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