SUB-LICENSE AGREEMENT- USA
--------------------------
THIS AGREEMENT made effective as of the 29th day of
February, 2000, between:
Winsire Enterprises Corporation, a British Columbia
company having an address at #102 - 000 Xxxxxxxx Xxx,
Xxx Xxxxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X0X 0X0
(hereafter called "Winsire")
- and -
Mega Tools USA, Inc., a Washington corporation having an
address at 160 - 0000 Xxxxxxx Xxx, Xxxxxxxxxx,
Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of America
(hereafter called "Mega Tools")
- and -
Jore Corporation, a Montana corporation having an
address at 00000 Xxxxxxx 00 Xxxxx, Xxxxx, Xxxxxxx
00000, Xxxxxx Xxxxxx of America
(hereafter called "Jore")
WHEREAS:
I. Winsire is the owner of the following patents (hereafter
the "Patents") for an invention of Hermann Fruhm entitled
"Cartridge Type Screwdriver" (hereafter the "Invention"):
Country Patent Number Issue Date Expiry Date
------------- ------------- ------------------ ----------------
Australia 668,616 17 September, 1996 15 October, 0000
Xxxxxxx E148,647 5 February, 1997 15 October, 0000
Xxxxxx XX 0000000-0 21 March, 2000 15 October, 0000
Xxxxxx 2,084,270 20 January, 1998 1 December, 2012
France EP 674,567 5 February, 1997 15 October, 0000
Xxxxxxx 69308038.8-08 5 February, 1997 15 October, 2013
Hong Kong HK1004260 20 November, 1998 15 October, 0000
Xxxxx EP 674,567 5 February, 1997 15 October, 0000
Xxxxx 2,869,678 8 January, 1999 15 August, 0000
Xxxxxx EP 674,567 5 February, 1997 15 October, 0000
Xxxxxxxxxxx EP 674,567 5 February, 1997 15 October, 2013
Taiwan NI-084443 1 March, 1997 00 Xxxxxx, 0000
Xxxxxx Xxxxxxx EP 674,567 5 February, 1997 15 October, 2013
U.S.A. 5,265,504 30 November, 1993 1 December, 2012
II. Winsire has filed applications (hereafter the
"Applications") to patent the Invention as follows:
Country Serial Number Filing Date Expiry Date
------------- ------------- ------------------ ----------------
South Korea 95-702,035 15 October, 1993 15 October, 2013
III. Pursuant to a "National Accounts License Agreement -USA", a
copy of which is attached hereto as Schedule "A", Winsire
has granted Mega Tools certain rights in respect of the
Invention, the Patents and the Applications, subject to a
termination date of the 8th day of November, 2005 and
further subject to a "Renewal Option" to extend the term of
the National Accounts License Agreement - USA to and until
the 1st day of December, 2032.
IV. With Winsire's consent, Mega Tools wishes to sub-license to
Jore certain of the rights granted to Mega Tools by Winsire
pursuant to the National Accounts License Agreement -USA.
V. Pursuant to a National Accounts License Agreement - Canada
Winsire has granted Mega Tools, Ltd. ("Mega Tools -
Canada") certain rights in respect of the Invention, the
Patents and Applications, subject to a termination date of
the 8th day of November, 2005 and further subject to a
"Renewal Option" to extend the term of the National
Accounts License Agreement - Canada to and until the 1st day
of December, 2032.
VI. Concurrently herewith Mega Tools - Canada intends to sub-
license to Jore certain of the rights granted to Mega Tools
- Canada pursuant to the National Accounts License
Agreement - Canada.
NOW THEREFORE, in consideration of the mutual
covenants contained in this Agreement and other valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
DEFINITIONS
1. In this Agreement:
(a) "Apparatus" means cartridge type screwdrivers produced
in accordance with any of the Licensed Patents and/or
the Know-how.
(b) "Improvement" means any modification or variant of the
Apparatus, whether patentable or not, which, if
manufactured, used, or sold, would fall within the
scope of at least one claim of at least one of the
Licensed Patents.
(c) "Know-how" means technical information, knowledge, and
expertise concerning the design, construction and use
of the Apparatus, possessed by Mega Tools, which is
not otherwise lawfully readily available to Jore as a
unitary package for a reasonable price except from
Mega Tools by virtue of this Agreement.
(d) "Licensed Patents" means the Patents and any patent
which issues from any of the Applications.
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(e) "National Account Customer" means Sears, Sears Canada
and Home Depot (and their respective successors);
provided that, after the date of execution hereof,
Mega Tools and Jore may, by agreement in writing,
extend the definition of "National Account Customer"
to include any of the following entities: Truserve,
Ace, WalMart, K-Mart, Builders Square, Home Base,
Target, Xxxx'x Home Centers, The Contractor's Yard,
Xxxx Xxxxx, Canadian Tire, Xxxxxx Canada, Home
Hardware, Howdens, Revy Home & Garden, Grope, Sodisco
Group, Zellers, Sam's, Costco, X.X.'s, Payless
Cashways, Scotty's, BuyMart, Mid-States, Eagle
Hardware and Garden, Distribution America, Pro Group,
Shopko, Villager, AAFES and Menards (and their
respective successors) .
(f) "Regular Account Customer" means any entity which is
not a National Account Customer.
(g) "Sub-License Agreement - Canada" means that certain
sub-license agreement referred to below in Recital VI
as the same may from time to time be modified,
amended, superseded or replaced.
(h) "Sub-License Agreement - USA" means this Agreement as
the same may from time to time be modified, amended,
superseded or replaced.
(i) "Territory" means United States of America.
