TECHNOLOGY LICENSE AGREEMENT made as of
December 1, 2006.
BETWEEN:
C-CHIP TECHNOLOGIES
CORPORATION
(NORTH AMERICA) INC., a
corporation
incorporated under the
laws of Canada,
having
its head office at 400 Montpellier Boulevard, Ville
St-Laurent, Quebec,
H4N 2G7, herein acting
and represented
by its duly authorized representative as he so declares;
(hereinafter referred to as "C-Chip")
AND:
IMETRIK SOLUTIONS INC., a corporation incorporated under the
laws of Canada, having
its head office at 740 , Notre-Dame
East, Suite 1320,
Montreal, Quebec, H3C
3X6, herein acting
and represented by its duly authorized representative as he
so declares;
(hereinafter referred to as "Licensee")
WHEREAS C-Chip is in the business of marketing and selling
technological devices
and products developed
by it using the AMPS,
REFLEX or Pager based
(analogue)
standard of communication under the trade-marks "Shadow 100", "Credit Chip 1"
and "Credit Chip 100"
(the "C-Chip
Products")
allowing credit providers to
locate and track down a vehicle equipped with such a device in case of
payment
default (the "C-Chip Business").
WHEREAS C-Chip has
developed a certain
expertise and know-how
related to the
manufacture, marketing
and sale of the C-Chip
Products within the Market (as
defined below) and the sale of GSM (digital) based products within the Market
(as defined below).
WHEREAS Licensee is in
the business of
developing
and marketing of wireless
solutions, using
technological
devices and GSM
(digital) based product (which
includes the
DACP08), including offering credit providers the ability to
remotely locate vehicles with immobilization capabilities,
by using a
worldwide
GSM/SMS network for
wireless communications and internet web applications
("Licensee's Technology").
WHEREAS Manaris Corporation (formerly known as C-Chip Technologies
Corporation)
("Manaris") and Licensee entered into a master agreement on technological and
business development on May 27, 2005 (the "2005 Agreement")
providing inter alia
for (i) the provision
of certain services by
Licensee to Manaris in connection
with the C-Chip Business, including the improvement of the manufacturing
processes relating to the C-Chip Products and the development of
improvements to
such products to allow for the manufacturing thereof on a larger scale and
(ii)
the provision of certain credit facilities to Manaris in the event
that it was
unable to pay the service fees due to Licensee under the 2005 Agreement (the
"Loan").
WHEREAS C-Chip,
a wholly-owned
subsidiary of Manaris,
was formed in order
to
carry on the C-Chip Business.
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WHEREAS there is currently outstanding an amount of US$1,143,321.03
pursuant to
the terms of the Loan (the "Outstanding Loan Amount").
WHEREAS Licensee
wishes to be in a position to fully service and respond to the
needs of the clients operating within the Market (as defined
below), regardless
of the technology used by each individual client, whether based on the
Technology (as defined below) or Licensee's Technology.
WHEREAS C-Chip
is the owner of or has the right to license and sublicense
certain intellectual property in relation to the C-Chip
Products.
WHEREAS C-Chip wishes to grant, and Licensee desires to acquire, an exclusive
license under C-Chip's Intellectual Property (as defined below),
subject to the
terms and conditions set forth hereinafter.
NOW THEREFORE, in
consideration of the
mutual promises set forth hereinafter,
the parties agree as follows:
1.
INTERPRETATION
1.1
Definitions
In this Agreement,
unless something in
the subject matter or
context is inconsistent therewith:
1.1.1
"2005 Agreement"
has the meaning set forth in the
preamble.
1.1.2
"Affiliate" has the meaning attributed thereto in the
Canada Business Corporations Act.
1.1.3
"Agreement" means this agreement entitled "Technology
License Agreement",
all schedules hereto and all
instruments supplemental hereto or in amendment or in
confirmation hereof.
1.1.4
"C-Chip Business"
has the meaning set forth in the
preamble.
1.1.5
"C-Chip Products"
has the meaning set forth in the
preamble.
1.1.6
"C-Chip's
Intellectual Property" means the
Trade-Marks, the
Processes,
the Technology, the
Know-how and any other Intellectual Property owned by
or licensed
to C-Chip in relation to the C-Chip
Products, as of the date of this Agreement.
