UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Report of Event occurring on February 26, 1998
Commission File No. 33-55254-15
GRANDEUR, INC.
NEVADA 87-043851
(State or other jurisdiction (I.R.S. Employer Identification of
incorporation or organization) Number)
1800 E. Sahara, Suite 107
LAS VEGAS, NEVADA 89104
(Address of principal executive offices)
Registrant's telephone number, including area code (702) 693-5744
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ITEM 1. Change in Control of Registrant.
Pursuant to an Agreement made and entered into on February 25, 1998 between
Grandeur, Inc., a Nevada corporation ("Grandeur") and 3127575 Canada Inc., a
Canadian corporation ("Seller"), Grandeur issued and delivered on February 26,
1998, 12,848,300 shares of its Common Stock bearing a restrictive legend to
Seller, in exchange for which issuance, Grandeur acquired all of the outstanding
shares of Seller. As a result of this transaction, Grandeur has become the
exclusive licensee of the del ID technology for personal identification by means
electronic scanning of finger characteristics.
The transaction was exempt from the registration requirements of the Securities
Act of 1933 by virtue of Section 4(2) thereof. Also, because the 12,848,300
shares were issued solely to non-U.S. persons, the transaction qualified for
exemption under Rules 901 et seq of Regulation S. See Item 9 below.
Following the above transaction the former shareholders of 3127575 Canada Inc.
owned 92.8% of the outstanding shares of Grandeur.
The del-ID technology permits precise and positive authentication of the
identify of any living individual and is applicable to a very wide range of
financial transactions where authentication of the individual is necessary to
eliminate fraud and other improper use of services. The del-ID system collects
biographical data from the finger image of the individual and transfers the
image into a unique electronic signature called the "del-gram". The del-gram is
not a digitized bitmap image of the finger, but a synthesized subset of
biological data sufficient to identify the individual.
Commercial applications of the del-ID technology are numerous and include access
to the information highway/Internet, identification of employees working from a
home office and requiring access to certain databases or information, health
cards, social insurance cards, drivers licenses, passport control encryption and
access to confidential files, control of payment by debit or credit payment
systems such as credit cards, smartcards, cash cards, authentication of oral
telephone ordering, access control to sensitized areas, hotel room access,
cellular and digital telephone controls, car entry and protection, census and
election control, door locks, vault locks, residential alarm system controls,
timesheet management, student file management and many others.
Patent protection is currently pending for the del-ID system in the United
States and in other major countries.
A copy of the Acquisition Agreement is attached as Exhibit A.
A copy of the Exclusive License Agreement is attached as Exhibit B.
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ITEM 2. Acquisition or Disposition of Assets.
See Item 1.
ITEM 6. Resignations of Directors.
On February 26, 1998 Krista Nielson and Sasha Belliston resigned as officers and
directors of Grandeur, Inc. Their resignations are attached as Exhibit C.
The following persons have been appointed as directors of the Registrant:
Pierre DeLanauze
Randall McCormick
Marc Deschenaux
Suzie DeLanauze
Julie Gaucher
Item 7. Financial Statements and Exhibits.
Financial statements required to be filed will be filed not later than May 5 ,
1998.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
On February 26, 1998 the Registrant sold 12,848,300 shares of its common stock,
par value $.001 per share, to persons who were shareholders of 3127575 Canada
Inc. in exchange for all of the outstanding shares of such corporation. All of
the shareholders of 3127575 Canada Inc. were non-U.S. persons within the meaning
of Rule 901 et seq of Regulation S and the offering has been conducted in
conformity with the other provisions of such Regulation. No underwriter was
involved in the transaction and no direct or indirect payments were made to any
persons in connection with the transaction.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Grandeur, Inc.
(Registrant)
Date: March 9, 1998 By s\ Pierre DeLanauze
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Pierre DeLanauze
President and Director
Grandeur, Inc.
EXHIBIT INDEX
EXHIBIT A: ITEM 1. ACQUISITION AGREEMENT
EXHIBIT B: ITEM 1. EXCLUSIVE LICENSE AGREEMENT
EXHIBIT C: ITEM 6. LETTER OF RESIGNATION
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EXHIBIT A
AGREEMENT
THIS AGREEMENT, made and entered into in Las Vegas, Nevada sets forth
the plan of reorganization as of the 25th day of February, 1998, by and between
GRANDEUR, INC., a Nevada corporation, herein called "PURCHASER", and 3127575
Canada Inc. a Canadian corporation, hereinafter called "SELLER".
PLAN OF REORGANIZATION
This plan of reorganization shall be a reorganization within the
meaning of IRC (1987), Section 368(a)(1)(B) as amended. PURCHASER shall acquire
100% of all right, title and interest, in the common stock owned by the
shareholders of SELLER in exchange solely for a part of PURCHASER'S voting
common stock. It is understood and agreed by the parties that the transaction
contemplated herein is termed a "shell transaction" or reverse
merger/acquisition, the purpose of which is to provide a public trading market
for the shares of PURCHASER/SELLER once the acquisition transaction is
completed.
