling it to carry out its obligations under the terms of this
Agreement; and
9.1.3 the Receiving Party shall not assert, directly or indirectly, any right
with respect to the Confidential Information which may impair or be
adverse to the Disclosing Party's ownership thereof.
9.2 Obligations of parties. Each party shall keep the Confidential Information,
and the fact that the Confidential Information has been provided, confidential
at all times (regardless of the extent or duration of the relationship of the
parties and regardless of whether such Confidential Information was disclosed
before or after the date of this Agreement) and shall not disclose such
Confidential Information, in whole or in part, to any person other than to its
agents, employees, suppliers and/or manufacturers of Equipment and other
authorized representatives (collectively herein referred to as the
"Representatives") who need to know such information in connection with the
performance of its obligations under the terms of this Agreement, without the
prior written consent of the Disclosing Party. Each party shall inform its
Representatives of the confidential nature of the Confidential Information and
shall require such Representatives to keep such information confidential by
legally binding means. Each party shall be fully responsible for any breach of
this Agreement by its Representatives and shall, at its expense, promptly take
appropriate legal action to stop or minimize improper disclosures by any of its
employees or ex-employees or other Representatives. Each party shall exercise
careful judgment to minimize the number of its Representatives who have access
to the other party's Confidential Information and to limit them to individuals
reasonably known to be trustworthy and of sound judgment. Areas of a party's
facilities where processes are carried out involving Confidential Information of
the other party shall be off limits to visitors to such facilities and shall be
accessible only to those having a need to know the information in order to carry
out a specific task for the party and who have signed a written legally binding
agreement effective to maintain the information in confidence and to authorized
Canadian or Quebec government personnel who it believes, upon reasonable
inquiry, are obligated by law to maintain such information in confidence. Each
party shall maintain a written log of all persons other than its Representatives
who are given access to the other party's Confidential Information. Nothing
herein shall be deemed to impair Licensor's right to disclose the Confidential
Information of Licensee to its other licensees, subject to appropriate
safeguards and to the said licensees signing confidentiality agreements, and
provided further that Licensor has the right to disclose comparable confidential
information of such other licensees to Licensee.
9.3 Property Rights In Confidential Information. Any Confidential Information
disclosed by the Disclosing Party shall remain the sole and exclusive property
of the Disclosing Party.
9.4 Information disclosed prior to this Agreement. Any Confidential Information
supplied to the Receiving Party by the Disclosing Party prior to the execution
of this Agreement shall be considered confidential in the same manner and
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shall be subject to the same treatment and obligations as the Confidential
Information made available after the execution of this Agreement.
9.5 Breach of Confidentiality. In the event of a material breach of the
undertakings of either party under this Section 9, the parties agree that money
damages may be inadequate and the Disclosing Party shall be entitled to seek
injunctive relief and specific performance. Such remedy shall not be deemed to
be the exclusive remedy for any such breach but shall be in addition to all
other remedies available at law. The Disclosing Party shall be entitled to
reasonable legal fees (including reasonable attorney's fees and expenses) and
other costs reasonably incurred to remedy any and all material breaches by the
Receiving Party of this Agreement.
9.6 Transfer of Confidential Information. All Confidential Information furnished
hereunder by either party to the other, whether orally, in writing or by
demonstration or otherwise, shall be maintained as confidential unless the
Disclosing Party notifies the Receiving Party to the contrary in writing.
9.7 Proprietary Information. Neither party hereto shall disclose any of its
proprietary information which may reveal incidentally or otherwise Confidential
Information originating with the Disclosing Party.
9.8 Confidential Information of any Person. Notwithstanding the provisions of
subsection 4.3, Licensor shall not be obliged to disclose to Licensee the
planned manufacturing capacity or sales of any Person, other than Affiliates or
Joint Ventures, licensed or otherwise authorized by Licensor or its Affiliates
to use the Intellectual Property and Technology and/or manufacture or sell
Products in North America or outside of North America, if applicable. However,
Licensor shall be obliged to disclose to an independent auditor appointed by
Licensee and acceptable to Licensor, acting reasonably, such planned
manufacturing capacity or sales in order to ensure the accuracy of the
calculation of Sales Proportion. Such independent auditor shall be bound by
confidentiality obligations similar to the provisions of Section 9 hereof.
