Made in the City of Montreal,
May 4, 2000
BETWEEN :
GSI TECHNOLOGIES USA INC., a body politic and corporate duly
incorporated according to the laws of Delaware, having its head
office at 721, S.E. 17th Street, suite 200, Fort Lauderdale,
Florida, 33316, represented by Mr. J. Michel de Montigny, its
president, duly authorized;
Hereinafter referred to as "the licensor";
AND :
3529363 CANADA INC., (GSI Canada), a Canadian company
incorporated according to the laws of Canada, having its head
office at 2001 McGill College, suite 1310, Montreal, Quebec, H3A
1G1, represented by Mr Yves Lebel, its executive vice-president &
Chief Financial Officer, duly authorized;
Hereinafter referred to as "the licensee";
PREAMBLE
WHEREAS the licensor holds a master license giving it all commercial rights
relating to the technology, being the GSI TV.com network concept, integrating
animated screens and interactive kiosks, remote controlled via a unique
broadcasting software, which the licensor holds by virtue of a master license;
WHEREAS the licensor plans to market the concept through the sale of licenses,
which will give to the licensees the commercialization rights for the technology
on a certain territory, and the right and obligation to be supplied by the
licensor or by suppliers approved by the licensor;
WHEREAS the licensee wishes to obtain the exclusive right to commercialize the
GSI TV.com technology in the territory of Canada and that the licensor agrees to
grant these rights to the licensee under certain terms, conditions, and
stipulations, described hereunder;
WHEREAS the licensee agrees to fulfill and to meet the said conditions for the
benefit of the licensor in order to maintain the said license; and
WHEREAS it is in the interest of the parties to describe the nature of their
agreement in a private written agreement;
IN CONSIDERATION OF THE PRECEDING, THE PARTIES AGREE TO THE FOLLOWING:
INTERPRETATION
Terminology
Where used in this agreement or in any amendments to this document, the
following terms shall have the following meanings:
i) Agreement
"Agreement" means the current agreement including its introduction and
schedules and all future amendments to the agreement;
ii) Technology license or Master license
"Technology license" means all rights relative to the use, sale and
sublicense of the Technology;
iii) Technology
"Technology" means Intellectual Property, Industrial Secret, Know-how,
Broadcasting System, Derivative, Maintenance and Enhancement in their
individual and collective form;
i) Intellectual Property
"Intellectual property" means acronyms, designs, brand marks, symbols,
pictograms, slogans, signs, posters, plates, forms, stationery and
other identification items, methods and techniques which are used by
the licensor with respect to the marketing of the Technology,
copyrights, patents, industrials designs and trademark as well as all
such items which may be acquired in the future by the licensor;
ii) Industrial Secret
"Industrial Secret" means any confidential information normally not
revealed by the licensor and/or licensee to their competitors, any
knowledge acquired by the licensee in relation to the present
Agreement without which the Technology will be deprived of some of its
originality, efficiency and/or exclusivity as well as any procedure
not patented;
iii) Know-how
"Know-how" means all technical information, procedures, formulas,
industrial secrets, technical uses, diagrams, designs, specifications,
lists of materials, production guides and information developed or
used by the licensor and/or the Licensee in relation to the
Technology;
iv) Broadcasting System
"Broadcasting System" means all the systems providing interactive and
multimedia global networking capabilities and based on the following
components:
Software
All programs and other operating information used by the Broadcasting
system such as:
- - Player Software
- - Receiving Software
- - GSI Multimedia Production Center
- - Primary Broadcasting Server;
Hardware
Mechanical and electronic components of the products generally
described as kiosks and marketed by the licensor and known as
NOVACOLUMN and CITYCOLUMN, including the following, but not limited
to:
- - Plasma screen
- - Projectors
- - Metallic Column
- - Adjustable (x,y,z) projector stand
- - Backup Server
- - Broadcasting Unit
- - Computerized environment management unit (C.E.M.U.);
- - Proprietary "fail-safe device";
v) Maintenance Services
"Maintenance Services" means any modifications or revisions to the
System which correct errors, support new releases of the operating
systems which the System is designed to operate, support new
input/output devices, or provide updates and corrections. It also
means the 24 hour maintenance service delivery to the licensee and the
Broadcasting software networking;
vi) Enhancement
"Enhancement" means changes or additions, including all new releases
and all updates made available by the licensor that add significant
new functions or substantially improve the performance of the
Technology;
vii) Derivatives
"Derivatives" means any work that is based upon one or more
pre-existing works, such as revisions, modifications, translations,
abridgements, expansions or any other form in which pre-existing works
may be recast, transformed, or adapted and that, if prepared without
authorization of the owner of the pre-existing work, would constitute
a copyright infringement or infringement to the proprietary rights of
the owner therein. "Derivatives" can also mean any works of reverse
engineering, de-compilation and disassembly;
viii) Fees
"Fees" means the monies received by the licensor from the total
revenues of the Licensee, accounted for during a calendar quarter;
ix) Territory
"Territory" means all countries, territories and areas of the world;
x) Legal Representatives
"Legal Representatives" means for each party, depending upon its
condition and structure, its executors, heirs, assignees or agents;
xi) Sublicense
"Sublicense" means the complete license granted to the licensee for a
certain sub-section of the designated territory.
xii) Transfers of technology
"Transfers of technology" means the transfer of skill and know-how
effected by way of training sessions offered by the licensor to the
employees of the licensee.
