LICENSE AGREEMENT
BETWEEN
AVENSYS LABORATORIES INC.
AND
AVENSYS INC.
XxXxxxxx Xxxxxxxx LLP
April 13, 2006
TABLE OF CONTENTS
1. INTERPRETATION...........................................................1
1.1 DEFINITIONS........................................................1
1.2 HEADINGS...........................................................4
1.3 EXTENDED MEANINGS..................................................4
1.4 STATUTORY REFERENCES...............................................4
1.5 ACCOUNTING PRINCIPLES..............................................4
1.6 CURRENCY...........................................................5
1.7 SCHEDULES..........................................................5
2. GRANTS AND COVENANTS.....................................................5
2.1 LICENSE GRANT......................................................5
2.2 TRADE-MARKS LICENSE................................................6
2.3 EXCLUSIVITY........................................................7
2.4 NO CONTESTATION....................................................7
3. OBLIGATIONS OF LICENSEE..................................................7
3.1 COMMERCIALIZATION OF THE PRODUCTS..................................7
3.2 RECORDS............................................................8
4. FIELD-RELATED RESEARCH AND DEVELOPMENT...................................8
4.1 SCOPE..............................................................8
4.2 REPORT.............................................................8
4.3 PROTOTYPES.........................................................9
4.4 DOCUMENTATION AND ASSISTANCE.......................................9
4.5 COSTS..............................................................9
4.6 REVENUE............................................................9
4.7 STANDARDS..........................................................9
5. SPECIFIC PROJECTS.......................................................10
5.1 SCOPE AND COSTS...................................................10
5.2 CONFIDENTIALITY...................................................10
6. OWNERSHIP...............................................................10
7. COMPENSATION............................................................11
7.1 ROYALTY RATE......................................................11
7.2 REDUCTION FOR THIRD PARTY ROYALTIES...............................11
7.3 PAYMENT...........................................................11
7.4 SINGLE ROYALTY....................................................12
7.5 TAX...............................................................12
8. PURSUIT AND MAINTENANCE OF PATENT AND TRADE-MARKS RIGHTS................12
8.1 PATENTS...........................................................12
8.2 TRADE-MARKS.......................................................12
9. INFRINGEMENTS...........................................................13
9.1 DUTY TO INFORM....................................................13
9.2 INFRINGEMENT BY THIRD PARTIES.....................................13
9.3 INFRINGEMENT OF THIRD PARTIES' RIGHTS.............................14
10. TERM AND TERMINATION....................................................14
10.1 TERM..............................................................14
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10.2 TERMINATION FOR MATERIAL BREACH...................................14
10.3 TERMINATION FOR INSOLVENCY........................................15
10.4 EFFECT OF TERMINATION.............................................15
11. CONFIDENTIALITY.........................................................16
11.1 CONFIDENTIAL INFORMATION..........................................16
11.2 EXCEPTIONS........................................................16
11.3 NONDISCLOSURE OBLIGATIONS.........................................16
11.4 RETURN............................................................17
11.5 INJUNCTIVE RELIEF.................................................17
12. REPRESENTATIONS AND WARRANTIES..........................................17
12.1 MUTUAL REPRESENTATIONS AND WARRANTIES.............................17
12.2 AVENSYS LAB'S REPRESENTATIONS AND WARRANTIES......................18
12.3 LICENSEE'S REPRESENTATIONS AND WARRANTIES.........................18
13. LIMITATION OF LIABILITY.................................................18
14. INDEMNIFICATION.........................................................19
14.1 INDEMNIFICATION BY LICENSEE.......................................19
14.2 INDEMNIFICATION BY AVENSYS LAB....................................19
14.3 NOTIFICATION AND COOPERATION......................................19
15. PROJECT MANAGEMENT......................................................20
15.1 PROJECT MANAGERS..................................................20
15.2 MEETINGS..........................................................20
16. GENERAL.................................................................20
16.1 PUBLIC ANNOUNCEMENT...............................................20
16.2 RELATIONSHIP OF THE PARTIES.......................................20
16.3 FURTHER ASSURANCES................................................21
16.4 BENEFIT OF THE AGREEMENT..........................................21
16.5 ENTIRE AGREEMENT..................................................21
16.6 AMENDMENTS AND WAIVERS............................................21
16.7 ASSIGNMENT........................................................21
16.8 SEVERABILITY......................................................21
16.9 NOTICES...........................................................22
16.10 GOVERNING LAW.....................................................23
16.11 COUNTERPARTS......................................................23
16.12 FACSIMILES........................................................23
A) PATENT LIST................................................................25
B) PATENT APPLICATIONS........................................................26
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LICENSE AGREEMENT made as of April 13, 2006.
BETWEEN: AVENSYS LABORATORIES INC., a corporation incorporated under Part 1A
of the Companies Act (Quebec), having its head office at 000,
xxxxxxxxx Xxxxxxx, Xxxxx-Xxxxxxxx, Xxxxxx X0X 0X0, herein acting and
represented by its duly authorized representative as he so declares;
(hereinafter referred to as the "Avensys Lab")
AND: AVENSYS INC., a corporation incorporated under Part 1A of the
Companies Act (Quebec), having its head office at 000, Xxxxxxx,
Xxxxxx-Xxxxxx, Xxxxxx X0X 0X0, herein acting and represented by its
duly authorized representative as he so declares;
(hereinafter referred to as "Licensee")
WHEREAS the parties, ITF Optical Technologies Inc. ("ITF") and Manaris
Corporation have entered into an asset purchase agreement dated as of the date
hereof, for the sale by ITF to Licensee and Avensys Lab of certain assets
associated with ITF's all-fiber photonics solutions manufacturing business (the
"Asset Purchase Agreement");
WHEREAS Avensys Lab is the owner of or has the right to sub-license certain
intellectual property;
WHEREAS in conjunction with the Asset Purchase Agreement, Avensys Lab wishes to
grant, and Licensee desires to acquire, an exclusive license under Avensys Lab's
Intellectual Property (as defined below), subject to the terms and conditions
set forth hereinafter;
WHEREAS Avensys Lab and Avensys wish to collaborate to discover and develop new
technologies in the Field (as defined below), subject to the terms and
conditions set forth hereinafter;
NOW THEREFORE, in consideration of the mutual promises set forth hereinafter,
the parties agree as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement, unless something in the subject matter or
context is inconsistent therewith:
1.1.1 "Affiliates" has the meaning attributed thereto in
the Canada Business Corporations Act.