AGREEMENT
In order to consummate the foregoing plan of reorganization and in
consideration of the mutual benefits to be derived therefrom and the mutual
agreements hereinafter contained, PURCHASER and SELLER approve and adopt this
agreement and plan of reorganization effective the closing date of February 26,
1998, and mutually covenant and agree with each other as follows:
SHARES TO BE TRANSFERRED AND SHARES TO BE ISSUED
On the closing date, set herein to be February 26, 1998, PURCHASER
shall issue 12,848,300 shares of PURCHASER'S common stock bearing a restrictive
legend. As of the date hereof, there are issued and outstanding one million
(1,000,000) shares of common stock. It is understood by SELLER that PURCHASER is
presently authorized to issue 100,000,000 shares of common stock.
In exchange for PURCHASER'S stock being issued to SELLER as above
described, SELLER shall on the closing date and contemporaneously with such
issuance of PURCHASER'S common stock deliver to PURCHASER 100% of the
outstanding common stock of SELLER.
All negotiations relative to this agreement and the transactions
contemplated hereby have been conducted with the assistance of CAPITAL GENERAL
CORPORATION who is acting as a broker, finder and consultant on behalf of both
PURCHASER and SELLER. Both PURCHASER and SELLER agree to hold harmless and
indemnify CAPITAL GENERAL CORPORATION from any and all claim, demand, cause of
action or suit raised or filed in connection with the operation or promotion of
PURCHASER and/or SELLER and the trading of PURCHASER/SELLER's shares.
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REPRESENTATIONS AND WARRANTIES OF SELLER
To the best knowledge of the parties, no representation or warranty by
PURCHASER in this agreement, nor any statement, certificate, schedule or exhibit
hereto furnished or to be furnished by or on behalf of SELLER to this agreement,
nor any document or certificate delivered to PURCHASER pursuant to this
agreement or in connection with actions contemplated hereby, contains or shall
contain any untrue statement of material fact or omits or shall omit a material
fact necessary to make the statement contained therein not misleading.
SELLER understands and agrees that PURCHASER is without substantial
assets or liabilities and with its public shareholders is thus defined herein as
a public "shell" corporation. SELLER understands and agrees that PURCHASER is a
"shell" corporation and makes no claim on any assets owned by PURCHASER previous
to the closing contemplated herein.
There are no legal, administrative or other proceedings, or other
claims, judgments, injunctions or restrictions, either threatened, pending or
outstanding against or involving PURCHASER or SELLER which are known, or which
they have reasonable grounds to know, of any basis for any such proceedings, or
other claims, judgments, injunctions or restrictions, except as in the
Prospectus attached hereto as Exhibit B and made a part of this Agreement or
otherwise disclosed herein. Specifically, a "Complaint and Order Denying
Exemptions and to Cease and Desist in the Matter of Capital General Corporation,
David Rex Yeaman et al. filed by the State of New Jersey in January, 1994. This
matter was resolved as disclosed in the Company's Form 10-Q/A filing with the
SEC dated November 28, 1994. Also, on February 8, 1996, David R. Yeaman,
formerly Secretary/Treasurer and Director of the Company was charged in the U.S.
District Court for the Eastern District of Pennsylvania with conspiracy, wire
fraud and fraud in the offer, purchase and sale of securities, in violation of
18 U.S.C.ss. 2, 371 and 1343, 15 U.S.C. ss. 77q(a), 77x, 78j(b) and 78ff, and 17
C.F.R. ss. 240.10b-5 (1986); and, that, on April 16, 1997, Mr. Yeaman was
convicted of one count of conspiracy, five counts of wire fraud and three counts
of securities fraud; and, that while Mr. Yeaman has resigned his affiliation
with PURCHASER, Yeaman Enterprises and Capital General Corporation, he may
continue to be deemed an affiliate of the Company by virtue of his familial and
historical relationships with the Company, its shareholders, officers and
directors.
However, SELLER acknowledges and represents that he is aware of the
risks of being a public company and understands and agrees that regulatory
efforts regarding public shell transactions similar to the transaction
contemplated herein has been and is currently being exerted by some states, the
U.S. Securities and Exchange Commission and the National Association of
Securities Dealers, Inc. (NASD). PURCHASER agrees to provide any supplemental
information which may be requested by SELLER relating to any matter discussed
herein or in the Prospectus attached hereto as Exhibit B.
PURCHASER/SELLER understands and agrees that once this transaction is
completed, it will be a public company subject to the extensive, complex state,
federal and NASD securities regulations incumbent on public companies. In
particular, the parties understand and agree that a Form 8-K must be filed with
the United States Securities and Exchange Commission within fifteen days after
closing which filing requires that audited financial statements be filed within
sixty days after the filing of the 8-K and that such responsibility shall not be
the responsibility of Capital General Corporation, its officers, directors or
employees nor the existing officers of PURCHASER, but the sole responsibility of
the new officers and directors of PURCHASER.
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SELLER acknowledges that they have carefully evaluated their financial
resources and investment position and the risks associated with this transaction
and acknowledges that they are able to bear the economic risks of this
transaction. SELLER further acknowledges that their knowledge and experience in
financial and business matters in general, and investments in particular,
qualifies them as sophisticated investors, and therefore capable of evaluating
the merits and risks of this transaction.