SECTION 10 - REPRESENTATIONS, WARRANTIES AND COVENANTS
10.1 Representations of Licensor. Licensor hereby represents, warrants and
covenants:
10.1.1 that it is duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation;
10.1.2 that it has the necessary corporate power and authority to execute this
Agreement and to perform its obligations hereunder. The execution of
this Agreement by Licensor and the performance by Licensor of its
obligations hereunder have been duly authorized by all necessary action
on its part and do not require any action, consent or approval of, any
registration with, or notification to any Person, or any action or
consent under any laws to which Licensor is subject;
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10.1.3 that Schedule 10.1.3 annexed hereto contains a true and complete list
and copy of all Patents, Copyrights and Trade Marks and a true and
complete list in all material respects of the Technology, none of the
applications and registrations in respect of such Patents, Copyrights
and Trade Marks have been opposed or held unenforceable except as set
forth in Schedule 10.1.3 annexed hereto and each of which is in full
force and effect. Licensor is the absolute owner of the applications and
registrations in respect of the Intellectual Property except as set
forth in Schedule 10.1.3;
10.1.4 except as set forth in Schedule 10.1.4 annexed hereto, to the Knowledge
of Licensor, it is the sole owner of and has the right to exclude others
from infringing or misappropriating the Patents, Copyrights, Trade Marks
and Technology. The Patents, Copyrights and Technology are sufficient to
enable Licensee to manufacture and sell the Products and to have
manufactured and to assemble the Equipment;
10.1.5 that the Intellectual Property set forth on Schedule 10.1.3 has been
duly registered with, filed in or issued by, as the case may be, the
appropriate authorities in the jurisdictions listed in such Schedule and
such registrations, filings and issuances remain in full force and
effect, except as set forth in Schedule 10.1.3 annexed hereto;
10.1.6 that, on the date hereof each of the Intellectual Property and the
Technology is free and clear of any hypothecs, charges, liens or
encumbrances, except for the liens on the Intellectual Property
described in Schedule 10.1.6 annexed hereto, all of the holders of such
liens having taken cognizance of and consented to this Agreement and
agreed to be subject to the provisions hereof insofar as the secured
Intellectual Property is concerned and to respect all of the obligations
of Licensor in favour of Licensee set out in this Agreement in the event
that any of them realizes on its security insofar as the secured
Intellectual Property is concerned;
10.1.7 that it has not granted any options, licenses or other rights to the
Intellectual Property and/or the Technology to any Person except as set
forth in Schedule 10.1.7 annexed hereto and HT Troplast AG has taken
cognizance of and consented to this Agreement and agreed in the event
that it purchases any of the Intellectual Property and/or Technology to
be subject to the provisions hereof as far as such purchased
Intellectual Property and/or Technology is concerned and to respect all
of the obligations of Licensor in favour of Licensee in this Agreement
insofar as such purchased Intellectual Property and/or Technology is
concerned;
10.1.8 that the execution, delivery and performance of this Agreement, the
granting of the rights and license provided herein and the consummation
of the transactions contemplated hereby will not breach, violate or
conflict with any instrument, agreement or undertaking, written or oral,
governing the Intellectual Property and/or the Technology and will not
cause the forfeiture or termination or give rise to a right of
forfeiture or termination of Licensor's rights to the Intellectual
Property and/or the Technology or in any way impair the right
- 20 -
of Licensor to bring any action for the infringement of the Intellectual
Property and/or the Technology or any part thereof;
10.1.9 that on the date hereof, the manufacture of the Products and the
Equipment does not, to the Knowledge of Licensor, infringe any rights of
any Person;
10.1.10 that there are no pending or threatened proceedings, litigation or other
adverse claims affecting, or with respect to, the Intellectual Property
and/or the Technology or any part thereof except as set forth in