(j) "Trademark" means MEGAPRO, or MEGA-LOK, or such other
trademark as Winsire may authorise in writing. For
greater certainty, Winsire owns the following
trademark registrations and applications:
(i) Canadian trademark registration number 473,554
MEGAPRO 15 In 1 & Design;
(ii) United States trademark registration number
2,083,666 MEGAPRO 15 In 1 & Design;
(iii) United States trademark registration number
2,130,439 MEGAPROOF 16 In 1;
(iv) Australian trademark registration number 771,100
MEGAPRO;
(v) New Zealand trademark registration number 297,017
MEGAPRO;
(vi) Application for Canadian registration of
trademark MEGAPRO filed on 22 October, 1999 under
serial number 1,033,592; and,
(vii) Application for United States registration of
trademark MEGAPRO filed on 28 October, 1999 under
serial number 75/833,890.
(k) The headings are inserted solely for convenience of
reference and shall not be deemed to restrict or
modify the meaning of the Articles to which they
pertain.
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GRANT OF SUB-LICENCE
--------------------
2. Subject to the terms and conditions of this Agreement, and
the making of payments as hereinafter provided, Mega Tools
hereby grants to Jore (for the term of this Agreement
unless otherwise provided) an exclusive sub-licence in
respect of the Licensed Patents and Know-how in accordance
with the following particulars:
(a) Jore is hereby granted a non-exclusive sub-license to
manufacture Apparatus in the Territory.
(b) Jore is hereby granted an exclusive sub-license to
sell Apparatus to National Account Customers for
subsequent sale of such Apparatus within the Territory
by such National Account Customers.
(c) Jore is hereby granted a non-exclusive sub-license to
utilize the Know-how in manufacturing and selling
Apparatus throughout the Territory to National Account
Customers for subsequent sale of such Apparatus within
the Territory by such National Account Customers.
(d) For greater certainty, during the term of this Sub-
License Jore shall have no right pursuant to this Sub-
License, and shall not:
(i) sell Apparatus to Regular Account Customers; or,
(ii) sell or otherwise distribute Apparatus outside
the Territory; or,
(iii) manufacture or sell Apparatus except for the
purpose of selling such Apparatus within the
Territory to National Account Customers for
subsequent sale of such Apparatus within the
Territory by such National Account Customers, and
except for the purpose of selling such Apparatus
to Winsire or Mega Tools pursuant to Article 4 of
this Agreement.
(e) If, during the term of this Agreement, Winsire or Mega
Tools develops or discovers, or is a co-developer or
co-discoverer of any Improvement then Mega Tools shall
promptly inform Jore thereof, and the rights hereby
granted to Jore shall, for the balance of the term of
this Agreement, be deemed to extend to the
manufacture, use and sale of such Improvement, without
the payment of any additional royalty.
(f) If, during the term of this Agreement, Jore discovers
or develops or is a co-developer or co-discoverer of
any Improvement then Jore shall promptly inform Mega
Tools thereof, Jore shall assign all rights in such
Improvement to Winsire free and clear of all
encumbrances, security interests or adverse claims,
and the rights hereby granted to Jore shall, for the
balance of the term of this Agreement, be deemed to
extend to the manufacture, use and sale of such
Improvement, without the payment of any additional
royalty. For greater certainty, in any case where an
employee of Jore or a contractor retained by Jore is
considered to be an inventor or joint inventor of an
Improvement, Jore shall communicate to Winsire all
known facts respecting such Improvement, and shall
each time request is made and without undue delay
execute and deliver to Winsire or cause to be executed
and delivered to Winsire all such papers as may be
necessary or
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desirable to perfect Winsire's title to
such Improvement, and shall generally do everything
possible to aid Winsire in obtaining and enforcing
proper patent protection for such Improvement in any
and all countries.
MOULDS
------
3.
(a) Jore acknowledges that Winsire has paid for and
therefore owns all moulds existing in the Territory as
of the effective date hereof, which are capable of
being used to manufacture any component of the
Apparatus.
(b) Unless Winsire (by notice in writing to Jore) elects
not to accept same, upon termination of this Agreement
for any reason, Jore shall contact Winsire to make
arrangements for, and shall thereafter deliver at
Jore's expense to Winsire all moulds which are capable
of being used to manufacture any component of the
Apparatus, provided that Winsire and Mega Tools shall
first reimburse Jore for any such moulds that were
paid for by Jore, by each paying Jore 50% of Jore's
invoiced cost of such moulds (for internally produced
moulds, such cost shall be the estimate of cost
produced by a mutually agreed upon mould manufacturer)
less depreciation at the rate of 10% per annum.
(c) Jore shall not permit possession of any mould capable
of being used to manufacture any component of the
Apparatus to pass to any party except Winsire. Jore
shall take whatever steps may be necessary to secure
written verification, satisfactory to Winsire, of
Winsire's right to secure possession of the moulds as
aforesaid.
(d) If Jore deems it necessary to obtain any additional,
substitute, replacement, repaired or refurbished
moulds in order to manufacture any component of the
Apparatus, then Jore shall pay all costs of obtaining
such additional, substitute, replacement, repaired or
refurbished moulds and such additional, substitute,
replacement, repaired or refurbished moulds shall be
subject to the terms of Articles 3(b) and 3(c) of this
Agreement.
SALES TO WINSIRE AND MEGA TOOLS
-------------------------------
4.
(a) Winsire may purchase Apparatus from Jore for sale
outside the Territory, except for Apparatus on which
Jore has included component parts that Jore has
offered to any of its customers on an exclusive basis.
