Friday, February 24, 2012

L 0111 . t)1 Li iit 1] L I1 P1 LIt It:l ifli 111 11F. II Eb1flt

2007-1 806(IT)G Date/Date: 2/24/2012 Heure/Time: 3:08:37 PM

De/Froin: Destinataire/To:

Prénom!First name Genevieve PrénomlFirst name Louise Sumrnerhill Noms de famille/Last name Vallee Noms de famille Last name

CoinpagnielCompany Appeals Management

MinistèrefDepartrnenf Branch/Direction de la Gesfion des MinistèrefDeparlment Appels

Numéro fax/Fax number Numéro fax/Fax munber 14168631515 Numéro de téléphone/Telephone (613) 944-7893

Nuinéro de téléphone/Telephone number number

Vos coinnientaires/C oinments: Genevilve Vallée Tax Court 00 Canada / Cour canadienne de l'impôt Regietry Aosiatarit/Adointe du grerfe 1-800-927-5499

Docket: 2007-1806(IT)G BETWEEN:

VELCRO CANADA INC., Appellant,

and

BIER MAJESTY THE QUEEN, Respondent.

Appeal heard on May 17, 2011, at Toronto, Ontario Before: Associate Chief Justice E.P. Rossiter

Appearances: Counsel for the Appellant: Louise Summerhill

and Mami Pemica Counsel for the Respondent: Margaret Nott

and Amit Ummat

JTJIJGMENT

The appeals from the reassessments made under the Income Tax Act for the 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003 and 2004 taxation years are allowed, and the reassessments are referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.

Signed at Ottawa, Canada, this 24 " day of February, 2012.

"E.P. Rossiter" Rossiter A.C.J.

Citation: 20 12TCC57 Date: 20120224

Docket: 2007- 1806(IT)G BETWEEN:

VELCRO CANADA INC., Appellant,

and

HER MAJESTY THE QUEEN, Respondent.

REASONS FOR JUJ)GMENT

Rossiter A.C.J.

Tntrndnctinn

[1] Velcro Canada Inc. ("VCI") was in the business of manufacturing and selling fastening products mainly for the auto industry. VCI paid royalties under a License Agreement to Velcro Industries BV ("VIBV"), previously a resident of the Netherlands, for the use of Velcro Brands Technology. In 1995, VI13V became a resident of the Netherlands Antilles and in October, 1995 assigned the License Agreement to Velcro Holdings BV ("VHBV"), a subsidiary resident of the Netherlands. Canada does not have a tax treaty with Netherlands Antilles. Between 1996 and 2004, VCI paid royalties to VHBV which in turn paid approximately 90% of that amount over to VIBV. Any royalties paid by VCI to VIBV would be subject to a withholding tax of 25 %. Canada does have a tax treaty with the Netherlands and under that treaty, VCI withheld and remitted a reduced rate of tax of 10% of the royalties paid to VHBV for the 1996 to 1998 taxation years and nil for 1999 and subsequent taxation years. VHIBV is of the view that it is the beneficial owner of the royalties, the Respondent has the contra view that VIIBV is the beneficial owner, and VCI therefore should have withheld and remitted a tax of 25 % of the royalties paid to VHIBV, as required by the Canada-Netherlands Convention ("Convention").

Page: 2

Facts:

[2] VCI was in the business of manufacturing and selling Velcro® fasteners mainly for the auto industry. VIBV was the owner of Velcro Brands and technology and entered into a License Agreement with VCI in 1987 ("License Agreement") so that VCI could use the Velcro® brand fastener technology in Canada.

[3] From 1987 to October 1995, VCI paid royalties to VIBV and withheld tax at the applicable rate pursuant to the Convention. A reorganization of the Velcro group of companies occurred on October 26, 1995 with VIEV becoming a resident of Netherlands Antilles. On October 27, 1995, VIBV signed an Assignment Agreement ("Assigrnnent Agreement") with VHBV whereby VIBV assigned to VHBV its rights and obligations under the original License Agreement so that VCI would pay royalties to VHBV under the original License Agreement but subject to the Assignment Agreement.

[4] As VHBV was a resident of the Netherlands, VCI continued to withhold tax from royalties at the rate of 10% pursuant to the Convention. The royalty rate was changed from 10 percent to zero in December 1998, which resulted in VCI ceasing to withhold any tax from the royalties.

[5] VIBV and VCI entered into a new License Agreement ("New License Agreement") effective October 1, 2003, which superseded the License Agreement. Also, effective October 1, 2003, VIBV and VIIBV entered into a new Assignment, Assumption and License Agreement ("New Assignment Agreement"). The terms and conditions of the New License Agreement and the New Assignment Agreement are similar to the License Agreement and Assignment Agreement.

[6] The licensing agreements granted VCI the right to use VIBV's intellectual property to manufacture and sell fastening products in exchange for royalty payments, with VIBV maintaining ownership of the intellectual property. Specifically, VCI obtained the right to manufacture, sell, and distribute the licensed products, and the right to use the licensed trademarks to promote, sell, and distribute those products. VCI's rights were exclusive in Canada and non-exclusive in other countries, as described in the agreements.

Page: 3

[7] The royalties owed under the licensing agreement were calculated on the net sale of the products. In the first agreement, different rates were applied depending on whether the licensed products were considered "established technology" (5 %) or "new technology products" (7.5%). There was no such distinction under the second agreement, with the rate set at 5 % of net sales for all licensed products. Royalties were to be paid quarterly under the first licensing agreement and monthly under the second agreement, with both agreements allowing the parties to agree to other timing for payments. The licensing agreements prevented VCI from conducting research and development using the licensed products, and required VCI to take any steps necessary to preserve VIBV's rights over the intellectual property, including advising VI1BV of any potential misuse or infringement. VIBV's right to assign the licensing agreements was specifically outlined, while VCI was precluded from assigning the agreement without first obtaining VIBV' s written consent.

[8] The "License Agreement" of October 1, 1987 is attached as Appendix A. Particular reference should be made to: Article II A. Licenses Article III A. Term Article IV A. Amount of Royalties owing Article IV B. Time and Method of Payment Article V Rights in License Technology and Licensed Trademarks Article XI Assignment Schedule C Royalty Rates

[9] The "Assignment Agreement" of October 27, 1995 is attached as Appendix B. Particular reference should be made to:

Article 1. Assignnient and License Article 2. Assumption Article 3. Rights retained by VIBV Article 4. Enforcement of Obligations under Subject Agreement Article 5. Third Party Beneficiary Article 6. Royalties Article 7. Payment Terms Article 8. Books and Records; Audit. Article 9. Termination Article 10 Further Assurances

Page: 4

[10] Attached as Appendix C is a letter from VIBV to VCI dated September 29, 1997 in relation to the License Agreement.

[11] Attached as Appendix D is the new License Agreement effective October 1, 2003.

[12] Attached as Appendix B is the New Assignment Agreement dated October 1, 2003. Particular reference should be made to Article 6, Royalties.

[13] The first assignment agreement between VIBV and VHBV was effective October 27, 1995, the day after VIBV moved its seat to Netherlands Antilles. Under both assignment agreements, VBBV was assigned the right to grant licenses for VIBV's intellectual property to VCI, and to collect royalty payments from VCI as payments for these licenses. V1{BV contracted to enforce the terms of the licensing agreement and to take any steps necessary if VCI breached the contract's terms. The ownership of the intellectual property, however, remained with VIBV, and VIBV was specified as the express third party beneficiary, with the right to enforce the licensor's rights if VFIBV failed to do so. To ensure that VHBV respected the terms of the assignment agreements, \TIBV had the right to inspect VB1BV's books and records throughout the agreements and for three years after its termination.

[14] In exchange for the rights granted under the assignment agreements, VHBV agreed to pay VJBV an arm's length percentage of net sales of the licensed products within 30 days of receiving royalty payments from VCI. The assignment agreements specified that the arm's length percentage was subject to the approval of Dutch tax authorities.

[15] The Canada Revenue Agency ('CRA") issued Notices of Assessment in 2006 with respect to 2002/2003 with penalties. Notices of Objection were filed. Additional Notices of Assessment were issued for 1995 through 2001 inclusive, plus 2004. The assessed amounts of non-resident tax plus penalties for each year are as follows:

Year Non-Resident Tax Penalty 1995 $ 270,634 $ 27,063 1996 $ 231,787 $ 23,179 1997 $ 325,043 $ 32,504 1998 $ 448,844 $ 44,884

Page: 5

1999 2000 2001 2002 2003 2004

$1,083,890 $1,299,000 $1,225,505 $1,362,484 $1,596,401 $ 740,350 $8,583,938

$106,389 $129,900 $122,552 $136,248 $158,940 $ 74,035 $855,694

The assessments/reassessments were confinned and the Appellant appealed.

[16] CRA had assessed the mandatory penalties under subsection 227(8) of the Income Tax Act ("Act"). The parties are in agreement that the imposition of the penalties will follow the result. Also initially there was an issue with respect to the possibility of some statute barment, but the parties are now in agreement that no issues are statute barred. Also the parties have agreed that the 1995 assessment dated October 25, 1996 shall be referred back to the Minister of National Revenue for reconsideration and recalculation on the basis that VIBV was a resident of the Netherlands in 1995 and therefore entitled to the benefit of the treaty.

Issue:

[17] Was VHIBV the beneficial owner of the royalties from VCI from 1996 through to 2004 and if so, therefore entitled to a reduced withholding rate under the convention?

Position of the Parties:

[18] Position of the Appellant:

The Appellant takes the position that VBIBV was the beneficial owner of the royalties from VCI for 1996 through 2004 and as such is entitled to the reduced rate of withholding tax under the convention.