SELLER acknowledges receipt of a copy of the Prospectus dated June 30,
1993, which is attached hereto as Exhibit B and made a part of this Agreement,
setting forth the relevant terms, conditions and disclosures of PURCHASER, as
well as such other information as SELLER deems necessary or appropriate as a
prudent sophisticated and knowledgeable investor in evaluating the acquisition
of PURCHASER'S shares and making this Agreement. SELLER has carefully read the
Prospectus, including particularly the portion thereof entitled "Risk Factors"
and acknowledges that PURCHASER has made available the opportunity to obtain
additional information to verify the accuracy of the information contained in
the Prospectus and to evaluate the merits and risks of this transaction. SELLER
acknowledges that they have had the opportunity to ask questions of PURCHASER
and CAPITAL GENERAL and have received satisfactory answers from PURCHASER,
CAPITAL GENERAL, or its affiliates, associates or employees concerning the terms
and conditions of this transaction and the information in the Prospectus.
SELLER covenants and warrants that the shares of common stock of
PURCHASER to be received by them pursuant to this agreement are being acquired
for their own account and for investment and not with the present view toward
the sale or distribution in the United States thereof and will not be disposed
of except (I) pursuant to an effective registration statement under the
Securities Act of 1933, as amended, or (ii) another transaction, which, in the
opinion of counsel acceptable to PURCHASER, is exempt from registration under
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. In order to effectuate the
covenants of this paragraph, an appropriate endorsement will be placed on the
certificates for shares of common stock of PURCHASER delivered to SELLER
pursuant to this agreement and stop transfer instructions shall be placed with
the transfer agent for the securities.
SELLER is aware that the shares distributed to him will not have been
registered pursuant to the Securities Act of 1933, as amended; and, therefore,
under current interpretations and applicable rules, particularly Rule 144 and
Regulation S, he will probably have to retain such shares for a period of at
least one (1) year and at the expiration of such one-year period his sale may be
confined to brokerage transactions of limited amounts requiring a notification
filing on Form 144 with the Securities and Exchange Commission and such
disposition may be available only if the PURCHASER is current in his filings
with the Securities and Exchange Commission and SELLER is aware of Rule 144
issued by the Securities and Exchange Commission under the Securities Act of
1933, as amended, and the other limitations imposed thereby on their disposition
of PURCHASER'S shares.
SELLER is aware that there can be no assurance regarding the individual
tax consequences of this transaction, nor can there be any assurance that the
Internal Revenue Code or the regulation promulgated thereunder will not be
amended in such manner as to deprive SELLER of any tax benefit that might
otherwise be received. SELLER is relying upon the advice of their personal tax
advisor with respect to the tax aspects of this transaction.
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SELLER acknowledges that it is his responsibility to comply with the
appropriate state and federal securities laws, as well as NASD rules and
regulations, particularly secondary trading requirements. SELLER agrees to list
PURCHASER in either Moody's Investor Services or Standard and Poors, exempting
secondary trading of PURCHASER'S stock in those states providing for such
secondary trading exemption.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
To the knowledge of the officers of PURCHASER, PURCHASER is not a party
to nor bound by any agreement, deed, lease, power of attorney or other
instrument other than which is herein disclosed. PURCHASER has executed an
Agreement with National Stock Transfer, Inc. A copy of this agreement is
available for inspection by SELLER.
PURCHASER represents and warrants that it is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Nevada and that the execution and performance of this agreement and the issuance
of stock contemplated hereby have been authorized by the board of directors of
PURCHASER. The shares of PURCHASER'S common stock to be delivered pursuant to
this agreement, when so delivered, will have been duly and validly authorized
and issued by PURCHASER and will be fully-paid and nonassessable.`
SELLER hereby further acknowledges and agrees that no representations
or warranties have been made by PURCHASER or CAPITAL GENERAL CORPORATION as to
the benefits to be derived by SELLER in completing this transaction. It is
expressly understood and agreed that neither CAPITAL GENERAL CORPORATION nor
PURCHASER or its officers or agents have made any warranty or agreement,
expressed or implied, as to the tax or securities consequences of the
transactions contemplated by this agreement or the tax or securities
consequences of any action pursuant to or growing out of this agreement.
ACTIONS PRIOR TO CLOSING
SELLER shall duly comply with all applicable laws as may be required
for the valid and effective transfer of property, assets and business
contemplated by this agreement.
The representations and warranties made by PURCHASER in this agreement
or given on its behalf hereunder shall be substantially accurate in all material
respects on and as of the closing date with the same effect as though such
representations and warranties had been made or given on and as of the closing
date.
SELLER shall perform and comply with all its obligations under this
agreement which are to be performed and complied with by it prior to or on the
closing date including the delivery of its documents specified herein.
This Agreement shall have been approved by the boards of directors of
both PURCHASER and SELLER.
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LAW GOVERNING
It is understood and agreed that all communications, negotiations,
meetings, agreements and understandings relative to this Agreement have taken
place in or from the state of Nevada. No communications, offerings, proposals or
other forms of negotiations have been conducted in or from the state of Utah.