1.1.7
"Confidential
Information" has the meaning set forth
in Section 8.1.
1.1.8
"Dealer" means
retail or wholesale vendors of
vehicles in the Market.
1.1.9
"Date of Disposition"
has the meaning set forth in
Section 3.3.
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1.1.10
"Hardware" means
telecommunications and related
devices that form part
of the C-Chip
Products and
that are used to
communicate
with, locate and/or
disable a vehicle in which a C-Chip Product is
installed.
1.1.11
"Intellectual Property" means all worldwide
intellectual and
industrial
rights
and includes
rights to (i) inventions and patents for inventions,
including all
divisional,
continuing,
substitute,
renewal, re-issue and
all other applications
and/or
letters patent
therefor, (ii) copyrights, (iii)
designs and industrial designs, (iv) trade-marks, and
any word, symbol,
icon, logo or other indicia of
origin adopted or used in connection with any product
or service,
(v) know-how, trade secrets and
confidential information, and (vi) other proprietary
rights, whether registered or not.
1.1.12
"Know-how" means
that
certain
knowledge
and
information that
C-Chip has
developed through the
C-Chip Business regarding the manufacture, marketing
and Sale of the C-Chip Products in the Market.
1.1.13 "Loan"
has the meaning set forth in the preamble.
1.1.14 "Market"
means the sub-prime used vehicle market
otherwise commonly
referred to as the
"buy here pay
here" (BHPH) market.
1.1.15 "Market
Products" means the C-Chip Products and
any
and all products that use the Licensee's Technology
that include
the "locate
and disable" functions,
which products in each
case are sold by the Licensee
in the Market;
1.1.16 "Minimum
Monthly Sales Quota" means the obligation of
Licensee to Sell a
minimum amount of
1,500 units of
the Market Products
in any given
month during the
term of this Agreement.
1.1.17 "November
Period" has the meaning set forth in
Section 3.1.1.
1.1.18
"Outstanding Loan
Amount" has the
meaning set forth
in the preamble.
1.1.19
"Processes" means any
processes developed by
C-Chip
related to and/or used to develop and/or manufacture
the C-Chip Products
and/or Sell the C-Chip
Products
in the Market.
1.1.20 "Project
Manager" has the meaning set forth in
Section 11.1.
1.1.21
"Repayment Date" has the meaning set forth in Section
3.4.
1.1.22 "Reseller
Agreements" means such
agreements entered
into between
C-Chip and a reseller
for the Sale of
the C-Chip Products,
which agreements are
listed in
Schedule 1.1.22.
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1.1.23 "Royalty"
has the meaning set forth in Section 3.1.
1.1.24 "Sale",
"Sell" (and other derivatives) means to
market, promote,
distribute,
sell, rent, lease,
license, sublicense
or engage in any other
form of
distribution of the
C-Chip Products or
other Market
Products, as
the case may be, to an end user,
distributor, Dealer,
reseller (including through the
Reseller Agreements)
or any other person or
entity,
either directly
or indirectly through a chain of
distribution
(including a financial
institution) or
otherwise.
1.1.25
"Software" means
any software code, including
sub-routines, developed by C-Chip and embedded in the
C-Chip Products,
as well as any software code
developed by C-Chip
relating to the internet web
applications used
in connection with the C-Chip
Products.
1.1.26
"Technology" means
vehicle-tracking
technology that
consists of both
Hardware and Software
developed by
C-Chip using
AMPS, REFLEX or Pager based network
systems technology, that interfaces with internet web
applications used
in order to communicate with,
locate and/or disable remote vehicles.
1.1.27
"Territory" means worldwide.
1.1.28
"Trade-Marks"
means the trade-mark(s) used in
connection with
the C-Chip Products owned by or
licensed to C-Chip
listed in Schedule 1.1.28, as
amended from time to time.
1.2
Headings
The division of this
Agreement into Articles and Sections and
the insertion
of headings are for
convenience
of reference
only and shall not affect the construction or interpretation
of this Agreement.
