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THIS AGREEMENT made as of this 17th day of November,
1995.
B E T W E E N :
XXXXXXXX XXXXXXX, IN TRUST ("NP")
- and -
LA-NUR INC., a company incorporated under the laws of the
Province of Ontario ("LA-NUR")
WHEREAS LA-NUR has developed and owns various methods of
technical know-how relating to the manufacture and use of a facial
muscle stimulator (the "Product");
AND WHEREAS LA-NUR is, or will be, the registered owner of the
trademark "NOVATONE", registration number 644502 (the "Xxxx");
AND WHEREAS NP is desirous of obtaining from LA-NUR a licence
to use the Methods and Technical Know-how (as hereinafter defined)
and right to manufacture the Product, subject to the approvals set
forth in this Agreement, and the right to distribute the Product in
the Territory (as hereinafter defined) whether under the Xxxx or
not;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the respective covenants contained herein, the sum of One Dollar
($1.00) paid by each party hereto to the other party hereto and
other good and valuable consideration (the receipt and sufficiency
of which is hereby acknowledged by each of the parties hereto), it
is agreed as follows:
1. Definitions. For the purposes of this Agreement, the
following definitions shall apply:
(a) "Xxxx" means the registered trademark "NOVATONE",
registration number 644502, now owned by Xxxxx Xxxxxxx
and Xxxxx Xxxxxxx, a partnership;
(b) "Methods and Technical Know-how" means all information,
knowledge and experience of a technical and commercial
nature, including trade secrets, specifications, methods,
applications, criteria, qualities, requirements and all
other information in connection with the Product and any
other information and data relating to techniques for,
methods of or practices in the manufacture, use and sale
of the Product;
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(c) "Product" means the facial muscle stimulator manufactured
under Methods and Technical Know-how possessed by LA-NUR;
and
(d) "Territory" means the world.
2. Methods and Technical Know-How. Subject to the terms and
conditions set out in this Agreement, LA-NUR covenants and
agrees to provide NP with the Methods and Technical Know-how
necessary to enable NP to have the Product manufactured. With
the exception of Samsung Electronics Co., Ltd. ("Samsung"), NP
shall not permit the manufacture of the Product by any other
manufacturer, without the express written consent of LA-NUR,
such consent not to be unreasonably withheld.
3. Grant of Licence.
(a) In accordance with the terms and conditions of this
Agreement, and effective from the date hereof and during
the term stipulated herein, LA-NUR hereby grants to NP:
(i) the exclusive right and licence to use the Methods
and Technical Know-how to manufacture, package,
market, promote, distribute, offer for sale and
sell the Product in the Territory; and
(ii) subject to subsection 4(a) below, the exclusive
right and licence to use the Xxxx in relation to
the Product manufactured, packaged, marketed,
promoted, distributed, offered for sale or sold by
NP in the Territory and, except in connection with
Product manufactured by Samsung, conforming to the
standards of quality of the Product prototype as
approved by LA-NUR.
(b) The authority to use the Xxxx shall continue until this
Agreement shall be terminated and shall extend only to
the manufacturing, packaging, marketing, promoting,
distributing, offering for sale and selling of the
Product.
(c) NP acknowledges and agrees that all rights, title and
interest in and to the Xxxx, including all intellectual
property rights therein, are, or will be, vested in and
shall remain vested in LA-NUR. Nothing in this Agreement
shall be construed as transferring ownership of any
rights of LA-NUR in the Xxxx.
(d) For greater certainty, nothing in this Agreement shall be
construed so as to prevent NP from manufacturing,
packaging, marketing, promoting, distributing, offering
for sale and selling the Product in the Territory under
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a tradename or trademark other than the Xxxx.
4. Covenants in Respect of the Xxxx.
(a) LA-NUR agrees to forthwith obtain from Xxxxx Xxxxxxx and
Xxxxx Xxxxxxx, a partnership, all of such partnership's
right, title and interest in and to the Xxxx in order so
that LA-NUR can comply with subsection 3(a)(ii) above.