Schedule 10.1.10 annexed hereto and, to the Licensor's Knowledge, no
Person is infringing or threatening to infringe the Intellectual
Property and/or the Technology or is in possession of or using the
Technology, except as set forth in Schedule 10.1.10;
10.1.11 that it has not disclosed the Technology or its confidential information
to any Person except (i) pursuant to the License Agreement between
Licensor and HT Troplast AG (successor of ▇▇▇▇ Troisdorf AG) dated June
22, 1990, (ii) to Licensor's Representatives and officers and to other
Persons pursuant to written obligation of confidentiality, (iii) to
Licensor's directors whom it believes, upon reasonable inquiry, are
obligated by law to maintain such information in confidence; (iv) to
governmental inspectors and authorities whom it believes are obligated
by law or regulation to maintain the information in confidence, and (v)
in the course of its business to attorneys, accountants and comparable
professionals who have ethical obligations to maintain such information
in confidence;
10.1.12 that all its Representatives, officers and directors other than those
Representatives who are not privy to any of Licensor's confidential
information are bound by confidentiality and assignment of intellectual
property and technology agreements (and non-competition agreements only
insofar as the directors of Licensor who are also employees of Licensor
and who are privy to Licensor's confidential information are concerned),
and such agreements and obligations do not confer on any such Person any
rights to the Intellectual Property and/or the Technology;
10.1.13 that it has not received any offer which remains open for acceptance
from any Person for the purchase of all or substantially all of its
assets, and to its Knowledge, the shareholders of Licensor who are
executive officers of Licensor have not received any offer which remains
open for acceptance from any Person for the purchase of their shares of
Licensor;
10.1.14 that, to its Knowledge, there are no other facts or circumstances which,
if known by Licensee, would reasonably dissuade Licensee from entering
into this Agreement or any other agreements entered into between
Licensor and Licensee on the date hereof.
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10.2 Representations of Licensee. Licensee hereby represents and warrants:
10.2.1 that it has all the rights and power to enter into this Agreement;
10.2.2 that the undersigned officer has full authority to execute this
Agreement; and
10.2.3 that this Agreement does not violate the terms of any other agreement to
which Licensee is subject or to which Licensee is bound.
10.3 Covenants of Licensor. Licensor hereby covenants that it shall not
hypothecate, charge, encumber or grant any security interest in the Intellectual
Property and/or the Technology or any part thereof in favour of any Person
unless such Person has first, in writing, taken cognizance of this Agreement and
agreed to be subject to the provisions hereof and to respect all of the
obligations of Licensor in favour of Licensee in this Agreement in the event
that it exercises any of its rights in respect of the Intellectual Property
and/or the Technology.
10.4 Covenants of Licensee. Licensee hereby covenants that it shall not sell or
convey any of the Equipment to any Person without the prior consent of Licensor,
which consent shall not be unreasonably withheld or unduly delayed. By way of
example only, Licensor shall not be entitled to unreasonably withhold or unduly
delay its consent if the Equipment being sold or conveyed is no longer fit for
the purpose for which it was intended, is obsolete or damaged beyond reasonable
repair, and is sold or conveyed in such a manner so as not to reveal any of the
trade secrets forming part of the Technology. Notwithstanding the foregoing,
Licensor's consent shall not be required to sell or convey any of the Equipment
i) if Licensee sells all or substantially all of its assets, or ii) in the
circumstances provided for in paragraph 7.1.5 hereof.
SECTION 11 - COSTS, VALIDITY AND INFRINGEMENT OF INTELLECTUAL PROPERTY
11.1 Validity of Patents, Copyrights and Trade Marks. Licensor will maintain the
validity of the existing and future Patents, Copyrights and Trade Marks by
paying all required fees and other costs associated with maintaining the
Patents, Copyrights and Trade Marks in force in those jurisdictions within the
Territory where they are presently and will in the future be registered.