This agreement may not be modified or terminated orally, and shall be construed
and interpreted according to the laws of the State of Nevada and enforced in its
courts.
Any and all disputes and controversies of every kind and nature between
the parties hereto arising out of or relating to this Agreement relating to the
existence, construction, validity, interpretation or meaning, performance,
non-performance, enforcement, operation, breach, continuance or termination
thereof shall be subject to an arbitration mutually agreeable to the parties or,
in the absence of such mutual agreement, then subject to arbitration in
accordance with the rules of the American Arbitration Association. It is the
intent of the parties hereto and the purpose of this provision to make the
submission to arbitration of any dispute or controversy arising hereunder an
express condition precedent to any legal or equitable action or proceeding of
any nature whatsoever.
ASSIGNMENT, AMENDMENT AND MODIFICATION
This agreement shall not be assigned by any party without the written
consent of the other. PURCHASER and SELLER may amend, modify and supplement this
agreement in such manner as may be agreed upon by them in writing.
TERMINATION AND ABANDONMENT
This agreement may be terminated and the transactions provided for by
this agreement may be abandoned without liability on the part of any party to
any other, at any time before the closing date by mutual consent of PURCHASER
and SELLER. In the event of termination and abandonment by any party as herein
provided, written notice shall forthwith be given to the other party, and each
party shall pay its own expenses incident to preparation for the consummation of
this agreement and the transactions contemplated hereunder. In the event that
this Agreement has not been completed by the closing date or within thirty days
thereafter, this Agreement and the transactions contemplated hereby shall be
deemed to have been abandoned and neither party shall be under any further
obligation to the other. In the event of such termination or abandonment, SELLER
shall forfeit any deposits, payments or other consideration tendered in
connection with the execution of this Agreement, unless otherwise expressly
provided herein.
NOTICES
All notices, requests, demands and other communications hereunder shall
be deemed to have been duly given, if delivered by hand or mailed, certified or
registered mail with postage prepaid:
(a) If to PURCHASER:
1800 E. Sahara, Suite 107
Las Vegas, Nevada 89104
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(b) If to SELLER:
1801 McGill College, Suite 1330
Montreal, Quebec, Canada H3A 2N4
ENTIRE AGREEMENT
This instrument embodies the entire agreement between the parties
hereto with respect to the transactions contemplated herein, and there have been
and are no agreements, representations or warranties between the parties other
than those set forth or provided for herein. Any announcements, amendments or
modifications shall be set forth in writing and approved by the parties hereto.
This agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
FURTHER DOCUMENTS
PURCHASER and SELLER agree to execute any and all other documents and
to take such other action or corporate proceedings as may be necessary or
desirable to carry out the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed all as of the day and year first above written.
GRANDEUR, INC. ("PURCHASER")
By: s\ Krista Nielson
Krista Nielson, President
3127575 CANADA INC. ("SELLER")
By: s\Pierre DeLanauze
Pierre DeLanauze, President
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EXHIBIT B
THIS EXCLUSIVE LICENSE AGREEMENT made as of November 12, 1997 BETWEEN:
PIERRE de LANAUZE, residing at 1231 Theoret, Ile Bizard,
Quebec, Canada, (the "Owner")
AND:
3127575 CANADA INC., a corporation incorporated under
the laws of Canada, having its head office at 1801
McGill College Avenue, Suite 1330, in Montreal,
Quebec, Canada. (the "Corporation")
(i) WHEREAS the Owner is the owner of an invention consisting of an apparatus
and method, including related software, for scanning and storing an optical
representation of a finger's capillary lines (the "Invention"); (ii) WHEREAS the
Owner has filed with the United States Patent Office a patent application under
Serial No. 08/370,979 for the purpose of obtaining a patent in connection with
the Invention (the "US Patent"); (iii) WHEREAS the Owner intends to
commercialize the Invention under the trade-mark "DEL-ID" (the "Trade-Mark") and
through other means; (iv) WHEREAS the Owner wishes to grant to the Corporation
the exclusive right to commercialize the Invention which shall include, among
other things, manufacturing and marketing the Invention, under the terms and
conditions herein contained; (v) AND WHEREAS the Corporation wishes to
commercialize the Invention which may include manufacturing and marketing and/or
sub-licensing others to manufacture and market the Invention (which license
and/or right to use shall include all rights under the US Patent and all other
related Patents worldwide), under the terms and conditions contained herein;
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NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
mutual covenants contained in this Agreement, the Parties agree as follows:
1. GRANT OF LICENSE
1.1 The Owner hereby grants to the Corporation the exclusive license to
use, manufacture, distribute and sell the Invention and all
improvements thereof worldwide, including the rights accruing under the
US Patent and all other related patents, in accordance with the terms
and conditions of this Agreement.
1.2 The Corporation hereby accepts such license and will undertake to
use its best efforts to commercialize the Invention on a worldwide
basis in accordance with the terms and conditions of this Agreement,
in such manner as the Corporation in its sole discretion deems
appropriate.