(b) Provided both Mega Tools and Mega Tools - Canada
remain licensees in good standing under their
respective "Regular Accounts License Agreement" with
Winsire Mega Tools may purchase Apparatus from Jore
for sale within the Territory to Regular Account
Customers, except for Apparatus on which Jore has
included component parts that Jore has offered to any
of its customers on an exclusive basis.
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(c) The price which Jore charges Winsire or Mega Tools for
any particular number of units of Apparatus shall be
no greater than the lowest price, less royalties as
provided in Article 6 of this Agreement, charged or
that would be charged by Jore to any other party for a
similar number of units of Apparatus, as of the date
on which such units are ordered from Jore by Winsire
or by Mega Tools.
COMMUNICATION OF KNOW-HOW;
--------------------------
PRESERVATION OF CONFIDENTIAL INFORMATION
----------------------------------------
5.
(a) Mega Tools shall communicate to Jore all Know-how in
the possession of Mega Tools reasonably relevant to
the design, manufacture, marketing, and use of the
Apparatus. During the term of this Agreement, Mega
Tools will continue to communicate to Jore, all such
further Know-how as comes into Mega Tools' possession.
(b) Jore shall communicate to Mega Tools all technical
information and know-how relevant to the design,
manufacture, marketing, installation or use of the
Apparatus, as comes into the possession of Jore.
(c) All Know-how and technical information communicated
pursuant to either of sub-paragraphs (a) or (b) hereof
shall be deemed to be confidential information, except
information which has been previously published as a
package or is otherwise clearly in the public domain.
Jore shall not disclose or authorize the disclosure of
such information to any third party, except as
expressly permitted by Mega Tools. Jore shall take
reasonable precautions to prevent the unauthorised
disclosure to third parties of all such confidential
information. Jore's obligation of confidentiality
shall terminate with respect to specific technical
information only if and when the said specific
technical information (i) is publicly disclosed by a
third party having no obligation of confidentiality to
Winsire; or (ii) becomes available to the public
otherwise than through the wrongful act or neglect of
Jore; or (iii) has been communicated by Mega Tools to
Jore more than seven years prior to disclosure thereof
by Jore and this Agreement has been terminated.
(d) Mega Tools shall use its best efforts to verify the
accuracy of the information furnished and provided to
Jore, but will not be liable for damages arising out
of or resulting from any information or
representations made available, or the use thereof,
under any circumstances.
ROYALTY PAYMENTS
----------------
6.
(a) In consideration for the sub-licence hereby granted,
Jore shall pay Mega Tools a Unit Royalty in respect of
each and every unit of Apparatus shipped or otherwise
disposed of by or on behalf of Jore in accordance with
the terms of this Agreement.
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(b) The Unit Royalty amount payable pursuant to sub-
paragraph (a) hereof shall be U.S. sixty cents (U.S.
$0.60).
(c) If the total Unit Royalties payable pursuant to sub-
paragraph (a) hereof and the Sub-License Agreement -
Canada in respect of any particular period terminating
on a date tabulated below do not exceed the Minimum
Royalty tabulated below for such period, then Jore
shall, no later than thirty (30) days after such
termination date tabulated below, pay Mega Tools an
amount equal to the difference between such Minimum
Royalty and such total Unit Royalty for such period.
Period(s) Terminating Minimum Royalty
Period(s) Terminating Minimum Royalty
--------------------- ---------------
Without Infomercial
-------------------
8 November, 2000 U.S. $30,000
8 November, 2001 U.S. $60,000
8 November, 2002 U.S. $60,000
8 November, 2003 U.S. $60,000
8 November, 2004 U.S. $60,000
8 November, 2005 U.S. $60,000
8 November, 2006 U.S. $60,000
8 November, 2007 U.S. $60,000
8 November, 2008 U.S. $60,000
8 November, 2009 U.S. $60,000
8 November, 2010 U.S. $60,000
8 November, 2011 U.S. $60,000
8 November, 2012 U.S. $60,000
With Infomercial
----------------
8 November, 2000 U.S. $ 60,000
8 November, 2001 U.S. $ 120,000
8 November, 2002 U.S. $ 120,000
8 November, 2003 U.S. $ 120,000
8 November, 2004 U.S. $ 120,000
8 November, 2005 U.S. $ 120,000
8 November, 2006 U.S. $ 120,000
8 November, 2007 U.S. $ 120,000
8 November, 2008 U.S. $ 120,000
8 November, 2009 U.S. $ 120,000
8 November, 2010 U.S. $ 120,000
8 November, 2011 U.S. $ 120,000
8 November, 2012 U.S. $ 120,000
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The terms "without infomercial" and "with infomercial"
shall mean that a National Account Customer has
produced and is airing in U.S. national cable markets
or their equivalent a video promotional piece on the
Apparatus. Such a video promotional piece would be
similar in nature and broadcast scope to the video
produced in 1999 by Jore and Sears on the Speed-Lok
Master Set. The Minimum Royalty for any given period
shall be determined pro rata according to the number
of days within such period that such a promotion is
actually airing and a 30 day period thereafter.
(d) Unit Royalties shall be paid by Jore to Mega Tools in
respect of any particular unit of Apparatus by the end
of the second month following the month in which such
unit of Apparatus is shipped or otherwise disposed of
by or on behalf of Jore.
(e) No royalty shall be payable by Jore in respect of any
unit of Apparatus purchased from Jore by Winsire or
Mega Tools.
(f) Calculation of any difference between Minimum Royalty
and Unit Royalty shall be made without regard to any
unit of Apparatus purchased from Jore by Winsire or by
Mega Tools.