The position of the Appellant is based upon:

1. The test of "beneficial owner" from Prévost Car Inc. v. R., 2008 TCC 231, affirmed in 2009 FCA 57.

2. The Convention, Article 3, section 2;

Page: 6

Income Tax Convention Interpretation Act, section 3; The Tax Court of Canada's decision in Prévost, paragraphs 95 and 100, aid paragraphs 14 and 15 from the Federal Court of Appeal's decision upholding Prévost:

3. The application of the definition of "beneficial owner" from Prévost in terms of - "possession" - "use" - "control" - "risk"

4. The lack of existence of evidence of an agency or nominee relationship or that VHIBV is a conduit.

[19] Position of the Respondent:

The Respondent takes the position that VIBV rather than VHBV is the beneficial owner of the royalties from VCI between 1996 and 2004, and therefore VF1BV is not entitled to the reduced rate under the Convention. The Respondent alleges that the assessments are correct in relation to VCI for failing to withhold and remit the withholding tax of 25 % of royalties paid to VHBV under section 12 of the Act since VIIIBV was not the beneficial owner of the royalties paid to it by VCI.

[20] The position of the Respondent is based upon three arguments:

1. V}{BV does not beneficially own the royalties; 2. VHBV is an agent or conduit; 3. VRBV did not exercise the "incidences of ownership" as required by Prévost, supra.

Applicable Statutes:

[21] The Convention between Canada and the Kingdom of the Netherlands is applicable because it addresses the issue of royalties. Article 12 of the Convention addresses royalties as follows:

1. Royalties: Royalties arising in one of the States and paid to a resident of the other State may be taxed in that other State.

Page: 7

2, However, such royalties may also be taxed in the State in which they arise and according to the laws of that State, but if the recipient is the beneficial owner of the royalties, the tax so charged shall not exceed 10% of the gross amount of the royalties.

3. Notwithstanding the provisions of paragraph 2: (a) copyright royalties and other like payments in respect of a deduction of

any literary, dramatic, musical or artistic work (but not including royalties in respect of motion picture films and work on film, videotape or other means of reproduction for use in connection with television broadcasting; and

(b) royalties for the use of or the right to use computer software or any patent or for information concerning industrial, commercial or scientific experience (but not including any such information provided in connection with the rental or franchise agreement) arising in a State and paid to a resident of the other State who is the beneficial owner of the royalties shall be taxable only in that other State.

[22] The particular relevant sections of the Act are sections 212, 215 and 227 with the remainders of the sections not quoted herein included in Appendix E.

212. (1) Tax -- Every non-resident person shall pay an income tax of 25% on every amount that a person resident in Canada pays or credits, or is deemed by Part Ito pay or credit, to the non-resident person as, on account or in lieu of payment of, or in satisfaction of,

Rents, royalties, etc.

(d) rent, royalty or similar payment

215. (1) Withholding and remittance of tax -- When a person pays, credits or provides, or is deemed to have paid, credited or provided, an amount on which an income tax is payable under this Part ... the person shall ... deduct or withhold from it the amount of the tax and forthwith remit that amount to the Receiver General on behalf of the non-resident person on account of the tax

215. (6) Liabifity for tax -- Where a person has failed to deduct or withhold any amount as required by this section from an amount paid or credited or deemed to have been paid or credited to a non-resident person, that person is liable to pay as tax under this Part on behalf of the non-resident person the whole of the amount that should have been deducted or withheld, and is entitled to deduct or withhold from any amount paid or

Page: 8

credited by that person to the non-resident person or otherwise recover from the non-resident person any amount paid by that person as tax under this Part on behalf thereof.

227. (8) Penalty -- Subject to subsection 227(8.5), every person who in a calendar year has failed to deduct or withhold any amount as required by subsection 153(1) or section 215 is liable to a penalty of

(a) 10 % of the amount that should have been deducted or withheld; or

227. (9) Penalty Subject to subsection 227(9.5), every person who in a calendar year has failed to remit or pay as and when required by this Act or a regulation an amount deducted or withheld as required by this Act or a regulation or an amount of tax that the person is, by section 116 or by a regulation made under subsection 215(4), required to pay is liable to a penalty..,

Analysis:

The Organization for Economic Cooperation and Development Publications

[23 1 The Treaty is based on the Organization for Economic Cooperation and Development's ("OECD") Model Tax Convention on Income and Capital 1977 ("1977 Model"). In 1986, the OECD Council adopted the OECD Conduit Companies Report ("Conduit Report"). As acknowledged by the Federal Court of Appeal in Prévost v. R., supra, the model conventions provide a guide to the interpretation and application of existing conventions. The Federal Court of Appeal, in Prévost, supra, asserted that later commentaries can also act as guides, with certain limitations, stating the following at paragraph [11]:

The same may be said with respect to later commentaries, when they represent a fair interpretation of the words of the Model Convention and do not conflict with Commentaries in existence at the time a specific treaty was entered and when, of course, neither treaty partner has registered an objection to the new Commentaries.

There are several points to be made about the Models, their Commentary and the Conduit Report:

1. Discussing beneficial ownership, agents, nominees, and, later, conduit companies, paragraph 4 in the 1977 Commentary and paragraphs 4 and 4.1 of the

Page: 9

updated Commentary to Article 12 are substantively similar (with some sentences being identical) to the same commentary in Article 10, oft-cited in Prévost.

2. While the Respondent highlights the fact that VIBV consistently ensured it retained the ownership of the Licensed IP, in light of the comment in paragraph 8.2 of the updated Commentary it is unclear what the Respondent intends to achieve by pointing that fact out, as the updated commentary establishes that payments cannot be properly characterized as royalty payments if full ownership is transferred:

8.2 Where a payment is in consideration for the transfer of the full ownership of an element of property referred to in the definition, the payment is not in consideration "for the use of, or the right to use" that property and cannot therefore represent a royalty.

3. Paragraph 7 of both the 1977 and the 2003 Commentary cite a single example with facts similar to the case at bar:

the beneficial owner of royalties arising in a Contracting State is a company resident in the other Contracting State; all or part of its capital is held by shareholders resident outside that other State; its practice is not to distribute its profits in the form of dividends; and it enjoys preferential taxation treatment (private investment company, base company).

The Commentary then poses the question as to whether it is justifiable to extend the Article's tax exemptions to the party who is the source of the royalties and then recommends that countries may want to agree to special exemptions when negotiating that take into account the situation described.

4. In discussing the denial of the tax benefits to conduit companies in Articles 10 to 12 and what traits a conduit might have, the Conduit Report states at paragraph 14(b):

The provisions would, however, apply also to other cases where a person enters into contracts or takes over obligations under which he has similar functions to those of a nominee or agent. Thus a conduit company can normally not be regarded as the beneficial owner if, though the formal owner of certain assets, it has very narrow powers which render it a mere fiduciary or an administrator acting on account of the interested parties (most likely the shareholders of the conduit company).

[24] In Prévost, the Federal Court of Appeal specifically affirmed the following statement by Chief Justice Rip:

Page: 10

[100] ... When corporate entities are concerned, one does not pierce the corporate veil unless the corporation is a conduit for another person and has absolutely no discretion as to the use or application of funds put through it as conduit, or has agreed to act on someone else's behalf pursuant to that person's instructions without any right to do other than what that person instructs it, for example, a stockbroker who is the registered owner of the shares it holds for clients.

(emphasis added)

After affirming the above paragraph, the Federal Court of Appeal went on to assert:

[15] ... The Crown, it seems to me, is asking the Court to adopt a pejorative view of holding companies which neither Canadian domestic law, the international community nor the Canadian government through the process of objection, have adopted.

The Federal Court of Appeal's statement is also supported by the Committee on Fiscal Affairs' warnings of the dangers of readily looking through corporations which is "incompatible with the principle of the legal status of corporate bodies, as recognized in the legal systems of all OECD Member countries,..". At paragraph 24(i) of the Conduit Report.

1) P

[25] The issue in this particular case comes down to the application of the "beneficial ownership test". The Appellant and the Respondent are in agreement that the test to be applied is the "beneficial ownership test" and it comes from Prévost v. R., supra, upheld by the Federal Court of Appeal. That case turned upon the interpretation of the term "beneficial owner" found in Article 10 of the Treaty. Similar to that Article is Article 12 which requires the recipient of the payments in question to be a resident of the other contracting state and a "beneficial owner" of the royalty payments for the benefits of the Article apply. The Federal Court of Appeal expressly accepted Chief Justice Rip's formulation in Prévost of the phrase's defmition, going so far as to say it

captured the essence of the concepts as it emerges from the review of the general, technical and legal meanings of the terms

Page: 11

and emphasized that this formulation also accords with what is stated in the OECD Commentaries and in the Conduit Report. The Federal Court of Appeal repeatedly referred to paragraph [100] of Chief Justice Rip's decision in Prévost, quoting the following:

[100] In my view the "beneficial owner" of dividends is the person who receives the dividends for his or her own use and enjoyment and assumes the risk and control of the dividend he or she received. The person who is beneficial owner of the dividend is the person who enjoys and assumes all the attributes of ownership In short the dividend is for the owner s own benefit and this person is not accountable to anyone for how he or she deals with the dividend income.