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1.1.2 "Agreement" means this agreement entitled "License
Agreement", all Schedules hereto and all instruments
supplemental hereto or in amendment or in
confirmation hereof.
1.1.3 "Asset Purchase Agreement" shall have the meaning set
forth in the Preamble.
1.1.4 "Avensys Lab's Intellectual Property" means the
Patents, the Trade-Marks and any other Intellectual
Property either currently owned by Avensys Lab and/or
developed by Avensys Lab during the term of this
Agreement pursuant to any Field-related research and
development conducted in accordance with Section 4.
1.1.5 "Business Day" means a day other than a Saturday,
Sunday or statutory holiday in Quebec.
1.1.6 "Confidential Information" has the meaning set forth
in Section 11.1.
1.1.7 "Documentation" means the notes, sketches, tables,
drawings, technical specifications, processes, and
models, if any, developed by Avensys Lab related to
Avensys Lab's Intellectual Property.
1.1.8 "Field" means the field within which Avensys Lab will
carry out research and development in accordance with
Section 4, as more fully described in Schedule 1.1.8,
as amended from time to time.
1.1.9 "Intellectual Property" means all worldwide
intellectual and industrial rights and includes
rights to (i) inventions and patents for inventions,
including all divisional, continuing, substitute,
renewal, re-issue and all other applications and/or
letters patent therefor, (ii) copyrights, (iii)
designs and industrial designs, (iv) trade-marks, and
any word, symbol, icon, logo or other indicia of
origin adopted or used in connection with any product
or service, (v) know-how, trade secrets and
confidential information, and (vi) other proprietary
rights.
1.1.10 "Licensee Intellectual Property" means any
Intellectual Property owned by Licensee that, by
agreement of the parties from time to time, shall be
expressly excluded from the application of Sections
6.2 and 6.3 hereof. In particular, Licensee
Intellectual Property shall include Licensee's
Intellectual Property in the Processes.
1.1.11 "Patent Improvements" means any modifications,
improvements, enhancements or advances that are
directly related to the Patents, whether or not those
improvements constitute patentable improvements under
the laws of any jurisdiction.
1.1.12 "Patents" means the registered patents and pending
applications for patents, either owned by Avensys Lab
or for which Avensys Lab has the right to sub-license
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without liability to a third party as listed in
Schedule 1.1.11, and all patents to be issued
pursuant thereto and all divisions, continuations,
continuations-in-part, reissues, substitutes and
extensions thereof.
1.1.13 "Processes" means the manufacturing processes
developed by Avensys Labs or Licensee (as
demonstrated by their business records) related to
and/or used to develop and/or manufacture the
Products.
1.1.14 "Process Improvements" means any modifications,
improvements, enhancements or advances that are
directly related to the Processes, whether or not
those improvements constitute patentable improvements
under the laws of any jurisdiction.
1.1.15 "Product" means any and all products developed,
manufactured or Sold by Licensee in the Field that
use or incorporate Avensys' Lab Intellectual
Property.
1.1.16 "Project Manager" has the meaning set forth in
Section 15.1.
1.1.17 "Prototype" means Field-related, functional,
pre-production applications of Avensys Lab
Intellectual Property, developed by Avensys Lab in
accordance with Section 4.
1.1.18 "Revenue" means all of the revenues recognized in
accordance with the GAAP (as defined in Section 1.5)
and received by Licensee from the Sale of any
Products in any or all parts of the world, less the
following deductions to the extent required or
permitted by the GAAP in connection with the
recognition of such revenues:
1.1.18.1 credit, allowance or refunds given on
account of returned goods;
1.1.18.2 transportation charges invoiced separately
and actually charged to third parties;
1.1.18.3 taxes, duties and customs on all sales of
Products;
1.1.18.4 agents' commissions paid by Avensys for the
sale of Products;
1.1.18.5 uncollectible amounts;
1.1.18.6 bona fide special rebates provided by
Avensys for Products purchased by third
parties; and
1.1.18.7 bona fide trade, quantity and cash
discounts.
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1.1.19 "Royalty" has the meaning set forth in Section 7.1.
1.1.20 "Sale", "Sell" (and other derivatives) means market,
promote, distribute, sale, rent, lease, license or
other form of distribution of a Product to an end
user, distributor, any other person or entity, either
directly or through a chain of distribution.
1.1.21 "Territory" means worldwide.
1.1.22 "Trade-Marks" means Avensys Lab trade-xxxx(s) listed
in Schedule 1.1.22, as amended from time to time.
1.2 Headings
The division of this Agreement into Articles and Sections and
the insertion of headings are for convenience of reference
only and shall not affect the construction or interpretation
of this Agreement. The terms "this Agreement", "hereof",
"hereunder" and similar expressions refer to this Agreement
and not to any particular Article, Section or other portion
hereof and include any amendment hereto. Unless something in
the subject matter or context is inconsistent therewith,
references herein to Articles or Sections are to Articles or
Sections of this Agreement.
1.3 Extended Meanings
In this Agreement, words importing the singular number only
shall include the plural and vice versa, words importing the
masculine gender shall include the feminine and neuter genders
and vice versa and words importing persons shall include
individuals, partnerships, limited liability companies,
associations, trusts, unincorporated organizations and
corporations.
1.4 Statutory References
In this Agreement, unless something in the subject matter or
context is inconsistent therewith or unless otherwise herein
provided, a reference to any statute is to that statute as now
enacted or as the same may from time to time be amended,
re-enacted or replaced and includes any regulations made
thereunder.