2.0 JuriSdiction
i) Subjection
This Agreement, its interpretation, performance, application, validity
and effects shall be subject to the applicable laws in effect in the
State of Florida, which partly or totally govern the scope of
provisions herein contained;
ii) Presumption
Any provision contained in the present Licensing Agreement which is
not in conformity with the applicable laws shall be deemed null and
void, insofar as such measure is prohibited by one of said laws. And
so it shall be for any subordinate stipulation or bound to such
disposition insofar as such measure or applicability depends on said
disposition;
iii) Adaptation
In any case where a provision shall violate an applicable law, it
shall be interpreted, as the case may be, as a means of conforming to
said applicable law, or failing to do so, in the most susceptible
method in order to respect the intention or both parties without
waiving the prescriptions of any applicable law that parties wish to
respect;
iv) Continuation or Avoidance
Where the present License Agreement shall contain an interdiction, all
other provisions of said License Agreement shall remain valid and
binding upon the parties, unless the provision(s) contrary to an
applicable law is (are) deemed essential to the adequate performance
of the Licensing Agreement or to the stability of the respective
provisions of the parties and where no compatible interpretation with
any applicable law(s) may correct the deficiency, in which case the
present License Agreement shall be found null ab initio and the
parties returned to their original and respective position since the
duration of the Agreement, in order to come to an equivalent
adjournment, as the case may be;
v) Priority
The current License Agreement shall constitute the total and integral
understanding reached between the parties and excludes any other
document, contract or previous verbal promise or concomitance that may
have taken place in the framework of the transactions that proceeded
the final performance of the License Agreement; that the parties
declare inadmissible any elements susceptible of modifying or
hindering, in any way, any of the provisions of the current License
Agreement;
3.0 GENERAL
A) Time of the Essence
Time shall be the essence in this Agreement. In the calculation of any
time limit provided for in the present Agreement, the following rules
have effect:
(i) The first day is not taken into account but the last day is;
(ii) Non legal days are accounted for; but if the last day of the time
limit is a non legal day, then the time limit ends on the next legal
day;
(ii) When used in the current Agreement, the term "month" refers to
calendar months;
If the Agreement refers to a precise date which is a non legal day,
then the Agreement should be read with that precise date referring to
the next legal date;
B) Concurrence
All rights stipulated in the present Agreement are concurrent and not
alternate. Any waiver of an agreed right by one or the other party, in
favor of the other, shall not be interpreted as a waiver of any other
right herein accepted, unless the wording of a provision indicates by
exception the necessity of such choice;
C) American Funds
All amounts referred to in the present Agreement shall be considered
to be American Funds (U.S. dollars);
D) Gender and Number
Where the understanding of the wording is required, the masculine
expression shall also include feminine and vice versa; the same shall
apply for a word expressing a number where singular shall also include
plural and vice versa. Any sentence containing a versatility in the
wording, shall be interpreted where the sense demands, in a way to
accommodate the appropriate version of such word, with all the
grammatical changes required in order to confer a logical meaning to
the sentence concerned;
E) Titles
The titles used in the present Agreement have no real interpretative
value - they serve as classification and identification elements of
the constitutive provisions of the Agreement between the parties
recorded in the instrument and, for this reason, they cannot influence
the interpretation of a provision.
4.0 SUBJECT
LICENSE
Conditional upon full respect by the Licensee of its obligations under
the present agreement, the licensor grants to the licensee an
exclusive right to use and sublicense the Technology IN CANADA'S
TERRITORY, including the Broadcasting license. THE LICENSEE ALSO HAS
THE RIGHT AND THE OBLIGATION TO BUY ALL PRODUCTS EXCLUSIVELY FROM THE
LICENSOR.
This Technology license also includes THE AVAILABILITY OF SUCH
SERVICES AS Network management of the Broadcasting system, the
Maintenance service and all the Enhancements of the Technology;
The parties hereto each acknowledge and agree that the Licensee is the
sole and exclusive Licensee IN CANADA'S TERRITORY of all rights
granted by the licensor under this Agreement;
SUBLICENSE
By way of this Technology license, the licensor grants the Licensee
the right to sublicense the Technology in whole or in part, inside the
territory of Canada, during the term of the Agreement.