Where an agency or mandate exists or the property is in the name of a nominee, one looks to find on whose behalf the agent or mandatory is acting or for whom the nominee has lent his or her name. When corporate entities are concerned, one does not pierce the corporate veil unless the corporation is a conduit for another person and has absolutely no discretion as to the use or application of funds put through it as conduit, or has agreed to act on someone else's behalf pursuant to that person's instructions without any right to do other than what that person instructs it, for example, a stockbroker who is the registered owner of the shares it holds for clients. This is not the relationship between PHB.V. and its shareholders. (emphasis added)

[26] Also, I would note the comments of Chief Justice Rip in Prévost at paragraph [98] thereof wherein he stated:

[98] In common law, a trustee, for example, holds property for the benefit of someone else. The trustee is the legal owner but does not personally enjoy the attributes of ownership, possession, use, risk and control. The trustee is holding the property for someone else and that, ultimately, it is that someone else who has the use, risk and control of the property. Also, in common law, one person may have a life interest in property and another may have a remainder interest in the same property. The owner of the life interest receives income from the property and owns the income; the owner of the remainder interest owns the capital of the property. There is no division of property in common law as there is in civil law. The word "beneficial" distinguishes the real or economic owner of the property from the owner who is merely a legal owner, owning the property for someone else's benefit, i.e., the beneficial owner.

Beneficial Ownership:

[27] As affirmed by the Federal Court of Appeal in Prévost, supra, when asserting who is the beneficial owner of the items being considered (e.g. a

Page: 12

payment of dividends or royalties), one must determine who has received the payments for his/her own use and enjoyment and assumed the risk and control of the payment he/she received. Here the focus is on the attributes of ownership of the payment/item to be considered.

[28] In the scenario such as the one before the Court, where it must be considered whether the recipient can be considered a conduit, one must take a close look at where the right to use and the enjoyment and assumption of risk and control of the payments lie. VHBV signed agreements that it would make payments to VIIIBV equal to a certain percentage of the net sales within 30 days of receiving payments from VCI. The respondent argues that this case can be distinguished from Prévost because of VHBV' s contractual obligation to make payments to V1BV within a specified timeframe. In Frévost, the Court found that there was no automatic or pre-determined flow of funds, and emphasized that the corporation resident in the Netherlands was not a party to the shareholders' agreement. Upon evaluating the facts in relation to the use and application by VHBV of the funds received from VCI it is also clear that despite a contractual obligation to make payments to VIBV, there was no automatic flow of funds in this case.

[29] From Prévost, there are really four elements in considering the attribution of beneficial ownership and those are: (a) possession; (b) use; (c) risk; and (d) control. The question therefore is, did VHBV have possession, use, risk and control of the royalties from VCI, considering, (a) the License Agreement; (b) the Assignment Agreement; (c) the New License Agreement; (d) the new Assignment Agreement; (e) the flow of funds; and (f) the fmancial statements and bank statements of VHIBV. These are the key instruments or documentats that one must look to deteniiine who has the possession, use, risk and control of the royalties in question. Also, it is important to emphasize that, as chief Justice Rip in Prévost noted, the Court is not likely to pierce the corporate veil unless the corporation has no discretion with regard to the use and application of the funds. The Court will look at whether the party in question exercised or held the attributes of beneficial ownership in regards to the royalty payments.

[30] The Appellant presented detailed evidence to the Court outlining the flow of royalty payments from VCI to \JHBV, the use of these funds by V}{BV, and VHBV' s subsequent payments to VIBV of the amounts owed under the assignment agreements. The Appellant presented Peter Pelletier, a corporate officer for Velcro Companies as a witness for the Appellant. I found him to be quite credible, and particularly helpful. At the time of his testimony, Mr.

Page: 13

Pelletier was the treasurer and chief frnancial officer for the Velcro Group Corp., which is responsible for consolidating the financial reporting of all Velcro companies and then providing this information to Velcro Industries N.V. (VINV), a publicly traded corporation during the time period in issue. Mr. Pelletier had extensive and detailed knowledge of the Velcro Companies drawn from his various positions with the companies over the years, and he had an intricate role in the corporate reorganization of the Velcro Companies in 1995. He was direct and frank in giving his detailed evidence. Mr. Pelletier's demeanor, manner of presentation, and depth of knowledge all gave a strong indication of his intricate involvement in the finances of the Velcro Companies. He gave his evidence in both direct and cross-examination in a calm, knowledgeable and effective fashion. Mr. Pelletier answered all questions directly giving detailed explanations where required. He did not attempt to avoid answering questions or couch his answers in a manner that would leave one dubious. He was honest and forthright in his evidence, and I found him to be a person of veracity and credible.

[31] Mr. Pelletier explained that VIBV is the holder of all intellectual property rights for the Velcro brands and incurs the research and development expenses in the development of new products and applications. He described the license agreement between VIBV and VCI as similar to many of the licensing agreements that VIBV had with manufacturing and sales entities in other countries. Mr. Pelletier described the purpose of VIBV's assignment of the licensing agreement to VI{BV as being to transfer the management of licensing royalty streams to VI{BV. While VIBV remained the owner of the intellectual property, VBBV assumed VCI's rights and obligations under the licensing agreement. VIBV, however, maintained the right to enforce VCI's contractual obligations if VHBV failed to do so.

[32] Amaco Management Services B.V. ("Amaco"), an ann's length corporation, conducted in large part the management of VHBV, including financial services. Mr. Pelletier explained that \THBV's board of directors met as needed, with no scheduled meetings and no meeting minutes maintained. All resolutions were by unanimous consent. He summarized VHIBV's three main activities as a) holding shares in subsidiaries, b) providing lending services to subsidiaries, and c) managing royalty streams, with the royalties being the largest income and expense items. 'VEBV' s tax returns, prepared and filed in Amsterdam, supported Mr. Pelletier's description of VHBV's activities, listing, amongst other items, investments in subsidiary companies, loans due from

Page: 14

subsidiaries, interest income from loans to subsidiaries, and royally and dividends from subsidiaries.

[33] Mr. Pelletier described the flow and utilization of the royalty payments during the years at issue before the Court, with VHBV' s bank records supporting his testimony. From 1996 to 2004, VHIBV received royalty payments in Canadian currency from VCI equal to the percentage of net sales under the licensing agreement, minus the 10% tax withheld and remitted by VCI until 1999, as required under the Convention. Upon receipt, these royalty payments were intermingled into VHIBV's other accounts and used for a variety of VHBV's purposes, at VEIBV's sole discretion. The funds were not segregated and then paid directly to VIBV; rather, the royalties were transferred into various other accounts under different currencies, and those accounts were used to fund \THBV' s general activities, including investment loans, operational expenses, and professional fees. When VBBV made its payments due under the assignment agreement, they were neither automatic nor from a segregated account kept solely for the royalty funds. V}IBV reached into the accounts where the royalty payments had intermingled with other funds and been used for general 'VHBV purposes, and transferred from those accounts the amounts due, minus the percentage withheld as approved by the Dutch tax authorities for transfer pricing purposes.

[34] In looking at the beneficial ownership issue one must apply the test as set out by Chief Justice Rip, and in doing so, one must look to the meaning of individual words, that is, "possession", "use", "risk" and "control". These words have ordinary meanings.

[35] When one looks to the word "possession" in Black's Law Dictionary, it speaks in terms of "having or holding properly in one's power" or "the exercise of dominion over property". How did \THBV exercise dominion over the royalties received from VCI? There are a number of ways that VBBV exercised dominion over the royalties:

1. Through the interaction between the license agreements and the assignment agreements, VHBV had the right to receive the royalties.

2. The royalties were deposited into an account, in Canadian funds, owned by VRBV.

3. VHI3V had exclusive possession and control over these accounts.

Page: 15

4. The royalties themselves were not subrogated from other monies of VHBV. The royalties were intermingled and moved with other monies flowing in and out of VHI3V accounts.

5. The amounts typically went from Canadian dollars into U.S. dollar accounts and were sometimes converted the next day or later at some other time.

6. VHBV converted the money eventually and moved it into the U.S. account. 7. When the money was in VFIBV accounts, the monies earned interest which

was earned to the credit of VHBV and not someone else or some other entity.

8. Various charges were deducted from \JEBV' s accounts and these are items which VHBV was liable for, including telephone bills, professional fees, and loan payments. These payments came out of the accounts of VHBV.

9. Sometimes the money went into a U.S. deposit account and at other times, into a Dutch currency account and it appears that there was really an unrestricted flow of funds from and between the accounts.

11. VHBV did not have to seek instructions on every step of the application of the funds from someone else.

12. There was co-mingling of the funds with the general funds of VHBV. 13. The royalty payment received by VHBV from VCI was one amount, while

the amount paid by VFIBV to VIBV was a different amount. The royalties did not simply go in and come out in an automated fashion.

[36] The term "use" in Black's Law Dictionary makes reference to the application or employment of something: "a long continued possession or employment of a thing for which it is adapted".

[37] Did VHBV "use" the royalties in the ordinary sense? Did it apply the royalty payments to its own benefit? Reference may be made to the facts referred to in paragraph [35] in discussing the issue of possession. The cash flow statements introduced by the Appellant during the course of trial show that the royalties were co-mingled with other monies and used to do a variety of things:

(a) pay bills and fees; (b) re-pay loans; (c) earn interest income for the benefit of VRBV; (d) invest in new enterprises; (e) make payments under legal obligations.

Page: 16

[38] Nothing in the License Agreement, New License Agreement, Assignment Agreement or New Assignment Agreement prevents VHBV from using the royalties - they were not segregated in any way, they were co-mingled with other funds and they were used on an operational basis as VIHBV saw fit. There were no restrictions on the use of the funds - \TBBV only had to meet certain contractual obligations with respect to monies it contractually owed to VIBV.