1.5 Accounting Principles
Wherever in this Agreement reference is made to a calculation
to be made in accordance with generally accepted accounting
principles ("GAAP"), such reference shall be deemed to be to
the generally accepted accounting principles in Canada from
time to time approved by the Canadian Institute of Chartered
Accountants, or any successor institute, applicable as at the
date on which such calculation is made or required to be made
in accordance with generally accepted accounting principles
and applied in a manner consistent with prior periods of the
Seller.
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1.6 Currency
All references to currency herein are to lawful money of
Canada.
1.7 Schedules
The following are the Schedules to this Agreement:
Schedule 1.1.8 - Field
Schedule 1.1.11 - List of Patents
Schedule 1.1.22 - List of Trade-Marks
Schedule 7.1 - Royalty
Schedule 7.3.2 - Avensys Lab's bank account information
2. GRANTS AND COVENANTS
2.1 License Grant
2.1.1 Subject to the terms, conditions and restrictions of
this Agreement, Avensys Lab hereby grants to Licensee
a personal, irrevocable, sole (i.e. exclusive,
subject to the rights of Avensys lab set forth in
Section 2.1.3 below) license, within the Territory,
to use, copy, enhance and modify Avensys Lab's
Intellectual Property and any Patent Improvements in
order to develop, manufacture, use and Sell the
Products.
2.1.2 Notwithstanding anything to the contrary in this
Agreement, the license granted herein to Licensee
includes the right:
2.1.2.1 to grant sublicenses (subject to terms and
conditions substantially similar to those
set forth in this Section 2) to Affiliates
of Licensee to use, copy, enhance and modify
Avensys Lab's Intellectual Property in order
to develop, manufacture, use or Sell the
Products;
2.1.2.2 to translate the Documentation; and
2.1.2.3 to have Products manufactured or assembled
by third parties and/or developed by or with
third parties solely for the benefit of
Licensee for the manufacture, use or Sale by
Licensee or its Affiliates.
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2.1.3 For greater certainty, nothing herein shall prevent
Avensys Lab from using, copying, enhancing, modifying
the Avensys Lab's Intellectual Property and any
Patent Improvements:
2.1.3.1 for its internal use;
2.1.3.2 in the context of the development or
commercialization of Prototypes; or
2.1.3.3 in the context of research and development
activities unrelated to the Field or its own
behalf or on behalf of a third party.
2.2 Trade-Marks License
2.2.1 Subject to the terms, conditions and restrictions of
this Agreement, Avensys Lab hereby grants to Licensee
a personal, irrevocable, exclusive license, within
the Territory, to use the Trade-Marks only in
association with the Products.
2.2.2 Licensee shall comply with Avensys Lab's standard
trade-xxxx guidelines as to the form and manner in
which the Trade-Marks may be used pursuant hereto. In
particular, Licensee shall not change, amend or
otherwise modify the Trade-Marks. Moreover, Licensee
shall identify the Trade-Marks, when used as
trade-marks, with a notation that the xxxx is a
registered/unregistered trade-xxxx of Avensys Lab, as
the case may be. Upon request, Licensee shall submit
for approval by Avensys Lab, acting reasonably,
samples of any packaging, documentation, advertising,
brochures and other material on which the Trade-Marks
appears or is intended to be used in relation to
Products being manufactured, used or Sold by
Licensee.
2.2.3 Licensee acknowledges that Avensys Lab is the
exclusive owner of the Trade-Marks and all goodwill
associated therewith, that all use of the Trade-Marks
by it enures to the benefit of Avensys Lab, and that
it shall not dispute or contest the validity,
ownership or enforceability of the Trade-Marks nor
attempt to dilute the value of the goodwill attached
thereto.
2.2.4 To the limited extent required to protect Avensys
Lab's rights in the Trade-marks, during the term of
the Agreement, Licensee shall give Avensys Lab's
representatives reasonable access to Licensee's
facilities, at Avensys Lab's expense, at reasonable
times during business hours, subject to Avensys Lab
giving Licensee at least five (5) Business Days prior
notice, for the purpose of quality control in
relation to Products branded with the Trade-marks, as
the case may be.
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2.3 Exclusivity
In order to assure Licensee of the exclusive rights under
Avensys Lab's Intellectual Property to commercialize the
Products, and except as provided by this Agreement, Avensys
Lab shall not:
2.3.1 itself use Avensys Lab's Intellectual Property to
develop, produce, market, distribute and sell
products (other than Prototypes) in or related to the
Field; or
2.3.2 grant to a third party any rights or licenses to use,
copy, enhance or modify any of Avensys Lab's
Intellectual Property to develop, produce, market,
distribute and/or sell products in or related to the
Field.
2.4 No Contestation
2.4.1 Licensee hereby undertakes not to contest Avensys
Lab's Intellectual Property nor the rights of Avensys
Lab therein at any time during or after expiration or
termination of this Agreement.
2.4.2 Avensys Lab hereby undertakes not to contest any and
all rights of Licensee to the Products and any
enhancements to the Product that are made as
permitted by this Agreement at any time during or
after expiration or termination of this Agreement.
3. OBLIGATIONS OF LICENSEE
3.1 Commercialization of the Products
3.1.1 Licensee shall use commercially reasonable efforts to
Sell the Products.
3.1.2 Licensee shall conduct its business with respect to
the Products in a professional manner.
3.1.3 Subject to Section 2.2, the Parties agree that
Licensee shall be free to make decisions in
connection with its marketing activities, including
the terms of sale and the price of the Product, in an
autonomous and independent manner.
3.1.4 Licensee may, in its discretion, xxxx every Product
and any documents it issues in respect thereof with
the Trade-Marks as are required pursuant to this
Agreement and as agreed between the Parties from time
to time. For greater certainty, Licensee may also
distribute the Products on a "white label" basis,
without use of the Trade-marks.
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3.2 Records
3.2.1 Licensee shall maintain all books and records under
generally accepted accounting practices evidencing
all the Sales of Product, the Revenue received in
respect thereof and Royalty payments under this
Agreement.