All sublicenses granted by the Licensee under this Agreement shall be
subject and subordinate to terms and conditions of this Agreement; the
licensor at its sole discretion can accept or refuse any sale of a
sublicense;
5.0 DESIGNATED TERRITORY
For the duration of this agreement, the licensor accords to the
licensee the exclusive right to commercialize the technology in the
territory of Canada, described below:
The territory of Canada comprises the provinces of Quebec, Ontario,
New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland,
Manitoba, Saskatchewan, Alberta, and British Columbia. The borders of
the provinces may eventually define the territories of the
sublicenses.
6.0 CONSIDERATION
In return for the grant of this license by the licensor, the licensee
agrees to pay to the licensor, for the duration of the present
agreement, the following amounts:
Fixed fee
The current license is granted in favor of the licensee for and in
consideration of a fixed fee of TWO HUNDRED AND FIFTY THOUSAND
($250,000) payable over TEN (10) years.
The licensee must pay the fixed license fee annually, on the
anniversary date of the signing of the current license agreement,
being ten (10) installments of TWENTY-FIVE THOUSAND ($25,000), for a
total of TWO HUNDRED AND FIFTY THOUSAND DOLLARS ($250,000).
Price of the products
The price of the products is to be negotiated but will not exceed 150%
of their total unit cost. The installation costs for electrical and
telecommunications connections will be in addition.
Invoicing
- - 30% with order
- - 60% on delivery
- - 10%, 30 days following delivery
Price of the license to sub-licensees
In terms of the price of the license that may be sold to
sub-licensees, no price schedule is foreseen by the licensor, although
it reserves the right to review each license sold.
Price of products under sub-licenses
The price of products sold under sub-licenses will be the same for the
licensee. However, the sub-licensees must purchase their products
directly from the licensor.
Conditions
The current license is also granted to the licensee in consideration
of the following agreements:
1) Management of the network
During the first three (3) years of the installed network, a network
management and maintenance agreement, an advertising content agreement
and a broadcasting agreement, as well as an agreement covering the
transfer of know-how must be signed between the licensee and the
licensor. The licensee must be in a position to manage the network by
itself at the end of the three (3) year period. This agreement with be
signed with the license for an approximate amount to be negotiated.
$75/month/kiosk.
2) Maintenance services
An agreement will be in effect for the first year, in order to offer
technical support needed by the licensee in order to maintain the
network and the server systems managing the software.
$40/month/kiosk
Payments
The parties acknowledge that any payment is due by the due date
without the need for notice and simply by the arrival of term. Any
default implies a forfeiture. Similarly, the cashing of any check or
receipt of a report with be conditional and will not imply
acquiescence as to the validity of the said check or report.
7.0 REPRESENTATION AND WARRANTIES OF THE LICENSOR
The licensor covenants, represents and warrants as follows and
acknowledges that the Licensee is relying upon such covenants,
representations and warranties to enter into the present Agreement:
A) Status
The licensor has been duly incorporated and organized and is validly
subsisting and in good standing according to the Laws of Delaware;
B) Capacity
The licensor has the legal capacity to enter into the Agreement
contemplated hereby and to fulfill all and any of its obligations
under the present Agreement. The granting of the recent License is not
subject to any restriction;
8.0 REPRESENTATIONS AND WARRANTIES OF LICENSEE
The Licensee covenants, represents and warrants as follows and
acknowledges that the licensor is relying upon such covenants,
representations and warranties to enter into the present Agreement:
A) Status
The Licensee has been duly incorporated and organized and is validly
subsisting and in good standing according to the Laws of Canada;
B) Capacity
The Licensee has the legal capacity to enter into the Agreement
contemplated hereby and to fulfill all and any of its obligations
under the present Agreement. The granting of the resent License is not
subject to any restriction;
9.1.1 DUTIES AND OBLIGATIONS OF THE LICENSOR
Exclusivity
The licensor promises to not grant other licenses, for the attribution
of the same rights, inside the designated territory identified in the
current agreement, this for as long as the current agreement is in
effect.
Peaceable enjoyment
The licensor agrees to provide the licensee with peaceable enjoyment
of the technology inside its designated territory conforming to the
terms of the current agreement. Legislation permitting, the licensee
may register the granting of the license with the competent
authorities.
Assistance
The licensor agree to make available to the licensee all the
assistance needed for the installation of the network of kiosks and
all the training required on the functioning of the technology,
subject to the payment of certain costs identified in related
agreements.
Substantial improvements
All improvements to the technology, as they affect the performance of
the broadcasting system and the available products that are linked to
the technology, whether able to be patented or not, patented or not,
available to the licensor for the duration of the current agreement,
will be made available to the licensee, subject to the payment of
certain costs.
Updates
All updates to the technology relating to the performance of the
broadcasting software will be made available to the licensee free of
charge for a period of three (3) years.
Signature
The licensor promises and is obliged to sign all other documents
necessary or useful for the noticing or the protection of the rights
of the licensee or granted to the licensee by virtue of the current
agreement.