(g) Jore shall keep separate records and sufficient detail
to permit the determination of royalties payable
hereunder and will, together with each royalty
payment, deliver to Mega Tools a written account,
certified by a senior officer of Jore, showing the
number of units of Apparatus in respect of which
royalties are payable to Mega Tools and showing in
detail the calculations upon which the royalties
payable to Mega Tools in respect thereof were
determined.
(h) Royalties paid by Jore to Mega Tools under this
Agreement shall not be refundable for any purpose
except for amounts paid due to computational errors,
and in such case, any overpayment shall be taken as a
credit against future royalties payable under this
Agreement, except at termination.
(i) All payments made to Mega Tools hereunder shall be
made in United States dollars, without any set-offs or
deductions other than withholdings at source for taxes
which Jore is required by law to withhold. Jore shall
furnish Mega Tools with pertinent documentation
respecting any withholding tax payments made by Jore
with respect to any payments made to Mega Tools.
Payment shall be made at Mega Tools' address for
receipt of notices hereunder or at such other address
or deposited in such bank account as Mega Tools may
from time to time designate by notice to Jore.
(j) If this Agreement is terminated pursuant to Section
13, the Minimum Royalty applicable to the year in
which the Agreement is terminated shall be prorated
with respect to the portion of the year that has
expired upon termination. For example, if this
Agreement is terminated on August 7, 2007, the Minimum
Royalty for 2007, without infomercial, will be three-
quarters of $60,000, or $45,000.
8
WARRANTIES
----------
7.
(a) Mega Tools warrants and represents that:
(b)
(i) Mega Tools has the power to grant this sub-
license to Jore;
(ii) Mega Tools has not made, granted or entered into
any encumbrance, license or other agreement
affecting the Licensed Patents or Trademark,
inconsistent with this Agreement;
(iii) The use of the Apparatus by Mega Tools has never
given rise to any complaint alleging infringement
of any patent, trademark or other intellectual
property right; and,
(iv) Mega Tools has not made, granted or entered into
any encumbrance, licence or other agreement
affecting the Know-how, inconsistent with this
Agreement.
(b) Jore warrants and represents that Jore has the skill,
expertise, facilities, equipment and manpower
necessary to energetically exploit the Licensed
Patents and Know-how within the Territory in
compliance with Winsire's standards so as to derive
maximum revenue for Winsire, Mega Tools and Jore;
(c) This Agreement is not subject to any warranties or
representations, express or implied, except as
specifically set forth.
FURTHER COVENANTS
-----------------
8. Jore acknowledges and agrees that:
(a) Jore shall not knowingly permit any party to
distribute Apparatus outside the Territory;
(b) If Jore is advised by Mega Tools that Apparatus
acquired from Jore has been distributed outside the
Territory, then Jore shall, to the extent permissible
by law:
(i) exert its best efforts to identify the party
responsible for such distribution; and,
(ii) make no further sales of Apparatus to such party,
or to any other party who Jore knows or
reasonably should know is acting as an agent for
such party until such party reasonably satisfies
Jore that it has remedied its out-of-Territory
sales and has agreed in writing not to sell
Apparatus outside of the Territory in future;
(c) If Jore is advised by Mega Tools that Apparatus
acquired from Jore has been distributed outside the
Territory by a particular party, then Jore shall make
no sales of Apparatus to such party, or to any other
party who Jore knows or reasonably should know is
acting as an agent for such party until such party
reasonably satisfies Jore that
9
it has remedied its out-of-Territory sales and has
agreed in writing not to sell Apparatus outside of the
Territory in future;
(d) Jore shall at all times during the Term of this
Agreement remain the licensee under the Sub-License
Agreement - Canada and shall duly and punctually
perform all its obligations thereunder.
COMPLIANCE WITH WINSIRE'S AND MEGA TOOLS' STANDARDS
---------------------------------------------------
9.
(a) Jore may select materials to be used to manufacture
the Apparatus, but such materials shall be subject to
Winsire's reasonable approval. Jore shall otherwise
be solely responsible for manufacturing the Apparatus,
provided however that:
(i) Jore shall not commence production of Apparatus
until after Winsire has approved, in writing, the
quality of the moulds used by Jore to produce the
Apparatus, such approval to be granted or
withheld by Winsire within fifteen (15) days of
the first to occur of Winsire's receipt or
inspection of products produced by such moulds;
(ii) In order to obtain Winsire's written approval of
the moulds, Jore shall supply Winsire with
samples of apparatus produced by the moulds, such
samples to be of a quality equal to or greater
than the quality of any samples previously
supplied to Winsire by Jore;
(iii) If Winsire does not approve the moulds after
inspecting two different samples of Apparatus
produced by the moulds, then Winsire shall
attend, at Jore's expense, and within fifteen
(15) days of its rejection of such moulds, at the
site of the moulds to provide technical
assistance in remedying deficiencies in the
moulds and thereby expedite Winsire's approval of
the quality of the moulds;
(iv) Jore shall pay Winsire U.S. Two Hundred Dollars
(U.S. $200) per day for each man-day of
assistance provided by Winsire under this
Article, plus travel, lodging, meal and
incidental expenses arising from the
implementation of this Article.
(v) Payments owed by Jore to Winsire in respect of
assistance provided by Winsire under this
Article, including reimbursement of any expenses
incurred by Winsire for which Jore is
responsible, shall be paid by Jore within thirty
(30) days of being invoiced therefore by Winsire.
