LICENSE AGREEMENT
This License Agreement made this 9th day of January , 1999.
BETWEEN:
E.T.C. INDUSTRIES LTD.
0000 - 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
(the "Licensor")
OF THE FIRST PART
AND:
DIRECTION TECHNOLOGIES INC.
#000 - 000 X Xxxxxx
Xxxxxx, XX 00000
(the "Licensee")
OF THE SECOND PART
WHEREAS:
A. The Licensor is engaged in the research, development,
manufacturing and marketing of proprietary electric vehicle
technology and holds 100% of the beneficial and legal title in
respect of such technology including without limitation: common
law trademarks and copyrights; the sole right to make application
for patents, trademarks, and copyrights in respect of the
Technology; engineering designs; concepts; models; prototypes;
parts; manufacturing machines and tools; trade secrets; know-how
and show-how associated with electric vehicles (collectively, the
"Technology").
B. The Licensor is willing to disclose to the Licensee, its
agents and employees, the Technology and such other production
knowledge and technical knowledge and technical experience, and
generally to advise and assist the Licensee and its technical
staff at reasonable times and in reasonable ways to facilitate
the Licensee's objective of producing electric vehicles embodying
the Technology (the "Products").
NOW THEREFORE IN CONSIDERATION of one (1) dollar (the
receipt and sufficiency of which is hereby acknowledged), the
premises, other good and valuable consideration and of the
covenants and agreements herein contained, the parties hereto
covenant and agree as follows:
I. LICENSE
The Licensor hereby grants to the Licensee, a license for
the exclusive rights to manufacture and market the Products
(collectively, the "Rights") world-wide (collectively, the
"Territory")
Upon any termination or cancellation of this License
Agreement for any reason, the license shall terminate.
II. CONDITION PRECEDENTS
The obligations in this License Agreement shall be subject
to the final approval of all regulatory authorities having
jurisdiction over the transactions contemplated hereunder,
including the Vancouver Stock Exchange.
III. LICENSE FEE, ROYALTY AND TERM
A. As used in this section "Net Sales Price" means the
price paid for a Product to the Licensee by a customer of the
Licensee less: any applicable sales, excise, customs or other tax
on sales of the Products by the Licensee and transportation,
freight and delivery expenses.
B. In consideration of:
1. $50,000 USD
2. royalties of 2% of
the Gross Sales Price as recorded by the Licensee
on every product sold, to be paid payable monthly
on the first day of the month; and
3. the Licensee
agreeing to use its best efforts in the
development and production of a multi-passenger,
short haul, commercial vehicle suitable for hotel,
resort and high traffic local markets
and subject to fulfilment of the terms and
conditions contained herein, the Licensor shall license
the Rights to the Licensee free and clear of all liens,
claims, charges and encumbrances whatsoever.
C. Each payment made pursuant to the provisions of this
License Agreement shall be accompanied by a statement signed by
the Licensee, stating in detail the aggregate amount of the
Licensee's Gross Sales Prices for the Products sold during the
period in respect of which the royalty is payable hereunder.
D. The term of this License Agreement shall be five (5)
years (the "Initial Term") commencing from the date of approval
of the regulatory authorities and shall be renewable for another
five (5) years under the same terms and conditions, unless:
1. the Licensee is in
default of this License Agreement
2. the Licensee or the
Licensor elects not to renew this License
Agreement; or
3. the Licensee does
not achieve annual gross sales of CDN$2,000,000
within the Initial Term:
E. Notwithstanding any provision herein, this License
Agreement may be terminated after two years from the commencement
of the Initial Term if the Licensee fails to build 3 prototype
electric vehicles based on the Technology within such two year
period.
IV. ASSIST IN ESTABLISHING PRODUCTION FACILITIES
The Licensor will advise and assist the Licensee in
establishing and installing such production facilities and
procuring and installing such equipment therefor as the Licensee
may need for the manufacture of the Products, and thereafter will
advise the Licensee in the operation of such production
facilities and equipment as hereinafter provided.
V. PROVISION OF INFORMATION
During the term of this License Agreement, the Licensor
shall make available to the Licensee full and complete technical
information from time to time possessed by the Licensor relating
to the Products, and the use of all assets as outlined in
Schedule "A".
VI. NON-DISCLOSURE OF TECHNICAL INFORMATION
The Licensee shall not disclose any information received
from the Licensor under this License Agreement to any person
except the Licensee's employees or agents to whom it shall be
necessary in the Licensee's opinion to make such disclosure to
enable the Licensee to obtain the benefit of such information in
the manufacture of the Products. The foregoing restrictions on
disclosure of information shall apply so long as the Products has
not become a matter of public knowledge, by disclosure in issued
patents, development of such knowledge in the industry or
otherwise.
VII. REPRESENTATIONS AND WARRANTIES
1. the Company is duly
incorporated and validly existing pursuant to the
laws of the Province of British Columbia;
2. there are no
options, warrants, rights or agreements
outstanding with respect to the purchase of any of
the Rights.