Licensor may, however, upon notice to but subject to reasonable objection by
Licensee, abandon any such Patents, Copyrights or Trade Marks as it deems of no
further practical use. For the purposes hereof, a reasonable objection of
Licensee shall include, without limitation, that the Licensee sells or
reasonably intends within the next twelve (12) months to sell Products in such
jurisdiction within the Territory. Notwithstanding the foregoing, Licensor shall
not be entitled to abandon any existing Patents, Copyrights or Trade Marks in
the manner provided for herein prior to the twenty-fifth (25th) month following
the date hereof. For North America, for the first two twelve (12) month periods
commencing on the date hereof, Licensee shall reimburse Licensor, within thirty
(30) days of receipt of evidence of any such payment by Licensor, for its
Proportion of such maintenance fees and other costs for ▇▇▇▇▇ ▇▇▇▇▇▇▇. ▇▇▇
- ▇▇ -
▇▇▇▇▇ ▇▇▇▇▇▇▇ commencing with the twenty-fifth (25th) month following the date
hereof and ending December 31, 2000 and for each fiscal year of Licensee
thereafter, and for each country outside of North America in each fiscal year,
Licensee shall reimburse Licensor, within thirty (30) days of the determination
of the Sales Proportion for the period in question and upon receipt of evidence
of such payments by Licensor, for its North American Sales Proportion of such
maintenance fees and other costs for North America and its Country Sales
Proportion of such maintenance fees and other costs for such country, for the
period in question.
11.2 Costs of Registration of Patents, Copyrights and Trade Marks. Licensor
shall pay all required fees and other costs associated with the registration of
new Patents, Copyrights and Trade Marks or associated with the registration of
the Patents, Copyrights and Trade Marks in North America, and in any country
where such Patents, Copyrights and Trade Marks are not presently registered and
where such registration would in Licensor's or Licensee's reasonable business
judgment be advisable. For the purposes hereof, it shall be advisable in either
parties reasonable business judgment to register such Patents, Copyrights and
Trade Marks in a country other than North America where it sells or reasonably
intends within the next twelve (12) months to sell Products, provided that
registration is reasonably available and achievable in such countries. For North
America, for the first two twelve (12) month periods commencing on the date
hereof, Licensee shall reimburse Licensor, within thirty (30) days of receipt of
evidence of any such payment by Licensor, its Proportion of such registration
fees and other costs for North America. For North America commencing with the
twenty-fifth (25th) month following the date hereof and ending December 31, 2000
and for each fiscal year of Licensee thereafter, and for each country outside of
North America in each fiscal year, Licensee shall reimburse Licensor, within
thirty (30) days of the determination of the Sales Proportion for the twelve
(12) month period in question and upon receipt of evidence of such payments by
Licensor, for its North American Sales Proportion of such registration fees and
other costs for North America and its Country Sales Proportion of such
registration fees and other costs for such country, for the twelve (12) month
period in question.
11.3 Notice of infringement. Each party shall promptly notify the other party in
writing of any infringement or threatened infringement by a third party of the
Intellectual Property and/or the Technology or the Licensee's Improvements, as
well as any action to invalidate or revoke or otherwise adversely affect the
Intellectual Property and/or the Technology or the Licensee's Improvements which
may come to its attention, including without limitation, any actual or intended
common law passing-off, or any third party claim that any of the Trade Marks
causes deception or confusion with or infringes upon its trade marks, service
marks or other property rights in any manner.
11.4 Proceedings. The parties shall consult with one another with respect to
each infringement or violation of the Intellectual Property and/or Technology or
the Licensee's Improvements. Whenever the owner of the Intellectual Property
and/or Technology or the Licensee's Improvements concludes that proceedings
should be taken with respect to any such infringement or violation of its
rights, the owner of such intellectual property and/or technology
- 23 -
shall promptly and diligently prosecute same at its cost and expense and shall
be entitled to all recoveries and awards therefrom. If such owner advises the
other party that it does not intend to participate in any such proceedings, then
unless such owner concludes upon reasonable grounds that no action should be
taken, the other party shall be free to prosecute same and shall pay all costs
and expenses related thereto and be entitled to all recoveries and awards
therefrom. The parties shall at all times fully cooperate in the prosecution of
all such proceedings.