(b) Jore will consistently devote commercially reasonable
efforts, at its own expense, to ensure that the
Apparatus is produced in accordance with Winsire's
quality standards. During any calendar quarter
throughout the term of this Agreement, Winsire may
request that Jore provide Winsire, without charge,
with six (6) samples of Apparatus. Forthwith upon
receipt of any such request Jore shall provide such
samples to Winsire, which samples shall be identical
to Apparatus being produced by or for Jore at the time
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such request is made. If Winsire determines that such
samples are of a quality which does not meet or exceed
Winsire's standards then Winsire shall promptly so
inform Jore and Jore shall thereupon cease all
manufacture of Apparatus and shall take corrective
action to ensure that all Apparatus manufactured by
Jore meets or exceeds Winsire's standards. Jore shall
not resume production scale manufacture of Apparatus
until after Winsire has certified, in writing, that
Apparatus manufactured by Jore meets or exceeds
Winsire's standards. Winsire's inspection of
Apparatus for any such re-certification shall take
place within fifteen (15) days of a request for re-
certification by Jore.
(c) Jore shall be solely responsible for all after sales
servicing of Apparatus, and for all returns or
exchanges of defective or damaged units of Apparatus.
(d) Mega Tools shall furnish to Jore all commercial and
marketing information and contacts which it has
heretofore obtained or developed in connection with
the exploitation of the Apparatus in the Territory,
and Jore agrees to furnish to Mega Tools all
commercial and marketing information and contacts
which it shall obtain or develop in connection with
the exploitation of the Apparatus within the
Territory.
(e) Jore shall use commercially reasonable efforts to
diligently and continuously promote the sale of
Apparatus throughout the Territory, at Jore's expense,
so as to create and sustain marketplace demand for the
Apparatus.
(f) At Jore's expense, Jore shall stock assembled,
packaged, ready for sale Apparatus in sufficient
quantity in warehouse facilities which Jore shall
maintain at such locations within the Territory as may
be required to enable Jore to deliver Apparatus
ordered from Jore within Jore's standard delivery time
frames.
(g) Jore shall comply with all laws and regulations
relating or pertaining to the manufacture, sale,
advertising or use of the Apparatus and shall maintain
the high quality and standards of Mega Tools and shall
comply with the regulations, orders and directives or
all regulatory agencies which shall have jurisdiction
over the Apparatus. Jore shall maintain records of
all tests and reports as necessary to demonstrate such
compliance.
MARKETING
---------
10.
(a) Mega Tools will, upon request, render marketing
assistance to Jore in respect of the Apparatus,
including attendance of a representative of Mega Tools
at the premises of Jore's prospective purchasers
within fifteen (15) days of a request by Jore,
provided that:
(b) Jore shall pay Mega Tools U.S. Two Hundred Dollars
(U.S. $200) per day for each man-day of assistance
provided by Mega Tools under this Article, plus all
travel, lodging, meal and incidental expenses arising
from the implementation of this Article.
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(c) Mega Tools shall not be obligated to provide more than
three (3) man-days of assistance per month pursuant to
this Article. The identity and number of Mega Tools'
personnel rendering such assistance shall be in Mega
Tools' reasonable discretion.
(d) Payments owed by Jore to Mega Tools in respect of
assistance provided by Mega Tools under this Article,
including reimbursement of any expenses incurred by
Mega Tools for which Jore is responsible, shall be
paid by Jore within thirty (30) days of being invoiced
therefore by Mega Tools.
TECHNICAL ASSISTANCE
--------------------
11.
(a) Mega Tools shall, at Jore's request and expense,
provide technical assistance to Jore within fifteen
(15) days of a request by Jore to provide such
assistance.
(b) Jore shall pay Mega Tools U.S. Two Hundred Dollars
(U.S. $200) per day for each man-day of assistance
provided pursuant to this Article; and, Jore shall be
solely responsible for all travel, lodging, meal and
incidental expenses arising from the implementation of
this Article.
(c) Mega Tools shall not be obligated to provide more than
three (3) man-days of assistance per month pursuant to
this Article. The identity and number of Mega Tools'
personnel rendering such assistance shall be in Mega
Tools' discretion.
(d) Payments owed by Jore to Mega Tools in respect of
assistance provided by Mega Tools under this Article,
including reimbursement of any expenses incurred by
Mega Tools for which Jore is responsible, shall be
paid by Jore within thirty (30) days of being invoiced
therefore by Mega Tools.
AUDIT
-----
12.
(a) Jore shall keep and maintain for a period of at least
six (6) years, at its executive offices, such full and
accurate records (including books of account) as are
necessary to determine the amounts payable hereunder
and shall permit Mega Tools or their authorised
representative during normal business hours and upon
reasonable notice to have full access to such records,
to audit them, and to make copies of them solely for
the purpose of verifying the accuracy thereof. Mega
Tools shall bear all costs of such examination unless
such examination reveals a material misstatement or
mispayment of the amount owing by Jore to Mega Tools
of 5% or more, in which event Jore shall bear all
costs of such examination, and Jore agrees to promptly
reimburse Mega Tools for such costs.
(b) If any such inspection reveals a shortfall in the
royalties payable to Mega Tools hereunder then Jore
shall forthwith pay the full amount of such shortfall,
plus interest as herein provided, to Mega Tools.
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TERM AND TERMINATION
--------------------
13.
(a) This Agreement shall remain in force until and shall
expire on the first day of December, 2012, provided
however that if the National Accounts License
Agreement - USA is terminated or if Mega Tools does
not extend the term of the National Accounts License
Agreement - USA by exercising the Renewal Option
contained therein, then this Agreement shall terminate
at such time as the National Accounts License
Agreement - USA terminates, in which case sub-
paragraph 13(g) hereof will become operative.
