PURCHASE AGREEMENT
This License Agreement made this 12th day of January 1999.
BETWEEN:
DIRECTION TECHNOLOGIES INC.
#000 - 000 X Xxxxxx
Xxxxxx, XX 00000
(the " Purchaser ")
OF THE FIRST PART
AND:
QIBLAH INTERNATIONAL INDUSTRIES LTD.
#0000 - 0000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
(the " Vendor")
OF THE SECOND PART
WHEREAS:
A. The Vendor is engaged in the research, development,
manufacturing and marketing of proprietary Qiblah direction
finding 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 Qiblah direction
finding (collectively, the "Technology").
B. The Vendor is willing to disclose to the Purchaser, its
agents and employees, the Technology and such other production
knowledge and technical knowledge and technical experience, and
generally to advise and assist the Purchaser and its technical
staff at reasonable times and in reasonable ways to facilitate
the Purchaser's objective of producing Qiblah direction finders
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. THE ASSETS PURCHASE
The Vendor hereby agrees to sell and the Purchaser hereby
agrees to buy all of the assets, undertaking and goodwill
relating to Qiblah direction finders of the Vendor, including but
not limited to the assets and technology as described in the
attached Schedule "A" (the "Assets").
II. THE PURCHASE PRICE
In order to conclude the purchase and sale transaction
contemplated by this Agreement, the Purchaser shall allot and
issue 5,000,000 common shares in the capital stock of the
Purchaser (the "Shares") to the Vendor at the deemed issuance
price of $0.10 on Closing and subject to fulfilment of the terms
and conditions contained herein, the Technology shall be free and
clear of all liens, claims, charges and encumbrances whatsoever.
III. REPRESENTATIONS AND WARRANTIES
1. the Vendor 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
Vendor is a party except as have been in writing
disclosed to and approved by the Purchaser;
4. the Vendor has all
corporate power and authority to carry on its
business as presently carried on;
5. the making of the
Purchase 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 Vendor or
any indenture, mortgage, deed of trust, agreement,
lease, franchise, certificate, consent, permit,
licence, authority or other instrument or
obligation to which the Vendor is a party or is
bound or any judgement, which the Vendor is bound
or, to the knowledge of the Vendor, any statute or
regulation applicable to the Vendor.
A. The Purchaser covenants, represents and warrants to the
Vendor that:
1. the Company is duly
incorporated and validly existing pursuant to the
laws of the State of Nevada;
2. the Purchaser has
all corporate power and authority to carry on its
business as presently carried on;
3. the making of the
Purchase 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 Purchaser
or any indenture, mortgage, deed of trust,
agreement, lease, franchise, certificate, consent,
permit, licence, authority or other instrument or
obligation to which the Purchaser is a party or is
bound or any judgement, which the Purchaser is
bound or, to the knowledge of the Purchaser, any
statute or regulation applicable to the Purchaser.
IV. TERMINATION
This agreement shall terminate at the option of the
Purchaser forthwith if Closing shall not have taken place by
January 15, 1999 or such later date as the parties may agree to
in writing. In the event of a default by either party of its
obligations pursuant hereto, the obligations of the other party
shall, at its opinion, terminate forthwith.
V. 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.
VI. SEVERABILITY
Should any part of this Purchase 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 Purchase 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 Purchase
Agreement without including therein any such part, parts or
portion which may, for any reason, be hereafter declared invalid.
VII. 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.
VIII. GOVERNING LAW
This Purchase 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.
IX. COUNTERPARTS
This Purchase Agreement may be executed in counterpart and
the counterparts altogether shall constitute a fully executed
Purchase Agreement, and any facsimile signature shall be taken as
an original.
IN WITNESS WHEREOF the parties hereto have duly executed
this Purchase Agreement as of the day and year first above
written.
QIBLAH INTERNATIONAL INDUSTRIES LTD. )
)
)
/s/ )
Per: Authorized Signatory )
DIRECTION TECHNOLOGIES INC. )
)
)
/s/ )
Per: Authorized Signatory )
SCHEDULE "A" TO THE AGREEMENT DATED 12TH JANUARY, 1999
BETWEEN QIBLAH INTERNATIONAL INDUSTRIES LTD.
AND DIRECTION TECHNOLOGIES INC.
Assets Inventory
The Exclusive rights to the use of all patents, patents
pending under application No. 972622 registered in South Africa
March 26, 1987, 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 the Qiblah
finders products of the Vendor (subject to the worldwide
manufacturing and certain marketing rights of Qiblah Technologies
Ltd. as set out in an agreement dated October 30, 1997 per
Schedule "B" attached) and more particularly:
10,000,000 common shares in Qiblah Technologies Ltd. a duly
registered non-reporting, non-listed South African public
corporation.
Tools, Dies and related manufacturing items for integrated
L.C.D.'s display units.
Injection molding tools.
1 set technical drawings.
Inventory comprised of:
5,000 compasses
4,000 L.C.D.'s
2,000 Casings
SCHEDULE "B" TO THE AGREEMENT DATED 12TH JANUARY, 1999
BETWEEN QIBLAH INTERNATIONAL INDUSTRIES LTD.
AND DIRECTION TECHNOLOGIES INC.
This Agreement is dated for reference the 30th Day of October,
1997
BETWEEN
QIBLAH INTERNATIONAL INDUSTRIES LTD., a British
Columbia corporation having its registered offices at
Suite 1710, 1177 West Hastings Street, Vancouver,
British Columbia, Canada V6E 2KE, hereinafter called
AOwner@
AS PARTY OF THE FIRST PART
AND
QIBLAH TECHNOLOGIES LTD., a South African corporation
having its executive offices at 00 Xxxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxx 0000, Xxxxx Xxxxxx, hereinafter
called AManufacturer@
AS PARTY OF THE SECOND PART
WHEREAS
1. Xxxx Xxxx Xxxxxxxx, Inventor, made the Patent Application
972622 in his name, which Application was duly registered with
the South African Registrar of Patents, Designs, Trade Marks and
Copyright on the 26th day of March, 1997, a copy of which
Application is attached to and forms part of this Agreement as
Schedule AA@;
2. By Agreement dated the 29th day of October, 1997, the
Inventor, Xxxx Xxxx Xxxxxxxx did assign to the Owner the whole of
the benefits of the said Patent Application, including the right
to the issue in the name of the Owner any Patents granted in
pursuance of such Application, a copy of which Agreement is
attached to and forms part of this Agreement as Schedule AB@
hereto;
3. The subject matter of the said Patent Application is a
electronic mechanism by which the Holy City of Makkah, center of
the Muslim faith and birthplace of the Prophet Muhammad, founder
of Islam, may be accurately located from any location on the face
of the earth. This mechanism has been incorporated into a fully
designed and operational unit called the Global Qiblah Locator
(AGQL@);
4. Manufacturer was incorporated in South Africa to be
responsible for the manufacturing and primary distribution of the
GQL.
NOW THIS AGREEMENT WITNESSES that in consideration of the sum of
Ten dollars, United States currency ($US 10.00), the legal
sufficiency whereof and the receipt by each party hereto is
acknowledged and accepted, the parties hereto are agreed as
follows:
1.0 Definitions
In this Agreement,
1.1 "Know-How" includes all technical information, procedures,
processes, trade secrets, methods, practices, techniques,
information, bills of parts, diagrams, drawings, specifications,
blue-prints, lists of materials, labor and general costs,
production manuals and data relating to the design, manufacture,
production, inspection and testing of the Products, which are
from time to time in the Owner's possession with free right of
disposal;
1.2 "Net Sales" shall mean in respect of any particular period,
the net invoiced sales of Products sold by the Manufacturer or on
behalf of the Manufacturer, excluding returns, discounts, value
added or sales taxes or other similar taxes payable on the
amounts so charged, freight, insurance, external packaging of
Products and credits, provided, however, that with respect of any
Products disposed by any of the Manufacturer to third persons in
any manner other than a regular competitive sales transaction,
the net invoice price of any item which is sold in such manner
shall be deemed to be an amount equal to the amount which would
have been the net invoice price of such item had it been sold in
the same market for cash in a regular competitive transaction;
1.3 "Patents" shall refer to the Patent Application set out in
Schedule "B" and shall include patents for improvements and
modifications thereof and applications for patents for
improvements and modifications thereof;
1.4 "Products" shall be deemed to be those items to be
manufactured according to the Patents and Know-How as generally
disclosed in the in the Application for the Patents and Know-How
and shall refer to and include the GQL, as more specifically set
out in Schedule AC@, and to all items associated with such
Products, such as advertising, packaging and informational
information, whether in electronic or printed format;
1.5 "Trade Marks" shall refer to those Trade Marks set out in
Schedule AD@ and shall include all trade marks and trade names
that may in the future be adopted by the Manufacturer in
connection with the Products manufactured by the Manufacturer;
1.6 "Territory" shall mean and refer to the geographical area
for which a license is created by this Agreement for the
distribution and sale of Products, comprising the independent
nations, principalities and other self-governing areas listed in
Schedule "D" hereto, whose geographical boundaries are comprised
and defined by the laws of same .
