LICENSE AGREEMENT
THIS LICENSE AGREEMENT made as of the day of , 2005
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BETWEEN: RADIATE RESEARCH INC.
84 Hines Road, Suite 150
Kanata, Ontario
K2K 3G3 (hereinafter referred to as "RADIATE")
OF THE FIRST PART
AND ABOND CORPORATION
8620 Delmeade
Ville Mont-Royal, Quebec
H4T 1L6 (hereinafter referred to as "ABOND")
OF THE SECOND PART
WHEREAS RADIATE has developed a Heated Infant Comfort Change System,
described herein;
AND WHEREAS ABOND manufactures, markets, and distributes infant products;
AND WHEREAS it is the intention of the Parties following the execution of this
Agreement, that ABOND will actively manufacture, market and sell the Heated
Infant Comfort Change System through its sales channels;
NOW THEREFORE RADIATE and ABOND agree as follows:
Article 1 -Definitions
(a) "Copyrights" shall mean any and all trademarks, brochures, inserts and
support literature associated with the Heated Infant Comfort Change System and
related Know-how under which RADIATE has the right to grant a license during the
time of this Agreement.
(b)"Know-how" means all technical information in the possession of RADIATE which
is necessary in order to enable ABOND to make, utilize, sell and support the
Heated Infant Comfort Change System and includes design principles,
manufacturing drawings, materials and process specifications, test
specifications and data to assist in preparation thereof, electronic circuits,
drawings and such similar data, under which RADIATE has the right to grant a
license during the time of this Agreement.
(c)"Net Sales Price" means any revenues obtained from the sale of any Heated
Infant Comfort Change System by ABOND to any of its customers other than RADIATE
on account of such sale, net of any commissions, discounts, or taxes, duties or
other government levies applicable to or on account of such Sale which are or
subsequently become payable by ABOND;
(d)"Patents " means all patents, which shall have been issued or granted in
applications for patent covering any invention relating to the Heated Infant
Comfort Change System and Know-how under which RADIATE has the right to grant a
license during the time of this Agreement.
(e)"Heated Infant Comfort Change System" means the product described in Schedule
"A" to this Agreement which implements the required function.
(f)"Sale" means the receipt of the full purchase price by ABOND of any Heated
Infant Comfort Change System bought by any customer of ABOND except RADIATE;
(g)"Trademarks" means all trademarks which shall have been issued and granted
covering any marks relating to the Heated Infant Comfort Change System and
Know-how and under which RADIATE has the right to grant a license during the
time of this Agreement.
Article 2 -Grant of License
(a) RADIATE hereby grants to ABOND a North American license to make, have made,
use and sell the Heated Infant Comfort Change System and alterations,
improvements and enhancements thereof.
(b) In the event of termination by RADIATE of this Agreement in accordance with
the provisions of Articles 9(b) or l0(c) herein, the license granted by RADIATE
to ABOND pursuant to Article 2(a) hereof shall be revoked forthwith, upon
receipt by ABOND of notice from RADIATE of such termination, and ABOND shall not
be liable for the payment of any further royalties to RADIATE pursuant to this
Agreement except as in accordance with Article 11(b) herein.
(c) Notwithstanding the North American license awarded to ABOND, RADIATE
reserves the right to continue its sales activity which largely serves
individual and independent retailers rather than bulk purchases. Accordingly
RADIATE shall supply corporations with less than 15 stores while ABOND will sell
to corporate entities more than 15 stores. RADIATE agrees to purchase from ABOND
the Heated Comfort Change System made by ABOND or its suppliers provided that
RADIATE is provided with most favorable pricing.
Article 3 -Royalties and Payments
(a) In consideration for the license granted and to be granted and of the
assistance provided and to be provided by RADIATE to ABOND, ABOND shall pay to
RADIATE quarterly royalties on the Sale of all Heated Infant Comfort Change
System and improvements thereof for a period of five (5) years from the
commencement of this Agreement at the rate of seven (7%) percent of the Net Sale
Price of said Heated Infant Comfort Change System.