10. OBLIGATIONS OF THE LICENSEE
Best efforts
The licensee agrees to exercise its best efforts to commercialize the
technology for its intended purposes, conforming to the terms of the
present agreement, and to adhere to the business plan forwarded during
the 120 days following the transfer of the license and the
installation date.
Business plan
Within one hundred and twenty (120) days following the signature of
this agreement, the licensee must provide the licensor a copy of a
business plan that includes forecasts for the number of products as
well as the installation of these within the protected territory, for
the duration of the license, being TEN (10) years.
Installation schedule
The licensee promises and is obliged to adhere to the following
installation schedule as it related to the achievement of the relative
stages of installation of the technology in the territory:
(attachment)
The licensor acknowledges that deadlines may not be met due to a force
majeure, without which the licensee may not claim indemnification on
the part of the licensor. However, the licensee risks losing its
rights to the license in the event it does not give its best efforts
to the installation of the network of kiosks and will be required to
discontinue its marketing program.
Supply and services
The licensee promises to obtain the products linked to the
broadcasting software exclusively from the licensor or from suppliers
designated by the licensor. Moreover, the licensee may only avail
itself of the services of the licensor for the maintenance of the
network and for the management of the network, for the first three
years.
In addition, as for sublicenses, the licensee promises to ensure that
the sub-licensees will only purchase products and services that may be
prescribed by the licensor and that they respect all the other
requirements of the current license relating to supply.
Payment of expenses
The licensors promises to pay all amounts due to every supplier
associated with the commercialization of the license, (for example,
hydro, telephone, or other modes of communication, rents for the
installation sites.)
Policies and general directives
The licensee promises to respect all the policies and directives
issued from time to time by the licensor relative to the
commercialization of the products, to the use of the products and
broadcasting software and to services associated with the products, to
information to be supplied to the sub-licensees and to generally
respect all directives of the licensor concerning the marketing of the
technology and the use of the technology. The licensor may demand a
customer list from the licensee in the event the latter, for whatever
reason, is unable to maintain service to its customers. The licensor
may then assume responsibility for these customers for any period
necessary.
Quality control
The licensee agrees to entrust to an agent chosen by the licensor the
mandate to inspect the installation of the technology and to audit
conformance of the said installation with the standards of quality
prescribed by the licensor. The licensee promises to respect in their
entirety the said installation standards and to permit the control
agent to affix certification stamps on the products that he may use.
In the event of default by the licensee in conforming with the quality
standards established by the licensor, the licensor has the right to
withdraw the license after sending a THIRTY (30) day notice concerning
the deviation of the licensee and its inaction, following the receipt
of the said notice, to conform to the standards.
Takeover
In the following instances, the licensee is under the following
obligations:
- - The licensee undertakes, if it is a company or corporation, to not
authorize the sale, the giving as collateral, the ceding or the
transfer of shares of any category of its capital stock or any
convertible security to anyone without having accomplished the
foregoing conditions and the obligations described below.
- - If the licensee is a company or a corporation, and if they are held by
a legal entity, it undertakes that any sale, the giving as collateral,
ceding, transfer or issuance of the shares of that person, of its
shareholders and the respective shareholders until the ultimate
holding of shares by a physical person, whoever that might be, be
effected in conformance with the provisions described below.
- - If the licensee is a company or a corporation, it undertakes to not
authorize any option to purchase or issuance of shares in any category
whatever of its capital stock to anyone whatsoever without the prior
accomplishment of its obligations described below
- - The licensee, if it is a company or corporation, undertakes to forward
to the licensor within one hundred and twenty (120) days from the
signing of the current agreement, and on the same date, for each
following year, a list of all the shareholders, directors, officers
and management of the licensee, which must be duly certified and
attested to be a certificate from a legal advisor of the licensee;
Therefore, the following conditions must be met:
a) The prior written approval of the third party in the capacity of new
licensee, of a director, manager or officer, shareholders or a
shareholder member of the licensee, whatever the case, by the licensor
according to the criteria used by the licensee for this purpose and
the licensee undertakes to furnish the licensor with all the
information deemed necessary for the licensor for this purpose.
b) In the event of a change of control in the licensee, and one or more
transactions, if the licensee is a company or corporation, or has the
approval of a new licensee, the licensee must have discharged all its
obligations and fulfilled all its undertaking and paid all its fees
with respect to this transfer of its rights. For the purposes of this
paragraph, the word "control" means the holding by one or several
shareholders of the majority of the voting shares of the issued and
outstanding capital stock of the licensee.
If all the foregoing conditions to the prescribed transactions have
been duly accomplished to the satisfaction of the licensor, then and
therefore the licensee or the former directors, managers or officers,
shareholders or members of the shareholders of the licensees, whatever
the case, will be relieved of their undertakings and obligations
according to the contract with the exception of those undertakings
identified under the headings "non-compete" and "confidentiality and
intellectual property" of this agreement which will become completely
applicable as if the contract had been terminated for them as of the
date of the transaction.