2.0 Grant of License
2.1 The Owner grants to the Manufacturer the exclusive license
under the Patents and Trade Marks to:
1. manufacture on a world-wide basis, the Products
covered by the Patents;
2. distribute, use and sell throughout the Territory, the
Products covered by the Patents so manufactured; and
3. use the Trade marks in conjunction with the Products
throughout the Territory.
2.2 Owner grants to the Manufacturer the exclusive rights to use
and exploit the Know-How in the manufacture of the Products.
2.3 Manufacturer acknowledges that some or all of the Know-How
has been disclosed and delivered to Manufacturer in confidence
prior to and in contemplation of the execution of this Agreement.
The remainder of the Know-How shall be furnished to the
Manufacturer as soon as possible after the date of execution of
the Agreement but not later than ninety days (90) from the date
of execution of this Agreement.
2.4 The obligation to furnish Know-How shall extend to Know-How
existing at the date of this Agreement and to any Know-How
defined in this Agreement which later becomes the possession of
the Owner during the term of this Agreement.
2.5 Owner warrants that there are no other subsisting licenses
under the Know-How in the Territory and covenants that no further
disclosure to third parties will be made by it of the Know-How in
the Territory while this Agreement is in force.
2.6 Owner warrants that the Know-how will be sufficient and
suitable for the manufacture of the Products to a quality
comparable to the quality of the sample Products furnished to the
Manufacturer by the Owner, provided that the Manufacturer at all
times conforms strictly with the Know -How.
2.7 Owner reserves the right to make and enter into other
agreements for the licensing of the rights of sale and
distribution of the GQL in other geographical areas of the world
not licensed herein to the Manufacturer on such terms and
conditions as to the Owner are acceptable, and further that such
terms and conditions may be different than the terms and
conditions of this agreement.
2.8 Owner reserves the right to license other persons or
corporations to manufacture the Products and to use the Know-How
for such purposes of manufacture under terms and conditions,
similar to those herein, in the event that the Manufacturer, for
any reason, is either unwilling or unable to supply sufficient
Products at the times or at the prices or to the quality
specified by the Owner, to meet the requirements of the market
place and the various Manufacturers created by the Owner.
3.0 Sub-licenses
The Manufacturer may, with the prior written consent of the
Owner, appoint sub-licensors for the Products within the
Territory provided that:
Any such sub-Manufacturers be at arm=s length with the
Manufacturer and that any such sub-Manufacturers enter into an
agreement with the Manufacturer which is satisfactory to the
Owner. The Owner shall be a party of any such sub-license
agreement.
Any such sub-license agreement shall include terms imposing on
the sub-Manufacturer all of the obligations of the
Manufacturer pursuant to this Agreement and shall reserve to
the Owner and the Manufacturer severally all of the rights of
the Owner. The Owner shall have the right to enforce and
terminate such agreement without the consent of the
Manufacturer.
Any agreement appointing a sub-Manufacturer shall be
terminable at the option of the Owner by the Owner in the
event of the termination of this Agreement (for whatever
reason) and shall provide that if it is not terminated by the
Owner on the termination of this Agreement, it may at the
option of the Owner continue in force as a license agreement
between the Owner and the sub-Manufacturer.
4.0 Term of the Agreement
4.1 Subject to the provisions for early termination as set out
in this Agreement, this Agreement shall remain in full force and
effect for a period of ten years (10) and shall expire on the
30th day of October, 2007.
4.2 This Agreement shall be automatically renewed on its expiry
for a further term of ten (10) years. Upon any such renewal,
whether automatic or otherwise, the terms and conditions shall
remain the same with the exception of the minimum production
quotas as set out in Schedule AE@, which shall be renegotiated by
the parties. In the event that the parties are unable to agree on
a new minimum production or market quota, the minimum production
or marketing quota shall be 100% of the minimum quota then
existing for the previous year of this Agreement, In the event
that the Owner does not wish to renew this Agreement, it may
terminate the same at the end of any two year period, by giving
120 days of prior written notice to the Owner.
5.0 Improvements
5.1 Each party agrees to promptly disclose to the other any and
all technical data and information relating to any and all
developments or improvements of the Patents or the Products
(whether or not patentable) and of the Know-how that it may
develop or acquire during the term of this Agreement to the
extent that such disclosure is not restricted or prohibited by
law, or any undertaking given to, or any conditions, restriction
or restraint imposed by third parties, or by considerations
relating to the validity of any Patent in respect of which
applications is about to be made.
5.2 The Manufacturer covenants and agrees that it shall not make
or manufacture any design changes or modifications to the
Products without the prior written consent of the Owner.
Manufacturer further covenants and agrees that any modifications,
design changes or improvements made to the Products, whether same
can be the subject of further patent applications or not, shall
be disclosed to the Owner and that such disclosures shall be made
sufficiently promptly so that the Owner can file whatever
applications for letters patent it wishes. Manufacturer agrees
that Owner shall have the sole right to make such patent
applications. Manufacturer further covenants and agrees to
execute promptly and without compensation any and all papers and
documents and to perform whatever lawful acts may be deemed
necessary or desirable to effect and maintain the Owner=s
licensed rights in the Patents and Know-How and improvements and
applications for letters patent and in all letters patent issuing
from applications for letters patent.
5.3 Owner shall grant to Manufacturer an exclusive license to
manufacture, market and sell the Products in the Territory under
all improvements and all developments to be furnished to Owner,
together with an ancillary grant of the right to use any
associated Trade marks and any associated Know-How, provided that
in the case of any such improvement or development the disclosure
of which by the Owner is subject to any restrictions, legal
prohibitions, undertakings given to or conditions, restrictions
or restraints imposed by third parties or considerations relating
to the validity of any patent in respect of which application is
about to be made, any grant by the Owner to the Manufacturer
under this provision shall be limited accordingly.
5.4 Under all developments or improvements of the Patents or the
Products to be furnished by the Manufacturer to the Owner, the
following additional terms shall apply:
1. Outside the Territory, the Owner shall have the exclusive
royalty-free license on any such improvements on the Patents or
Products now owned or hereafter made or acquired by Manufacturer
during the life of this Agreement. Manufacturer further covenants
and agrees to notify Owner of any improvements and to execute
promptly and without compensation any and all papers and
documents and to perform whatever lawful acts may be reasonably
deemed necessary or desirable to effect and maintain the Owner=s
licensed rights or the rights of any of the Owner=s sub-
Manufacturers in said improvements and applications for letters
patent and in all letters patent issuing from said applications
for letters patent.
2. Inside the Territory, Manufacturer shall have the exclusive
license to manufacture and sell the products incorporating or
constituting such developments or improvements as approved by the
Owner; provided that in the case of any such improvement or
development the disclosure of which by the Manufacturer is
subject to any restriction, legal prohibitions, undertakings
given to or conditions, restrictions or restraints imposed by
third parties , or considerations relating to the validity of any
patent in respect of which application is about to be made, any
grant by the Manufacturer to the Owner shall be limited
accordingly.
5.5 Where technical data and information relating to any
developments or improvements of the Products is legally obtained
or obtainable from an unrelated party only upon payment, there
shall be no obligation on either party to make such payment in
order to obtain such technical data and information for
disclosure to the other party provided, however, that is the
party does not make such payment, such technical data and
information shall be disclosed to the other party.
6.0 Obligations of the Owner.
6.1 The Owner shall provide to the Manufacturer sample marketing
information and standard information such as installation
instructions, technical data and manuals as are necessary to
promote the sale of the Products, and including trade
advertisements and promotional literature, if requested by the
Manufacturer. The Manufacturer shall obtain the prior written
approval of the Owner to use any such information which is not
simply a translation or a copy of that provided by Owner.
Manufacturer shall provide a translation in the English language
of such promotional material at the time of applying for such
approval.
6.2 The Owner agrees to use its best efforts to provide the
Manufacturer with accurate technical assistance under this
agreement, but the Owner does not assume any responsibility for
any Products produced and sold by the Manufacturer; nor shall the
Owner be deemed to make, or have made, any warranties of any
nature whatsoever with respect to such technical assistance or
with respect to the Products.
6.3 Upon the written request of the Manufacturer, the Owner
shall render all Know-How, training and technical assistance
necessary to be provided by the Owner under this agreement at
times and places mutually agreed upon and subject to the
availability of the Owner's personnel and facilities. The Owner
does not warrant or agree that any of its personnel to be
furnished or to be made available to the Manufacturer under this
agreement will speak any language other than English. The
Manufacturer shall obtain any and all necessary visas, work
permits, residence permits or other permits or approvals
necessary for the entry into and working in the Territory of all
technical personnel who are to be provided by the Owner under the
terms of this agreement.
.