[39] In Black's Law Dictionary, "risk" refers to "the chance of injury, damage or loss" or "liability for injury, damage or loss that occurs". Reference here would be to economic loss.

[40] VBEV did assume some risk in relation to the royalties. There was currency risk in that the monies were received by VHBV in Canadian funds, converted eventually to U.S. funds or Dutch funds. Nothing in any of the agreements referred to shifting any currency risk to anyone else from VI4BV. The royalties were the assets of VHBV. They were available to creditors and were shown as such on their fmancial statements. VHBV reported these funds as assets on their financial statements and therefore were at risk of seizure or availability to creditors, with no priority given to VIBV as a creditor. There was also no indemnification in any of the agreements to reduce the risks and exposure of V}IBV.

[41] Finally reference can be made to "control" and the definition of control as found in the Black's Law Dictionary is "to exercise power or influence over".

[42] Many of the comments referred to in the interpretation of the phrases "possession", "use" and "risk", equally apply to "control". It was noted that the royalties did not just flow through \TITfBV but, at the discretion of V}IBV, the payments were co-mingled with other funds of VHBV and were subject to the risk of creditors the same as its other assets. VITIBV exercised its control, subjecting the funds to increases or decreases by virtue of earning interest or losing value because of the risk of currency exchange and using the funds, in part, to pay other outstanding obligations of \/IHBV.

[43] The Respondent asserts that VHBV is not the beneficial owner of the royalties, and make reference to the incidences of beneficial ownership. They refer to the use and enjoyment of the royalties, but it is not 100% of the royalties amount that are paid to VIBV but only approximately 90 %. The other 10 % is subject to the discretionary use, enjoyment, and control of VHBV, assuming it is

Page: 17

using the exact same funds, which is not necessarily the case because of the co-mingling of royalty funds with the general funds of VHBV. VHBV also uses, enjoys, and controls funds through currency exchanges and possible investment of some of the royalty payments. Also, VHBV assumes the risk of the royalty payments and certaiuly the control as is indicated by (a) the co-mingling of the funds with its other assets; (b) being subject to fluctuating currency rates; and (c) the fact that VHIBV can invest the funds and earn interest income, and use some of the funds if not all of the funds, to meet its other financial obligations; these facts are all attributes of risk assumption.

[44] \/}IBV did have an obligation to pay a certain amount of money to VIBV which was equivalent to 90 % of the royalties received. The funds paid were not necessarily the same funds as the royalty payments received because the original payments were co-mingled with other assets of VHBV. The funds paid to VIBV were not necessarily in the same dollar because if the funds were converted from Canadian dollars to U.S. dollars or to Dutch currency, it may have been a different amount because of the currency exchange.

[45] Despite the Respondent's assertion to the contrary, there was no pre-detennined flow of funds. What there is is a contractual obligation by VHBV to pay to VJBV a certain amount of monies within a specified time frame. These monies are not necessarily identified as specific monies, they may be identified as a percentage of a certain amount received by V}IBV from VCI, but there is no automated flow of specific monies because of the discretion of VIHBV with respect to the use of these monies.

[46] The Respondent asserts that VBIBV was a mere agent for VIBV and refers to Roberge Transport Inc. v. R., 2010 TCC 155. At paragraph [53], the defmition of agency was provided by the Court as follows:

[53] The following definition of agency, by Gerald Fridman, has been quoted and applied in a number of Canadian cases:

Agency is the relationship that exists between two persons when one, called the agent, is considered in law to represent the other, called the principal, in such a way as to be able to affect the principals legal position by the making of contracts or the disposition of property.

[47] Tn other words, if you do not have the ability to affect the legal position, then the agency enquiry ends. This is the same interpretation that was given to

Page: 18

the phrase "agency" in Merchant Law Group v. R., 2010 FCA 206 when the Federal Court of Appeal stated:

[17] It is settled at common law that for an agency relationship to exist the agent must be able to affect the principaPs legal position with third parties by entering into contracts on the principal s behalf or by disposing of the principal's property ... and Reynolds on Agency, 17th ed. (London: Sweet & Maxwell, 2001) at paragraph 1-001. In the words of Professor Fridman, citing Royal Securities Corp. Ltd. v. Montreal Trust Co., [1967] 1 O.R. 137 at 155 (H.C.J.) aff'd [1967] 2 O.R. 200 (C.A.), "the law of agency will apply only when the acts of one person on behalf of another make a difference to that other's legal position, that is to say, his or her rights against, and liabilities towards, others. The grant of the right to exercise another person's legal powers, thereby potentially affecting the grantor's legal position, is an essential feature of agency."

[22] This Court has previously recognized that an essential quality of agency is whether the putative agent has the capacity to affect the legal position of the principal. Thus, in Glen garry Bingo, once the Court determined that the putative agent did not have the capacity to affect the legal position of its alleged principal, the Court found it unnecessary to address any of the other factors indicative of an agency relationship. The absence of the ability to affect the legal position of the alleged principal conclusively determined that there was no agency relationship. See: Glengarry Bingo at paragraph 32. The Court then went on to explain, at paragraph 33, that:

The most common example of how an agent might affect the legal position of its principal is by entering a contract on the principal's behalf. It is clear here that GBA was not authorized to enter contracts with third parties on behalf of the members. For instance, GBA could not have entered into a contract for purchase of bingo equipment on behalf of its Members. It was only empowered to bind itself. In the contract of purchase, GBA bound itself; it did not purport to act for its Members nor did it expose them to risk. The fact that the Members were insulated from risk is demonstrated by the reaction of ABS when GBA was in arrears on its equipment payments: ABS made no attempt to seek compensation from the Members and the Members did not entertain the idea that they might be liable. These events illustrate that GBA could not effect the legal position of its Members, which demonstrates that an essential element of agency was not present. [Emphasis added.]

Page: 19

[23] Other cases have considered the importance of the ability of an agent to affect the legal position of the principal and the assumption of risk by the principal, and reach the same conclusion. See, for example, Kinguk Trawl Inc. v. Canada (2003), 301 N.R. 89 (F,C,A.) at paragraphs 35-36, Parkland Crane Serv'ice Ltd. v, Canada, [1994] G,S,T.C. 58 (T,C.C.) at pages 58-10, 58-11, and Shvartsinan v. Cana4a, [2002] T.C.J. No. 148 at paragraph 12,

[48] VHIBV did not have the capacity to affect the legal position of VIBV and therefore was not a legal agent. In the Assignment Agreements there was a provision that VBBV could not amend the subject agreement or waive the enforcement of any provision without the express prior written consent of V]BV and further, there was no amendment or waiver of the agreement or any provision thereof to be affected unless it was assigned by the party against whom the enforcement of such an amendment or waiver was sought. Further, VBIBV could not assign the agreements without the prior written consent of VTBV. If you are going to be able to affect the legal position you should be able to assign or amend and VBBV could do neither.

[49] Notwithstanding that VHIBV was obligated to enforce the licensing agreements and notifi VIBV of any breaches and take steps to remedy the breach unless directed otherwise by VI13V, and notwithstanding that VIBV had the right to inspect and audit \7}{BV's books and that VHBV was contractually required under the assignment and license agreements to take such action as VIBV may reasonably request to secure and protect the rights of VI1BV, the key to an agency relationship is that the agent has the ability to affect the legal position of the other. This is not the case with respect to \7IBV in relation to VHBV.

[50] Tn terms of nominee, Black's Law Dictionary refers to a "nominee" as "a person designated to act in place of another, usually in a limited way". There was no evidence presented to the Court that VFIBV acted in a limited way on the facts. In fact, VBBV acted on its own account at all times subject to the assignment agreements.

[51] Tn terms of a conduit, the Canadian Oxford Dictionary defines "conduit" as "a channel or pipe that contains liquids", "a person or organization ... through which anything is conveyed (the mediator was a conduit for communication for the parties)". There is nothing in the agreements to suggest that VHBV was a mere channel. The fmancial statements fail to show that \JHBV is a mere agent, nominee or conduit - quite the contrary. For the Court to fmd that VBBV was a conduit, there would have to have been no discretion with respect to the funds.

Page: 20

[52] \TBBV obviously has some discretion based on the facts as noted above regarding the use and application of the royalty funds. It is quite obvious that though there might be limited discretion, VHBV does have discretion. According to Prévost, there must be "absolutely no discretion" - that is not the case on the facts before the Court. It is only when there is "absolutely no discretion" that the Court take the draconian step of piercing the corporate veil.

[53] The Respondent also argues that because VIBV was an express third party beneficiary to the assignment agreement, VHBV's right to receive the royalty payments was not absolute. The assignment agreements state that VIBV is entitled to exercise the rights of VHBV and enforce the obligations of the VCI under the license agreements and to enforce such rights at its sole discretion. When the effect of this clause is walked through step by step, one can see that the use and enjoyment and the assumption of risk and control of the funds continued to lie with VHBV. For example, in the event that VCI missed a payment and VHIBV did not immediately act to enforce VCI's obligations to pay, VIBV could exercise their rights under the assignment agreements and take VCI to court to enforce its obligation to pay. Nevertheless, VCI's obligation is to VHBV under the license agreements. If the court calls for the enforcement of VCI's obligations to pay, the payment would go to VHBV. VIBV could then sue VHBV for payment under the assignment agreements (if such a payment had not been made by VHBV as a consequence) but it would be for payment of the amount owed with VHBV maintaining the discretion as to the source, from its general accounts, of the payments. VIBV has no legal control over the right to specific funds paid by VCI to VHBV. In fact, this scenario is analogous to the facts in Prévost and like in Prévost where such an agreement (in that case a shareholders' agreement) does not automatically pass on the dividends or royalties to the contracting party, without any discretion on the part of VHIBV (or Prévost in that case), it cannot be said to shift the beneficial ownership of the payment over to the third party.