1.3 This license to use the Invention shall be deemed to cover all
aspects of manufacturing, marketing, distribution and sale, including
the negotiation and entering into:
1.3.1 of sub-licensing, joint venture and other forms of
technology transfer agreements with respect to the
Invention;
1.3.2 of research and development agreements with respect
to the Invention and its existing and potential
application, and with respect to improvements to the
Invention.
1.3.3 of manufacturing, distribution, agency and other
forms of commercial agreements with respect to the
Invention and its various components.
1.4 The Owner shall not, directly or indirectly, commercialize or
market the Invention or grant to any other person or entity, the right
to commercialize or market the Invention. The Owner agrees to refer to
the Corporation all commercial inquiries, orders or requests concerning
the Invention.
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2. REPRESENTATIONS AND WARRANTIES
2.1 Owner represents and warrants that, to the best of its knowledge:
2.1.1 It owns all rights to the Invention and that such
Invention does not infringe on the rights of third
parties;
2.1.2 It has the right to enter into this Exclusive License
Agreement and the execution, delivery and performance
of this Agreement by the Owner does not conflict with
any existing law, rule or regulation applicable to
the Owner or any contract or agreement to which the
Owner is a party;
2.1.3 There are no court orders, judgments or decrees that
impair or restrict the validity or enforceability of
the US Patent or other related Patents and no action,
suit, inquiry, proceeding or investigation is currently
pending before any court, administrative agency or
other governmental body in which such use, validity or
enforceability is being challenged or questioned in any
way, either directly or indirectly, by way of claim,
counterclaim or affirmative defense, it being clearly
acknowledged by the Corporation that such
representation and warranty does not apply to any
proceedings before any patent office with respect to
the prosecution and issuance of any patent;
2.1.4 It has not received any notice of any potential or
threatened claim of infringement of third party
patents and is not aware of any facts which could
give rise to any claim of infringement of such patent
rights or of any challenge to any such patent rights
as the result of the use of the Invention;
2.1.5 The use of the Invention in the manner contemplated
by this Agreement does not infringe upon the rights
of third parties.
2.2 The Corporation represents and warrants that, to the best of its
knowledge:
2.2.1 The Corporation is duly incorporated, validly existing
and in good standing under the laws of the State,
Province or other jurisdiction of its incorporation and
has full corporate power to enter into this Agreement;
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2.2.2 The execution, delivery and performance of this
Agreement by the Corporation does not conflict with
any existing law, rule or regulation applicable to
the Corporation or any contract or agreement to which
the Corporation is a party.
3. INITIAL CONSIDERATION PAYABLE BY THE CORPORATION
As initial and non-refundable consideration for entering into this
Agreement and the granting of the license to use the Invention pursuant to the
terms and conditions hereof, the Owner has been paid the sum of $1,000,000 USD
and the Owner hereby acknowledges the receipt of such amount.
4. ROYALTY PAYMENTS BY THE CORPORATION
4.1 In addition to the consideration provided for in Section 3, the
Corporation agrees to pay to the Owner a royalty equal to 2 % of all
revenues derived by the Corporation, directly or indirectly, from the
Invention (the "Royalty"), provided that the Royalty shall be
renegotiated to a lesser amount if the US Patent does not issue.
4.2 Royalty payments shall be made by the Corporation to the Owner no
later than 45 days following June 30 and December 31 of each calendar
year. The Corporation shall provide at the same time as its payment a
detailed report of all revenues earned in such period, indicating,
without limitation, the relevant agreements under which such revenues
were earned.
5. MARKETING AND PROMOTION BY THE CORPORATION
5.1 The Corporation shall use its best efforts and all proper means to
develop the world market for the Invention to its maximum potential.
The Owner agrees to assist the Corporation in every reasonable way with
respect to such activities.
6. RESEARCH AND DEVELOPMENT
The Owner and the Corporation agree that further product developments
and improvements (whether or not patentable) to the Invention may be necessary
to maintain and improve market share for the Invention over competing products
and agree to cooperate to maintain and enhance technological superiority. To
this end the Owner and the Corporation each agree to work together to promote
and carry out the necessary research and development. The parties agree that all
such improvements to, or new applications for, the Invention (whether or not
patentable) shall be the property of the Owner, but shall be licensed to the
Corporation in accordance with and on the same terms as the exclusive license
granted by this Agreement.
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7. AGREEMENTS TO BE ENTERED INTO BY THE CORPORATION
All agreements relating to the Invention shall be consistent with, and not
conflict with, the terms of this Agreement and all sub-licensing agreements
shall bind such sub-licensees to protect the confidentiality of the Invention
and to make improvements developed by them the property of the Corporation and
the Owner. All sub-licensing agreements shall be submitted to the Owner before
execution for review and comment but not approval.
8. OTHER OBLIGATIONS OF THE CORPORATION AND THE OWNER
8.1 Each party shall be responsible for, and shall pay its own expenses
with respect to the preparation and performance of this Agreement
except as may otherwise be agreed in writing. Expenses of the Owner
that relate to the Invention incurred prior to the execution of this
Agreement are to be borne by the Owner.