Upon the completion of such transfer, LA-NUR agrees to
forthwith provide copies of documentation evidencing same
to NP.
(b) LA-NUR agrees to maintain the good standing of the Xxxx
at all times during the term of this Agreement and any
renewal term thereof.
(c) NP acknowledges that LA-NUR is not, as of the date
hereof, the registered owner of the Xxxx.
5. Covenant in Respect of Minimum Purchase. NP agrees to place
a purchase order with the manufacturer of the Product for no
less than 1,500 units of the Product within ninety (90) days
from the date hereof.
6. Term.
(a) The term of this Agreement shall for a period of three
(3) years from the date hereof (the "Initial Term").
(b) NP shall have the right to renew this Agreement for a
further period of three (3) years commencing from the
expiry of the Initial Term (the "Second Term"). This
renewal to be effective automatically upon the expiry of
the Initial Term, unless NP provides 30 days' prior
written notice to LA-NUR of its intention not to seek
automatic renewal.
7. Termination by LA-NUR.
(a) LA-NUR shall have the right to terminate this Agreement
upon the happening of any of the following events:
i. if NP fails to pay any amount due and payable under
this Agreement, including the minimum annual
payments set out in subsection 10(b) below, and
such default shall continue for a period of 30 days
after written notice thereof has been given to NP;
or
ii. if NP breaches any material terms or conditions of
this Agreement and such breach continues for a
period of 30 days after written notice thereof has
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been given to NP; or
iii. if NP ceases to carry on business, takes any action
to liquidate its assets, makes a general assignment
for the benefit of its creditors or institutes any
proceedings under any statute relating to
insolvency or bankruptcy.
(b) If this Agreement is terminated by LA-NUR as aforesaid,
NP agrees to notify such customers of the Product of the
termination as LA-NUR requests in writing.
8. Termination by NP. NP shall have the right to terminate this
Agreement and his obligations hereunder (including the royalty
payments set out in Section 10 below) upon 30 days' written
notice to LA-NUR at any time on or after January 1, 1997. In
the event that NP terminates this Agreement pursuant to this
Section 8, NP shall be obligated to comply with the terms of
Section 10 with respect to any royalties owing at the time of
such termination except for the minimum annual payment set out
in subsection 10(b) thereof for the calendar year when such
termination occurs.
9. Effect of Termination. Notwithstanding anything herein
contained, upon the expiration, or termination of this
Agreement for any reason whatsoever, NP shall be at liberty to
sell its merchantable inventory during the six (6) months next
following the date of expiration or termination of this
Agreement under the Xxxx, subject to the payment by NP of the
royalty pursuant to subsection 10(a).
10. Royalties.
(a) For the Initial Term, NP shall pay to LA-NUR a royalty in
the amount of $4.00 for each unit of the Product sold by
or on behalf of NP in the Territory and such royalty
shall become due and payable fourteen (14) days after
receipt by NP of funds derived from sales of such
Product.
(b) For the calendar years 1996, 1997 and 1998 only, NP shall
pay to LA-NUR the greater of (i) the royalty amount set
out in subsection 10(a) above or (ii) the minimum annual
payment set out below on or before December 31 of each
respective year:
Calendar Year Minimum Payment
1996 $100,000
1997 $200,000
1998 $200,000
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(c) For the Second Term, if applicable, the parties agree to
renegotiate in good faith the royalty amount set out in
subsection 10(a) above but in no event shall the royalty
be greater than $4.00 for each unit of the Product sold.
If the parties cannot mutually agree upon a royalty
amount at that time, the royalty shall be deemed to be
$4.00 for each unit of Product sold.
(d) All payments of royalties by NP to LA-NUR shall be
accompanied by a statement of NP showing details of funds
derived from sales of the Product during the period to
which the royalty payments apply.