[54] In considering several cases cited since the Federal Court of Appeal in Prévost, the only case that engages in a significant discussion of beneficial ownership is Alberta Power (2000) Ltd. v. Canada, 2009 TCC 412. I am loathe to quote myself, but I believe that the following comments in Alberta Power (2000) Ltd. show the difference in the Respondent's and the Appellant's perspectives:

[63] In Matchwood Investments Ltd. v. R,, 1998 CarswellNat 1486, [1998] 4 C .T. C. 2492, a case regarding a taxpayer who took a mortgage in order to claim a

Page: 21

capital gains reserve but was subsequently found not to have obtained beneficial ownership of the property until the deed was registered, McArthur J. of this Court stated the following regarding was (sic) is a "beneficial owner":

10 The Minister submits that the Appellant who was the mortgagee in possession in 1994 did not obtain beneficial ownership of the property until the execution and registration of the Quit Claim Deed to him in April 1995. In paragraph 12 of the Reply to the Notice of Appeal the Respondent uses the word "interest" rather than "ownership" as provided for in the Act. These reasons may be different if the word "interest" was correct. In this regard I refer to the definition of "beneficial interest" in the Mozley and Whiteleys Law Dictionary and to the Dictionary of Canadian Law, Carswell Second Edition. I will deal with the words "beneficial ownership". While the Appellant re-acquired possession of the property in 1994 it did not obtain title or ownership until 1995 when it was granted a Quit Claim Deed, It is unfortunate this Deed was not available to be placed in evidence. While it is agreed that it was registered in 1995 there was no evidence as to when it was executed, although it would appear that it was also executed in 1995. The Dictionary of Canadian Law, Second Edition defines "beneficial owner" in part:

the real owner of the property even though it is in someone else's name they quote Csak vs. Awnon (1990) 69 DLR at 567 and at 570 Lane J. stated: 'A person who has the right to drill into a unit of minerals and produce therefrom oil and gas or potash.

[55] Similar to the Respondent in Matchwood Investments, it appears the Respondent in the ease at bar is also taking the position that VIE V's interest (as an express third party beneficiary) is synonymous with beneficial ownership. This is not the case. The person who is the beneficial owner is the person who enjoys and assumes all the attributes of ownership. Only if the interest in the item in question gives that party the right to control the item without question (e.g. they are not accountable to anyone for how he or she deals with the item) will it meet the threshold set in Prévost. In Matchwood, the Court found that the taxpayer did not have such rights until the deed was registered; likewise, VIBV is not a party to the license agreements (having ftilly assigned it, along with its rights and obligations, to Vl{BV). It no longer has such rights and thus does not have an interest that amounts to beneficial ownership.

[56] I realize that I have been repetitious in reviewing some of the facts of this case, but I felt that was necessary to indicate how the facts relate to the incidences of beneficial ownership as discussed by Chief Justice Rip in Prévost.

Page: 22

[57] For the reasons given above I believe that the beneficial ownership of the royalties rests in VHBV and not in VIBV and as such, the appeal is allowed and the matter is referred back to the Minister of National Revenue for reconsideration and reassessment on that basis and further, the 1995 assessment dated October 25, 1996 is referred back to the Minister for reconsideration and recalculation on the basis that VIBV was a resident of the Netherlands in 1995 and therefore entitled to the benefit of that treaty.

[58] The parties may speak to or make written submissions on costs within 30 days of the date of this Judgment.

Signed at Ottawa, Canada, this 24th day of February, 2012.

"E.P. Rossiter" Rossiter A.C.J.

CITATION: 20 12TCC57

COURT FILE NO.:

STYLE OF CAUSE:

PLACE OF HEARING:

DATE OF HEARING:

2007-1 806(IT)G

VELCRO CANADA INC. v. HER MAJESTY THE QUEEN

Toronto, Ontario

May 17, 2011

REASONS FOR IUDGMENT BY: Associate Chief Justice E.P. Rossiter

DATE OF JUDGMENT: February 24, 2012

APPEARANCES:

Counsel for the Appellant: Louise Summerhill and Mann Pemica Counsel for the Respondent: Margaret Nott and Aniit Ummat

COUNSEL OF RECORD:

For the Appellant:

Name:

Firni:

For the Respondent:

Louise R. Summerhill

Aird & Berlis Toronto, Ontario Myles J. Kirvan Deputy Attorney General of Canada Ottawa, Canada

APPENDIX A

UCisE AGRMWr

THIS AGREZMENT made as of the fi.rsL ay of October 1987, by nd between VELCRO 14OUSTatEs 8.Y., a llsted liability company

organired unUer the laws of the The Kingdom of the 4ttheriands (hereafter the 'icensor') and VELCRO CA2ADA LD a 1imied Liabilityomany organized under the laws of Canada (hereaftez the 'tjcensae'),, -

WITNssTa

ziEREAS T.iceneor oine certain patent5 trademarks, irede etrets, nopyrights and otherproprietary properties the use df hich tt wishes to 1ieense to censee under the terms end

condltzions of this Agraeeent

VKRHS Licensee wishee to qbtsis such a license pursuant to -uh terw,s arid conditions, and

WHH2A9 E,ienor and Licerrese are parties to one or more ikcense agreements arid both pacties desIre- to eater into a new license agreement to supersede any and all such earlier

reeeritr

ROW, TEE .REFORE, in cpnsidertion of the mutual promises ter- ein corLtatrted, and for ether. good and valuable consideration,

receipt of which is hereby acrnowJedged, te• parties agree as Locs

r Oefijtio

A. shall mean all data or information fend any tangible e''idente, record or representation hereof, whether prepared, conceivadordeveloped by or for any ne- o more of the 'Velcro Companlia" (as hereafter defined) or :eceived by any one or more of tha irelro Companies from an iutside source, which is riot generally kriowa ogtside oi the Velcro ompaniea and whib is maintained iii confidence by t1 Velcro ompan&es. WIthout limiting the generality of thé foregoing, ortftdentLal Information shall tclude

(1) any idea, Improvement, irwentinu, innovation, eveiopirtent, techttival data, design, formula, device, pattern, oncept 4 computer program, model, diagram, eruipment, tool,. - raining or service manual, product. specification, plan for a new r revised product or 5ervice, compilation of information orworr o proCess, arid any arid all revisioriS and improvements reLat-ngto iy of the foregoing (in each case whether or riot reduced to rgib1e forta); and

(2) the rame of any cu.es, lemployee, . pcospective. ustorner or consultant, any eales or- rnarketjrg waterial f pldfl or

survey; any busjes5 plan or opportunity; any product Or J.opaient plan or specieication; any business propoaai,

t, aricsal r-ecprd, or business recor and all other' non-public records sod LnEdreation relating to the present or proposed

ainess of any one or more of the Velcro Companies.

Notwithstnd1ng the-foregoing, the term "confidential InforotsUon" shall not -ppiy to information which the Veloto, Companies have voluntarily 'disclosed to epblip without restriction, or which has otherwise' lwCuily enteied he public

B. " Es tab1te'chnoia"ahaj]. mean all patemis, trade secrets, copyrights, Conidentisl Ifrmation., know-how, and other forxs of nteil9ctual or lOdustrial property owned by or 1&ceed to t,4censor in the 'Manufacturing Territory" (as hereafter defined) or elsewhere, except1,ng those that constitute "new yechnolg3" (as hereaftez dafind).

C. "Net 3aj' shall mean bons fide asounta invoiced by Licensee, before Ardu6tion of'salas taxes, commissions, or diacount, regardless qt whthe such, amunts are scttrally collected by Licensee. Any and ail Intra-coepany sales btween Licensee and its subajdiarjes axd affiliates sjali, for purposes of this definLtion, be included as part of "c4ross Sales" at not Less than the 5mounts invoiced in arm's length transationa Eon sales p5 "Licensed Products? (as hereafter defined) having

:)ai:abfe , specifications, qualities and guantitLes

0. Prpducts" shall mean all products that body or 'ate moade through tM use of "Licensed Techflology" and all poduota that are sold under or in connection wIth "Licensed T ra demr-k e (both as hereafter defined).

• " ndTenooy" shall aean all 'Establihsd Technoloqy and all "New Technology" Jpon the epiratioo of, amy patent or the detefainationby a cduct or other competent authority that a patent is Invalid or unenforceable, sh,mtnt shalL cease to be "Licensed Technology," "stab1ished i'echnology" or "tew Technology for purposes çmf this FgreemenL. -

F. "cefl1 pe&raemarIca' shall mean all tradesmarka, ser-vice maSks, trade names and other indicia of origin re9istered to L,&censOr orLicensee in anJ one or açre.juriathctions within th Sales Territory or used by Licehsor or Licensee Lo connection with arty product that embodies or is made using Licensed ?echnology at any biness related to'L.censed Technology.

G. 'ManoEaaturimg Trrjt" hall mean the countries irs which Licenses is listed as 4anufacturer on the attached Schedule A, as such aay asded ftom time to time by the parties.

-2-

2

r ' N

shall mean al]. patents,trade 5eCrem, onfidentie]. Inortiab,on, know-bow, atd other forne of ,ntellectuel or industrial progery owned by 6r licensed to

neor ic the )'tanufacturing 1erriry or elsewhere which relate :c. ny product, device or process ider3tjfjed op the attached cbeule B. Schedule B may be amendLd from time to time iy

egreement of the parties to reflect further developmets of New i'echriology. -

I. b echrIoiogyroduçLs" stiaU. mean all Licensed Products that embody or that are made using any pert of the New Technoloqy,

a Licensed Product partiaily embodies, or is isade or sold in art with, boLti Established Technology and Nw TechnoLogy,. it

shall be considered a New Technology Product.