3. there are no
agreements existing or contemplated, written or
oral of any nature or kind whatsoever to which the
Licensor is a party except as have been in writing
disclosed to and approved by the Licensee;
4. the Licensor has all
corporate power and authority to carry on its
business as presently carried on;
5. the making of the
License Agreement and the completion of the
transactions contemplated hereby does not conflict
with or result in the breach of or the
acceleration of any indebtedness under any terms,
provisions or conditions of or constitute default
under the Articles of Incorporation or any
amendment thereto or the By-laws of the Licensor
or any indenture, mortgage, deed of trust,
agreement, lease, franchise, certificate, consent,
permit, licence, authority or other instrument or
obligation to which the Licensor is a party or is
bound or any judgement, which the Licensor is
bound or, to the knowledge of the Licensor, any
statute or regulation applicable to the Licensor.
A. The Licensee covenants, represents and warrants to the
Licensor that:
1. the Company is duly
incorporated and validly existing pursuant to the
laws of the State of Nevada;
2. the Licensee has all
corporate power and authority to carry on its
business as presently carried on;
3. the making of the
License Agreement and the completion of the
transactions contemplated hereby does not conflict
with or result in the breach of or the
acceleration of any indebtedness under any terms,
provisions or conditions of or constitute default
under the Articles of Incorporation or any
amendment thereto or the By-laws of the Licensee
or any indenture, mortgage, deed of trust,
agreement, lease, franchise, certificate, consent,
permit, licence, authority or other instrument or
obligation to which the Licensee is a party or is
bound or any judgment, which the Licensee is bound
or, to the knowledge of the Licensee, any statute
or regulation applicable to the Licensee.
VIII. ADVISORY CAPACITY
In providing the technical information and technological
assistance, the Licensor and its employees are acting in an
advisory capacity only and nothing herein contained shall be
construed as creating a relationship between the Licensor and the
Licensee as a partnership or joint venture. Further, it is
understood that legal and beneficial ownership of the Technology
shall at all times belong to the Licensor.
IX. TERMINATION
A. This License Agreement shall be in force provided that:
1. if at any time
either party to this License Agreement shall have
defaulted in the performance of its obligations
hereunder, the other party may give written notice
of such default, and if such default shall
continue for a period of 30 days after such
notice, the party who has so given notice of
default may thereupon terminate this License
Agreement forthwith by giving to the other party
written notice of termination;
2. if any proceedings
in bankruptcy or for the appointment of a
receiver-manager or trustee or any other
proceedings under any law for the relief of
debtors shall be instituted by or against the
Licensee or the Licensor, or if either of such
parties shall make an assignment for the benefit
of creditors, this License Agreement shall, at the
option of the other party exercisable by notice in
writing to that effect, forthwith terminate; or
B. In the event of termination of this License Agreement:
1. the Licensee shall
pay to the Licensor the royalty fees calculated
hereunder to the date of termination as if that
date were the end of the month;
2. paragraph VI and VII
of this License Agreement shall survive the
termination of this License Agreement; and
3. the Licensee agrees
that it shall not for a period of 2 years, either
directly or indirectly, be associated with the
business of research, development, manufacturing,
distributing and retailing business of electric
vehicles in the Territory.
X. NOTICE
Any notice given by either party hereto to the other party
shall be deemed to have been sufficiently given if sent by
registered mail, to the address of the other party set forth on
page one hereof, unless and until another address shall have been
designated in writing by such other party for that purpose. Any
notice so given shall be deemed to have been received five
business days following the day that it was sent.
XI. SEVERABILITY
Should any part of this License Agreement, for any reason,
be declared or held invalid, such invalidity shall not affect the
validity of any remaining portion, which remaining portion shall
remain in force and effect as if this License Agreement had been
executed with the invalid portion thereof eliminated, and it is
hereby declared the intention of the parties hereto that they
would have executed the remaining portion of this License
Agreement without including therein any such part, parts or
portion which may, for any reason, be hereafter declared invalid.
XII. FURTHER DOCUMENTS
The parties shall execute such of the documents and do such
other things that may be reasonably necessary to give full effect
to the transactions contemplated hereby.
XIII. GOVERNING LAW
This License Agreement shall be subject to and governed in
accordance with the laws of the Province of British Columbia,
Canada, and the parties hereto do attorn to the exclusive
jurisdiction of the Courts of the Province of British Columbia.
XIV. COUNTERPARTS
This License Agreement may be executed in counterpart and
the counterparts altogether shall constitute a fully executed
License Agreement, and any facsimile signature shall be taken as
an original.
IN WITNESS WHEREOF the parties hereto have duly executed
this License Agreement as of the day and year first above
written.
E.T.C. INDUSTRIES LTD. )
)
)
/s/ )
Per: Authorized Signatory )
DIRECTION TECHNOLOGIES INC. )
)
)
/s/ )
Per: Authorized Signatory )
SCHEDULE "A'
Assets Inventory
All patents, patents pending, trademarks, copyrights, title,
engineering designs, concepts, models, prototypes, parts,
manufacturing machines and tools, trade secrets, know-how and
show-how, and customer lists associated with the research,
development, manufacturing, distributing and retailing business
of electric powered vehicles of the Vendor and more particularly:
One 1987 Suburban Truck VIN# CSUBR 0XXXXX0X0XX000000
One 1993 Pace Trailer VIN# 0XXXX0000XX000000
One MI-5 Electric Car
One MI-6 Electric Car
One complete set of MI-6 Electric Car Moulds