Signature
The licensee promises and is obligated to sign all other documents
necessary or useful for the disputation or the preservation of the
rights of the licensor or those granted to the licensee by virtue of
the current agreement.
Laws and regulations
The licensee must conform to all laws and regulations established by
competent authorities relating to the commercialization of the
technology.
Sub-licensees
All the obligations of a licensee are also obligations of the
sub-licensee relative to the licensee.
11.0 SPECIAL PROVISIONS
Confidentiality
The licensee acknowledges that the part of the technology that is the
subject matter of the current license contains industrial secrets
which are the exclusive property of the licensor and, accordingly, it
acknowledges that the unauthorized disclosure of these industrial
secrets may have serious implications for the licensor.
Consequently, the licensee promises to the licensor that it will act
in the following manner:
a) To deploy its best efforts to prevent third parties from learning the
industrial secrets relative to the technology;
b) To take all the steps necessary to prevent the non-authorized
disclosure of the said industrial secrets or confidential data by any
employee of the licensee;
c) On the written authorization of the licensor to permit its employees
to divulge the industrial secrets contained in the technology only to
third parties to which it must communicate them in order for the
licensee to meet its obligations in respect of the current agreement
insofar as these third parties have consented to the same obligations
of confidentiality applicable to the said industrial secrets. The
licensee further agrees to keep confidential the description of the
technology, if it or a part of it is not the subject of a patent and
all additional information permitting or facilitating the construction
of equipment incorporating the technology of the construction of a
plant incorporating the technology or the commercialization of the
equipment or the plant.
Protection of the technology
The licensee promises to promptly advise the licensor about any
copying or violation of the technology IN ITS TERRITORY as soon as
such an act is brought to its attention. The parties agree to consult
each other in order to determine the appropriate measures to be taken
under the circumstances. If the parties jointly conclude that it is
necessary to proceed to the courts relative to the act, the licensor
promises to take the necessary measures to stop the act, at the cost
of the licensor.
If the licensee or the licensor, whichever the case, decides not to
take action, the other may do so in its name and at its own cost, so
long as the licensor indemnifies the licensee for all fees, costs, and
damages incurred directly or indirectly by the latter.
Any process until a judgement or definitive regulation of the
litigation will indicate in which manner the compensation should be
shared according to the interests of the concerned parties. In the
event of a total demand, action or other procedure in which it is
alleged that the commercialization of the technology constitutes in
infraction against the rights of a third party in an intellectual
property, the licensee promises to promptly forward to the licensor a
copy of all documents or procedures that can be forwarded or
signified. The licensee promises to collaborate fully with the
licensor relative to the disputation of all such demands, actions, or
other procedures including, with limiting the generality of the
foregoing, to make available to the licensor all files, information,
samples, specimens, or other pertinent material.
According to provisions that follow, the licensor undertakes to
prendre fait et cause for the licensee in the context of all such
demands, actions or other procedures and to reduce the fees that
continue to be payable equivalent to the damages, costs and expenses
(including, but without limiting the generality of the preceding, the
fees and reasonable disbursements of an attorney) paid in this
capacity by the licensee. It is agreed by the parties that no
regulation outside the court may be concluded by the licensee in the
context of a legal pursuit in regard to the preceding provisions
without the prior written authorization of the licensor. Any
indemnification paid by a third party must be deposited in a trust
account held jointly by the attorneys for the parties to the current
agreement and must be shared between the parties, deductions made for
the fees and legal disbursements and other disbursements incurred for
the purposes of the litigation which are absorbed by the licensee.
The licensee undertakes to not in any way alter the technology nor any
improvements to it during the installation of the technology without
having first obtained the prior written consent of the licensor.
The licensee must without delay communicate in writing to the licensor
about any improvement to the technology, whether this improvement is
able to be patented or not, that, for the duration of the current
agreement, is made by an employee of the licensee or which is brought
in some manner to his knowledge during the said period. The licensee
acknowledges that the said improvement remains at all times the
property of the licensor. The licensee promises to not contest
directly or indirectly, nor to help contest the validity of the
intellectual property, as well as all improvements to it, and this,
for the entire duration of the current agreement as well as following
its expiration, termination, cancellation, or withdrawal.
The decision as to the opportunity to file patents applications or
registrations for the improvement of the technology is at the entire
discretion of the licensor.
Non-compete
The licensee declares that it and its directors, management or
officers, shareholders or members and employees do not have any
interest in any similar license granted by the licensor, nor any other
sub-license or license similar to that of the licensor. Moreover, the
licensee promises to ensure that the managers principally linked to
the commercialization of the license personally promise as such to the
licensee by means of a non-disclosure agreement.