3.2.2 For the period in which the Royalties accrue
hereunder and for a period of three (3) years after
completion of Royalty payment, Licensee shall grant
Avensys Lab or its designated professional advisors
reasonable access during business hours to inspect
books and records kept by Licensee relating to the
Sales of Product, the Revenue received in respect
thereof and Royalty payments under this Agreement and
shall make such books and records available and
permit them to audit, inspect and take copies of the
books and records. In the event that such audits and
inspections reveal accounting or other errors in
relation to Royalty payments due to Avensys Lab, the
difference shall be paid immediately by Avensys Lab
or Licensee, as the case may be, with interest at a
rate of one percent (1%) monthly (twelve per cent
(12%) annually). All costs and expenses arising out
of such audits and inspections shall be borne by
Avensys Lab
3.2.3 In the event Avensys Lab wishes to inspect the books
and records maintained by Licensee in relation to the
Sales of Products, the Revenue received in respect
thereof and Royalty payments under this Agreement, it
shall notify Licensee, in writing, of necessary
matters including the subject period, scope and
period of such inspection as well as the organization
to which the inspector belongs and the title and name
of the inspector at least twenty (20) Business Days
prior to the inspection commencement date.
4. FIELD-RELATED RESEARCH AND DEVELOPMENT
4.1 Scope
Avensys Lab agrees to continue, during the term, to conduct
research and development in the Field in view of the
manufacturing and Sale of Products by Licensee for the mutual
benefit of the parties. For greater certainty, nothing herein
shall prevent Avensys Lab from undertaking research and
development activities unrelated to the Field on its own
behalf or on behalf of a third party.
4.2 Report
Avensys Lab shall provide status reports to Licensee upon
request and on a quarterly basis with respect to any
Field-related research and development. The status reports
shall specify the progress that has been made with respect to
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any and all then ongoing project, and will be presented in
writing, or if presented orally, will be summarized in writing
within five (5) Business Days of any such presentation.
4.3 Prototypes
4.3.1 Upon completion of any Prototype, Avensys Lab shall
immediately inform Licensee. Avensys Lab shall
provide a written description of the Prototype and,
upon Licensee's request, shall provide
demonstrations, at Avensys Lab's facilities, in order
for Licensee to evaluate the Prototype and the
potential Product applications.
4.3.2 Avensys Lab shall allow Licensee to test the
Prototypes at Avensys Lab's premises for a period of
sixty (60) Business Days.
4.4 Documentation and Assistance
4.4.1 In the event that Licensee wishes to use a Prototype
as a basis for the production of Products, Avensys
Lab shall, within ten (10) Business Days of
Licensee's request, provide Licensee with a copy of
all Documentation that is relevant to the manufacture
of a Product.
4.4.2 Avensys Lab shall, upon request of Licensee from time
to time, render such other assistance, at Licensee's
expense, as Licensee may reasonable request for the
development, manufacture or Sale of the Products.
4.5 Costs
Avensys Lab shall bear all costs incurred in respect of the
research and development conducted and any assistance provided
pursuant to this Section 4 and agrees that such costs are
covered by the Royalty payments made by Licensee in accordance
with the terms of this Agreement.
4.6 Revenue
Avensys Lab shall be entitled to all of the revenues received
by Avensys Lab from the Sale of any Prototypes during the term
of this Agreement, subject to any royalties due to Licensee in
the event that the Prototypes use or incorporate Licensee's
Intellectual Property, in which case the provisions of this
Agreement in relation to the payment of royalties by Licensee
to Avensys Lab shall apply to Avensys Lab's payment of
royalties to Licensee mutatis mutandis.
4.7 Standards
Avensys Lab hereby agrees that it will use reliable equipment
and agrees to acquire and/or maintain the facilities,
equipment and staff as appropriate to effectively carry out
its research and development undertakes pursuant to Sections 4
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and 5 hereof in accordance with industry standards. For
greater certainty, the standards of practice in respect of
research and development that were implemented by ITF as at
the closing of the Asset Purchase Agreement shall be
considered acceptable standards for the purposes hereof.
5. SPECIFIC PROJECTS
5.1 Scope and Costs
Notwithstanding the provisions of Section 4, Avensys Lab
acknowledges that from time to time, Licensee may approach
Avensys Lab to assist Licensee in carrying out research and
development work for specific projects (each a "Specific
Project"). For each Specific Project contemplated, the parties
shall cooperate to create a work plan setting out the
objectives of said Specific Project, its scope, the budget,
the completion schedule, the testing and acceptance mechanisms
and the reporting. A work plan and the allocated budgets may
be subsequently modified as reasonably required under the
circumstances, with the consent of the parties.
5.2 Confidentiality
Avensys Lab acknowledges that any development work carried out
by Avensys Lab for Licensee under any Specific Project
constitutes Confidential Information and shall not be
disclosed to a third party without the prior written
authorization of the disclosing party.
6. OWNERSHIP
6.1 Nothing contained in this Agreement shall be deemed to convey
any title to or ownership in Avensys Lab's Intellectual
Property, in whole or in part, to Licensee. All rights in
Avensys Lab's Intellectual Property not expressly licensed to
Licensee are hereby reserved by Avensys Lab.
6.2 The parties agree that in the absence of any contrary written
agreement between the parties, the Intellectual Property in
Avensys Lab's Intellectual Property, in any Prototypes and in
any Patent Improvements and, in particular, in the results of
all development work carried out by Avensys Lab in accordance
with Sections 4 and 5, to the extent they are novel or
otherwise protectable by Intellectual Property rights, shall,
as between Avensys Lab and Licensee, be owned by Avensys Lab.
6.3 Licensee hereby assigns to Avensys Lab any right it may have
in the Patent Improvements, effective upon their creation.
6.4 The parties agree that all such Intellectual Property in the
Patent Improvements shall be subject to the terms of the
exclusive license granted to Licensee by Avensys Lab pursuant
to Section 2.1 hereof.