6.4 Upon the written request of the Manufacturer during the term
of this agreement, the Owner agrees to send at such reasonable
intervals and times as may be mutually acceptable to the Owner
and the Manufacturer at least one of the Owner's technical
personnel and such additional technical personnel as may be
mutually agreed upon between the parties, to the Manufacturer's
plant in the Territory, to provide such technical assistance as
may be reasonably necessary to produce Products of a quality at
least equal to those being produced by the Owner. Such assistance
shall include the training of a reasonable number of the
Manufacturer's personnel. The Manufacturer shall reimburse the
Owner for the costs with respect to any employees sent to and
maintained in the Territory under this paragraph. Such
reimbursement shall be made by the Manufacturer in Canadian
currency and shall be in the amount of the total of the
following:
(a) the expenses of the personnel in traveling to and from
Territory; and
(b) the ordinary living expenses of the personnel while in
the Territory.
The Manufacturer further agrees to advance to the Owner the
cost of one or more round-trip air fares, as the case may be,
from the Territory simultaneously with its request for such
technical personnel. The Manufacturer further agrees to reimburse
the Owner for the aforementioned costs and expenses within thirty
days following receipt of the Owner's invoice therefor after
deduction of the air fare referred to above. It is understood,
however, that all ordinary living expenses of such technical
personnel relating to the initial set-up and installation of
equipment under this agreement, excluding the cost of food and
accommodation, are to be paid by the Owner. The Owner does not
warrant or agree that any of its personnel to be furnished or to
be made available to the Manufacturer under this agreement will
speak any language other than English.
7.0 Manufacturer's Duties -- Exploitation of Patents
7.1 The Manufacturer shall within the limits of its reasonable
ability, promote the sales of the Products in the Territory, and
conduct its business in a manner so as to enhance the reputation
of the Products and Trade Marks.
7.2 The Manufacturer shall manufacture the Products to the
highest standards and use the best quality of available materials
and sub-assemblies that are economically possible and available,
having regard to the nature of the Products and the use to which
they are to be put.
7.3 The Manufacturer shall maintain the standards of design,
materials, quality control, production and safety testing and
inspection at least equal to the standards specified by the Owner
and shall permit the Owner, at its own expense to inspect the
production line while in operation and to call for and inspect
samples of the Products manufactured by the Manufacturer, and to
inspect the Manufacturer's operations generally, in order to
determine if the Manufacturer has adhered to such standards. In
the event that the Manufacturer fails to adhere substantially to
such standards, the Owner may give the Manufacturer thirty days'
written notice of demand to comply, and if the Manufacturer fails
to comply (or if compliance by its nature requires a period
longer than thirty days, then if the Manufacturer fails to
commence complying and thereafter continues the process of
correcting the non-compliance), then the Owner, in addition to
its other remedies, may terminate this agreement by notice in
writing.
7.4 The Manufacturer agrees diligently to promote the sale of
the Products under this agreement. The Manufacturer further
agrees that its advertising expenditures for the promotion of the
Products during the course of every quarter during the term of
this agreement, and any extensions thereof, shall be in an amount
equal to Three (3%) percent of the Net Sales of such Products
sold by the Manufacturer during the quarter preceding. A detailed
report concerning such advertising shall be made to the Owner
within fifteen days after the end of each quarter.
7.5 The Manufacturer shall ensure that any registration or
notification required by the laws of the Territory shall have
been carried out. The Manufacturer shall comply with all laws and
regulations as may apply with the Territory, as applicable to
this agreement and all transactions and activities contemplated
or to be performed under this agreement. The Manufacturer shall
procure and maintain all approvals, licenses, permissions and
permits necessary to the performance of its business and conduct
its business in a manner so as to not bring discredit upon the
reputation of the Products or the Owner. The Manufacturer shall
keep the Owner informed of any laws or regulations of the
Territory which may affect the promotion, sales, services or
maintenance of the Products in order that the Owner will not
breach any such laws or regulations through lack of awareness
thereof.
7.6 The Manufacturer acknowledges that the essence of this
agreement is that the Owner's present and future Products will
receive priority attention from the Manufacturer. Accordingly,
the Manufacturer undertakes and agrees that during the term of
this agreement the Manufacturer will not sell any products which
may, in any way, compete with the promotion and sale of the
Products or have any financial or other interest, either directly
or indirectly, and either as shareholder, officer, director,
adviser, lender, owner, manager or agent, in any corporation,
partnership or other entity whose business is the sale or
manufacture of products which may in any way compete with the
manufacture, promotion and / or sale of the Products without the
written consent of the Owner. Nothing in this agreement shall
prevent the Manufacturer from continuing to carry on the business
of products other than Products of the Owner.
7.7 The Manufacturer must keep the Owner informed of the
locations of its production facilities in a timely manner.
8.0 Marketing and Production of Products
8.1 The Manufacturer agrees that it shall commence selling the
Products on or before December 1st, 1997.
8.2 The Manufacturer agrees that it shall manufacture and sell
the minimum number of Products as set out in Schedule "E" forming
part of this agreement. In the event that the Manufacturer fails
to meet the minimum quotas as set out in Schedule "E", the Owner,
at its sole option may:
(a) terminate this agreement with thirty days' notice in
writing to the Manufacturer;
(b) revoke the Manufacturer's exclusive license for the
Territory and grant the same or lesser licenses to third
parties within the Territory;
(c) attempt to renegotiate the terms of this agreement with
the Manufacturer;
(d) waive the Manufacturer's breach of this term of the
agreement in one or more specific instances of the
Manufacturer's failure to meet the minimum annual marketing
and production quotas, but this action shall not be deemed
to relieve the Manufacturer from its obligations to
otherwise meet the minimum marketing and production quotas
and shall not constitute a waiver of the Owner's right
thereafter to insist upon performance of the Marketing and
production quota covenant of the Manufacturer.
8,3 Any authorized representative of the Owner shall have the
right to enter at any time during business hours into the plant
or plants of the Manufacturer for the purpose of inspecting and
supervising the Manufacturer's methods and procedures of
processing, manufacturing, storage, display and marketing of the
Products.
9.0 Manufacturer's Prohibitions
9.1 The Manufacturer shall not advertise the Products outside
the Territory except where advertisements are included in
international publications.
9.2 The Manufacturer shall not seek customers, establish any
branch or maintain any office or depot in relation to the
Products anywhere outside the Territory.
10.0 Consideration
10.1 The Manufacturer agrees to pay the Owner the amounts by way
of initial payment the total of Ten Million shares (10,000,000),
issued as fully paid and non-assessable voting common shares, in
the capital of Manufacturer at a nominal value of One (1.00)
South African Rand, per share. At the date of this Agreement, One
South African Rand is equivalent to $0.25 Canadian currency.
10.2 As consideration for the license granted under the licensed
Patents and licensed Trade Marks, the Manufacturer agrees to pay
the Owner during the term of this Agreement an ongoing royalty
equal to Ten (10.0%) percent of the Net Sales of any Product
manufactured and sold by or on behalf of the Manufacturer (the
"Royalties"). Such Royalties shall be payable to the branch and
account designated by the Owner.
10.3 Within thirty days of the end of each quarter in each year,
the Manufacturer shall deliver to the Owner a report setting out
the numbers, description (including description of end use and
customer name) and value of the sales of each Product
manufactured by or on behalf of the Manufacturer and sold by it
(whether separately or as part of any larger unit or product)
during such preceding quarter. Concurrently with the making of
each such report, the Manufacturer shall remit the Royalties then
due to the Owner in respect of the Products sold by or on behalf
of the Manufacturer in the preceding quarter.
10.4 No Royalties shall be payable in respect of Products sold or
otherwise disposed of by the Manufacturer for the purpose of
samples or bona fide tests on such Products.
10.5 All payments to the Owner under this agreement shall be made
without any deduction of any kind except for withholding taxes,
if any, eligible on the payments. The Manufacturer undertakes to
take all reasonable steps to assist the Owner to obtain the
benefit of any double taxation agreement which may apply to any
of the payments under this agreement and to minimize the impact
of any taxation in respect of such payments.
10.6 In the event that withholding taxes are eligible on any
payments under this Agreement, the Manufacturer shall withhold
the withholding taxes required and shall promptly remit such
taxes to the appropriate taxing authority in the Territory. Upon
any such remittance, the Manufacturer shall promptly provide the
Owner with documentation evidencing the payment of such taxes,
and any other documentation that the Owner shall reasonably
require so as to obtain a foreign tax credit in Canada.
10.7 Interest on all late royalties and any other sums or
payments due to the Owner under this agreement shall be charged
at the average of London Interbank Offering Rate (ALIBOR@) for
the month containing the due date for the late royalty or other
late sum or payment plus 2.0% per annum from the due date until
such overdue royalty, sum or other payment is received.