11.5 One party institutes proceedings. It is understood that the party that did
not institute suit or action shall render all reasonable assistance to the party
that did institute suit or action, including, but not limited to, executing all
documents as may be reasonably requested by the party that did institute such
suit or action, and providing all necessary documentation evidencing the
infringement that such party has in its possession or may acquire thereafter.
11.6 Licensee's proceedings. In the event that Licensee initiates any lawsuits
involving or relating to the Intellectual Property and/or the Technology, it
shall do so in good faith and to the best of its ability.
11.7 Licensor's proceedings. In the event that Licensor initiates any lawsuits
involving or relating to the Licensee's Improvements, it shall do so in good
faith and to the best of its ability.
11.8 Ownership of Intellectual Property and/or Technology. Licensee shall not
contest the ownership or validity of the Intellectual Property and/or
Technology, whether directly or indirectly, at any time during the term of this
Agreement or at any time thereafter, except to the extent permitted by law in
any applicable jurisdiction.
11.9 Ownership of Licensee's Improvements. Licensor shall not contest the
ownership or validity of the Licensee's Improvements, whether directly or
indirectly, at any time during the term of this Agreement or at any time
thereafter, except to the extent permitted by law in any applicable
jurisdiction.
SECTION 12 - INDEMNIFICATION
12.1 Indemnification of Licensee. Licensor shall indemnify and save and hold
Licensee harmless from and against any debts, liabilities, claims, actions,
causes of action, suits, damages, losses, costs and expenses, including damage
to property and reasonable attorneys' fees and expenses, which Licensee is or
may become liable for or be compelled to pay as a result or by reason of any
violation, contravention or breach of any covenant, agreement or obligation or
any breach of any representation or warranty made by Licensor or its directors,
officers, servants, agents or employees under, pursuant to or in this Agreement.
12.2 Indemnification of Licensor. Licensee shall indemnify and save and hold
Licensor harmless from and against any debts, liabilities, claims, actions,
causes of action, suits,
- 24 -
damages, losses, costs and expenses, including damage to property and reasonable
attorneys' fees and expenses, which Licensor is or may become liable for or be
compelled to pay as a result or by reason of any violation, contravention or
breach of any covenant, agreement or obligation or any breach of any
representation or warranty made by Licensee or its directors, officers,
servants, agents or employees under, pursuant to or in this Agreement.
SECTION 13 - GOVERNMENT APPROVAL
13.1 Government approval. Licensee undertakes, at its sole cost and expense, to
obtain any required approval, registration, notification or authorization of
this Agreement from any governmental authority in any country comprised in the
Territory where Licensee sells or intends to sell Products and where such
approval, registration, notification or authorization is necessary.
SECTION 14 - SALE OF INTELLECTUAL PROPERTY AND/OR TECHNOLOGY
14.1 Sale of Intellectual Property and/or Technology. Licensor hereby agrees and
undertakes not to assign, sell or alienate to any Person all or any part of the
Intellectual Property and/or Technology in any manner unless such Person first
agrees in writing to be subject to the provisions of this Agreement and to
respect all of the obligations of Licensor in favour of Licensee set out in this
Agreement. In the event that such Person purchases or becomes owner of a part
and not all of the Intellectual Property and Technology, such Person shall be
subject to the provisions of this Agreement only insofar as such part of the
Intellectual Property and/or Technology is concerned and shall respect all of
the obligations of Licensor in favour of Licensee set out in this Agreement only
insofar as such part of the Intellectual Property and/or Technology is
concerned.
SECTION 15 - FAIRNESS COMMITTEE AND ARBITRATION
15.1 Nomination of a Fairness Committee. Promptly after the date hereof, the
parties hereby agree to appoint a fairness committee (the "Fairness Committee")
comprised of one (1) representative of each of Licensor and Licensee (provided
that the representative of Licensee shall be chosen by the Investors only). Each
of the Licensor and the Licensee (acting through the Investors only) shall be
entitled to replace the representative appointed by it upon giving the other
party three (3) days prior written notice of the names of the individual being
replaced and replacing him.