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6.5 Avensys Lab shall be responsible to file, prosecute and
maintain Avensys Lab's Intellectual Property and any
Intellectual Property it may have in the Patent Improvements,
and bear all costs incurred in respect of the same.
6.6 Licensee shall, upon request of Avensys Lab, from time to
time, execute all instruments or documents and render such
other assistance, at Avensys Lab's expense, as Avensys Lab may
reasonably request in order to maintain any such Intellectual
Property.
6.7 The parties agree that, in the absence of any contrary written
agreement between the parties, the Intellectual Property in
the Processes shall, as between Avensys Lab and Licensee, be
owned by Licensee.
6.8 Avensys Lab hereby assigns to Licensee any Intellectual
Property it may have in the Processes or in the Process
Improvements, effective upon their creation.
7. COMPENSATION
7.1 Royalty Rate
Licensee shall pay the royalty set out in Schedule 7.1 on all
Revenue (the "Royalty") in consideration of the licenses
granted to it by Avensys Lab pursuant to Sections 2.1 and 2.2
and the research and development conducted pursuant to Section
4.
7.2 Reduction for Third Party Royalties
In the event that Licensee, in its reasonable judgment,
determines it to be necessary or desirable to license in third
party patents or technology relating to any Products and is
required to pay royalties to one or more third parties in
respect of such patents or technology in order to enable
Licensee to realize Revenue, then the royalties otherwise
payable to Avensys Lab in respect of such Revenue shall be
reduced by agreement between the parties, having regard to the
royalties to be paid to such third parties and the relative
value of each of the Intellectual Property and such third
parties' patents or technology to the Products and/or other
technology generating Revenue; provided, however, that in no
event shall such reduction exceed 50% of the Royalty on such
Revenue otherwise due to Avensys Lab.
7.3 Payment
7.3.1 Payment of the Royalty shall be made within sixty
(60) days following the end of each quarter.
7.3.2 All royalties shall be payable to Avensys Lab and
will be delivered to the address and bank account
information set out in Schedule 7.3.2; provided,
however, that Avensys Lab may change said address and
bank account information and give written notice
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thereof to Licensee at least thirty (30) days prior
to such change. In such case, Licensee shall make
payment to such notified address and bank account.
7.4 Single Royalty
It is understood that in no event shall more than one royalty
be payable under this Section 6 with respect to a particular
unit of any Product.
7.5 Tax
7.5.1 All amounts and payments under this Agreement are
exclusive of any tax, duty, levy, or similar
government charge that may be assessed by any
jurisdiction, whether based on gross revenue, the
license, Sale or other exploitation of Avensys Lab's
Intellectual Property or the Products, the execution
of this Agreement or otherwise, except for those
based on either party's net income.
7.5.2 In the event any invoices are issued under this
Agreement, such invoice will include any applicable
tax that may be assessable on the charges set forth
therein.
8. PURSUIT AND MAINTENANCE OF PATENT AND TRADE-MARKS RIGHTS
8.1 Patents
8.1.1 Avensys Lab shall file, prosecute and maintain the
Patent rights and bear all costs incurred in respect
of the same.
8.1.2 Avensys Lab agrees to keep Licensee informed as to
the status of the Patents and, upon request, shall
provide Licensee with copies of all filings and
correspondence of a substantive nature with respect
to Patents or Patent applications and copies of all
correspondence of a substantive nature that Avensys
Lab receives with respect to the Patents.
8.2 Trade-Marks
8.2.1 Avensys Lab shall maintain the registrations for the
Trade-Marks for so long as Licensee uses the
Trade-Marks. The costs associated with the
maintenance of the registrations for the Trade-Marks
shall be borne by Avensys Lab.
8.2.2 Licensee shall execute all instruments or documents
and render such other assistance, at Avensys Lab's
expense, as Avensys Lab may reasonably request in
order to maintain the Trade-Marks.
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9. INFRINGEMENTS
9.1 Duty to inform
9.1.1 Each party undertakes to inform the other party
promptly of (i) any infringement or threatened
infringement by a third party of any Intellectual
Property rights of either party and (ii) of any claim
of any infringement of any Intellectual Property
rights of either party made by a third party which
comes to its attention.
9.1.2 Avensys Lab undertakes to immediately inform Licensee
if a Patent is issued, denied, not granted or
declared null, invalid or void.
9.2 Infringement by Third Parties
9.2.1 If any of Avensys Lab's Intellectual Property is
infringed by a third party, Avensys Lab and Licensee
will decide the course of action to take in order to
put an end to the infringement and/or to seize any
product manufactured, marketed, distributed or sold
in violation of Avensys Lab's Intellectual Property.
9.2.2 If Avensys Lab judges in its reasonable discretion
that Avensys Lab's Intellectual Property rights were
infringed upon by a third party, it shall take any
and all necessary measures it deems reasonable in the
circumstances, without any obligation to do so, at
its own cost and expense including institution of
legal proceedings within ninety (90) days after
gaining knowledge thereof on its own or receipt of a
notice from Licensee. Avensys Lab shall keep Licensee
informed regarding the progress of such necessary
measures. Licensee shall have the right to
participate in such legal proceedings or settlement
negotiations at its own cost and expense and by
counsel of its own choice; provided that Avensys Lab
shall not have the right to settle, compromise or
take any action in any dispute which diminishes,
limits or inhibits the scope, validity or
enforceability of Avensys Lab's Intellectual Property
without the express written consent of Licensee.
9.2.3 Licensee shall have the right at its own cost and
expense and by counsel of its own choice to institute
and prosecute legal proceedings against suspected
infringers of Avensys Lab's Intellectual Property
rights as Licensee may deem necessary or desirable to
safeguard its rights under this Agreement if Avensys
Lab does not institute legal proceedings within
ninety (90) days after gaining knowledge thereof by
Avensys Lab on its own or receipt of a notice from
Licensee sufficiently detailed to institute such
legal proceedings. In such case, Licensee shall keep
all proceeds resulting from such legal proceedings
and shall have the right to settle such proceedings
save and except if such settlement includes any
invalidation of any Avensys Lab's Intellectual
Property. During the course of any such proceedings,
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Licensee shall keep Avensys Lab informed regarding
progress of the proceedings, and Avensys Lab shall
fully provide necessary support and cooperation at
Licensee's expense. Avensys Lab shall have the right
to participate in such proceedings or settlement
discussions at its cost with counsel of its choice.