J. 'New Vrademark". shall.mean ail tjcensd Trademarca t1t ,re first used by or first cegrstered to Licensee.

(. "j,o" shall znen the countries in which ,jcensee i'5 listed as a Product Supplier, Product Importer or

product Dsbribütor on the attached Schedule A, as such Scheaule ay be amended from time to time by the artiez, -

L. "i oie' shall mean Velcro Xrtdustrtths N,V. and loE its subsidiaries-and affiliates,. . . -.

LI. Licensee

A. During the term Of this Agreement, and subject to all the andcondion stated herein,.Lirensor hereby grants

Li name

1. The exclusive right to manufacture Licensed Products -in the. Manufacturing Territory; . .

2, frhe right to al1 Licsriied PrOductS to Licenser's authorized importer or importers (f any) or, if there arm ro mh impcirters, directly to end users, iri each cuatry (f any) lrl which Licenoe is listed as' q Product SUplier on Schedule A, as such Schedule may be amended from time to time by the farties;

3. The right to import and resell Licensed products' to Licensor's authorized distributor or dlsributor'(if army) or, if there are no auch distributors, directly,tth end users, in each country )if any) in which Licen5ee is listed as a Product Imporr no Schedule A, as such Schedule may be amendd from L.ee to time by the parties; and

4.- the right to distribute and sal]. Licensed Producta in each' country (if any) in which Licensee ja listed as aP.roduct DistribUtor on Sdhedule A, as such Schedule may be amended from time to tithe by the parties-

-3--

3

4

B. LiOensae r$.ghts pursuant to Section IL..1-4 shall be 5xcluve or nofleXOlusve as indicaled-ori Schedule A hereto, as u"h Schedule may be amended from time to b-me by the parties and

a subject to an.y exclusive rights that have been granted to any otuer entity by Liceno,

C. This Agreeuent does not grant to LiCensee any right to use the L.lcensed Technology f-or ttie pdrpase cE res-errh or development.

xlI. Term -

A. This hgreement' shall conu5erCce on the date first written ebve and shall extend for veyears.Lheraafter. The Aqreement shall be 'automatically renewed for additional five year, terms thereafter unless:

I. t.i.cenaee ceases to be a whl1y-ovned aobeidiary of, or under ,cor'irnon ownership with, the Licensor,;

2, 4ithez party gives the 'other party written notice of terainatiors 3Q days prior to' the expiration of the then-current tera of this Agre'enantj

3. The parties agree-in writing-to terminate the Agraenrent; or

4. This Agreement is terminated pursuant to SCction X -.

B. Itndiately upon termination or expiration of thLs ,greement tot any reaaon' -

I-. ik].l rights and licenses granted hereunder shall cease; -

2. Licensee shall cease any and ii exercise of the rights arid Ijoenses granted hrawkder; .

3. Licnaee shall stake avaitabie to Lioensoi, upon Licenser's toqdest, alL records, files arid memoranda relating to the manufacture, sale and distz'ibution of the Licensed Pr-oduct-s

- 4. Licenser may cancel any registration of the license granted hereunder and any,reglstratipn of Licensee as a Registered - lser made pursuant to Seetlon V.B. hereof, and shall' have the full cooperation of- Licensee in effecting s&Oh oarroellaiona; and

5, Licensee shall offeT to sell to t,icensor at appraised fair market value (i) a-li machInery and equ&paent than - in the possession cE Licensee which is cov&rad by any exisb-ng patent, trade secret or ether proprietary inforati.oc of Lioens?-r, including without liaitatisn -looms f cutdrtg machines., and ex,tgus,on a1 pnent; and (5.L) all or sny part of LiOensee's inventorieS of

-4-

--

ticemsed Products and raw materials used in the. productior .of L.censed Prduts. Licensor may pl.rchase at: si.eh appraised, fair market vlüe any portion or all of the items described above, in .L5IiaOrs sole And absolute d&scrtjon. .Pop the purpose of this p graph, 'appraised fair market valua' means fairaarket: value as deted'ni.ned by an'independent appraiser or appraisers mdtually acceptable.to Licensor and Licensee, or, if the pactis cannot: so agree, as settled by fin1 and 'binding arjtratjon in accordance with the ptovisions cE 5ecticn XI,I F. hereof,

• O. The provisions'of this Aqreeeent regarding the oWnCr3hi nd protection of Licensed Technology and'Confi,dentjal Inform tion

shall survive any non-renewal, expiration or termination of tr,s Agreement, regardless of the cause, 'reason or circumstances'of

• such non-renewal, expiration or. termination.

tV.. Rsyaltie,

A. pliot cE Royalties Owing

.: in exchange for the tchno1ogy and/or tradematk licenses granted hereunder, Licensee shall py ho Licensor the fol3.ow49 royalties:

(a) a royalty at the royalty , rat,e set forth in hedul C, Part X on LiOnee's Net Sales df' all 'ricehsed roducta excepting NeW Technoiggy Pru:duts; and

(b) a royalty et'the royalty ratd set forth in g''dule C, Part Ii an Licenêa's Net Ss1e of. oil New Tchnoiogy P. ,lucts

2. All taxes,' tariffs, duties or iteposts imposed by any government or political sbbdivision upon t,iceiiseeor upon the payment of royalties hereunder Shall be borne excinsively by Licensee and dhsil not be .1eductd froe the paysents made to Licensdr hereunder. To the eterjt that any such deduction may b recp.ired by the law of ahy jurisdiction,, the royalty payable hereunder shall be lncreasd by an amount sfflCient to pay for Such d4duchio,

J. In addition to any paymemt'requlred by Section tVt,l. above, the t,iccnaor and Licensee will undertake an annual revi,ew within ninety (90) days after the close of ach year of this Agreem.ent of the income, expenses and profits gerierate4 from the Licensee's use of Licensed Technology and, to the ecteflt it is detersined by the r.icensor and the Licensee that the royalties provided in Section IV.Al. ate riot 'comrsiensura.e with the income attributable' to the Licensed Technology within the men aing of Section 482 of the U.S.Internal Revenue Code of 1956, as amended (the "Cod°) and in accordance with applicable regulations promulgated thereunder, additional payments of royalties wLll be made by the Licensee to the Licensor. .

-5-

5

t.

4. With iespech to Licenseews.s-a].es of Licensed Products o arty 'executive agency" as that tern is de€ined i-n 48 CJ'R. S .101, the asounts owing pursuant to Sectiort XV.A.1. hereof shalt

reduced to the same ectent that such executive agency n4i1 expressly dternrined such payments to be "utrssortab].e

ithrrt the utearuing of theFedera). Acquisition ReguLations

B. Tisue anhpd of Paent

1, Ltctnsae -shall pay all ryltie quartsr-annuall, 'ithirt fifteen days following the end of aph q6arter of ,iceasees fiscal year, o at such other times as the parties may corn tixee to time agree,'

2. Ail royalty payments shall be made in such currency nd at such place as may be apecifisa by Licensor front time t I me.

3. ticenises'sjua-ll keep true and accurate bcioka of, uccounuts showing all oprations that are subject to this ugreesent. LicensOr Shall have the right tp inspect, or . to cause in accountant or other uth6rized agent or agents to inspect, icerrsee'sbooks.and records to verify that Licensee has paid all

:ckyalti,as owing to Licensor.

T. :9h1i in Licensed hnay and Licensed Tr'adeffiirlcs

t, t anq trademark rights, shall at aLL times belong to

.ensor. Licensee shall not uitdet any circumstances assert 5"jn the Licensed Technology or r,jnsed Trademarks, or ut

roy part thereof, nor shall r.icensO take any action thaE ccld i mny way diniirui_h, altef or affat adversely Licensors rights in' he Licensed Technology and Licensed Trademarks.

S. Licèrusee shall cooperate in the execution of any 3ocuments, and the taking of any other action, that Licensgr reasonably requestato create, tecotd or , perfect Licenser's sole urtd exclusive ownership of the Licensed Tschruology andLicensèd rradenuarks, including wjthot limitation to the, foeoing: sxeeution and filing of appropriate dooument to qualify j.Lcensee ss aRegistered User in any jurisdictions in whLgh sucu ualifLcatuort Is necessary or desirable; practice of inverut3,on and

filing of docuweruts itt any juriedictiorus in which working of patents is reçuired or desirable; and taking any and aLlactiOrts necessary to apply for or obtain patert:ts, trademark registrations cc copyright registrations. Licensee shall advise Liceruao,r of ny -actions that Licenser has. riot taken but t.hat would, in th judgment of Licensee, b necessary or advisable to Qreatei. racord, oc perfect, Licenser's rights in the Licensed Technqlogy and Licensed Tradsrks

-6-

.1'

7

C. ticensor shall háe the sale aid exolusi.ve discretIon with re3eot to, and Shall bCar all expenses related to, the prosacuti.on, o f all applications, payment of all Sflrwitieg, the f, 'rig of all extensj.çins and renewals, and all ct1mx acts

assary to obtairi, prOt,ect or maintain rights in the 'Licensed Technology and Licansed T radema c ks during the terra of this Agreemept. Li.censor shall reimbursetdcgnsee for any such expense that stay be reasonably incurrei by Licensse

VI. Pro E ectL.n Of bi-ce n s ed Tchf101opy and Licgosed Trdesrk

l,icensee shall provi~ Lly advise ticansor of any rnIsdse or infringement or posaibi infringruent of the Liceçised TGchticilogy or LLcensec Trademarksof wbj'ch. Licensee Iecoees aware. Licensor hit decide in its scile acl excLusive'i5cretion what action to

take or act to take in responee'-to any suth misuee or infringement, and LiCensee shall take no actien litresponse, to any such misuseor infringement unleSs iristrtcted tdo.yL.i.ensor. ny action so taken by L1.censee to protect the Licensed TeciTholOgy

or r.,icensed Trademarks shall be deemed taken on bthalf or aria for the benfit,oE t,tcedsor,. AL1 expenses' incurred in connection with any action taken to protect or enforoe rights iii the Lioatsed 'rechnolbgy or Licensed Trademarks shall be borne exclusively by L>cenor. Liciensor shall reimburse Licensee for any such'ecperie that may be reasonably incurred by Licensee..