11.0 Currency of Payment
11.1 Except as otherwise specified in this agreement, all
payments required to be made by or on behalf of the Manufacturer
under this agreement shall be converted to and paid in United
States dollars, based on the prevailing "buying" foreign
exchange rate for United States dollars on the date any such
payment is due, and shall be paid to the Owner or to such account
or accounts at such bank or banks as the Owner may in its sole
discretion designate from time to time and the Owner shall give
the Manufacturer thirty days' written notice of any such change
in place of payment. In the event that the Manufacturer is late
in making any payment due pursuant to this agreement, then, in
addition to any interest charges that may accrue thereon in
accordance with this agreement, the exchange rate to be applied
to any such late payment shall be the Owner's most favorable
"buying" foreign exchange rate at the Royal bank of Canada at any
time during the period commencing on the date that the payment
was due and the date such payment was actually made.
11.2 If any law or regulation is imposed in the Territory
restricting or limiting the right of the Manufacturer to make
payment to the Owner as provided in this agreement, the
Manufacturer shall immediately notify the Owner of any such
restrictions or limitations and shall use its best efforts to
register or qualify this agreement under any such law or
regulation in order to allow the Manufacturer to make full
payment to the Owner as provided in this agreement. The
Manufacturer agrees to modify any terms or conditions of this
agreement which would not unreasonably interfere with its
utilization of the rights granted under this agreement, if such
modifications are necessary in order to allow the Manufacturer to
make full payment to the Owner. If the agreement cannot be
modified to the satisfaction of both parties so as to allow the
Manufacturer to obtain sufficient exchange to make its required
payments under this agreement, then in that event the Owner shall
have the option of accepting payment in any other authorized
currency acceptable to the Owner and designated by the Owner to
the Manufacturer in writing or the Owner may terminate this
agreement on sixty days' notice thereof to the Manufacturer.
12.0 Warranty re Patents and Trade Marks
12.1 The Owner warrants that it has the right to grant the rights
granted in this agreement and that it has granted no other rights
or licenses which would derogate from the rights granted in this
agreement.
12.2 The Manufacturer acknowledges the validity and ownership of
the Patents in the Territory. The Manufacturer further
acknowledges the validity of the Trade Marks and agrees that the
Trade Marks are and shall remain the property of the Owner.
12.3 The Manufacturer shall not in any way do anything to
infringe upon, harm, or contest the validity of the Patents or
Trade Marks.
12.4 The Manufacturer shall maintain, in such manner as may be
requested by the Owner, a watch service to detect machines,
apparatus, methods or processes in the Territory relating to the
Products and particularly those that infringe the Patents or
Trade Marks and shall report any infringements of the Patents or
Trade Marks to the Owner.
12.5 Each party shall advise the other promptly of any instances
of infringements, imitations, illegal use or misuse, of any
Patent or Trade Xxxx. The Manufacturer shall have the right to
commence legal action for the enforcement of any such Patents and
Trade Marks in the Territory, but prior to the commencement of
any such action by the Manufacturer, the Manufacturer shall
advise the Owner by notice in writing of its intention to do so.
The Owner shall have the option to be exercised by delivery of
notice in writing to the Manufacturer to assume carriage of any
such action and appoint counsel of its choice at any time during
the action provided that the Owner reimburses the Manufacturer
for all reasonable legal costs incurred by the Manufacturer from
the date of commencement of the action. The Owner and
Manufacturer shall cooperate fully in the prosecution of any such
action free of charge, and each agrees that it shall be joined as
a party plaintiff to the action and authorizes such joinder. Each
shall have the right at its own expense to retain independent
counsel who shall be kept fully informed of all issues in the
action, who shall be advised in advance of each new step in the
action, and who shall be entitled promptly to receive copies of
all pleadings, documents and correspondence regarding the action.
In the event that any such action is successfully prosecuted
against an infringer, any damages, accounting of profits, award
of legal costs or other recovery shall be applied first to
reimburse the party having carriage of the action for its
reasonable legal expenses, including any amounts paid by the
Owner to the Manufacturer in assuming carriage of the action, and
any remaining amounts shall then be divided between the Owner and
the Manufacturer in proportion to the damages suffered by the
Manufacturer and the Royalties lost by the Owner with respect to
the infringing conduct, subject to arbitration as hereinafter set
out if the parties are unable to agree upon such proportion. In
the event that any such action is unsuccessful, the one of the
Owner and the Manufacturer having carriage of the action shall be
responsible in equal shares for paying any legal costs which may
be awarded to the successful defendant.
13.0 Indemnity for Patent and Trade Xxxx Actions
13.1 The Owner will defend the Manufacturer against a claim that
the sale of any of the Products infringes Patents or Trade Marks
in the Territory and the Owner will pay resulting costs, damages
and legal fees finally awarded, provided that the Manufacturer
promptly notifies the Owner in writing of the claim; and the
Owner has sole control of the defense and all related settlement
negotiations.
13.2 The Manufacturer shall have the right to terminate this
agreement by notice in writing, effective immediately upon
receipt, in the event that the Owner's applications for Patents
referred to in Schedule "A" do not issue from the patent
applications within Five years from the date of execution of this
agreement.
l 4.0 Registrations, Maintenance and Filings
14.1 The Manufacturer shall be responsible for maintaining the
Patents and Trade Marks in full force and effect throughout the
term of this agreement. Further, the Manufacturer agrees to
obtain any registration or any approvals or authorizations in
connection with this license and its supplementary agreements
that, in the opinion of the Owner, may be necessary or desirable
to be obtained from any government or governmental agency or
instrumentality in the Territory and the obtaining thereof shall
be a condition to this entire agreement. The Manufacturer shall
be responsible for obtaining a certified translation of the
document, if required, for the scrutiny of such government,
agency or instrumentality and shall bear all costs of compliance
with regulations or requirements thereof.
14.2 The Owner agrees that, at the expense of the Manufacturer,
the Owner shall follow up and pay all renewal fees and otherwise
maintain the Patents and rights in the Patents and the Trade
Marks provided, however, that the parties' agents and attorneys
retained for such purpose shall be jointly appointed by the Owner
and the Manufacturer. Each party further agrees to notify the
other at the time it makes an application for a patent or trade
xxxx or acquires any right in a patent or trade xxxx which is or
becomes subject to the terms of this agreement, such notice to
include the expiration dates of any period during which a related
patent or trade xxxx application must be filed in any other
country.
14.3 In the event that either the Owner or the Manufacturer
decides not to file for patent protection for any invention or
discovery relating to the Products, it agrees to notify the other
party within thirty days after such decision in order to allow
such other party to pursue any rights to such invention or
discovery.
14.4 If either the Owner or the Manufacturer intends to dispose
of or abandon any of the Patents, rights in the Patents, patent
application or the right to file under the Paris Convention for a
foreign patent (the "Patent Interest") which would be covered by
this agreement, it shall promptly notify the other party of such
intention and give such other party sufficient notice to permit
it to take all steps necessary to preserve such Patent Interest.
Such other party shall then have the right during a sixty-day
period commencing with such notification to assume any such
Patent Interest which the notifying party intends to dispose of
or abandon and to undertake the procuring or preserving of such
Patent Interest to itself. The notifying party will co-operate
with the other party in such endeavor (including making an
assignment of full right, title and interest in the Patent
Interest) provided that such other party shall bear all costs
(including any tax liability) in connection therewith. Nothing in
this agreement shall prevent the Manufacturer from assigning or
selling its rights to receive Royalties or its reversionary
rights in anticipation of termination of the license granted by
this agreement.
14.5 Each of the Manufacturer and the Owner shall render all
reasonable assistance free of charge if so requested by the other
in the prosecution of any present or future Patent applications
in the Territory and shall do all things in its power towards
maintaining the validity and enforcement of any Patents which may
have issued or which may issue in respect of such Patent
applications. The Manufacturer shall at the cost of the Owner
render all practicable assistance, if so requested by the Owner,
in connection with and in support of any application by the Owner
for the extension of the terms of any Patent.
15.0 Trade Marks and Other Proprietary Marks
15.1 The Manufacturer is authorized, but not obligated to
describe, refer to and advertise itself as a Manufacturer of the
Owner for the manufacture of the Products in the Territory.
15.2 The Manufacturer agrees to display prominently on all of the
packaging and containers for Products manufactured and offered
for sale, the trade name "Global Qiblah Locator@, including any
additions or modifications thereof. Below this identification and
/ or any trade xxxx owned or developed for Owner, the
Manufacturer may affix an additional xxxx showing that the
manufacture has been made in the workshops of the Manufacturer.
Text and size, however, shall not exceed one-half the above trade
name . The Manufacturer agrees to use only the packaging,
containers, labels, designs, advertising and descriptive material
which have been approved by the Owner prior to their use. The
Manufacturer shall be diligent in submitting such materials to
the Owner for approval, and the Owner agrees to respond within a
reasonable period. As far as possible, standard programs,
outlines and procedures shall be established for advertising,
promotion work and packaging. Routine minor matters handled in
accordance with accepted and approved outlines and plans need not
be submitted to the Owner for specific approval, except that all
advertising copy must be approved by the Owner. The Owner agrees
to provide the Manufacturer with appropriate designs for labels
and containers.