For the duration of this license and for a period of twenty-four (24)
months after its withdrawal or its expiry, the licensee promises not
to do business with become involved with nor to help another person,
company, or corporation by the involvement of associated persons,
associated or otherwise, to do business or be involved or have an
interest in a similar or identical commercial activity, either as an
employee, agent, manager, associate or otherwise and this, in the
protected territory in respect of the current license, or for any
other protected territory of the licensor, at the time of the
annulment or expiry of the license.
Non-solicitation of personnel
The licensee promises for the duration of the current agreement and
for a supplementary period of TWO (2) years to not solicit the
services nor to encourage the departure of a member of the staff of
the licensor nor to recommend anyone of them for employment with a
third party.
Any infringement of the above on the part of the licensee will give
rise to a penalty equivalent to the annual salary of the person who
has left the service of the licensor as a result.
This penalty is payable to the licensor who nevertheless reserves the
right to take appropriate judicial action to stop the said
infringements.
Liquidated damages and interest
In the event of an infringement of any one of the prescribed
undertakings by the licensee or a related bound person, the licensee
will be responsible for the payment to the licensor, in terms of
liquidated damages and interest and not in terms of penalty, an amount
of TEN THOUSAND DOLLARS ($10,000) per day of infringement, subject
however to recourse in the form of an injunction or any other recourse
that may be exercised by the licensor according to the law.
Force majeure
None of the parties to the current agreement may be considered to be
in default in the performance of its obligations according to the
current agreement if such execution is retarded, held back or
prevented because of force majeure. Force majeure constitutes all
causes that do not depend on the will of the parties to the current
agreement, that they could not have reasonably foreseen and against
which they could not have protected themselves. Force majeure
comprises, but without limitation, all fortuitous events, strikes,
partial work stoppages, lock-outs, fires, riots, intervention of the
civil or military authorities, complying with regulations or
ordinances of all governmental authorities and war (declared or not).
Relationship of the parties
Nothing in the current agreement has the effect of creating a
principal-agent relationship, a partnership, an employer-employee
relationship or legal representative relationship between the licensor
and the licensee. Moreover, the licensee has not received the power
either tacit or expressed, to create obligations or to link the
licensor in any manner whatsoever.
The parties acknowledge that they act as independent entrepreneurs and
that each is free to manage their business in the manner they intend
in spite of the current agreement. They confirm that no provision of
the agreement can be interpreted in such a way as to give a right of
control to the licensor over the affairs and operations of the
licensee, in default of which such a provision should be interpreted
restrictively in order to protect the licensor.
Transfer of rights
The licensee promises to not sell, cede, or otherwise transfer to
anyone, directly or indirectly, in whole or in part, its rights and
interests in this license without the agreement of the licensor. It
may sell sub-licenses, in accordance with the conditions contained in
the current agreement, but the licensor always maintains a right over
oversight on the attribution of this sub-licenses.
No warranty and limit of liability
A) No warranty
The Licensee acknowledges that the licensor and/or its employees
and/or its legal representatives are making no representation nor
giving any warranty, even the usual implicit commercial warranty of
good value and/or suitability to the Licensee in respect to the
Technology;
The licensor does not warrant, nor represent that neither the
Technology, nor the right of any other person within the Territory,
nor does the licensor warrant that "prior art" to such Technology
existed anywhere in the Territory;
The licensor warrants, however, that neither the licensor nor its
employees, officers and directors have any reason to believe in the
existence of, any such infringement or prior art, the existence of
which would render Technology unable to be converted by any form of
intellectual property protection.
The Licensee will notify the licensor if any claim of infringement is
brought.
Nothing in this Agreement shall be construed as:
(i) A warranty or representation that anything made, used, sold, or
otherwise disposed of under any license granted in this Agreement is
or will be free from infringement or patents or third parties; or
(ii) An obligation to bring or prosecute actions or suits against third
parties for infringement of any patents;
B) Limit of liability
The parties hereby covenant and agree that the licensor cannot be held
responsible for any damage sustained by the Licensee or any third
party in relation with the operation of the Technology.
The licensor expressly makes no representative or warranty whatsoever
as to the functioning, safety or suitability for the intended use of
the Technology.
The Licensee agrees that the licensor shall not be liable to the
licensee, any sub-licensee or user of the Technology for any loss,
costs or damage of any kind suffered by the Licensee, or any
sub-licensee or user of the Technology, which may arise out of the
manufacture, use or sale of the Technology;
Furthermore the Licensee undertakes to promptly indemnify the licensor
for any claims against the licensor in relation to the license granted
by the present Agreement or the operation of the Technology;
Insurance policy
The licensee must subscribe for and maintain in effect for the
duration of the license insurance policies in such amounts and
according to terms and conditions that can be reasonably prescribed by
the licensor from time to time and of which the amount, the manner and
form will be determined by the licensor.