15.2 Fairness Committee. In the event of any dispute, controversy or
disagreement between the parties arising out of or in relation to the validity,
interpretation or performance of the provisions of this Agreement, the parties
shall first meet and try in good faith to resolve their differences. In the
event they are unable to meet within ten (10) days of either party requesting a
meeting or are unable to resolve their differences within ten (10) days of their
meeting, then the Fairness Committee shall meet in an effort to resolve the
differences between the parties. All decisions of the Fairness Committee shall
be made unanimously by its members.
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15.3 Arbitration. In the event that the Fairness Committee is unable to meet
within ten (10) days of either party requesting same or the Fairness Committee
is unable to resolve any dispute through negotiation as set forth in subsection
15.2 within ten (10) days of its meeting, then such dispute shall be
definitively dealt with using the rules of conciliation and arbitration of the
International Chamber of Commerce, by one or more arbitrators appointed in
accordance with said rules, and to the exclusion of any courts, except for
injunctive relief and any provisional remedy, including seizure before judgment,
which may be obtained from any court or tribunal having jurisdiction, and until
a final decision is rendered, this Agreement shall continue in effect as if the
dispute, controversy or decision did not exist. Any arbitration proceeding
required pursuant to the terms thereof shall take place in Montreal, Quebec and
shall be conducted in both the English and French language. The cost of the
arbitration shall be borne in the manner provided for in the arbitration award.
SECTION 16 - MISCELLANEOUS PROVISIONS
16.1 Registration. Licensee shall have the right, at its cost, to cause a
summary of this Agreement to be registered or recorded against the Patents in
all patent offices where such registration or recording mechanism is available.
Any summary of this Agreement shall be prepared by Licensor at its expense and
shall be satisfactory to the Licensee.
16.2 Patent Marking. Licensee shall ▇▇▇▇ all Products with the numbers of all
applicable Patents in accordance with the laws of all jurisdictions where they
may be sold. Such markings shall be in such form as may be directed by Licensor
from time to time in order to assure compliance with such laws.
16.3 Notices. All notices, requests, demands and other communications hereunder
shall be given in writing and shall be given by telecopier, or delivered by
hand, to the other party at the following addresses:
if to the Licensee: LAMINES CTEK INC.
▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Chairman and President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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if to the Licensor: COMPOSITECH LTD.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇, ▇.▇.▇.
Attention: the President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy in
all cases to: INDUSTRIES DEVMA INC.
▇▇▇, ▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
SOCIETE INNOVATECH DU GRAND MONTREAL
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: President and Chief Executive Officer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
FONDS DE SOLIDARITE DES TRAVAILLEURS DU
QUEBEC (F.T.Q)
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Vice President, Legal Affairs
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Senior Vice President, Investments
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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FONDS REGIONAL DE SOLIDARITE ILE DE MONTREAL,
limited partnership
▇▇▇, ▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Managing Director
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy in
all cases to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇-▇▇▇▇▇▇▇▇ Blvd. West
Suite 1400
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as each party may have previously indicated to the
other party in writing in conformity with the foregoing. Any such notice,
request, demand or other communication shall be deemed to have been received on
the date of delivery if delivered by hand, or the next business day immediately
following the date of transmission if sent by telecopier. The original copy of
any notice sent by telecopier shall be forwarded to the other party by
registered mail, receipt return requested.
16.4 Further Documents. Each party upon the request of the other, shall do,
execute, acknowledge and deliver or cause to be done, executed, acknowledged or
delivered all such further acts, deeds, documents, assignments, transfers,
conveyances, powers of attorney and assurances as may be reasonably necessary or
desirable to effect complete consummation of the transactions contemplated by
this Agreement.