8.2 The Corporation shall use reasonable care to conduct its business
in such a way as to minimize any taxes or other expenses payable by
the Owner so long as such does not conflict with the best interests of
the Corporation.
8.3 The Corporation and the Owner shall each use its best efforts to
comply with all laws and regulations as may apply to this Agreement
and all transactions and activities contemplated or to be performed
under this Agreement.
8.4 The Corporation shall prepare, maintain and cause to be preserved
complete and accurate books of account and records (specifically
including, without limitation, the originals or copies of agreements
and documents supporting entries in the books of account) covering all
transactions arising out of or relating to this Agreement, in such
manner as will allow the Owner's independent chartered accountants to
audit same in accordance with generally accepted auditing standards.
The Owner and its duly authorized representatives shall have the
right, from the date hereof and for a period of two years following
any expiration or termination of this Agreement, during regular
business hours and upon 15 days' prior notice, to audit said books of
account and records and to examine and make copies thereof and of
related agreements and documents.
9. PROTECTION OF INVENTION AND PATENTS
9.1 The Owner shall take all steps necessary to apply for, prosecute,
preserve and maintain, at its expense, the US Patent and all other
Patents which are needed worldwide to protect the integrity
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and exclusivity of the Invention. The Owner shall notify the
Corporation upon the filing of any additional patent applications for
the Invention and provide the Corporation with a copy of any such
patent application as well as all issued patents, and shall update the
Corporation, from time to time as to the status of all such
applications and issued patents. The Corporation may request that the
Owner apply for and maintain patents in additional jurisdictions in
which the Corporation intends to commercialize the Invention and the
Owner agrees to file for and maintain such patents. The Corporation
shall have the right to make any payments needed to prosecute patent
applications or to maintain patents if the Owner fails to do so and to
reduce royalties due the Owner by the amount of such payments.
9.2 The Corporation agrees that nothing herein contained shall give to
the Corporation any ownership interest in the Invention, the US Patent
or any other patent relating to the Invention and that the Invention,
the US Patent and any other patent relating to Invention, is the sole
property of the Owner, subject to the exclusive license granted
hereunder.
10. INFRINGEMENT OF INVENTION AND PATENTS BY THIRD PARTIES
10.1 The Owner shall take all actions necessary to protect against
misappropriation of trade secrets relating to the Invention and to
protect the US Patent and Other related Patents against infringement by
third parties, and the Corporation agrees to cooperate fully with the
Owner in this respect. In the event that the Owner, after 90 days'
notice from the Corporation of an infringement, fails to bring suit or
action against the infringer, then the Corporation may institute such
action at the Owner's expense, it being understood that the Owner's
liability as to such expenses will be limited to and include only
reasonable legal fees and related out-of-pocket disbursements that may
be incurred by the Corporation. Such expenses may be offset against any
amounts of Royalty due to the Owner hereunder during the time such
proceedings remain pending. In the event that the Corporation is
successful after final determination of such proceedings and the
expenses incurred by the Corporation, as defined above, have not been
fully offset by amounts owing to the Owner, the Corporation shall be
entitled to recover such expenses out of any recovery from such suit or
action. Any additional recovery shall be shared by the Parties in
proportion to their damages or injuries.
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10.2 The Corporation and the Owner agree to notify each other of any
conflicting use or any act of infringement, passing-off or unfair
competition involving the Invention, the US Patent or any other patent
relating to the Invention of which such party becomes aware and to
notify each other of any allegation that the Invention, the US Patent
or any other patent relating to the Invention violates the intellectual
property rights of any third party.
11. IMPROVEMENTS TO THE INVENTION
11.1 Each party shall inform the other party of the existence of any
improvement to or new application for the Invention within a reasonable
time following discovery. 11.2 All improvements to the Invention by the
Owner or by the Corporation will be the sole property of the Owner. The
Owner agrees that it will license any such improvement or new
application to the Corporation in accordance with and on the same terms
and conditions as the exclusive license granted by this Agreement.
12. INFORMATION AND CONFIDENTIALITY OBLIGATIONS
12.1 Upon written request of the Corporation, the Owner shall deliver
to the Corporation, as soon as reasonably practicable, all confidential
information relating to the Invention as may be reasonably necessary
for the Corporation to make full use of the license granted under this
Agreement.
12.2 The Corporation and the Owner acknowledges that the technology
comprising the Invention is of a confidential nature and is
proprietary and valuable as a trade secret of the Owner and necessary
to maintain the value of the benefits granted to the Corporation
hereunder, and each of the Corporation and the Owner agrees to use all
necessary means to maintain its confidential nature.
12.3 With respect to any technical, marketing or other information
disclosed by one party (the "Discloser") and identified as
confidential to the other party (the "Recipient") obtained in the
course of this Agreement, the Recipient shall maintain the
confidentiality of said information and shall not use or otherwise
disclose said information without the prior written consent of the
Discloser. In addition to providing all necessary know how to the
Corporation, the Owner shall collect and maintain all such materials
and all such information developed in the future with respect
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to the Invention and any improvements in a secure place access to
which is available to the Corporation.