15.3 The Manufacturer agrees that its right to use the trade name
and trade xxxx shall be conditional upon its selling only
Products of a quality equal to those being produced at any given
time by the Owner, or at the Owner's discretion, in accordance
with the reasonable standards of quality specified from time to
time by the Owner.
15.4 In the event that the Owner decides to apply for
registration of any one or more of the Trade Marks and/or Patents
in connection with the Products in the Territory, the Owner shall
notify the Manufacturer in writing and may request and obtain the
Manufacturer=s advice and assistance if required, and keep the
Manufacturer informed of pertinent developments and / or the
issuance of registration. The cost of any such registration of
trade marks and/or patents shall be for the account of the Owner
and all such registrations shall be applied for and issue in the
name of and as the sole property rights of the Owner.
15.5 If any Trade Marks of the Owner are used by the
Manufacturer, alone or in combination with other trade marks of
the Owner or the Manufacturer, in such manner as to be
distinctive by reason of design, color, format or any other
reason, such distinctive features and associated good will shall
become the property of and enure to the benefit of the Owner, and
the Manufacturer agrees that it will, without any payment or
other consideration, sign and execute such documents as are
necessary to transfer and assign all rights thereto to the Owner.
15.6 Should the law or regulations of any part of the Territory
invest the Manufacturer with any property rights to any of the
Trade Marks or Patents, the Manufacturer shall promptly, freely
and co-operatively relinquish to the Owner any and all such
rights upon termination of this agreement for any reason, without
recourse or cost to the Owner and shall thereafter refrain from
any further usage of the said Trade Marks or Patents.
15.7 Following termination of this agreement for any reason
whatsoever, the Manufacturer agrees not to register or use any of
the Trade Marks, or any trade marks or trade names which are the
same as or confusingly similar to the Trade Marks. This
obligation shall survive the termination of this agreement for a
period of time not exceeding three years..
16.0 Manufacturer's Indemnity of Owner -- Insurance
16.1 Manufacturer agrees to indemnify and hold the Owner harmless
against any liability, damage or expense (including costs and
attorney's fees and expenses) by reason, or arising out of or
relating to any acts, duties or obligations or omissions of the
Manufacturer or of any personnel employed or otherwise engaged by
the Manufacturer to perform the Manufacturer's obligations and
duties under this Agreement, and the Manufacturer shall, at the
request of the Owner assume the defense of any demand, claim,
action, suit or proceeding brought against the Owner by reason
thereof and pay any and all damages assessed against or that are
payable by the Owner as the result of the disposition of any such
demand, claim, action, suit or proceeding. Notwithstanding the
foregoing, the Owner may be represented in any such action, suit
or proceeding at its own expense and by its own counsel.
16.2 For the carrying out of the covenant contained above, but
without limiting the generality thereof, the Manufacturer shall
procure and maintain, in full force and effect, a comprehensive
general liability insurance policy or policies with personal
injury liability blanket, contractual liability and completed
operations liability insurance endorsements protecting the
Manufacturer and the Owner and their officers and employees
against any loss, liability or expense due to personal injury,
death or property damage or otherwise arising out of or occurring
in connection with the business of the Manufacturer. The Owner
shall be an additional insured in such policy or policies which
shall be written by a responsible insurance company or companies
licensed to do business in the Territory and meeting with the
reasonable approval of the Owner, with a combined single limit of
not less than Two million dollars for bodily injury or death and
for property damage. Such policy or policies shall provide that
they will not be canceled or altered without at least sixty days'
prior written notice to the Owner. Within ten days after
execution of the agreement, the Manufacturer shall furnish the
Owner with a certificate or certificates of such insurance,
together with evidence that the premiums therefor have been paid.
Maintenance of such insurance and the performance by the
Manufacturer of its obligations under this paragraph shall not
relieve the Manufacturer of liability under the indemnity
provisions set forth in this agreement.
17.0 Confidentiality
17.1 All information, including the Know-How, other than
information generally known in plastic injection molding industry
or information made known by a third party to the Manufacturer
other than as a consequence of the Manufacturer's relationship
with the Owner ("Confidential Information") supplied by or on
behalf of the Owner pursuant to this agreement shall be treated
as confidential by the Manufacturer and shall be used solely to
enable the Manufacturer to manufacture, use, sell and develop a
market for the Products in accordance with this agreement, and
all documents containing or disclosing such Confidential
Information shall at all times be and remain the property of the
Owner; provided, however, that the Owner shall not during the
continuance of this agreement demand the delivery of such
documents from the Manufacturer.
17.2 The Manufacturer covenants and agrees that no Confidential
Information given to it by or on behalf of the Owner in the
manner described or otherwise shall be disclosed to anyone
outside the organization of the Manufacturer without the prior
written consent of the Owner.
17.3 The Manufacturer agrees to use all reasonable efforts to
take such action as may be appropriate to prevent the
unauthorized use and disclosure of, and to keep confidential all
such Confidential Information, including:
(a) ensuring that such Confidential Information is
disclosed only to responsible employees of the Manufacturer
who have first been properly instructed to maintain such
Confidential Information in confidence;
(b) not disclosing to any third party the terms and
conditions of this agreement;
(c) not disclosing methods of manufacture or sale of the
Products including production and marketing plans; and
(d) safeguarding all documents against theft, damage or
access by unauthorized persons.
17.4 Permitted Disclosure: Nothing contained in this agreement
shall prevent the Owner or the Manufacturer from making
disclosure of any of the Confidential Information to:
(a) any authorized body for the sole purpose of obtaining
registration of any Patent for any invention or discovery
which is the subject of this agreement; or
(b) any other person, firm or corporation for the purpose of
promoting the sale or use of Products by the Owner and any
of its other Manufacturers or by the Manufacturer and any of
its permitted sub-Manufacturers, provided that the
Manufacturer shall obtain from the persons to whom such
disclosure is made a covenant of non-disclosure in favor of
both the Owner and the Manufacturer.
18.0 Books and Records
18.1 The Manufacturer shall keep at its principal place of
business, clear and proper books of account showing production
and sales of Products subject to royalties under this agreement
and agrees that within thirty days following the last days of
March, June, September and December, it will submit a written
statement giving the total sales of the Products for the quarter
being reported.
18.2 The Owner shall have access to the books and records of the
Manufacturer at all reasonable times to check all relevant
figures and information affecting or relating to the
Manufacturer's operations under this agreement, including the
amount of sales of the Products made hereunder by the
Manufacturer and the amount of royalties payable under this
agreement; provided, however, that if both the Owner and the
Manufacturer agree upon an independent agency such as a firm of
chartered accountants to represent them, either the Owner or the
Manufacturer may at its election substitute for the Owner's
examination a certificate of the mutually agreed-upon firm of
accountants as to the amount of sales and the amount of royalties
payable under this agreement and as to any other information and
figures that determine or relate to the operations of the
Manufacturer under this agreement. The Manufacturer shall supply
the Owner with a statement of its regular auditors at the time of
its regular yearly audit, certifying the number of Products
manufactured and the amount of sales thereof and other figures
and information necessary or helpful in determining production or
sales of the Products and the amount of royalties payable under
this agreement.
18.3 The Owner shall be entitled to appoint {chartered
accountants] to audit the production records for the production
of the Product, and the Manufacturer shall give access to such
records and supporting documentation and otherwise reasonably
assist in such audit so that the Owner may obtain independent
verification of the written statements referred to above. In the
event that such audit reveals an error in favor of the
Manufacturer in excess of 3% of the amount stated in the
production statements for the year in question, then, in addition
to any other remedies the Owner may have, the Owner may terminate
this agreement forthwith.
18.4 Notwithstanding termination of this agreement, the
Manufacturer shall permit such examinations to continue to take
place until all outstanding claims have been settled to the
satisfaction of the Owner.
19.0 Excusable Delay
19.1 In case of force majeure preventing or hindering either
party from performing its obligations under this agreement, the
affected party may give written notice to the other containing
reasonable particulars of the force majeure in question and the
effect of such force majeure as it relates to the obligations of
the affected party and such force majeure shall not constitute a
default under this agreement, provided that the party affected by
the delay makes reasonable efforts to correct the reason for such
delay. Such notice shall entitle the affected party to suspend
deliveries or payments, as the case may be. For the purpose of
this agreement, "force majeure" shall mean any of the following
events beyond the control of the parties:
(a) lightning, storms, earthquakes, landslides, floods,
washouts and other acts of God;
(b) substantial or material fires, explosions, breakage of
or accidents to plant, machinery, equipment and storage of
the supplier;
(c) strikes, lockouts or other industrial disturbances of
the supplier;
(d) civil disturbances, sabotage, war, blockades,
insurrections, vandalism, riots, epidemics,
(e) inability to obtain supplies necessary to manufacture
and package the Products at the supplier's plants, if
inability is industry-wide among similar manufacturers or
inability to obtain electric power, water, fuel or other
utilities, or services necessary to operate the plants; and
(f) any other material event that could reasonably be
considered to be force majeure by reason that it is beyond
the control of the party affected; but shall not include the
inability of either party to obtain financing or any other
financial inability on the part of either party.