The parties agree that any costs and expenses
incurred by Licensee as a result of such proceedings
shall be set off against Licensee's Royalty payment
obligations under this Agreement.
9.3 Infringement of Third Parties' Rights
9.3.1 Avensys Lab undertakes to indemnify and reimburse
Licensee within thirty (30) days from the date of
relevant notice for all sums it may have to pay as
damages, interests and costs to a third party as a
result of any final judgment or settlement agreed to
in writing by Avensys Lab and brought against
Licensee on the grounds that any Product manufactured
under Avensys Lab's Intellectual Property breaches
any Patent whatsoever or infringes upon or violates
the intellectual property rights of one or more third
parties.
9.3.2 Notwithstanding the above and anything to the
contrary in the Agreement, Avensys Lab'
indemnification shall not extend to claim(s),
lawsuit(s), judgment(s), or settlement(s) relating to
any enhancement of Avensys Lab's Intellectual
Property.
10. TERM AND TERMINATION
10.1 Term
10.1.1 The Agreement enters into force as of the date hereof
and shall continue, unless earlier terminated in
accordance with the other provisions of this Section
10, for an initial term of ten (10) years.
10.1.2 Subsequently, this Agreement will automatically renew
for successive five (5) year periods unless, at least
ninety (90) days' prior to the beginning of any
renewal term, one party gives the other party written
notice of its intent to terminate the Agreement.
10.2 Termination for Material Breach
The Agreement may be terminated by each party, by sending
notice of termination in writing to the other party, in case
of any material breach of any of the terms or conditions of
this Agreement by the other party, if such party fails to
remedy such breach or default within thirty (30) days after
receipt of written notice thereof from the other party hereto.
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10.3 Termination for Insolvency
10.3.1 Subject to applicable law to the contrary, Avensys
Lab or Licensee may terminate this Agreement upon
written notice to the other party if the other party
(i) makes a general assignment for the benefit of
creditors, (ii) is the subject of proceedings in
voluntary or involuntary bankruptcy or (iii) has a
receiver or trustee appointed for substantially all
of its property; provided that in the case of an
involuntary bankruptcy proceeding such right to
terminate shall only become effective if the other
party consents thereto or such proceeding is not
dismissed within sixty (60) days after the filing
thereof.
10.3.2 Each of the parties hereto acknowledges and agrees,
subject to applicable law to the contrary, that this
Agreement (i) constitutes a license of Intellectual
Property (as such term is defined in the United
States Bankruptcy Code, as amended (the "Code")), and
(ii) is an executory contract, with significant
obligations to be performed by each party hereto.
10.3.3 The parties agree that Licensee may fully exercise
all of its rights and elections under the Code, if
any, including, without limitation, those set forth
in Section 365(n) of the Code.
10.3.4 The parties further agree that, in the event that
Licensee retains its rights as a licensee under the
Code pursuant to such an exercise, Licensee shall be
entitled to complete access to any Intellectual
Property licensed to it hereunder and all embodiments
of such Intellectual Property. Subject to applicable
law to the contrary, such embodiments of the
Intellectual Property shall be delivered to Licensee
not later than (i) the commencement of bankruptcy
proceedings against Avensys Lab, unless Avensys Lab
elects to perform its obligations under this
Agreement, or (ii) if not delivered under (i) above,
upon the rejection of this Agreement by or on behalf
of Avensys Lab.
10.4 Effect of Termination
10.4.1 In case of expiration or termination of this
Agreement under this Section 10:
10.4.1.1 all licenses granted hereunder shall
terminate and all rights of Licensee to Sell
the Products will cease as of the date of
such expiration or termination; and
10.4.1.2 each party will destroy or return all copies
of the other party's Confidential
Information in its possession and provide
such other party with a certificate signed
by a duly authorized officer attesting to
such destruction or return.
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10.4.2 The expiration or termination shall not:
10.4.2.1 affect any party's financial obligation to
make any required payments hereunder; and
10.4.2.2 release either party hereto from any
liability which at the time of such
termination has already accrued to the other
party.
11. CONFIDENTIALITY
11.1 Confidential Information
For the purposes of this Agreement, "Confidential Information"
means the provisions of this Agreement and information about
the disclosing party's business or activities that is
proprietary and confidential, which shall include all
information regarding the Intellectual Property, the Products,
all business, financial, technical and other information of a
party marked or designated by such party as "confidential" or
"proprietary" or information which, by the nature of the
circumstances surrounding the disclosure, should in good faith
to be treated as confidential.
11.2 Exceptions
Notwithstanding the foregoing, Confidential Information will
not include information which: (i) is now, or hereafter
becomes, through no act or failure to act on the part of the
receiving party, generally known or available to the public;
(ii) is acquired by the receiving party before receiving such
information from the disclosing party and without restriction
as to use or disclosure; (iii) is hereafter rightfully
furnished to the receiving party by a third party, without
restriction as to use or disclosure; (iv) is information which
the receiving party can document was independently developed
by the receiving party without use of or reference to the
disclosing party's Confidential Information; (v) is required
to be disclosed by applicable law, provided that the receiving
party uses reasonable efforts to give the disclosing party
reasonable notice of such required disclosure and an
opportunity to obtain a protective order or other appropriate
remedy; or (vi) is disclosed with the prior written consent of
the disclosing party.