More specifically, the licensee must subscribe and keep in effect or
arrange to have subscribed and kept in effect for the duration of this
contract, the following insurance policies:
a) At least one "total risk policy" covering the kiosks and the other
installations against all loss or damage resulting from fire,
vandalism, an explosion, and any other risk or disaster or loss on the
basis of its full replacement value
b) At least one of its insurance policies covers its civil responsibility
protecting the insured against the monetary consequences of any civil
responsibility that it might incur for whatever reason, because of the
property, because of its operation or use, because of material bodily
damages suffered by whomever. Such insurance policies should cover the
reciprocal responsibility of the insured and they should provided for
a protection of at least five million American dollars (US$5,000,000)
for each case of injury or death. This minimal protection may be
increased to take account of new circumstances of risk.
The licensee should forward to the licensor a copy of these insurance
policies or any other document confirming the foregoing prescribed
coverage within ninety (90) days of the signing of the current
agreement.
In the event the licensee fails to undertake to subscribe or maintain
in effect the insurance policies described above, the licensor will
have the right to subscribe and maintain in effect these insurance
policies, to pay the premiums and to take whatever actions is
necessary for the maintenance of these insurance policies. The
licensee will reimburse the licensor the amounts disbursed with
interest.
Sub-licensee
All specific provisions in their entirety are also applicable to a
sub-licensee, along with any necessary adaptations.
12.0 GENERAL PROVISIONS
A) Schedules
All the schedules to the present Agreement initialed by the parties
for identification are one integral part of the present Agreement;
B) Arbitration
Any claim arising from the present Agreement which is challenged, any
controversy or dispute regarding the execution of the present
Agreement, including its annulment, as well as any dispute with regard
to the interpretation or application of the present Agreement must be
submitted to arbitration to the exclusion of the courts, the whole in
accordance with the procedure hereinafter established.
Any party to the present Agreement wishing to submit a claim,
conflict, dispute or disagreement to arbitration must forward to the
other party a written notice (hereinafter referred to as "Notice to
Arbitrate"), containing the following items:
A reasonably detailed description of the claim, conflict, dispute or
disagreement to be submitted to arbitration;
The name, address and profession of the person proposed to act as
either a sole arbitrator or on a board of three (3) arbitrators; the
other party must, within a delay of ten (10) days as of the receipt of
the Notice to Arbitrate, forward to the plaintiff party a notice
confirming the choice of the proposed arbitrator or the name, address
and profession of the person proposed ad the second arbitrator. In the
event of the default by the other party to contest in writing the
choice of the proposed arbitrator within the prescribed delay, such
other party shall be deemed to have accepted the proposed arbitrator
who shall act alone;
If a second arbitrator has been nominated in accordance with the
proceeding provisions, the two (2) arbitrators so nominated must,
within ten (10) days of the nomination of the second arbitrator,
proceed with the nomination of the third arbitrator. In the event of
the default by the two (2) first arbitrators to choose the third
arbitrator within the prescribed delay, or should the two (2) first
arbitrators fail to occur on the choice of the third arbitrator within
the prescribed delay, the appointment of the third arbitrator shall be
referred to and made by a court of competent jurisdiction upon the
motion of the more diligent party;
The date of hearing of the parties in dispute must be held twenty (20)
days following the receipt of the Notice to Arbitrate (if the
appointment of a second arbitrator has not been made in accordance
with the preceding provisions), or within ten (10) days of the
appointment of the third arbitrator, as the case may be. The award of
the arbitrator or board of arbitrators must be rendered in writing and
served to the parties within fifteen (15) days following the hearing
of the parties. Any such award which is rendered shall be final and
without appeal, and shall become executable as a judgement against the
parties upon ratification.
C) Notice
Any notice required under the present Agreement shall be in writing
and shall be delivered by a communication mode permitting to the
sending party to prove its delivery to the addresses at the address
hereby mentioned at the beginning of this Agreement. Any party hereto
may change its address for service by written notice given as
aforesaid;
D) Amendment
No amendment of this Agreement shall be binding unless expressly
provided in an instrument duly executes by parties hereto;
E) Non-Renunciation
The silence on the part of one party or its negligence or tardiness in
exercising a right or recourse which has been granted or made
available to it by virtue on the present Agreement shall never be
interpreted or held against such party as a renunciation to any right
or recourse;
13.0 END OF THE AGREEMENT
Cancellation
1. By the licensor without notice
The current agreement can be cancelled with full right without notice
or summons in any one of the following instances:
a) If the licensee begins any process in respect of the laws on
insolvency or bankruptcy or if any process according to all such laws
is launched against the licensee:
b) If a trustee, receiver or any other person having similar powers is
named to take responsibility for any or part of the assets or affairs
of the licensee;
c) If a lessor or any other person, company or legal entity having the
legal right to do it, takes possession or all or part of the assets or
affairs of the licensee;
d) the dissolution or liquidation, voluntary or forced, of the licensee;
or
e) If the licensee effects a transaction relating to its share capital,
in contravention of the foregoing provisions;
f) If a final judgment of a competent court is against the licensee and
if this judgement is not satisfied in a period of thirty (30) days
from the date on which the judgement became enforceable.