11. Participation in Rebates, Etc. In the event that any volume
discounts, rebate fees or discount bonuses (whether by way of
cash, kind or credit) are received by NP from any manufacturer
or supplier designated by NP, whether or not on account of
purchases made (i) by NP for its own account or for the
account of LA-NUR or (ii) by NP directly for its own account,
LA-NUR shall be entitled to receive from NP one-half of such
volume discount, rebate fee or discount bonus.
12. Access to Certain Documents and Audits.
(a) LA-NUR shall have the right, upon two weeks prior written
notice to NP, to review sales records and related
documents of NP to verify the due and proper payment of
the royalty referred to in Section 10 hereof.
(b) During the term of this Agreement and for a period of one
(1) year thereafter, NP shall keep sufficiently detailed
records of the Product sold by NP to permit verification
of the reports and payments made or to be made to LA-NUR
pursuant to subsection 10(d) hereof.
(c) If LA-NUR elects to have an auditor conduct an audit on
the sales records and related documents of NP in respect
of sales of the Product
i. and a deficiency of less than or equal to five per
cent (5%) is not found from the statements
furnished pursuant to subsection 10(d) hereof, the
cost of such audit shall be borne by LA-NUR;
ii. and a deficiency of greater than five per cent (5%)
is found from the statements furnished pursuant to
subsection 10(d) hereof, the cost of such audit
shall be borne by NP.
13. Consulting. Other than providing Methods and Technical Know-how as
contemplated hereunder, LA-NUR agrees to cause Xxxxx
Xxxxxxx to provide consulting services in connection with the
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Product to NP for a fee of $50.00 per hour plus all expenses related
thereto upon reasonable request by NP at any time and from time to time.
This fee is to be paid by NP within fourteen (14) days of receipt of
an invoice from LA-NUR or Xxxxx Xxxxxxx for such services rendered to NP.
14. Representations and Warranties of LA-NUR. LA-NUR represents,
warrants and covenants to NP, and acknowledges that NP is
relying on such representations, warranties and covenants, the
following:
(a) LA-NUR is a corporation duly incorporated and validly
subsisting in all respects under the laws of the Province
of Ontario. There are no proceedings in progress,
pending or, to the best of the knowledge of LA-NUR,
threatened, which could result in the revocation,
cancellation or suspension of any licenses, registrations
or qualifications of LA-NUR;
(b) LA-NUR has good right, full corporate power and authority
to enter into this Agreement and to grant the rights to
NP in the manner contemplated herein and to perform all
of its obligations under this Agreement. LA-NUR and its
board of directors have taken all necessary or desirable
actions, steps and corporate and other proceedings to
approve or authorize, validly and effectively, the
entering into of, and the execution, delivery and
performance of, this Agreement and the granting of the
rights to NP hereunder;
(c) this Agreement is a legal, valid and binding obligation
of LA-NUR enforceable against it in accordance with its
terms subject to (i) bankruptcy, insolvency, moratorium,
reorganization and other laws relating to or affecting
the enforcement of creditors' rights generally and (ii)
the fact that equitable remedies, including the remedies
of specific performance and injunction, may only be
granted in the discretion of a court;
(d) the execution, delivery and performance of this Agreement
by LA-NUR, and the completion of the transactions
contemplated hereby, will not constitute or result in a
violation, breach or default under any term or provision
of any of the articles, by-laws or other constating
documents of LA-NUR or any material contract to which LA-NUR is a
party;
(e) no person has any agreement, option, understanding or
commitment, or any right or privilege (whether by law,
preemptive or contractual) capable of becoming an
agreement, option or commitment, for the purchase or
other acquisition from LA-NUR of any of the rights
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granted to NP hereunder or any rights or interest therein;
(f) LA-NUR is not under any obligation, contractual or
otherwise, to request or obtain the consent of any
person, and no permits, licenses, certifications,