20.0 Warranty
20.1 The Manufacturer warrants to the Owner that the Products
shall be of merchantable quality. The Manufacturer, at its
option, and at its cost, shall replace any Products which fail to
comply with such warranty or shall refund the purchase price paid
to the Manufacturer therefor. The period of the warranty shall
extend for a period of six months after the date of sale of the
Products to a customer and for a period of ninety days from the
date of sale of replacement or spare parts to a customer.
20.2 The aforesaid warranty shall be the only warranty made by
the Manufacturer with respect to the Products and is in lieu of
all obligations or liabilities on the part of the Manufacturer
for damages including, but not limited to, consequential damages
arising out of or in connection with the sale, use or performance
of Products.
20.3 The Manufacturer shall not make any representation or
warranty to customers which shall differ from or exceed in any
way those made by the Owner in its published literature or in its
terms and conditions of sale.
21.0 Manufacturer's Status
The relationship between the Manufacturer and the Owner is
intended to be and shall be that of buyer and seller, and the
Manufacturer and its employees, agents and representatives shall
under no circumstances be considered agents, partners, joint
venturers or representatives of the Owner. The Manufacturer shall
not act or attempt to act, or represent itself, directly or by
implication, as agent, joint venturer, partner or representative
of the Owner or in any manner assume or attempt to assume or
create any obligation or liability of any kind, nature or sort,
express or implied, on behalf of or in the name of the Owner.
21.2 The relationship created by this agreement does not
constitute the granting of a franchise to the Manufacturer by the
Owner and no federal or provincial franchise statute, law,
regulation or rule is intended to or has been applied by the
parties, nor shall any such franchise, statute, law, regulation
or rule be deemed or construed to apply to the formation,
operation, administration or termination of this agreement.
22.0 Term and Termination
22.1 Either party may terminate this agreement without notice or
other act if,
(a) the other party is in default in any material respect in
the performance of any of its obligations under this
agreement or otherwise commits any material breach of this
agreement, and such default continues after thirty days'
written notice from the non-defaulting party to the
defaulting party stating the particulars of such default
(for the purposes herein, any failure to make any payment
due under this agreement shall be a material default);
(b) bankruptcy or insolvency proceedings are instituted by
or against the other party, which the other party does not
defend or which it is not successful in defending, or the
other party is adjudicated a bankrupt, becomes insolvent,
makes an assignment for the benefit of creditors or proposes
or makes any arrangements for the liquidation of its debts
or a receiver or receiver and manager is appointed with
respect to all or any part of the assets of the other party;
(c) if any sovereign entities or political subdivisions in
the Territory enact legislation relating to the relationship
created by this agreement which grants rights to the
Manufacturer which are not granted by this agreement, this
agreement shall terminate automatically one day prior to the
date such legislation becomes effective; or
(d) in the event an excusable delay fails to permit either
party to fulfil its obligations after a delay of six months
after the date the obligation would have been required to
have been fulfilled but for the occurrence of the excusable
delay.
22.2 The Owner may terminate this agreement without notice or
other act if,
(a) the whole or substantially the whole of the assets of
the Manufacturer are sold or conveyed;
(b) the Manufacturer assigns or purports to assign this
agreement without the prior written consent of the Owner;
(c) the Manufacturer attempts to change the control and/or
management of the Manufacturer's organization, which change
shall be unacceptable to the Owner, in the Owner's sole
discretion;
(d) the Manufacturer states in writing that it intends to
cease manufacturing, marketing or selling the Products; or
(e) the Manufacturer shall have failed to substantially meet
market demand for the Products.
22.3 For greater certainty, if the Manufacturer is a corporation,
partnership or other business entity which offers its shares,
units or other evidence of equity ownership to the public, a
change in effective control in fact shall be deemed to have
occurred when at least 20% of such equity ownership has been
transferred and if the Manufacturer does not offer its shares,
units or other evidence of equity ownership to the public, a
change in effective control in fact shall be deemed to have
occurred when at least 40% of such equity ownership has been
transferred.
23.0 Events Upon Termination
23.1 Upon termination of this agreement for any cause whatsoever,
(a) all Royalties, including Royalties on the Products then
on hand or in the course of manufacture, distribution or
sale shall immediately become due and payable;
(b) the Manufacturer shall forthwith, and not later than
thirty days thereafter, return free of any charge to the
Owner, all written information of whatever kind, including
graphic and electronically or magnetically recorded
documents furnished by the Owner or created by the
Manufacturer in relation to the Products including, without
limitation, notes, memoranda, diaries, records, drawings,
prints, sketches, plans, specifications and other technical
information made by the Manufacturer or its agents,
affiliates or employees and copies of any kind made thereof
by anybody, and derived from the technology of the Patents,
Know-How, Trade Marks, Products or the manufacture thereof;
further, the Manufacturer agrees that it will forthwith
discontinue the use of and refrain from using, disclosing or
exploiting the Know-How and any technical data and
information pertaining thereto or any improvement or
development in respect thereof disclosed to it under this
agreement by the Owner and from manufacturing or selling the
Products and the Owner shall forthwith have the right to
institute proceedings for infringement of any of its Patent
and Trade Xxxx rights then in force;
(c) the Manufacturer shall turn over to the Owner all sales
inquiries and unfilled orders and the parties shall
negotiate the amount of compensation, if any, which the
Manufacturer may receive therefor; and
(d) the Manufacturer shall cease trading in the Products and
shall notify all dealers and other interested parties of the
termination. The Manufacturer shall further cease to make
any representations to the public that it is an authorized
manufacturer, marketer or dealer of the Products.
23.2 Notwithstanding any such termination:
(a) all warranties set out in this agreement and all
obligations of indemnification shall survive and continue to
bind the parties for the earlier of six months after the
date of termination of this agreement or the expiry date
expressly warranted for any specific item;
(b) the Manufacturer shall honor any remaining payment
obligations set out in this agreement;
(c) the Manufacturer shall be permitted to sell all Products
manufactured prior to the termination, provided such sales
are completed by delivery of goods and receipt of payment
therefor within three months of the date of such termination
and are subject to the payment obligations as set out in
this agreement.
24.0 Damages
If the Owner unilaterally terminates this agreement for any
reason other than those set forth in this agreement, then the
Owner shall pay to the Manufacturer as liquidated damages the sum
of $US 25,000.00 The payment shall not be made in the event that
the Owner terminates this agreement due to the fact that the
Manufacturer has failed to perform any of its obligations or
duties under this agreement.
25.0 Conformity with Local Laws
25.1 The rights and obligations of the parties under this
agreement shall be subject to all applicable laws, orders,
regulations, directions, restrictions and limitations of the
governments having jurisdiction of the parties. In the event,
however, that any law, order, regulation, direction, restriction
or limitation, expropriation, seizure or interpretation thereof
shall in the judgment of either party substantially alter the
relationship between the parties under this agreement, or the
advantages derived from such relationship, either party may
request the other party to modify this agreement, and if, within
fifteen days subsequent to making such request, the parties are
unable to agree upon a mutually satisfactory modification hereof,
then the adversely affected party may terminate this agreement on
fifteen days' notice given to the other party, not later than
thirty days following the end of such thirty day period.
25.2 The parties shall each at its own expense in its own
countries, take such steps as may be required to satisfy the laws
and requirements of the respective countries with respect to
declaring, recording or otherwise rendering this agreement valid.
26.0 Disclosure
26.1 This agreement may be filed with any governmental agency or
official as determined to be appropriate by either party.
27.0 Dispute Resolution
27.1 All disputes, controversy or claims arising out of or in
connection with or in relation to the contract, including any
question regarding its existence, validity or termination, shall
be submitted to and be subject to the jurisdiction of the courts
of the Province of British Columbia (including the Supreme Court
of Canada) which shall have exclusive jurisdiction in the event
of any dispute under this agreement. The parties irrevocably
submit to the jurisdiction of such courts to finally adjudicate
or determine any suit, action or proceedings arising out of or in
connection with this agreement. In the alternative, the parties
may agree to submit the matter to arbitration in accordance with
the Rules of Conciliation and Arbitration of the International
Chamber of Commerce by one or more arbitrators appointed in
accordance with the said Rules.