VII. Warràjjpisclairae,_TrrdsrnnitCation and rlRj€tion or Liability

A. Liceneoc warrants that thCLicenserl Technology does nat intringe the patent, copyright, trade secret, or ot'hmr.prorieta'ry 'right of any other party'.

B. L,ICENSOR DISCLAIMS ANY AND ktJ, WARRANTIES OTREa TA.TRO$E EXPRESSLC SET PORT-m fl-i SECTION vII.A., ICLUDINGflTaOUT LIMIThTION WARRANTIES O' MEPCaMTABILIT?, WAnR! TIES OF i'ITNfSS FOR A PMTICU[AR PURPOSE AND h2! AD ALL IMPLIED WARkANTIES.

C. Licerisee shall. promptly 1ñtcm Licettsor of any 0leii r' '-

uhreatrred claim that any part of the, Licensed Technology or any Licensed'Trademark infringes arty claLed right of any othaF' party. Licensor shall have the right to defend or to settle, in its sole and exclusive discretion,' any such claim or threatened- claim . Liceneor shall indemnify and hold nicerree harmless from a nd against any E3.rtal, non-eppmaLable ward'of damagei that slay be entered against Licensee in corinection .'Lth any suth claun, provide'd that (al Licen.So,t is notified promptly in writing by'. Licensee Of each notice and cc'rrurunlcation regarding such claus and- is given the authority, i.nfçtrtaatFori and aCsiatSnce neceaSsr ot' -

advisable' to dfend and rpond to such claim, 'and (b) Licenser shaLl hava the sole and exclusive conttol of the defense of any such claim and of all negotiat,OnS far its settieient or compromise. .

0. The provisions of Section VII staEe cerisor's sole, (us1vear1d e tire liability to Lice.e for any cLaim relatLg

to the Licensees use of the L,icensed Taobo1ogy or Lierieed r .diu.arks including without limitation claims of patent,

.yright, trade secret, orather proprietary rights infringement. In no event shall Licensor be liable for special, indirect or consequential damaea, even ii iiso has been advised of the

- poss&bility of the same. Licenors Liability, hereunder with reseot to any one claim 5h4)ll odt eçeed [,icersee ctul, out- of-pocket losses. incurrdf in connection with such claim, and EicensQrs cumulative liability hareunder,..shall oat at any time -ecceed the cumulative amount. tht Licensee has paid to -r.iceosor hereunder. -

cfjntj Informa

A. Licnaee acknQwlec3ges all Confidential Information is a. valuable asset of L,icensot, the value of which wuld be ubstantiaLly.diainisted or , destroyed by uhauthorized disclosure.

B. Licensee shall -not disclosp any Confidential Infrimation -:--- to vencrs, customers, or other persons without the prior, written consent of LiCen5ot, . .

C. L1pnaee Shall enter into,wrjtten,cdnfidentlality o:r nondisc1oure aqteaents and, where appropriste, oncompaition- aureements satisfactory to L1,censot with LIcensee'S eaiployes, with vendors to nicensea-and with anyosa. else to whom .,nEidentil Infbrmation Is or say be discloaed. Such agceemermts

.11 be in a form satisfactory to Licensôr. .

D. Licensee shall take all othet dctios reasoriab].y neceasary ot advisable to protect and maintain LicSflSOE'S tights in all Confidential Infotmation These actiàcs shall include, withoUt lirsitetion;

1. Etb1iahsent.an4 maintenance of security procedures at all of Linenwe's locations at which CoLdent.ial InffQrmation is kept or ued . .

2. Znforming Licetisee'semplçyecs that confidential Information is onfidentiaj,, proprietary- arid secret;

3. nforming Licensee's employees on a periodic basis of the importance of maintaining the sectecy of all Confidential Information; and .

4. Such other actions as Licenser may reasonably cagiest to maintain the secrecy of all ConfideOtial tnformatjds.

IX. objgatiprieeding Lensed,.c4demS

A. E,tcensee5U$e of the License& Trademarks shall at all times be in accordance with the standards for trademark usage that

-8-

are established from lime to time by Licensor. TheBe in1ude, ,ithoul limitation, the following:

1, ticenee shali use the Lienged Trademarks onl' on .n connect.on with products made using the Licensed .Techndlogy

nci such other prothics as may be approved by Lichnsof Erm time O tifle; and

2. All products marufactured, distributed or sold by .icensee under or in cortoeçtion with the Eicensed Trademarks shall

meet or exceed the standards of quality established from tIme to time by Licenser,

B. Licensor may Lnspect Licensee's products and prereisa open ressorabie notice t ensure compliance with the foregoing requirements.

C All New Tradenarka shall be the property of Licenser. ny New Tredsgark that j first registered to or ethrwise owned y LLcenae, and all goodci.1l of the business associated with ary

such Nw Trademark, shall be, and hereby is, transferred, and signed to 'Licensor. Liaerse! agrees to extcute any docwnertts, rd to take any other ecta, reasonably requested by.Licensor to

effect sdcfl transfer and assignment artd cbherwie to create, FecOrdor perfect Licertsors rights in.New Tradewark.

0. Licensor shell reimburse Licersee for Lichseesdirect ncj indirect çsts of the deveiontsnt of New Tradsrttarks, including

without lijnitaion the casts and sxpnses if ar, incurred by [,nsee in obtainin oi maintaining the registratcn of any New

_em.srk in any' jur,sdiction.

x. Termination

A. Thia Agreement may be terminated by Licvncr

L. It L.thensee. defaults in any of its obligations hereunder;

2. if Licenmor ceases io'owa LO% of Licensee's comsion stock or

3. if Licensee becomes involved in voluntary Or i.nvolUrmtaty bankruptcy or similar procedings.

L Any termination under Section X shall be efecUVe imnnmediatly upon Licenser's giving written notice thereof to Licensee.

XI. A21Lurimerit

A. Liceasor may assign this agreement, and its rights and ob1iations herender, at arty time,and, upon such assignJUetlt, Licenmor shaLl provide notice to Licensee. Following any 5uc

ssignnent, Licensor's as53gnee shaLl have all the rights and bliga.tions of t.icetsor, including the right Of as guaent ,.urtder his SectiQrL XI.A.

B. L&cens5a shall notissigrt this Agreement, or any part erect, without the pri.or express wrjtIfl conzetTh of Licensor.

10

II. Oener

A. This Agreement, together with alL Schedules hereto, onstitrites the entire agreement of the parties with respect to La subject matter, superseding all negotiations and çirior greestents.

B. The failure of r..J.censor to 6nforce its riytts' or remedies nde any part of this Aeenrent sWell not waive i.ts right to nEorce the same part at a different tiec, or to enforce other arts of this. Agreéthertt.

C. If any provision of this Agreement is uhertforceeble, it hail be Seared from the balance of the..Agreeutertt, which hh4ll enisin itt full force andeffect. re the extertt that arty picviaiod f this Agraement may be deemed excessirely brOad in duration, ope or any other aspect, it shall be enforced to the maximum xtaconntenb with applicable law,

D. The Agreement shall be binding upon the parties anq their eapective successors dnd permitted assigns. -

Z, This Agreement stay be executed in two or more each of which shall be considered an original.

F. Any diEerence, dispute or cLsiu that stay ari:se under his Agreement shall be submttted to binding arbitrati.on. Such rbi€ratiort shell be held in accordace with the tYNCITRAL rhitration RUles then in effect by three 3) arbitrators pointed 141 accordance with such rules.- Such arbitration sha].l

ake place in the English language. The decision of such rbitratior shall be binding on beth parties, end a judgment'crn an tard rendered may be entered in any cour of competent urisdict ion.

G. Licenser and Licensee are independent contractcrs and are, nt, and shall riot rerement themselves as, princlal arid agent, -. rtfler$ or joint venturers.

:

VEtCRO CA1ADA LD

Byz S )

Seen fu o. tbi signature j5f itt. DA,3. ogii)Cat

by we, Jan Alpid PAward Xthiwg, eivil-).&w flotaly, oi1-atjg • in wter4aw

Amtedaw.j Hre1t

11

—11-

-4,

12

ScffEDL A

020.UJ-&iU.&X4. tLU1UCrbItt1pJ.4.fl rJQUULX iffl )QflkL YrpnJcr LILS.Lr IlL

EC1uv

o .