The terms "this Agreement", "hereof",
"hereunder" and
similar expressions
refer to this
Agreement
and not to any
particular Article,
Section or other
portion
hereof and include any amendment hereto. Unless something in
the subject
matter or context is inconsistent therewith,
references herein to
Articles or Sections
are to Articles or
Sections of this Agreement.
1.3 Extended
Meanings
In this Agreement,
words importing the singular number
only
shall include the plural and vice versa, words importing the
masculine gender shall include the feminine and neuter genders
and vice versa
and words importing persons shall include
individuals,
partnerships,
limited liability
companies,
associations,
trusts,
unincorporated
organizations
and
corporations.
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1.4 Statutory
References
In this Agreement,
unless something in
the subject matter or
context is
inconsistent therewith
or unless otherwise
herein
provided, a reference to any statute is to that statute as now
enacted or as the
same may from time to time be amended,
re-enacted or replaced
and includes any regulations made
thereunder.
1.5 Accounting
Principles
Wherever in this Agreement reference is made to a
calculation
to be made in accordance with generally accepted accounting
principles ("GAAP"),
such reference shall
be deemed to be to
the generally accepted
accounting
principles in Canada
from
time to time approved
by the Canadian
Institute of Chartered
Accountants, or any successor institute, applicable as at the
date on which such
calculation is made or required to be made
in accordance with generally accepted accounting principles
and applied in a manner consistent with prior periods of the
Seller.
1.6
Currency
All references
to currency herein are to lawful money of
United States of America.
1.7
Schedules
The following are the Schedules to this Agreement:
Schedule 1.1.22 - Reseller Agreements; and
Schedule 1.1.28 - Trade-Marks.
2.
GRANTS AND COVENANTS
2.1
License
Grant
2.1.1
Subject to the terms,
conditions and restrictions of
this Agreement,
C-Chip hereby grants
to Licensee an
exclusive
license under
C-Chip's
Intellectual
Property to manufacture and Sell the C-Chip Products
in the Market within the Territory.
2.1.2
Notwithstanding
anything to the
contrary in this
Agreement, the
license granted herein to Licensee
includes the right:
2.1.2.1 to modify,
copy or enhance
the Technology
and Processes
for use within the scope of
the license set forth in Section 2.1.1;
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2.1.2.2 to grant
sublicenses
under Section 2.1.1
(subject
to terms
and
conditions
substantially similar
to those set forth in
this Section 2 and
subject to the
Royalty
payment obligations
set forth in Section 3)
to Affiliates of Licensee to manufacture and
Sell the C-Chip Products in the Market
within the Territory;
2.1.2.3 to
have C-Chip Products manufactured or
assembled by third parties and/or developed
by or with
third parties solely for the
benefit of Licensee for the manufacture, use
or Sale by Licensee or its Affiliates; and
2.1.2.4 to Sell the
C-Chip Products together with or
simultaneously with
the sale of the
other
Market Products
(including
Licensee's
Technology based products) in order to fully
service and meet the requirements of clients
operating within the Market.
2.1.3 For
greater certainty,
nothing herein shall
prevent
C-Chip from using,
copying, enhancing
or modifying
C-Chip's Intellectual Property:
2.1.3.1 for its
internal use; or
2.1.3.2 in the context
of research and
development
activities unrelated
to the Market on its
own behalf or on behalf of a third party.
2.2
Trade-Marks License
2.2.1
Subject to the terms,
conditions and restrictions of
this Agreement, and in
conjunction with the
license
granted pursuant to
the terms of Section 2.1, C-Chip
hereby grants
to Licensee an exclusive license,
within the Territory,
to use the Trade-Marks only in
association with the C-Chip Products.
2.2.2
Licensee shall
comply
with C-Chip's standard
trade-mark guidelines
as to the form and
manner in
which the Trade-Marks may be used pursuant hereto. In
particular, Licensee
shall not change, amend or
otherwise modify the Trade-Marks. Moreover, Licensee
shall identify
the Trade-Marks, when used as
trade-marks, with a
notation that the mark is a
registered/unregistered trade-mark of C-Chip and/or
its licensors,
as the case may be. Upon request,
Licensee shall submit for approval by C-Chip, acting
reasonably, samples of any packaging, documentation,
advertising, brochures
and other material on which
the Trade-Marks
appear or which is
intended to be
used in
relation
to C-Chip Products being
manufactured, used or Sold by Licensee.