(b) ABOND agrees that given that the North American license remains in place for
ABOND the total payment including royalties in the third, fourth and fifth year
of the agreement shall not fall below seventy-five (75%) percent of the total
payments including royalties of the previous year.
(c) ABOND shall keep proper records and books of account showing the quantity
and Net Selling Price of the Heated Infant Comfort Change System sold hereunder
and such records and books of accounts shall be kept separate from any books not
related solely to the Heated Infant Comfort Change System and shall be open
during all normal business hours to inspection by RADIATE or its duly authorized
representatives or agents.
(d) RADIATE shall have the right to buy back the all rights granted to ABOND for
the lessor of $500,000 or four (4) times the cumulative payments previously made
by ABOND to RADIATE at any time during the term of this agreement (e) In respect
to any sale of the Heated Infant Comfort Change System by ABOND to a Subsidiary
or Holding Company or to a Fellow Subsidiary or to any third party which is
otherwise associated with or acting in concert with ABOND the royalty payment to
RADIATE shall be that which would be paid on a sale at full market value payable
by a purchaser at arm's length.
(f) ABOND shall by January 31st each year send to RADIATE a statement showing
the quantity and Net Selling Price of the Heated Infant Comfort Change System
sold by ABOND during the previous year ending on the 31st of December and
showing the amount of royalty due hereunder in respect thereof. With each such
statement ABOND shall send a remittance to RADIATE for the amount of royalty due
hereunder. ABOND shall bear the interest on a day-to-day basis of overdue
payments at a rate equal to 5% in excess of the Base Rate of the Royal Bank from
time to time.
Article 4 -Consulting Services
RADIATE will make available, as required, up to one man month of support from
RADIATE to ABOND to assist in the transfer of the Heated Infant Comfort Change
System to ABOND, such support to be invoiced by RADIATE at the rate of $500/man
day.
Article 5 -Ownership and Use of Licensed Property
(a) ABOND agrees that RADIATE is the owner of the Know-how, Patents Copyrights
and Trademarks, and that the rights of ABOND as to and under the Know-how,
patents, Copyrights and Trademarks are only as provided by the terms of this
Agreement. ABOND covenants that neither it or any of its affiliates, agents,
officers, or employees will use the Know-how, Patents, Copyrights or Trademarks
in any manner inconsistent with the terms of this Agreement. ABOND further
covenants to take all reasonable steps as required by RADIATE to protect the
confidentiality of such Know-how, Patents, Copyrights and Trademarks.
(b) The power control and foil heating system used in the Heated Infant Comfort
Change System is a patented system which is used in other RADIATE products other
than the Heated Infant Comfort Change System. This agreement shall not have the
effect of restricting the licensing of the power control and use of foil heating
system by RADIATE for systems other than the Heated Infant Comfort Change
System.
(c) The covenants of ABOND in this article shall survive any expiration or
termination of this Agreement.
Article 6 -Term of Agreement
This Agreement shall remain in full force and effect, subject only to the early
termination rights contained in Articles 10 or 13 during the initial full five
(5) year period of the Agreement. RADIATE shall be prepared to consider
continuation of this license on terms to be agreed upon by both parties hereto
towards the end of the period. Should early termination of the Agreement occur,
in accordance with the provisions of Article 10 or 13 such termination shall in
no way restrict the subsequent use by RADIATE hereto of any information obtained
in Article 5, 8 and 9 herein.
Article 7 -Indemnity
(a) In the event that ABOND is presented with or threatened with any claim for
infringement of any Patent, Copyright or Trademark, trade secret or other
industrial or intellectual property right, where such infringement or alleges
infringement arises from the use, design or sale of the Heated Infant Comfort
Change System, ABOND will immediately notify RADIATE and provide all details
thereof. ABOND shall not, without the consent of RADIATE compromise any such
claim and RADIATE agrees to assist in the defense of any such claims.
(b) ABOND agrees to indemnify and hold RADIATE harmless from and against any and
all loss, cost, damage, liability or expense or whatsoever nature arising out of
or in connection with either
(i) any damage or injury to any person resulting from the sale of the
Heated Infant Comfort Change System by ABOND, or (ii) any claim by a
third party arising out of or in connection with the utilization of the
device.