11.3 Nondisclosure Obligations
During the term of this Agreement and for a period of five (5)
years thereafter, each party agrees (i) that it will not
disclose to any third party or use any Confidential
Information disclosed to it by the other except as expressly
permitted in this Agreement and (ii) that it will take all
reasonable measures to maintain the confidentiality of all
Confidential Information of the other party in its possession
or control, which will in no event be less than the measures
it uses to maintain the confidentiality of its own information
of similar importance. Either party may disclose the terms of
this Agreement to potential investors, lenders or acquisition
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partners and their representatives, provided that disclosure
is made pursuant to customary non-disclosure agreements
limiting the recipient's use of disclosed information to the
evaluation of the potential investment, loan or acquisition.
11.4 Return
Upon the disclosing party's request, the receiving party will
promptly return to the disclosing party all tangible items
containing or consisting of the disclosing party's
Confidential Information and all copies thereof, including,
but not limited to software, training materials, etc.
11.5 Injunctive Relief
Each party acknowledges that all of the disclosing party's
Confidential Information is owned solely by the disclosing
party (or its licensors) and that the unauthorized disclosure
or use of such Confidential Information would cause
irreparable harm and significant injury to the disclosing
party, the degree of which may be difficult to ascertain.
Accordingly, each party agrees that the disclosing party will
have the right to obtain an immediate injunction enjoining any
breach of this Section, as well as the right to pursue any and
all other rights and remedies available at law or in equity in
the event of such a breach.
12. REPRESENTATIONS AND WARRANTIES
12.1 Mutual representations and warranties
Each of the parties represents and warrants to the other party
that:
12.1.1 it is duly incorporated, organized and validly
existing and in good standing under the Laws of its
jurisdiction of incorporation;
12.1.2 it has good and sufficient power, authority and right
to enter into and deliver this Agreement;
12.1.3 this Agreement has been duly executed and delivered
by it, and is a valid and binding obligation of such
party enforceable in accordance with its terms;
12.1.4 it has not entered into any contract, arrangement or
understanding with any other person or entity, and
will not do so during the term of this Agreement,
that does or may impair or diminish its ability to
fully perform, be responsible for and meet all the
obligations and liabilities to it set forth in this
Agreement;
12.1.5 it has no pending or anticipated litigation, action
or proceeding before any court, tribunal or person
relating to any matter or thing that may affect its
ability to fully perform, be responsible for and meet
all the obligations and liabilities set forth in this
Agreement; and
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12.1.6 it has, and will fully maintain at its own cost, all
the necessary and appropriate authorizations and
permissions to fully perform, be responsible for and
meet all the obligations and liabilities relating to
it set forth in this Agreement.
12.2 Avensys Lab's Representations and Warranties
Avensys Lab represents and warrants to Licensee that:
12.2.1 it has the right to grant the rights and licenses
granted to Licensee herein without breach of
obligation to any third party;
12.2.2 to the best of its knowledge, Avensys Lab's
Intellectual Property does not infringe on any
existing intellectual property right of any third
party;
12.2.3 it has not received any notice from any person or
entity that Avensys Lab's Intellectual Property
infringes upon an intellectual property right of any
third party; and
12.2.4 it will use reliable equipment and agrees to acquire
and/or maintain the facilities, equipment and staff
as appropriate to effectively carry out its research
and development.
12.3 Licensee's Representations and Warranties
Licensee represents and warrants to Avensys Lab that:
12.3.1 it has and/or will acquire and maintain all license
and permits required in order to manufacture, use or
Sell the Products.
13. LIMITATION OF LIABILITY
IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER PARTY
FOR ANY LOST PROFITS OR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR
SERVICES, OR FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES HOWEVER
CAUSED AND UNDER ANY THEORY OF LIABILITY (INCLUDING CONTRACT, TORT,
CIVIL LIABILITY, DELICT, QUASI-DELICT, NEGLIGENCE OR OTHERWISE) AND
WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGE. EXCEPT FOR (I) AMOUNTS PAYABLE BY LICENSEE UNDER THIS
AGREEMENT, (II) LICENSEE'S OR AVENSYS LAB'S BREACH OF ITS OBLIGATIONS
UNDER SECTION 11 OR OF THEIR RESPECTIVE REPRESENTATIONS UNDER SECTION
12 OF THIS AGREEMENT, AND (III) LIABILITY ARISING UNDER SECTION 14, IN
NO EVENT WILL EITHER PARTY'S LIABILITY ARISING OUT OF THIS AGREEMENT OR
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THE USE, MANUFACTURE OR SALE OF THE PRODUCTS EXCEED THE GREATER OF
$50,000 OR THE AGGREGATE OF AMOUNTS ACTUALLY PAID BY LICENSEE UNDER
THIS AGREEMENT, HOWEVER SUCH LIABILITY IS CAUSED AND UNDER ANY THEORY
OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGE. THE PARTIES AGREE THAT THIS SECTION
REPRESENTS A REASONABLE ALLOCATION OF RISK.
14. INDEMNIFICATION
14.1 Indemnification by Licensee
Subject to Section 14.3, Licensee hereby agrees to indemnify
and hold Avensys Lab and its parent, affiliates and their
respective successors, officers, directors, employees and
agents harmless from and against any and all actions, claims,
losses, damages, liabilities, awards, costs and expenses
(including reasonable lawyer's fees) arising out of any claim
or suit brought against Licensee by a third party resulting
from Licensee's Sale of the Products in a manner which is
inconsistent with the terms of this Agreement.
14.2 Indemnification by Avensys Lab
14.2.1 Subject to Section 14.3, Avensys Lab shall indemnify
and hold Licensee and its and its parent, affiliates
and their respective successors, officers, directors,
employees and agents harmless from and against any
and all actions, claims, losses, damages,
liabilities, awards, costs, and expenses (including
reasonable lawyer's fees) resulting from or arising
out of Avensys Lab's Intellectual Property, or which
is based on a claim of infringement against Avensys
Lab's Intellectual Property underlying the Products
and Avensys Lab shall defend and settle, at its
expense, all suits or proceedings arising there from.
14.2.2 In the event an injunction is sought or obtained
against use of Avensys Lab's Intellectual Property
underlying the Products or in Licensee's opinion is
likely to be sought or obtained, Avensys Lab shall,
at its option and expense, either (i) procure for
Licensee the right to continue to Sell the Products,
or (ii) replace or modify Avensys Lab's Intellectual
Property to make its use non-infringing while being
capable of performing the same function without
degradation of performance.