12.4 The obligations set forth in this Section 12 shall not apply when
and to the extent such information;
12.4.1 is in the public domain other than by acts of the
Recipient;
12.4.2 was known to the Recipient prior to receipt from the
Discloser;
12.4.3 corresponds in substance to any information received
in good faith by the Recipient from any third party, unless
such information was obtained by such third party directly
or indirectly from the Discloser on a confidential basis;
12.4.4 was independently developed by an employee or agent
of Recipient, prior to receipt of such information from the
Discloser.
13. TRADE-MARK
13.1 The Corporation agrees to commercialize and market the Invention
only under the Trade-Mark "DEL-ID", and the Corporation is
specifically granted an exclusive license to use such mark and to
sub-license its use to others.
13.2 The Corporation agrees that nothing herein contained shall give
to the Corporation any ownership interest in the Trade-Mark and that
the Trade-Mark is the sole property of the Owner, subject to the
exclusive license granted hereunder.
13.3 The Corporation agrees not to raise or cause to be raised any
question concerning or objection to the validity of the Trade-Mark, or
to the right of the Owner thereto on any ground whatsoever or to the
right of the Owner to grant any of the rights granted to the
Corporation under this Agreement.
13.4 The Corporation agrees;
13.4.1 not to use a trade-mark identical with or confusingly
similar to the Trade-Mark with respect to any other products. The
Corporation further agrees that it will not, directly or
indirectly, at any time, attempt to register a trade-mark which
consists of the Trade-Mark or any trade-mark which is likely to
be confusing therewith;
13.4.2 to take such steps as may be reasonably required by the
Owner to protect the Trade-Mark and maintain the Trade-Mark as
the exclusive property of the Owner.
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13.5 The Corporation and the Owner agree to notify each other of any
conflicting use or of any act of infringement, passing-off or unfair
competition involving the Trade-Mark by unauthorized persons of which
each becomes aware or of any allegation that the Trade-Mark violates
the intellectual property rights of any third party. The Owner agrees
to initiate infringement, passing-off or unfair competition court
proceedings involving such unauthorized acts or such allegation
relating to the Trade-Mark. The Corporation agrees to cooperate fully
with the Owner at Owner's request to oppose such activities by
unauthorized persons, but shall not itself engage in any court
proceedings against nor enter into any settlement discussions with or
in any way itself attempt to oppose the said activities by unauthorized
persons unless the Owner, after 30 days written notice, has failed to
do.
13.6 The foregoing provisions of this Section 13 shall apply, mutatis
mutandis, with respect to any affiliate or sub-licensee of the
Corporation and the Corporation hereby covenants with the Owner to
ensure the observance and performance of the conditions and
restrictions herein contained by any affiliate or sub-licensee of the
Corporation.
14. NON-COMPETITION
14.1 The Corporation covenants and agrees that during the term of this
License Agreement and for a period of two years following any
termination of this Agreement initiated by the Corporation for any
reason other than a material breach by the Owner, the Corporation shall
not, directly or indirectly, commercialize or market any system,
apparatus or technology which competes, directly or indirectly, with
the Invention.
14.2 The foregoing provisions of this Section 14 shall apply, mutatis
mutandis, with respect to any affiliate or sub-licensee of the
Corporation and the Corporation hereby covenants with the Owner to
ensure the observance and performance of the terms and conditions
herein contained by any affiliate or sub-licensee of the Corporation.
15. INDEMNIFICATION
15.1 Subject to the Corporation's compliance with its obligations set
forth in Paragraph 15.3, the Owner shall indemnify, defend, and hold
the Corporation harmless against any and all losses, damages, expenses,
reasonable attorneys' fees (regardless of outcome), settlement costs
and
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judgments resulting from the Owner's breach of any of its obligations
or warranties under this Agreement.
15.2 Subject to the Owner's compliance with its obligations set forth
in Paragraph 15.3, the Corporation shall indemnify, defend, and hold
the Owner harmless against any and all losses, damages, expenses,
reasonable attorneys' fees (regardless of outcome), settlement costs
and judgments resulting from the Corporation's breach of any of its
obligations or warranties under this Agreement.
15.3 A Party (the "Indemnitee") which intends to claim indemnification
under this Section 15 shall promptly notify the other Party (the
"Indemnitor") of any action, claim or other matter in respect of which
the Indemnitee intends to claim such indemnification. The Indemnitee
shall permit the Indemnitor, at the discretion of the Indemnitor, to
settle any such action claim or other matter and agrees to the
complete control of such defense or settlement by the Indemnitor;
provided, however, that such settlement does not adversely affect the
Indemnitee's rights hereunder or impose any obligations on the
Indemnitee in addition to those set forth herein in order for it to
exercise such rights. No such action, claim or other matter shall be
settled without the prior written consent of the Indemnitor and the
Indemnitor shall not be responsible for any legal fees or other costs
incurred other than as provided herein. The Indemnitee shall cooperate
fully with the Indemnitor and its legal representatives in the
investigation and defense of any action, claim or other matter covered
by this Indemnification. The Indemnitee shall have the right, but not
the obligation, to be represented by counsel of its own selection, at
its own expense.