28.0 Assignment
28.1 Neither this agreement nor any of the rights or duties of
the Manufacturer shall be assigned, transferred or conveyed by
the Manufacturer, by operation of law or otherwise, nor shall
this agreement or any rights of the Manufacturer enure to the
benefit of any trustee in bankruptcy, receiver, creditor, trustee
or successor of the Manufacturer's business or of its property,
whether by operation of law or otherwise, or to a purchaser of
all of the shares of the Manufacturer or to a purchaser of the
entire business or substantially all of the assets of the
Manufacturer, without the prior written consent of the Owner. The
Manufacturer acknowledges that the Owner may assign this
agreement to an affiliate or subsidiary.
29.0 Language
29.1 Upon execution, this agreement may be translated into the
language of the Territory provided, however, that in the event of
any diversion between the English language version and any other
version, the English language version shall prevail.
30.0 Extended Meanings
30.1 Words importing the singular number include the plural and
vice versa and words importing gender include all genders.
31.0 Interpretation not affected by Headings
31.1 The division of this agreement into paragraphs and the
insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation of this
agreement.
32.0 Applicable Law
32.1 This Agreement is made, executed, and delivered in
Xxxxxxxxx, Xxxxxxx Xxxxxxxx Xxxxxx, and any controversy arising
hereunder or in relation to this Agreement shall be governed by
and construed in accordance with the domestic laws of the
Province of British Columbia, Canada. The parties hereto hereby
agree that the application of the United Nations Convention on
Contracts for the International Sale of Goods to this Agreement
does not apply and is strictly excluded.
33.0 Entire Agreement
33.1 This agreement constitutes the entire agreement of all the
parties with respect to the subject-matter hereof and, except as
stated in this agreement and in the instruments and documents to
be executed and delivered pursuant to it, contains all of the
representations, undertakings and agreements of all parties
respecting the subject-matter hereof. There are no
representations, undertakings or agreements of any kind between
all the parties respecting the subject-matter hereof except those
contained in this agreement.
34.0 Severability
34.1 The invalidity or unenforceability of any provision of this
agreement shall not affect the validity or enforceability of any
other provision.
35.0 Currency
35.1 Unless otherwise specifically provided in this agreement,
all references to dollar amounts or other money amount are
expressed in terms of lawful money of the United States of
America.
36.Notices
36.1 Any notice or other documents required or permitted to be
given under this agreement shall be in writing and shall be
delivered, mailed by prepaid registered mail, return receipt
requested or sent by facsimile transmission addressed to the
party or parties to whom it is to be given at the address shown
below or at such other address or addresses as the party or
parties to whom such writing or document is to be given shall
have last notified all other parties in accordance with the
provisions of this paragraph:
(a) if to the Manufacturer at: Qiblah Technologies Ltd.
00 Xxxxxxx Xxxxxx
Xxxxxxxxxxxx
Xxxxxxxx 0000, Xxxxx Xxxxxx
(b) if to the Owner at: Qiblah International
Industries Ltd.
Xxxxx 0000, 0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx
X0X 0X0
36.2 Any such notice or other document shall:
(a) if delivered, be deemed to have been given and received
at the place of receipt on the date of delivery, provided
that if such date is a day other than a business day in the
place of receipt, such notice or document shall be deemed to
have been given and received at the place of receipt on the
first business day in the place of receipt, thereafter;
(b) if transmitted by facsimile transmission, be deemed to
have been given and received at the place of receipt on the
next business day in the country of receipt, following the
day of sending, provided that the sender has received
telephone confirmation from the recipient of receipt of same
on or before the date transmission is deemed to have been
received as above, and
(c) if mailed, be deemed to have been given and received at
the place of receipt on the date of actual receipt.
36.3 In the event of postal disruption, such notices or documents
must either be delivered personally or sent by facsimile
transmission.
37.0 Amendment of Agreement
37.1 None of the terms, conditions or provisions of this
agreement shall be held to have been changed, waived, varied,
modified or altered by any act or knowledge of either party,
their respective agents, servants or employees unless done so in
writing signed by both parties.
38.0 Waiver of Breach
38.1 No waiver on behalf of any part of any breach of the
provisions shall be effective or binding on such party unless the
same shall be expressed in writing and any waiver so expressed
shall not limit or affect such party's rights with respect to any
future breach of any of the provisions of this agreement.
39.0 Further Assurances
39.1 Each of the parties covenants and agrees that he, his heirs,
executors, administrators, successors and permitted assigns will
execute such further documents and do and perform or cause to be
done and performed such further and other acts as may be
necessary or desirable from time to time in order to give full
effect to the provisions of this agreement.
40.0 Successors and Assigns
40.1 This agreement shall be binding on and enure to the benefit
of the successors and assigns of both parties and all persons or
corporations succeeding to or acquiring the business now carried
on by the Owner or the Manufacturer. The Manufacturer shall not
be entitled to assign this agreement in whole or in part without
the consent in writing of the Owner, which consent shall not be
unreasonably withheld.
41.0 Time
41.1 When calculating the period of time within which or
following which any act is to be done or step taken the date
which is the reference day in calculating such period shall be
excluded.
42.0 Time of the Essence
42.1 Time shall be of the essence of this agreement.
In witness whereof the parties have duly executed this agreement
as of the date first above written.
The Common Seal of
QIBLAH TECHNOLOGIES LTD.
was hereunto affixed in the presence of c/s
By: /s/___________________________
Authorized Signatory
The Common Seal of
QIBLAH INTERNATIONAL INDUSTRIES LTD.
was hereunto affixed in the presence of c/s
By: /s/___________________________
Authorized Signatory
SCHEDULE "A" TO THE AGREEMENT DATED 30TH OCTOBER, 1997
BETWEEN QIBLAH INTERNATIONAL INDUSTRIES LTD.
AND QIBLAH TECHNOLOGIES LTD.
Patent of March 26, 1998
This one page exhibit, which is unable to be placed in
electronic media, is a patent issued by the South Africa patent
office on March 26, 1997 in the name of Xxxx X. Xxxxxxxx. This
patent (Application No. 972622) covers a direction locating
device and bears the official stamp of the Registrar of Patents,
Designs,, Trade Marks, and Copyright.
SCHEDULE "B" TO THE AGREEMENT DATED 30TH OCTOBER, 1997
BETWEEN QIBLAH INTERNATIONAL INDUSTRIES LTD.
AND QIBLAH TECHNOLOGIES LTD.
This Agreement is dated for reference the 2 9th Day of October,
1997
BETWEEN
XXXX X.. XXXXXXXX, Businessman, in care of X. Xxxxx,
Xxxxxxxxxxxxxxxxxxxx 00, 00000 Xxxxxxxxx, Xxxxxxx, or his
lawfully designated nominee, hereinafter called "Owner"
AS PARTY OF THE FIRST PART
AND
QIBLAH INTERNATIONAL INDUSTRIES LTD., a private corporation
pursuant to the laws of the Province of British Columbia,
with its executive offices at Suite 2400, 0000 Xxxx Xxxxxxxx
Xxxxxx, Xxxxxxxxx, XX, X0X 0X0, and its lawfully appointed
nominee(s) hereafter called "Qiblah"
AS PARTY OF THE SECOND PART
WHEREAS:
A. Owner is the inventor and developer of an personal use
portable electronic device, as described as "Direction
Finder" in Patent Application 97/2622, Registered 26th
March, 1997 by Patent Attorneys Xxxxx & Xxxxx, Pretoria,
Republic of South Africa, a copy of which Application is
attached hereto as Schedule "A" to this Agreement,
hereinafter called the "Patent"; the purpose of which device
is to locate from any place in the world, the true direction
of the City of Makkah, the birthplace of Xxxxxxxx; and
B. The Patent Application empowers the Owner to register the
Patent in each country which is a subscriber to the
International Patent Protection Treaty, of which Treaty
South Africa is a signatory; and
C. The Owner wishes to assign to Qiblah the whole of the Patent
rights existing under the Patent Application.
NOW THIS AGREEMENT WITNESSES that in consideration of the sum of
Ten dollars of lawful currency of Canada ($10.00) now paid by
each Party to the other, the receipt and sufficiency of which is
by each Party to the other hereby acknowledged and other good and
valuable consideration, the Parties hereto are agreed as follows:
1. Assignment.
Owner hereby assigns, sets over and transfers to Qiblah,
absolutely, and Qiblah does hereby accept such assignment,
effective from the date hereof, of the legal and beneficial
rights of registration and ownership of the Patent Application
and Patent subsequently pursuant to the Patent Application
appealing in Schedule "A" hereto.
2. Purposes of Agreement
This agreement is made to secure to Qiblah absolutely, from the
date of this Agreement, the Patent rights for the countries
described in paragraph 1 and to permit Qiblah to deal with the
licensing of such rights without further or other enquiry by the
party or parties acquiring such rights as Qiblah may license, as
to the ownership of Qiblah of the Patent rights or the right of
Qiblah to deal with such rights in any manner and upon such terms
and conditions as Qiblah may in its sole and arbitrary
discretion.