authorizations or approvals of, or notifications to, any
federal, provincial, municipal or local government or
governmental agency, board, commission or authority are
required to be obtained by LA-NUR in connection with the execution,
delivery or performance by LA-NUR
of this Agreement or the completion of any of the transactions
contemplated hereby;
(g) there are no actions, suits or proceedings, judicial or
administrative (whether or not purportedly on behalf of
LA-NUR) pending or, to the best of the knowledge of LA-NUR,
threatened, by or against or affecting LA-NUR which
relate to the rights given to NP hereunder, at law or in
equity, or before or by any court or any federal,
provincial, municipal or other governmental department,
commission, board, bureau, agency or instrumentality,
domestic or foreign;
(h) Xxxxx Xxxxxxx and Xxxxx Xxxxxxx, a partnership, has good
and valid title to the Xxxx, free and clear of any and
all encumbrances; has the exclusive right to use the Xxxx
and has not granted any licence or other rights to any
other person in respect of the Xxxx (other than to LA-NUR); and is
entitled to assign all of its rights and
interest in and to the Xxxx; and
(i) To the best of the knowledge of LA-NUR, in manufacturing,
packaging, marketing, promoting, distributing, offering
for sale and/or selling the Product, NP will not infringe
upon any Canadian patent, trademark or property right of
any third person, existing as at the date hereof.
15. Representations and Warranties of NP. NP represents, warrants
and covenants to LA-NUR, and acknowledges that LA-NUR is
relying on such representations, warranties and covenants, the
following:
(a) this Agreement is a legal, valid and binding obligation
of NP, enforceable against it in accordance with its
terms subject to (i) bankruptcy, insolvency, moratorium
and other laws relating to or affecting the enforcement
of creditors' rights generally and (ii) the fact that
equitable remedies, including the remedies of specific
performance and injunction, may only be granted in the
discretion of a court;
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(b) NP shall provide to its customers and honour such
warranties in connection with the production and sale of
the Product as are in place from time to time;
(c) NP shall, at its sole cost and expense, take out and keep
in force and effect, throughout the term of this
Agreement and any renewal term thereof, product liability
insurance on the Product in commercially reasonable
amounts, fully protecting LA-NUR against loss or damage
occurring in connection with the manufacturing and
marketing of the Product;
(d) in performing its obligations hereunder, NP shall comply
with the applicable laws of the territory in which it
conducts its activities in connection with the Product
and shall indemnify and save harmless LA-NUR from any
failure to comply;
(e) NP agrees to indemnify and save harmless LA-NUR from and
against all actions, causes of action, claims, suits and
demand of whatsoever kind, in law or in equity, claimed,
made or brought against LA-NUR arising out of or in any
way connected with, the non-grant to Samsung of a right
to manufacture the Product;
(f) NP shall use its reasonable best efforts in distributing
and selling the Product; and
(g) NP agrees not to produce or distribute any other type of
electronic muscle stimulator product designed for facial
application during the term of this Agreement and any
renewal term thereof.
16. Limitation of Liability.
(a) Notwithstanding any other provision of this Agreement,
LA-NUR's entire liability to NP for damages from any
cause, other than gross negligence or fraud, shall not
exceed the amounts actually accrued in favour of LA-NUR
from NP pursuant to this Agreement at the time that any
such action was commenced.
(b) Other than gross negligence or fraud, in no event shall
LA-NUR be liable for special, indirect, incidental or
consequential damages, including, without limitation,
damages or loss to equipment, loss of profits or revenue,
loss of goodwill, increased expenses of operation, cost
of capital, or the claims of third parties, including,
without limitation, product liability claims.
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17. Assignment.
(a) LA-NUR shall not assign any of its rights or obligations
hereunder without the prior written consent of NP, such
consent not to be unreasonably withheld.