g) If the licensee stops actively commercializing the license for
whatever reason for a period of three (3) months;
h) If the licensee fails to maintain its corporate status in its current
form;
i) If the licensee makes a false representation to the licensee as to its
activities;
j) If the licensee puts obstacles in whatever form in the way for the
licensor to exercise its right to inspect the network of kiosks during
opening hours and to have access to all written documents or data
required for a complete inspection; k) If the licensee fails in its
undertaking regarding confidentiality relating to any confidential
information it received about the technology
2. By the licensor without notice
The licensor may at all times by way of a written notice of FIFTEEN
(15) days to the licensee to this effect, cancel the current
agreement, without prejudice to all its rights and recourses, during
the occurrence of one or other of the following events:
a) if the licensee fails to pay any amount due in respect of the current
agreement
b) if the licensee does not adhere to the business plan and schedule of
installations
c) if the licensee does not respect the limits of its own territory
d) If the license does not conform to the standards and directives
prescribed by the licensor
e) if the licensee does not adhere to any of the terms and conditions of
the current agreement
3. By the licensee without notice
Despite the provisions of the section regarding the duration of the
license, the licensee will have the right to immediately terminate the
license without any other notice or delay, in the following instances:
a) If the licensor begins any process in respect of the laws on
insolvency or bankruptcy or if any process according to all such laws
is launched against the licensor;
b) If a trustee, receiver or any other person having similar powers is
named to take responsibility for any or part of the assets or affairs
of the licensor;
c) the dissolution or liquidation, voluntary or forced, of the licensor;
or
d) if a final judgment of a competent court is against the licensor and
if this judgement is not satisfied in a period of thirty (30) days
from the date on which the judgement became enforceable;
e) If the licensor makes a false representation to the licensee as to its
activities;
f) If the licensor fails to deliver the technology and the technical
assistance, as described beforehand.
Procedure at the end of the agreement
1. Continuance of certain obligations
Notwithstanding the annulment, cancellation or expiry of the current
agreement, the licensee continues to be bound by the provisions
concerning confidentiality, intellectual property and the non-compete
clauses of the current agreement
2. License fees due
The annulment or expiry of the current agreement renders due at the
latest THIRTY (30) days after the date of the annulment or the expiry
of the agreement all sums payable for the current year in respect of
section 7 of the current agreement.
Cessation of the commercialization of the license
In the event of the withdrawal or the expiry of the license, the
licensee must immediately cease commercializing the license, and on
the failure of the licensee to conform, the licensor may resort to an
injunction to have the use of the technology stopped.
Provisions relating to inoperative kiosks on the protected territory
The licensee undertakes to remove, disconnect or disengage at its own
cost and on the demand of the licensor all inoperative kiosks on the
protected territory, property of the licensee or of one of the
sub-licensees. The used kiosks may be eventually recycled in other
protected territories, The licensor does not have any obligation to
recover the inoperative kiosks and the licensee has complete
responsibility to dispose of them in an appropriate manner, that is to
say, to destroy them or to recycle them, in such as way that they lose
their former attributes.
Bankruptcy
In all cases in the event of the bankruptcy of the licensee, the
contract will be automatically terminated and all the rights will be
ipso facto retro-ceded to the licensor without any legal intervention.
14.0 DURATION
Initial duration of 10 years
This agreement will be in effect for a period of TEN (10) years, from
the date of signature. At the end of the first TEN (10) year period,
the current agreement may be renewed for an addition TEN (10) years,
under terms and conditions described in the paragraph below.
Renewal
At least ONE HUNDRED AND EIGHTY DAYS (180) before the expiry of the
first period of TEN (10) years, the licensor will forward to the
licensee a draft of the contract then being proposed by the licensor
(hereafter in this article called the "new contract") granting on its
signing the right to commercialize the technology but with provisions
which may be completely different than those in the current agreement.
If the licensee is satisfied with the content of the "new contract,"
he may sign the said agreement for a period of TEN (10) YEARS.
The provisions of this paragraph apply on the condition that the
licensee has fulfilled all its responsibilities and obligations under
the current agreement.
15.0 EFFECTIVE DATE
The current agreement goes into effect on the date of the signing by
the parties to this agreement.
16.0 RANGE OF THE AGREEMENT
The current agreement binds and is enforceable not only with respect
to the parties and the intervening parties but also with respect to
their legal representatives.
IN WITNESS WHEREOF, THE PARTIES HAVE SIGNED IN MONTREAL
(3) COPIES, THIS 4 DAY OF THE MONTH OF MAY 2000.
The Licensor
By:/s/ J. Michel de Montigny
J. Michel de Montigny
The Licensee
By: /s/ Yves Lebel
Yves Lebel