14.3 Notification and Cooperation
Each party's obligations to the other under Section 14.1 or
14.2 above is conditional upon (i) the indemnified party
notifying the other immediately in writing, upon knowledge of
any claim, for which it may be entitled to indemnification
under this Agreement; (ii) the indemnified party permitting
the other to have the sole right to control the defense and
settlement of any such claim; (iii) the indemnified party
making no admissions, oral or in writing; (iv) the indemnified
19
party providing reasonable assistance to the other, at the
other's expense, in the defense of such claim; and (v) the
indemnified party not entering into any settlement agreement
or otherwise settling any such claim without the other's
express prior consent or request. The indemnified party may
participate in the defense or settlement of a claim with
counsel of its own choice and at its own expense.
15. PROJECT MANAGEMENT
15.1 Project Managers
The primary technical/commercial contact for each party (each
a "Project Manager") will be:
For Avensys Lab:
Xxxxxxxx Xxxxxx
V.P. R&D
For Licensee:
Xxxx Xx Xxxx
Senior Director, operations
15.2 Meetings
The Project Managers will meet at least every quarter to
discuss the on-going research and development conducted by
Avensys Lab in accordance with Sections 4 and 5, the Sale of
the Products and related Revenue, any technical or commercial
issues that may have arisen since the previous meeting and,
more generally, any other issue related to the performance of
this Agreement.
16. GENERAL
16.1 Public Announcement
Any public release to this Agreement shall be mutually agreed
upon by the parties.
16.2 Relationship of the Parties
Each of the Parties hereto is an independent contractor.
Neither this Agreement, nor any terms and conditions contained
herein, shall be construed as (i) creating a partnership,
joint venture, franchise or agency relationship between the
parties or (ii) giving either party the authority to direct or
control the daily activities of the other party.
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16.3 Further Assurances
Each of the parties will from time to time execute and deliver
all such further documents and instruments and do all acts and
things as another party may reasonably require to effectively
carry out or better evidence or perfect the full intent and
meaning of this Agreement.
16.4 Benefit of the Agreement
This Agreement will enure to the benefit of and be binding
upon the respective heirs, executors, administrators, other
legal representatives, successors and permitted assigns of the
parties.
16.5 Entire Agreement
This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and cancels
and supersedes any prior understandings and agreements between
the parties with respect thereto, including the Entente Cadre
pour un ensemble de projets R&D entered into between the
parties on June 1st, 2005. There are no representations,
warranties, terms, conditions, undertakings or collateral
agreements, express, implied or statutory, between the parties
other than as expressly set forth in this Agreement.
16.6 Amendments and Waivers
No amendment to this Agreement will be valid or binding unless
set forth in writing and duly executed by all the parties. No
waiver of any breach of any provision of this Agreement will
be effective or binding unless made in writing and signed by
the party purporting to give the same and, unless otherwise
provided in the written waiver, will be limited to the
specific breach waived.
16.7 Assignment
16.7.1 Either party may assign this Agreement (i) to any of
its Affiliates which is capable of exercising its
rights and performing its obligations hereunder or
(ii) to any person which acquires control of it by
purchase of shares or with which it may merge or
consolidate or to which it may transfer all or
substantially all its assets or the portion of its
assets that relate to this Agreement.
16.7.2 Except as provided in Section 16.7.1, neither party
may assign the Agreement without the prior written
consent of the other party.
16.8 Severability
If any provision of this Agreement is determined to be invalid
or unenforceable in whole or in part, such invalidity or
unenforceability will attach only to such provision or part
thereof and the remaining part of such provision and all other
provisions hereof will continue in full force and effect.
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16.9 Notices
Any demand, notice or other communication to be given in
connection with this Agreement shall be given in writing and
shall be given by personal delivery, by registered mail or by
electronic means of communication addressed to the recipient
as follows:
To Avensys Lab:
Avensys Laboratories Inc.
000, xxxxxxxxx Xxxxxxx
Xxxxx-Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Mr. Xxxxxx Xxxxx, President
Telecopier: (000) 000-0000
To Licensee:
Avensys Inc.
000, Xxxxxxx
Xxxxxx-Xxxxxx, Xxxxxx
X0X 0X0
Attention: Xx. Xxxxxx d'Amours, President and Chief Executive
Officer
Telecopier: (000) 000-0000
or to such other address, individual or electronic
communication number as may be designated by notice given by a
party to the others. Any demand, notice or other communication
given by personal delivery shall be conclusively presumed to
have been given on the day of actual delivery thereof and, if
given by registered or certified mail, on the third Business
Day following the deposit thereof in the mail and, if given by
electronic communication, on the day of successful transmittal
thereof if given during the normal business hours of the
recipient and on the Business Day during which such normal
business hours next occur if not given during such hours on
any day. If the party giving any demand, notice or other
communication knows or ought reasonably to have known of any
difficulties with the postal system which might affect the
delivery of mail, any such demand, notice or other
communication shall not be mailed but shall be given by
personal delivery or by electronic communication.
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16.10 Governing Law
This Agreement shall be governed by and construed in
accordance with the laws of the Province of Quebec and the
laws of Canada applicable therein.
16.11 Counterparts
This Agreement may be executed in any number of counterparts,
each of which will be deemed to be an original and all of
which taken together will be deemed to constitute one and the
same instrument.
16.12 Facsimiles
Delivery of an executed signature page to this Agreement by
any party by electronic transmission will be as effective as
delivery of a manually executed copy of the Agreement by such
party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
referred to above.
AVENSYS LABORATORIES INC.
Per: /s/ Xxxxxx Xxxxx
----------------
Xxxxxx Xxxxx,
President
AVENSYS INC.
Per: /s/ Xxxxxx d'Amours
-------------------
Xxxxxx d'Amours,
President and Chief Executive
Officer
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