16.5 Gender. Any reference in this Agreement to any gender shall include both
genders and the neutral, and words used herein importing the singular number
only shall include the plural and vice versa.
16.6 Headings. The division of this Agreement into Sections, subsections and
other subdivisions, and the insertion of headings are for convenience of
reference only and shall not affect or be utilized in the construction or
interpretation of this Agreement.
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16.7 Severability. Any Section, subsection or other subdivision of this
Agreement or any other provision of this Agreement which is, or becomes,
illegal, invalid or unenforceable shall be severed therefrom and shall be
ineffective to the extent of such illegality, invalidity or unenforceability and
shall not affect or impair the remaining provisions hereof, which provisions
shall be severed from an illegal or unenforceable Section, subsection or other
subdivision of this Agreement or any other provisions of this Agreement.
16.8 Entire Agreement. This Agreement together with any other instruments to be
delivered pursuant hereto, constitute the entire agreement among the parties
pertaining to the subject matter hereof and supersede all prior agreements,
understandings, negotiations, and discussions, whether oral or written, between
the parties.
16.9 Amendments. No amendment of this Agreement shall be binding unless
otherwise expressly provided in an instrument duly executed by each party
hereto.
16.10 Waiver. Except as otherwise provided in this Agreement, no waiver of any
of the provisions of this Agreement shall be deemed to constitute a waiver of
any other provisions (whether or not similar), nor shall such waiver constitute
a continuing waiver unless otherwise expressly provided in an instrument duly
executed by the parties.
16.11 Delays. When calculating the period of time within which or following
which any act is to be done or step taken pursuant to this Agreement, the day
which is the reference day in calculating such period shall be excluded. If the
day on which such delay expires is not a business day, then the delay shall be
extended to the next succeeding business day.
16.12 Preamble. The preamble hereof shall form an integral part of this
Agreement.
16.13 Governing Law. This Agreement shall be governed by and interpreted and
enforced in accordance with the laws of the Province of Quebec and the laws of
Canada applicable therein.
16.14 Separate entities. This is an agreement between separate entities and
neither is the agent or servant of or possesses the power to obligate the other.
This Agreement shall not be construed so as to constitute Licensor and Licensee
partners or joint venturers or so as to create any other form of legal
association which imposes liability upon either party for the acts or omissions
of the other party.
16.15 Successors and assigns. This Agreement and the provisions hereof shall
enure to the benefit of and be binding upon the parties and their respective
successors and permitted assigns. Except as otherwise provided for in this
Agreement, neither party shall assign, encumber or hypothecate any of its
rights, title and interest in and to this Agreement without the other party's
prior written consent. Notwithstanding the foregoing, the Licensee may assign,
encumber and/or hypothecate its right, title and interest in and to this
Agreement to its lenders.
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16.16 Currency and conversion rate. All payments contemplated herein shall be
effected in the lawful currency of the United States of America, at the address
designated by either party from time to time. For the purpose of calculating the
Sales Proportion, the sales that are not made in United States dollars will be
converted into United States dollars based on the average monthly closing rate
for the period of the sales as reported by the Chase Manhattan Bank for the
conversion of such foreign currencies into United States dollars. In addition,
all amounts payable by Licensor to a third party in currency other than United
States dollars shall be converted into United States dollars based on the noon
rate as reported by the Chase Manhattan Bank for the conversion of such foreign
currencies into United States dollars on the date such amount is paid by
Licensor.
16.17 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same document.
16.18 Language. The parties hereto state their express wish that this Agreement
as well as all documentation contemplated hereby or pertaining hereto or to be
executed in connection herewith be drawn up in the English language; les parties
expriment leur ▇▇▇▇▇ explicite a l'effet que cette convention de meme que tous
documents envisages par les presentes ou y ayant trait ou qui seront signes
relativement aux presentes soient rediges en anglais.
IN WITNESS WHEREOF, the parties have signed at the place and on the date
first hereinabove mentioned.
COMPOSITECH LTD. LAMINES CTEK INC.
Per: ___________________________ Per: ___________________________
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