(b) NP may, at any time and from time to time, assign all its
rights and obligations under this Agreement to Xxx
Xxxxxxxxxx, in Trust, who may, in turn, assign such
rights and obligations to Windsor Acquisition Corp., a
corporation incorporated under the laws of the Province
of Ontario, and LA-NUR expressly accepts such assignment
upon a written notice to that effect, provided that such
entity or entities agree to become bound by the terms of
this Agreement.
18. Confidentiality.
(a) The parties agree and acknowledge that all information
relating to the Product is confidential information of
LA-NUR and constitutes trade secrets of LA-NUR and NP
shall keep confidential such information throughout the
term of this Agreement and for a period of five (5) years
thereafter.
(b) The parties agree and acknowledge that all other
information provided by each concerning its own business
shall be considered confidential information and each
party shall keep confidential such information throughout
the term of this Agreement and for a period of five (5)
years thereafter.
19. Notice. Any notice or other communications (a "Notice")
required or permitted to be given hereunder shall be in
writing and shall be delivered in person, transmitted by
facsimile or sent by registered mail, charges prepaid,
addressed as follows:
(a) if to NP:
0000 Xxxxxxx Xxxxx
Xxxx 00
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xx. Xxxxxxxx Xxxxxxx
Facsimile No: (000) 000-0000
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(b) if to LA-NUR:
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxx. Xxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
or at any such other address or addresses as may be given by
any of them to the other in writing from time to time. Such
Notice, if mailed, shall be deemed to have been given on the
second business day (except Saturdays or Sundays) following
such mailing, or if delivered personally or transmitted by
facsimile, shall be deemed to have been given on the day of
delivery or transmission, as the case may be, if a business
day, or if not a business day, on the business day next
following the day of delivery or transmission, as the case may
be; provided that if such Notice shall have been mailed and if
regular mail service shall be interrupted by strike or other
irregularity before the deemed receipt of such Notice as
aforesaid, then such Notice shall not be effective unless
delivered or transmitted by facsimile.
20. Status of NP. The parties hereto acknowledge that NP is an
independent contractor and nothing in this Agreement is
intended to constitute LA-NUR as an agent, partner or joint
venturer of NP. Subject to the specific controls which are
necessary for LA-NUR to have over the operation of the
business of NP in performance of this Agreement as provided
herein, NP shall conduct its business in connection with the
Product in its own discretion.
21. General Contract Provisions.
(a) The division of this Agreement into articles and sections
is for convenience of reference only and shall not affect
the interpretation or construction of this Agreement.
(b) Unless otherwise indicated herein, all dollar amounts
referred to in this Agreement are in lawful money of the
United States of America.
(c) Time shall be of the essence of this Agreement.
(d) No modification or amendment to this Agreement may be
made unless agreed to by the parties hereto in writing.
(e) This Agreement constitutes the entire Agreement between
the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings,
negotiations, commitments, conditions, representations,
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warranties and undertakings.
(f) This Agreement may be executed in several counterparts,
each of which so executed shall be deemed to be an
original, and such counterparts together shall constitute
but one and the same instrument.
(g) This Agreement shall be binding upon and enure to the
benefit of the parties hereto and their respective
successors and permitted assigns.
(h) This Agreement shall be construed, interpreted and
enforced in accordance with, and the respective rights
and obligations of the parties shall be governed by, the
laws of the Province of Ontario.
(i) The parties hereto agree that this Agreement may be
transmitted by facsimile or such similar device and that
the reproduction of signatures by facsimile or such
similar device will be treated as binding as if originals
and each party hereto undertakes to provide each and
every other party hereto with a copy of this Agreement
bearing original signatures forthwith upon demand.
(j) The parties agree that the U.N. Convention on Contracts
for the International Sales of Goods (Vienna, 1980) shall
not apply to this Agreement nor to any dispute or
transaction arising out of this Agreement.
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IN WITNESS WHEREOF this Agreement has been executed by
the parties as of the date first above written.
Witness:
Xxxxxxxx Xxxxxxx, In Trust
LA-NUR INC.
Per: /S/ Xxxxx Xxxxxxx, President