(b) Any party hereto may terminate this Agreement without
prior notice:
(i) if another party hereto or any party to the Sub-
License Agreement - Canada ceases to function as
a going concern; or,
(ii) if another party hereto or any party to the Sub-
License Agreement - Canada makes an assignment or
arrangement for the benefit of creditors; or,
(iii) if any proceedings under any bankruptcy or
insolvency laws are instituted by or against
another party hereto or any party to the Sub-
License Agreement - Canada; or,
(iv) upon the liquidation, dissolution, merger, or
consolidation of any other party hereto or any
party to the Sub-License Agreement - Canada,
excepting a merger or consolidation in accordance
with section 14 of this Agreement; or,
(v) if a receiver or trustee for another party hereto
or any party to the Sub-License Agreement -
Canada or any of such party's assets or
properties is appointed or applied for.
(c) If Mega Tools on the one hand, or Jore on the other,
is in breach of any material term or condition of this
Agreement or if Mega Tools - Canada on the one hand or
Jore on the other, with respect to the Sub-License
Agreement - Canada, is in breach of any material term
or condition of that Agreement, and fails to remedy
such breach within thirty days of having been notified
in writing thereof by the other party to this
Agreement, then the other party may, at its option,
terminate this Agreement, without prejudice to any
other rights or remedies which such other party may
have.
(d) If this Agreement is terminated by Mega Tools at a
time when Jore is under a contractual obligation to
provide Apparatus to a third party, then this
Agreement shall be deemed to remain in effect for the
time and to the extent necessary to enable Jore to
fulfil such contract, and payments and royalties shall
be payable in respect of the fulfilment of such
contract, to the same extent as if this Agreement
remained in full force and effect; provided that in no
case shall the period of any such deemed extension
exceed one year.
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(e) Jore may terminate this Agreement on ninety (90) days
written notice if it determines, in its sole
discretion, that marketing of the Apparatus or
products which include the Apparatus, is not
commercially viable; provided, however, it shall be a
condition precedent to the exercise of this right of
termination that Jore likewise exercises its similar
right of termination contained in the Sub-License
Agreement - Canada..
(f) The obligations of confidentiality imposed by this
Agreement shall not terminate by reason of the
termination of this Agreement, but shall remain in
effect unless and until terminated as herein set
forth.
(g) If the National Accounts License Agreement - USA is
terminated for any reason, or if Mega Tools fails to
exercise the "Renewal Option" set forth in the
National Accounts License Agreement - USA, and
provided that Jore is not in breach of any material
term hereof, then Winsire shall forthwith enter into
negotiations with Jore, with a view to concluding a
substitute agreement to enable Jore's rights hereunder
to remain in full force and effect for the remaining
term of this Sub-License Agreement.
(h) Termination of this Agreement for any cause shall not
relieve the parties of their respective obligations
and liabilities:
(i) existing at or accruing to the time of
termination, or
(ii) related to covenants which by their terms are
expressly or reasonably intended to survive
termination, all of which shall survive any such
termination.
Without limiting the generality of the foregoing, all
indemnification obligations of the parties contained
herein shall survive any such termination.
(i) A party's rights to terminate this Agreement for any
reason (whether or not exercised by such party) shall
not preclude such party from alternatively seeking any
other remedy provided by law.
SUCCESSORS AND ASSIGNS
----------------------
14. Neither this Agreement nor any interest herein is
assignable or transferable by Jore to any party without
Winsire's prior written consent, whether by way of
assignment, sub-license, operation of law, reorganization
of Jore's business, or otherwise. Any attempted
assignment, sub-license or transfer by Jore without
Winsire's prior written consent shall be null and void and
shall, at Winsire's option, forthwith terminate this
Agreement and all of Jore's rights hereunder.
Notwithstanding the foregoing, however, the merger or
consolidation of Jore with or into another entity shall not
be deemed an assignment or transfer hereunder if Jore is
the surviving entity in any such merger or consolidation or
if the then shareholders of Jore own at least fifty-one
percent (51%) of the capital stock of the surviving entity
in any such merger or consolidation.
14
ADDRESSES FOR NOTICES
---------------------
15. Notices required or permitted to be sent to a party to this
Agreement, may be sent by prepaid registered mail to the
address of such party appearing in the style of this
Agreement, or to such more recent address as such party has
made known in writing to the other party to this Agreement.
ENTIRE AGREEMENT
----------------
16. This Agreement constitutes the entire agreement between the
parties relating to the subject matter hereof and
supersedes every previous agreement, communication,
expectation, negotiation, representation or understanding,
whether oral or written, express or implied, statutory or
otherwise.
NO PARTNERSHIP OR JOINT VENTURE
-------------------------------
17. The parties to this Agreement recognise and agree that each
is operating as an independent contractor and not as an
agent of the other. This Agreement will not constitute a
partnership or joint venture and no party can be bound by
the other to any contract, arrangement or understanding
except as specifically stated herein.
INFRINGEMENT OF THIRD PARTY PATENTS OR TRADEMARKS
-------------------------------------------------
18.
(a) Subject to Section 20, if any complaint alleging
infringement or violation of any patent, trademark or
other proprietary rights is made against Jore or its
customers, licensees or sublicensees in respect of the
manufacture, use or sale of units of the Apparatus in
any country, then the following procedure shall be
adopted. Jore shall promptly upon receipt of any such
complaint notify Mega Tools of same, and shall
throughout the pendency of such complaint keep Mega
Tools fully informed of the actions and positions
taken by the complainant and taken and proposed to be
taken by Jore. Subject to this paragraph, all costs
and expenses properly incurred by Jore in
investigating, resisting, litigating and settling such
complaint, including the payment of any award of
damages and/or costs to any third party, shall be paid
by Mega Tools within fifteen (15) days of receipt of
documentation to support such costs and expenses. No
decision or action concerning or governing any final
disposition of the complaint shall be taken without
full consultation with and approval by Mega Tools,
which approval shall not be unreasonably withheld.