(c) RADIATE does not give any warranty condition or representation as the
merchantability, suitability or fitness for any purpose of the Heated Infant
Comfort Change System.
(d) RADIATE accepts no contractual or other obligation nor any liability for any
loss or damage of any kind whatsoever for any decision made or action taken
based on this license and reserves the right to change the device. RADIATE shall
notify ABOND of any such design changes within thirty (30) days of such a
decision being reached.
(e) The indemnity contained in this Article shall survive any expiration or
termination of this Agreement.
Article 8 -Improvements
(a) During the term of this Agreement, each Party shall make freely available to
the other Party for its free use all technical data, information, technical
information and Know-how, whether patented or not, which the receiving Party
shall possess relating to improvements to the Heated Infant Comfort Change
System and ABOND shall be entitled to make use of such technical data,
information, technical information and Know-how, subject only to the provisions
of Articles 5(a) and 9 herein.
(b) It is intended that RADIATE and ABOND will cooperate in the development of a
variety of Heated Infant Comfort Change Systems.
Article 9 -Confidentiality
(a) Subject to provisions of Article 9(c) hereof, RADIATE covenants to avoid and
prevent the disclosure to others of the Know-how and any other information
supplied by ABOND which ABOND identifies in writing as being confidential.
RADIATE agrees to take reasonable steps to require that its affiliates,
officers, agents and employees hold the Know-how and other confidential
information in confidence provided RADIATE shall incur no liability if it can
show that is has taken all reasonable precautions comparable to those which it
adopts to protect its own confidential information of a similar grading.
(b) Subject to Article 9(c) hereof, ABOND covenants to avoid and prevent the
disclosure to others of all information supplied by RADIATE which RADIATE
identifies in writing as being confidential. ABOND agrees to take reasonable
steps to require that its affiliates, officers, agents and employees hold such
information in confidence provided ABOND shall incur no liability if it can show
that it has taken all reasonable precautions comparable to those which it adopts
to protect its own confidential information of a similar grading.
(c) Notwithstanding anything contained in this Agreement, neither party shall be
prevented from using and disclosing information which is:
(i) Published by the owner of the information;
(ii)Now or subsequently comes into the public domain without
breach of this Agreement;
(iii)Also disclosed to the recipient hereunder by a third
party without restrictions as to use and disclosure; or
(iv) Independently developed by employees of the recipient
hereunder.
(d) The covenants in this article shall survive any expiration or termination of
this Agreement
Article 10 -Termination for Cause
(a) Notwithstanding the provisions of Article 6 herein if ABOND is in breach of
any of its obligations under this Agreement, RADIATE may give notice of such
breach to ABOND and request the latter to remedy same. If ABOND fails to remedy
said breach within sixty days after the receipt of such notice, then this
Agreement may be terminated forthwith by written notice of termination given by
RADIATE.
(b) RADIATE may terminate this Agreement by written notice to take effect
immediately upon receipt thereof by ABOND if:
(i) ABOND is in breach of article 9 of this agreement
relating to secrecy of confidential information.
(ii) ABOND becomes insolvent or makes an assignment for the
benefit of creditors, or a receiver is appointed of its business
or a voluntary or involuntary winding-up petition is filed.
Article 11 -Effect of Termination
Upon termination of this Agreement, whether pursuant to Article 6, 10 or 13, the
obligations of RADIATE and ABOND under this Agreement shall forthwith terminate,
save and except those obligations contained in Article 2, 5, 7, 8 and 9 of this
Agreement, but no termination shall affect the right, title, or interest of any
third party in the Heated Infant Comfort Change System.
RADIATE shall grant ABOND sufficient time to sell existing stocks on order and
in transit at that time which period shall not exceed (3) three months provided
always that royalty payment shall be made on such stocks.