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2.2.3
Licensee
acknowledges
that C-Chip
and/or
its
licensors are the exclusive owners of the Trade-Marks
and all goodwill associated therewith, that all use
of the Trade-Marks
by it enures to the
benefit of
C-Chip and/or its
licensors,
and that it shall
not
dispute or
contest the validity, ownership or
enforceability of the
Trade-Marks
nor attempt to
dilute the value of the goodwill attached thereto.
2.2.4 To
the extent required to protect C-Chip's and/or its
licensors' rights in the Trade-Marks, during the term
of the Agreement, Licensee shall give C-Chip's
representatives
reasonable
access to Licensee's
facilities, at
C-Chip's expense, at reasonable times
during business
hours, subject to C-Chip giving
Licensee at
least five (5) Business Days prior
notice, for
the purpose of quality control in
relation to
C-Chip Products branded with the
Trade-Marks, as the case may be.
2.2.5
Licensee may Sell the
C-Chip Products on a "white
label" basis,
without use of the Trade-Marks, it
being understood
that any decision by Licensee to
cease using the
Trade-Marks in
connection with
the
C-Chip Products
shall not in any way affect or
release it from its Royalty payment obligations under
Section 3 hereof.
2.3
Exclusivity
In order to assure
Licensee of the
exclusive rights under
C-Chip's Intellectual
Property to
manufacture
and Sell the
C-Chip Products
in accordance with the terms of this
Agreement, and except as provided otherwise in this Agreement,
C-Chip shall not:
2.3.1
itself use C-Chip's Intellectual Property to develop,
produce, market,
distribute
or Sell the C-Chip
Products or similar products in the Market; or
2.3.2
grant to a third party any rights or licenses to use,
copy, enhance or modify any of C-Chip's Intellectual
Property to develop,
produce, market,
distribute or
Sell the C-Chip Products in the Market.
2.4 No
Contestation
2.4.1
Licensee hereby
acknowledges that
C-Chip and/or its
licensors remain
owners of C-Chip's Intellectual
Property and
the goodwill attached to it and
undertakes not
to contest C-Chip's Intellectual
Property nor the
rights of C-Chip or
its licensors
therein at any time
during or after
expiration
or
termination of this Agreement.
2.4.2
Licensee agrees
not to use C-Chip's Intellectual
Property except in accordance with this Agreement.
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3.
COMPENSATION
3.1
Royalty
In consideration of the licenses granted to Licensee by C-Chip
pursuant to Sections 2.1 and 2.2 and the resulting ability of
Licensee to
fully service and meet the needs of clients
operating within the
Market, Licensee
shall pay to C-Chip
a
royalty (the "Royalty"), which shall be payable as follows:
3.1.1 an
amount of $20.00 per Market Product Sold by
Licensee for
the period of November 1, 2006 to
November 30,
2006 (the "November Period") in the
amount of $22,860.00
which amount will be set off
against the amount
otherwise due under
the Loan for
the November Period in
the amount of $33,645.12, it
being understood
that the difference between such
amounts in the amount of $10,785.12 will be paid by
C-Chip to Licensee on or before January 15, 2007;
3.1.2 a
lump sum reduction of
the principal
and interest
owing on the
Outstanding Loan
Amount as of the date
hereof in the amount of $200,000;
3.1.3
subject to the
provisions of Section
3.2, an amount
of $20.00 per Market
Product Sold by
Licensee as of
the date hereof, which shall be payable by means of a
periodic reduction
of the principal and interest
owing on the Outstanding Loan Amount, to be applied
against the
Outstanding Loan
Amount on the first day
of the month following
the end of the month in which
the Sale occurred.
3.2 Failure to
meet Minimum Monthly Sales Quota
In the event that Licensee fails to Sell a sufficient
number
of Market Products in
any given month during the term of this
Agreement in order to meet the Minimum Monthly Sales Quota for
such month, the
parties hereby agree that the Royalty payable
pursuant to the terms of Section 3.1.3 for such month shall be
the aggregate
amount of $30,000
regardless of the
number of
u