Mega Tools may elect to participate formally in any
litigation involving the complaint, to the extent that
the court permits, and any additional expenses
generated by such formal participation shall be borne
entirely by Mega Tools (subject to the possibility of
recovery of some or all of such additional expenses
from the complainant).
(b) In no event shall Mega Tools or Winsire be liable to
Jore under this Agreement or otherwise for any amount
in respect of any complaint alleging infringement or
violation
15
of any patent, trademark or other proprietary rights
pertaining to any device not of Winsire's design or
manufacture with which the Apparatus may be equipped
or adapted to operate.
THIRD PARTY PRODUCT LIABILITY
-----------------------------
19.
(a) If a product liability claim is made in respect of
Apparatus equipped or adapted with a device which is
not of Mega Tools' design or manufacture then Jore
shall cease all further manufacture, sale or
distribution of Apparatus equipped or adapted with
such device forthwith upon receipt of Mega Tools'
written request to do so.
(b) If, in Winsire's sole opinion, Apparatus equipped or
adapted with a device which is not of Winsire's design
or manufacture is of an overall inferior quality, or
is having a negative impact on marketplace acceptance
or demand for Apparatus not equipped or adapted with
such device, then Jore shall cease all further
manufacture, sale or distribution of Apparatus
equipped or adapted with such device forthwith upon
receipt of Winsire's written request to do so.
(c) In no event shall either Winsire or Mega Tools be
liable to Jore under this Agreement for any amount in
respect of a product liability claim made in respect
of Apparatus equipped or adapted with a device which
is not of Winsire's or Mega Tools' design or
manufacture.
(d) Jore shall indemnify and hold Winsire and Mega Tools
and each of them harmless in respect of any and all
existing and future:
(i) costs, expenses, fees and any other amounts
(including, without limitation, expenses,
including legal expenses, of investigating or
contesting or otherwise occasioned by, any
demand, claim, action, liability or judgement
referred to below) that Winsire or Mega Tools may
sustain, pay, incur or be liable for in respect
of or in any way relating to Apparatus equipped
or adapted with a device which is not of
Winsire's or Mega Tools' design or manufacture;
and,
(ii) demands, claims, actions, liabilities, and
judgements (including, without limitation, those
for punitive or exemplary damages, and those in
respect of direct, indirect and consequential
losses and damages), that Winsire or Mega Tools
may sustain, pay, incur or be liable for or which
may be threatened or brought by any other person
against Winsire or Mega Tools in respect of or in
any way relating to Apparatus equipped or adapted
with a device which is not of Winsire's or Mega
Tools' design or manufacture.
Jore agrees that the demands, claims, actions, causes
of action, liabilities and judgements referred to
herein include those arising from any alleged or
actual intentional act, wilful default, negligence or
any other type of liability of Winsire or Mega Tools
whatsoever or arising from any non-performance,
shortcoming, limitation
16
or defect in or other failure
of whatsoever of a device which is not of Winsire's or
Mega Tools' design or manufacture.
(e) Mega Tools shall indemnify and hold Jore harmless in
respect of any and all existing and future:
(i) costs, expenses, fees and any other amounts
(including, without limitation, expenses,
including legal expenses, of investigating or
contesting or otherwise occasioned by, any
demand, claim, action, liability or judgement
referred to below) that Jore may sustain, pay,
incur or be liable for in respect of or in any
way relating to the design, but not the
manufacture of Apparatus; and,
(ii) demands, claims, actions, liabilities, and
judgements (including, without limitation, those
for punitive or exemplary damages, and those in
respect of direct, indirect and consequential
losses and damages), that Jore may sustain, pay,
incur or be liable for or which may be threatened
or brought by any other person against Jore in
respect of or in any way relating to the design,
but not the manufacture of Apparatus.
Mega Tools agrees that the demands, claims, actions,
causes of action, liabilities and judgements referred
to herein include those arising from any alleged or
actual intentional act, wilful default, negligence or
any other type of liability of Jore whatsoever or
arising from any non-performance, shortcoming,
limitation or defect in or other failure whatsoever of
the design, but not the manufacture of Apparatus.
MAXIMUM LIABILITY OF WINSIRE
----------------------------
20. Notwithstanding any other provision of this Agreement, in
no event shall Winsire be liable to Jore (whether in
contract, tort or on the basis of any other legal
principle) under or in connection with this Agreement or in
connection with its performance for any amount in excess of
the sum of US Thirty-five Thousand Dollars (U.S. $35,000).
VALIDITY OF LICENSED PATENTS
----------------------------
21. Jore covenants and agrees that it shall not, throughout the
remaining term or terms of the Licensed Patents, challenge
the validity of any of the claims of any of the Licensed
Patents or assist any third party in doing the same.
PATENT MARKING; PROMOTIONAL MATERIALS
-------------------------------------
22.
(a) Jore shall place in a conspicuous location on each
unit of Apparatus sold by it a permanent label or
plate bearing a patent notice conforming to the
statutes in force in the Territory relating to the
marking of patented articles.
17
(b) Jore shall not adopt, publish or cause to be published
any packaging, advertising, display or other
promotional materials pertaining to the Apparatus
without first having consulted with Mega Tools.
TRADEMARKS
----------
23.