16. TERM
The exclusive, worldwide license granted to the Corporation under this
Agreement shall have an initial term equal to the duration of the US Patent. If
such patent is not granted, the license shall have an initial term of 20 years.
Following the expiration of the initial term, the Corporation shall have the
right to renew the license in perpetuity at reduced royalty rates to be
negotiated at the time of such renewal or renewals. The license may be earlier
terminated in accordance with the provisions of Section 17 of this Agreement.
17. TERMINATION
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17.1 Each of the Corporation and the Owner shall have the right to
terminate this Agreement (except for those provisions which by their
nature survive expiration or termination);
17.1.1 if the other Party is in default of any material
provision, term or condition herein contained and
shall fail to remedy such default within 60 days of
written notice thereof from the other Party;
17.1.2 the other Party becomes bankrupt or insolvent, makes
an assignment for the benefit of its creditors or
attempts to avail itself of any applicable statute
relating to insolvent debtors or if any of its
creditors takes any step or measure under such
applicable statute and such step or measure is not
discharged or abandoned within 60 days;
17.1.3 if the other Party is the Corporation, if it winds
up, dissolves, liquidates or takes steps to do so or
otherwise ceases to function as a going concern;
17.2 Upon expiration or termination of this Agreement the following
shall apply:
17.2.1 each Party shall reconvey and release to the other
party all rights and privileges granted by this
Agreement;
17.2.2 the Corporation shall cease using all advertising,
informational or technical material relating to the
Invention or bearing the Trade- Mark;
17.2.3 the Corporation shall cease its use of the Invention
and refrain from holding itself out as authorized to
do so by the Owner;
17.2.4 the Corporation shall immediately pay all amounts
owing by it to the Owner and the Owner shall
immediately pay all amounts owning by it to the
Corporation;
17.2.5 this Paragraph 17.2, Section 15 and Paragraphs 12.2
through 12.4 Shall survive the expiration or
termination of this Agreement.
17.3 Except if termination occurs as a result of a material breach of
the Owner, no compensation or indemnity will be payable by the Owner to
the Corporation as a result of the termination of this Agreement.
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18. ASSIGNMENT
The Parties covenant and agree that neither Party shall, without the prior
written consent of the other Party, transfer to any person or entity the whole
or any part of this Agreement or any of its interest, right or obligations
hereunder, except as contemplated by Section 1 hereof.
19. INDEPENDENT CONTRACTOR
This Agreement does not and shall not be construed to create any
partnership or agency whatsoever as between the Owner and the Corporation. The
Corporation and the Owner shall not, by reason of any provision herein
contained, be deemed to be the partner, agent or legal representative of the
Owner or of the Corporation, as the case may be, nor to have the ability, right
or authority to assume or create, in writing or otherwise, any obligation of any
kind, express or implied, in the name of or on behalf of the Owner or of the
Corporation, as the case may be.
20. NOTICES AND OTHER COMMUNICATIONS
All notices, requests, consents, approvals, reports or other
communications pursuant to or in connection with this Agreement shall be given
in writing and in the English language, by personal delivery or by registered
mail, postage prepaid and return receipt requested, addressed to such other
Party or delivered to such other Party at its respective address appearing on
the first page hereof, or at such other address as notice may given by either of
them to the other from time to time.
21. GENERAL
21.1 All payments due pursuant to this Agreement shall bear interest
from the due date and until paid in full at a rate equal to 10% per
annum.
21.2 This Agreement constitutes the entire agreement between the
Parties with respect to all matters herein contained, and cancels and
supersedes any representations or writings whatsoever not incorporated
herein and made a part hereof. This Agreement shall not be amended,
altered or qualified except by an instrument in writing, signed by the
Parties hereto and any amendments, alterations or qualifications
hereof shall not be binding upon or affect the rights of any Party who
has not given its consent in writing.
21.3 The division of this Agreement into Sections, Paragraphs and
Sub-paragraphs and related headings is for convenience of reference
only and shall not affect the interpretation or construction of this
Agreement.
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21.4 This Agreement shall be governed by and construed in accordance
with the laws in force in the Province of Quebec, Canada.
21.5 No waiver by any Party of any breach by the other Party of any of
its covenants, obligations and agreements hereunder shall be a waiver
of any subsequent breach of any other covenant, obligation or
agreement, nor shall any forbearance to seek a remedy for any breach
be a waiver of any rights and remedies with respect to such or any
subsequent breach.
21.6 This Agreement has been drafted in the English language at the
express request of the parties. Cette convention a ete redigee en
langue anglaise a la demande explicite des parties.
IN WITNESS WHEREOF the Parties have duly executed this Agreement as of
the date and year first above.
Witness:
PIERRE de LANAUZE
Attest:
3127575 CANADA INC.
By:
Secretary Vice President
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EXHIBIT C
RESIGNATIONS
February 26, 1998
The Board of Directors
Grandeur, Inc.
Ladies and Gentlemen:
The undersigned hereby resign as directors and officers of Grandeur,
Inc., a Nevada corporation, effective immediately.
Very truly yours,
s\ Krista Nielson
Krista Nielson
s\ Sasha Belliston
Sasha Belliston
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