Article 12 -Responsibility of Parties
The parties agree that any act would be a breach of this Agreement, if performed
by one of the Parties, shall be deemed to be an act for which that party is
responsible if the act is performed by:
(a) Any person, firm or corporation by that party; (b) Any
person, firm or corporation controlling that Party; (c) Any
person, firm or corporation controlled by a person, firm or
corporation controlling that Party; or (d) Any firm of which
that Party shall for the time being be a member.
Article 13 -Force Majeur
(a) Neither of the Parties hereto will be in breach of any of this Agreement for
the duration of any Force Majeur for which either of the Parties notifies the
other. For the purpose of this Agreement, Force Majeur shall include war
declared or undeclared, natural disasters such as storms, fire, earthquakes,
flood or epidemics, civil commotion and riots, sabotage, unforseeable government
measures, acts of any governmental authority, de jure or de facto or any other
causes beyond the control of the Parties concerned which prevents the Parties
from performing their obligations under the Agreement.
(b) If the performance of the contractual obligations of either Party becomes
impossible or is delayed owing to Force Majeur for a period of more than six (6)
months, the Parties hereto agree to consult with each other with respect to
extending the time of the performance of such obligations, but if no such
agreement is reached then this Agreement shall be subject to termination at the
option of the party who has been notified of the existence of Force Majeur by
the other Party.
Article 14 -Notice
(a) Any notice to be given hereunder shall be in writing and is sufficient if
delivered by facsimile, messenger or sent by first class pre-paid registered
mail properly addressed as follows:
(i) To RADIATE INC. 84 Hines Road, Suite 150, Kanata,
Ontario K2K 3G3
(ii) To ABOND INC. 8620 Delmeade
Ville Mont-Royal, Quebec, H4T 1L6
(b) In the event that either of the Parties changes its primary business
location, it shall forthwith, in writing, notify the other Party of such change
of address, and from the date of the receipt of the notice, that address shall
supersede the address of the Party setout in Article 14(a) herein for the
purpose of delivery of future notices
(c) Wherever required in this Agreement, notice given by one Party to the other
shall be deemed to have been received as follows:
(i) If delivered by facsimile or by messenger, on the day
following the sending thereof by the Party giving such notice;
and (ii) If delivered by first class postage pre-paid
registered mail, on the third day following the mailing of
such notice.
Article 15 -Place for Payment of Royalties
All payments to be made by ABOND to RADIATE pursuant to Article 4 of this
Agreement shall be made at the address specified in Article 14 or such other
address as RADIATE may specify by written notice to ABOND in accordance with
that Article.
Article 16 -Successors and Assigns
This Agreement shall be binding on the Parties hereto and their successors and
assigns. RADIATE shall not assign or sub-license this Agreement nor any benefit,
or part thereof without the prior written consent of ABOND.
Article 17 -Entire Agreement
This Agreement sets forth all the promises, agreements, conditions and
understandings between the Parties hereto relating to its subject matter and
constitutes the entire Agreement between RADIATE and ABOND, and no subsequent
alterations, amendments, changes or additions hereto shall be binding and valid
unless reduced to writing and signed by each Party. Both Parties acknowledge
that no representations, inducements, promises or agreements, or otherwise, not
incorporated by reference herein or attached hereto at the time of execution of
this Agreement were made by either Party.
Article 18 -Waiver
No waiver by either Party of any breach of any term or condition by the other
Party shall be deemed a waiver of any other breach whether of the same or any
other provision hereof, nor shall any delay or omission on the part of either
Party to exercise or avail himself of any right or remedy hereunder operate as a
waiver of any such breach.
Article 19 -Governing Law, Interpretation
This Agreement shall be construed in accordance with and shall be subject to the
laws of the Province of Ontario. All references to currency in this Agreement
shall be interpreted as referring to lawful currency of Canada. Words denoting
the singular include the plural and vice versa and words importing the masculine
gender include the feminine and neuter genders and vice versa.
IN WITNESS WHEREOF this Agreement has been executed as of the day and year first
above and written.
RADIATE CORPORATION ABOND CORPORATION
Per Per
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Title Title
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Schedule A
1. Comfort Change System