(a) Winsire owns and shall continue to own all right,
title and interest in and to the Trademark throughout
the Territory. Jore shall do nothing inconsistent
with such ownership.
(b) Jore shall not, at any time, contest, or assist others
in contesting, Winsire's ownership of the Trademark or
the validity of the Trademark.
(c) Jore acknowledges the great value of the publicity and
goodwill associated with the Apparatus and agrees that
such goodwill belongs exclusively to Winsire.
INFRINGEMENT OF LICENSED PATENTS
--------------------------------
24. Jore shall keep a diligent watch over the Territory, in
order to detect any apparatus which infringes, or possibly
infringes the Licensed Patents. Upon detection of any such
infringement, or possible infringement, Jore shall promptly
notify Winsire thereof. Winsire shall have the exclusive
right, but shall not be obligated, to take appropriate
legal action to restrain such infringement and/or recover
damages in respect thereof. If Winsire elects to take such
action, it shall do so at its own expense and the conduct
of the action shall be entirely directed by Winsire. Jore
shall, at no cost to Winsire, assist Winsire in such action
by testifying in any legal proceedings, signing all
necessary papers, and rendering any other assistance
(except financial assistance) which may, in the opinion of
Winsire or its counsel, reasonably be required to prosecute
such action to a successful conclusion. If Winsire elects
not to pursue legal action or does not take reasonable
affirmative steps to pursue legal action within thirty (30)
days of receiving Jore's notification of a potential
infringement by a third party, or if Winsire subsequently
abandons any such legal proceedings, then Jore may pursue
legal action respecting any such third party infringement
without involvement by Winsire. In that event, Jore shall
be entitled to retain any proceeds from such action.
GOVERNING LAW
-------------
25. This Agreement shall be construed in accordance with, and
governed by, the laws of the Province of British Columbia,
Canada, and the applicable Federal laws of Canada, in
effect in the said Province.
18
ARBITRATION OF DISPUTES
-----------------------
26.
(a) All disputes arising out of or in connection with this
Agreement, or in respect of any defined legal
relationship associated therewith or derived therefrom
shall be referred to and finally resolved by
arbitration under the rules of the British Columbia
International Commercial Arbitration Centre.
(b) The appointing authority shall be the British Columbia
International Commercial Arbitration Centre.
(c) The case shall be administered by the British Columbia
International Commercial Arbitration Centre in
accordance with its "Procedures for Cases Under the
BCICAC Rules".
(d) The place of arbitration shall be Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, Xxxxxx.
SEVERABILITY
------------
27. All provisions of this Agreement are, and shall be deemed
to be, severable, and if any provision of this Agreement is
determined to be void as contrary to law or public policy,
such provision shall be deemed to be severed from this
Agreement, and the remaining provisions of this Agreement
shall remain in full force and effect.
MODIFICATION AND WAIVER
-----------------------
28. No cancellation, modification, amendment, deletion,
addition or other change in this Agreement or any provision
hereof, or waiver of any right or remedy hereby provided,
shall be effective for any purpose unless specifically set
forth in writing, signed by all of the parties hereto. No
waiver of any right or remedy in respect of any occurrence
or event on one occasion shall be deemed a waiver of such
right or remedy in respect of such occurrence or event on
any other occasion.
FURTHER ASSURANCES
------------------
29. The Parties shall execute such further documents and do
such further things as may be necessary to give full effect
to the provisions of this Agreement and the intent embodied
herein.
WINSIRE'S AND MEGA TOOLS' NON-RESPONSIBILITY
--------------------------------------------
30. Neither Winsire nor Mega Tools nor any of their employees
or officers shall have any responsibility for any of the
acts or operations of Jore under this Agreement or for any
decision made in connection therewith, whether upon the
recommendation of Winsire or Mega Tools or otherwise.
19
INTEREST ON OVERDUE PAYMENTS
----------------------------
31. Except as otherwise specified herein, interest shall accrue
on all overdue payments hereunder from the due date for
such payment until actual payment, such interest to be
computed at an effective annual interest rate of eighteen
percent (18%) per annum.
GENDER
------
32. Words importing the masculine gender include the feminine
or neuter, words in the singular include the plural, words
importing a corporate entity include individuals and vice
versa.
EQUAL PARTICIPATION IN DRAFTING
-------------------------------
33. The parties have equally participated in the drafting of
the within Agreement, each having had the opportunity to be
independently represented by counsel.
TIME OF THE ESSENCE
-------------------
34. Time shall be of the essence of this Agreement and all
provisions hereof.
REMEDIES CUMULATIVE
-------------------
35. The rights, powers and remedies of the parties to this
Agreement provided in this Agreement are cumulative and do
not affect any right, power or remedy otherwise available
to them at law or in equity.
20
IN WITNESS WHEREOF, the parties hereto have caused
these presents to be executed under their corporate seals and
the hands of their proper officers duly authorised in that
behalf.
EXECUTED at Vancouver, British Columbia, Canada, this 28 day of
April, 2000 as of the 29th day of February, 2000.
Winsire Enterprises Corporation
/s/ Hermann Fruhm
By: ________________________________
Hermann Fruhm, President
EXECUTED at Langley, British Columbia, Canada, this 28 day of
April, 2000 as of the 29th day of February, 2000.
Mega Tools Ltd.
/s/ Xxxx Xxxxxx
By: ________________________________
Xxxx Xxxxxx, President
EXECUTED at Ronan, Montana, United States of America, this ___
day of April, 2000 as of the 29th day of February, 2000.
Jore Corporation
/s/ Xxxx Xxxx
By: ________________________________
Xxxx Xxxx, President
21