3. License Fees
The license fees and other terms and conditions existing between
the Owner and Qiblah under an Agreement dated 12' September, 1997
between the Owner and Qiblah shall remain unaltered by this
agreement and in the event of any conflict, either in
interpretation or in effect of law, the provisions of this
agreement shall have precedence.
4. Qiblah Right of Assignment
Qiblah shall have the right at any time and from time to time to
assign, contract or otherwise deal with the Patents assigned to
Qiblah under this Agreement, with any person or corporation, on
such terms and conditions as to Qiblah, in its sole and arbitrary
discretion may deem necessary or advisable, subject to the
performance by Qiblah of its obligations under paragraph 3
5. Representations and Warranties of the Owner
The Owner hereby represents and warrants to Qiblah that:
(a) The Owner is the recorded and sole beneficial owner of
all of the Patent Application appearing in Schedule "B"
hereto and any other rights titles and interest in and
to the Direction Finder; and
(b) The Owner, at the expense of Qiblah, shall register in
the name of Qiblah the Patent for each and every of the
Countries for which Qiblah set out in paragraph 2 of
this Agreement and shall provide to Qiblah timely
written notice of such registration; thereafter Qiblah
shall be solely responsible for the maintenance of the
Patent and all associated fees and expenses; and
(c) Entering into this Agreement does not conflict with any
applicable law of the Republic of Germany or of the
Republic of South Africa nor does it conflict with, or
result in a breach of or accelerate the performance
required under any contract or other commitment to
which he is a party or by which he is bound; and
(d) Owner has the exclusive and unencumbered right to enter
into this Agreement and possesses all necessary
authority to assign to Qiblah all of the rights, titles
and interests of the Owner in and to the Patent and
intellectual property rights appurtenant thereto for
all of the countries described in paragraph 2 hereof in
accordance with the terms and conditions of this
Agreement; and
The representations and warranties hereinbefore set out are
conditions upon which Qiblah has relied in entering into this
Agreement and same shall survive the term of this Agreement and
the Owner hereby contracts and agrees to forever indemnify and
hold harmless Qiblah from all loss, damage, costs, actions and
suits arising out of or in connection with any breach of any
representation or warranty made by him and contained in this
Agreement.
6. Representations and Warranties of Qiblah
Qiblah represents and warrants to the Owner that:
(a) It is a company in good standing under the laws of the
Province of British Columbia, one of the Provinces of Canada and
that it has full corporate power and authority to enter into this
Agreement; and
(b)Execution of this Agreement by Qiblah does not conflict
with any applicable law or with its charter nor does it conflict
with, or result in a breach of, or accelerate the performance
required by any contract or other commitment to which it is a part,
or by which it is bound; and
The representations and warranties hereinbefore set out are
conditions upon which the Owner has relied on entering into
this agreement and shall survive the term of this Agreement
and Qiblah hereby contracts and agrees to indemnify and
hold harmless the Owner from all loss, damage costs,
actions and suits arising out of or in connection with any
breach of any representations or warranty made by them and
contained in this Agreement.
7. Notices
(a) Any notice, election, consent or other writing required
or permitted to be given hereunder shall be deemed to
be sufficiently given if delivered or if mailed by
registered air mail or by telegram or fax, addressed as
follows:
In the case of the Qiblah:
Qiblah International Industries Ltd.
0000 - 0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
In the case of the Owner:
Xx. Xxxx Xxxx Xxxxxxxx
x/x X. Xxxxx
00000-Xxxxxxxxx
Xxxxxxxxxxxxx Xxx. 00
Xxxxxxx
and any such notice given as aforesaid shall be deemed to have
been given to the parties hereto if delivered, when delivered, or
if mailed, on the tenth business day following the date of
mailing, or, if telegraphed or faxed, on the next succeeding day
following the telegraphing or faxing thereof PROVIDED HOWEVER
that during the period of any postal interruption in either the
country of mailing or the country of delivery, any notice given
hereunder by mail shall be deemed to have been given only as of
the date of actual delivery of the same. Any party may from time
to time by notice in writing change its address for the purposes
of this paragraph.
8. General Terms and Conditions
(a) The parties hereto hereby covenant and agree that they
will execute such further agreements, conveyances and
assurances as may be requisite, or which counsel for
the parties may deem necessary to effectively carry out
the intent of this Agreement.
(b) No changes, alternations. or modifications of this
Agreement shall be binding upon either party until and
unless a memorandum in writing to such effect shall
have been signed by all parties hereto.
(c) The titles to the articles to this Agreement shall not
be deemed to form part of this Agreement but shall be
regarded as having been used for convenience of
reference only.
(d) The schedules to this Agreement shall be construed with
and as an integral part of this Agreement to the same
extent as if they were set forth verbatim herein.
(e) This Agreement shall be governed by and
interpreted in accordance with the laws in effect from
time to time in the Province of British Columbia,
Canada, and the parties hereto attorn to the courts of
British Columbia for the resolutions of any disputes
arising out of this Agreement.
(f) This Agreement shall enure to the benefit of and
be binding upon the parties hereto and their respective
heirs, successors and assigns.
(g) All references to the masculine case shall include the
feminine case and the plural case where the context may
so indicate; reference to "he" when referring to the
Owner or to the Owner directly, shall mean the owners
collectively, jointly and severally.
IN WITNESS WHEREOF this Agreement has been executed by the
parties hereto as of the day and year first above written.
Signed, Sealed and Delivered by /s/
Xxxx X. Xxxxxxxx
XXXX X. XXXXXXXX Xxxx X.
Xxxxxxxx
in the presence of the following witness:
/s/Xxx Xxxxxx
Xxx Xxxxxx
Vancouver, BC, Canada V6G IN6
The Common Seal of
QIBLAH INTERNATIONAL INDUSTRIES LTD.
Was affixed by its duly authorized signatories
Corporate Seal
/s/ Xxxxxx X. Schindelhauer /s/Xxxxxxx X.
Xxxxxx
Xxxxxx X. Schindelhauer
Xxxxxxx X. Xxxxxx
President, Director Secretary,
Director
SCHEDULE "A" TO THE AGREEMENT DATED 29TH OCTOBER, 1997
BETWEEN XXXX X. XXXXXXXX AND
QIBLAH INTERNATIONAL INDUSTRIES LTD.
Patent of March 26, 1998
This one page exhibit, which is unable to be placed in
electronic media, is a patent issued by the South Africa patent
office on March 26, 1997 in the name of Xxxx X. Xxxxxxxx. This
patent (Application No. 972622) covers a direction locating
device and bears the official stamp of the Registrar of Patents,
Designs,, Trade Marks, and Copyright.
SCHEDULE "B" TO THE AGREEMENT DATED 29TH OCTOBER, 1997
BETWEEN XXXX X. XXXXXXXX AND
QIBLAH INTERNATIONAL INDUSTRIES LTD.
COUNTRIES OF ISLAM
COUNTRY POPULATION* (Millions)
Xxxxxxx 00.0
Xxxxx 57.0
India 873.0
Indonesia 186.0
Iran 60.0
Iraq 19.0
Jordan 3.5
Liberia 2.8
Libya 4.5
Kuwait 2.4
Malaysia 18.6
Morocco 27.0
Oman 1.6
Syria 14.0
Saudi Arabia 16.0
Tunisia 8.0
Turkey 58.0
Pakistan 123.0
United Arab Emirates 2.5
Yemen / South Yemen 12.0
Canada and 80 other 20.0
convention countries
Total 1536.3 (1,536,300,000)
* Basis 1993 World Atlas; Published by Rand XxXxxxx, 1995
SCHEDULE "C" TO THE AGREEMENT DATED 30TH OCTOBER, 1997
BETWEEN QIBLAH INTERNATIONAL INDUSTRIES LTD.
AND QIBLAH TECHNOLOGIES LTD.
PRODUCTS
The Global Qiblah Locator, comprising the following manufactured
and sub-contracted parts:
1. Compass
2. Top Housing (Injection molded plastic
3. Bottom Housing (Injection molded plastic)
4. Printed circuit Board
5. Liquid Crystal Display and contacts
6. Circuit Board electronic components ("Population")
7. Micro Chip and liquid crystal display driver
8. Battery holder
9. Membrane Touch Control
10. Map
11. Screws
12. Assembly jigs
13. Advertising materials
SCHEDULE "D" TO THE AGREEMENT DATED 30TH OCTOBER, 1997
BETWEEN QIBLAH INTERNATIONAL INDUSTRIES LTD.
AND QIBLAH TECHNOLOGIES LTD.
TERRITORIES
Continent of Africa
Yemen, north and south
United Arab Emirates
Saudi Arabia
Oman
Syria
Iron
Jordan
SCHEDULE "E" TO THE AGREEMENT DATED 30TH OCTOBER, 1997
BETWEEN QIBLAH INTERNATIONAL INDUSTRIES LTD.
AND QIBLAH TECHNOLOGIES LTD.
TRADE MARKS
NONE