-12--

SCEQ5tE2

tw TECHNOLOGY

'New Tecogy".eans technooy '(incLuding pant,utLjLy rwodel patents nd design patents granted subequen€ to Eeeaber 31, 19aç, ao,d techntqal informatlon, trade secrets and :onfidantial Information) not coaunercially pra.ced by or 1Lceed to L.icensee prior to Nqvember 118 and' wi-,lch 4s not nticipated by 'tehno1ogy licensed by Li-censor to Liceriaee pE'to'r

to November J. 198B. Routine developiaents of Leo1'u&Iogy ]camsed by tioensor to Licansee prior to oe,mber 1.,198 stai1 rtot b4 regarded as Wet TechnOlogy, avn' though they were not comraerci1Ly rac€1ctd'by or licensed to Licensee inti1 after November 1,

1988. . S

13

14

SCaEDULE C - -

RMES -

( cya1y rate for Estab]ishd Tchno1ogy roducts %

rI Royalty rate for New Technothgy ?rods 7 /2% -•' - -:

-1-a---

EL

Traar

• V6LCRO VELCRO.(Dinkd Ei & C) VEE'OPM VELSTICK VET.COIR '/ELSTRAP vL—sqUg VELCRO WITI V DESG1 VtCRO WIT}t

FLYING V DESIGN VELO DESIGN OF ROOK Loop SOFTARDWARZ PQ-IN POION- SOI-HATE HI-GE.DE EtIGZCLIV oRGANIZERS TOUN N HOt.D

TEXACRO / DE9IGW OF TWO

IGDREG

eQi.sçat 1gnN.o.

116367 11389 • - 231353 187225 • 188738 • 148602 36876

25414 30685

236875 • 175979 165626 192742 238422 192743 ••••••;-

23155 265301 235421 259638 162429 322321 323199

RDT3T - D

15

-15--

L.IcNSEE'$ } TtO

______________________________ a Notary Pb1ic, pertify:

1

On this - day of __________________• 19 beEur se pesona1 ly appeaied ____________________________ to CC, kncrwn ard ' known to me to be the eson' ho igied the atached instrumCnt as of VELCRO CANADP LTD. a corpqration duly organized and legally eciting urder the laws of__ hose home dffiôe is , 1octad at

I for thea certify that said individual ' is duly authorized to • 5190 the attaghed ins trrnnent in the name of said ootporation and that the'porposes for which said instrusent are grantdare wiLhir the acope of the objects or activitie of said cochoratlolt.

Notry Pub1ic

16

APPENDIX B

ASSIGN1YNT AS IJMPflON AND LICEwSt AGE

• Ths Msign'ncsit,, Ammpei qn and License Agreement effective Odtober 27, 199etween Velcro Industries BY. ('VIBY') a private limited liability company organized and edsting under the laws of the Netherlands located at Castorweg 22-24, Curacan, Netherlands Aeidulea and Velcro Holdings B.V. (By"), a Netherlanc, private limited liability company lpestad at Hoekesu-ode 6, 1 102 BR Atnaterdani, The Netherlands,

WFIEI1BAS, VTBV has csstcrr4 into the aZrnernesit relating to tle licetiing oçpatcnt; technology, trade secrets, know-how andrna.rks described hereto on ExhibiA(theSub3e Aeement');

WIffiREAS, VIBV wishes to assign and ddegat; and VHBV wishes to obtab, an assume, certain rights and ohigations under thn Subject Agreement; arid

WHERBAS. the parties wish Its provide for the payiisnt df royalties byVBBV to VIBV;

NOW TIIBRBFORE, for good and valuable consideration, the receipt and suciency of vhich are hereby ac nowledged, VIBV and VHBV hnrthy agree as follows:

1. 4ssngvsrncint sndLkestse. VIBV hereby assigns, sets oor, tnmf4s and conveys, and VHBV hereby accepts, the Subject Agreement and all rights of V1B\ under the Subject kgrcesneut, other than the rights retained byyV as set forth in Section 3 of this Aeeecent.

BV hereby grants to VIIBV the eight to grant asblieerisós wider the patents, tchnoIogy, trade secrets iziow-bow and marks owned by VLBV and identified in the Subject Agreement, solely pursuant to the Licenses set forth in the Subject Agreement

2. 4mpiian. VIBV hereby delegates, and VHBV hnreby assumes, all obligations and duties of VIBV under the Subject Agreernedt.

3. Rights Renzined by nBV. VIBV is end shall remain owner of all right, title and intortst in and to nil patexils, patent applications, teeboology, trade secrets kriowhow, nua1ts, registrations of marks, applications for the registration of marks, goodwill and other proprietary rights licensed undei this Agreement or the Subject Agreement. Nnthing in this Akroemat shall be construed to assign, sot p%/cr, transfer or convey any right relating tn the ownçralip of any bf the foregoing to YHBV. Without limitIng the generality of the foregoing, all rights in such marks - - arid all tights under the Subject Agreement respecting such tnarks shall remain at all times the sole property of VIBV, and all use of such marks 6i VEBY cit any party to the SisbjectAgreemeot shall inure to the benefit of VIBV. VHBV agrees to assist in application for such patents and registration of such marks in the name of VIBV in any countwhere V1BY may so request, in - renewal anti maintenance of such paicats and such registations arid in such recording ofVHBV or the third lsr-ty to the Subject Agreement as a user as VffiV may request. Nohrng in this Agreement shall be coristhjed as granting VHBV a license under airy other patent, technology,

ttatle rn.akorcthcrproprietzryniglnt-OfV1BVO1aliCt115Cto gran1 'Iiceses, other than pursuant to the Subject Agreement.

2

4 Eeforccr1ie01 of Vbliraiiotur U r&thJcaAgreiswat, \5fla\ ?o terms and coaditiona of the Subject Agoetatent. VHBV shall jromptiy inforni 'VV

of any breach or uttemptcd bre.acl of the texans end cndltions of the Subject Agreement by any partj theret6 or the ursauthotized disdosnrc by any party thereto, of confidential informatia; saul shall, unJess directed otherwise-by WBV, take appropxiaxd steps ts remedy any uch breath or unauthorized diacto sure, Without limiting the generality of the tbregoing YEB'V shall,police the use of the patents, tedinolcigy, tradesecrets, cno-.how, and marb Uccosed under ±e Su*ce . Agreement tQ as tO naintain VThV's high ateddzrds of ctuality h the goois cc services in connection with wttidi any of the foregoing pmpaieuxy righls are used, and VHBV shall enforce the obligations of any party to that Subject Agreement regarding the ereatiop, recordation, sccssring, perfection or protection of the rights ofVIBV-undec the SubjectAgreement, including sights regarding assisting VIBV in regitretion of masts in the naire ofV]BVIn any country

- 0

where VIBY may so r'equest in renewal and maintenance 61 such reatoationaod insuch recording of iudi party as a user as VtBV may request. VBBV stall take subh actiostas V)BV may direct in ohier to exercise any right t9 audit under the Subjeht Agreement eric take any action regarding,the infriogersmnt or afleged infringement ofthe propcietaay'right of any third party b VBV or arty party to the Subject Agreement or the inflingement by any third aa1y of

ny prprietasy right of VIBV. -

• 5. Third Party &zzeficiery., The parties herdy agree that VtBV i an express third party eflciaa'y ofthe provisions of the Subject Agreement assigned to VEBV and VIBV shall

be entitled to exercise the rights of the liccrçrt and enforce the obligations qi the lideasee tinder .. - -. ' 'Subject Agreement, VIBV shall have the right to cefotee such rights under the Subject - teement on its own behalf in Its sole drreioru VIIBV shall provide VIBV with such assiitarice as VEBY requests in connection with the enforcement of any such sights.

() Royai4e.r, ikv shall collect toyaities 'frotri the third party licensee undtr tIre Subjedgrecrssents and VHBV shall pay to VIBV.an arm's length percentage of"Net Sales' of 'Lienaed Products' as those terms are delined itt the first Article of the Subject Agreement, subject to, appruval by the appropriate Netheriandi taxing authorities. Each pasty agreesto separately notify. the ,Qther of all tax nnlings relattid to royalties and the-Subjeqt Areentent.

7. ?qymret Thrnu. All snounts owing under this Agreement shall be paid to VIBV within thirty days of receipt of paymnt by VHV by check or wire transfer to a batik accotint designated by VIBV, in the currency in which the royalties es-a receivef by VHllV, VHV shall - pay all import duties, fees, sales, use,. value added or other taxes or governmentsl charges of any kind asaessd upon or in eqnnection with the transastions contemplated by this Agreement as required by M&herlands law. To the cxtnt than any such duties, taxes or charges are paid by "fflBV by Way of withholding or deduction o for or on aent of VIBV, auebpayrnents thalI

be deductod by,VEIBV from (he ambunt owed under tlsit Agreement.

3

, Books ahd Rccordr; Audit. Throughout the tctru of this Agreement and for a neriod ofthrte years thnrecr, VV shall rnajigsijibodka and records sufficient to ddrmine

esinbunts awiis hereunder and VHBVj compflanceith the terms and coditioe of this Aemesit VmS' shaIJ have the riga to inspect and audit all such books and records to ensure coi~xplianKwith the terms of this Agreement Ai7 such audit shah be condunted only by V]BV, a representative of VIB V or ass independent auditor dcignated by VV, and all audits shall be co&scted during regular business hours. In the event that during such audit it is. deesmitsed that the unpaid fees owed to VIBV erceed five percent (5%) of the fees actually paid by VRBV to VIBV since the time of the preicus audit (or the beginthng othis Agreement if such audit is th llrst audit hereunder), thtr VBBV shall pay the coats of such audiL

9. Termincion. \1BVmayteris±sat this Agreement, for any msaon, or for no reason, thirty (30) days following VIBW writtsii notie to WillS' and upon VThV'a assumption of all nghts duties, obligations and liabilities spider the Subject Agreement In addition , this Agreement shall termmate automatically and without notice upon ternnnthon of thc Subject Agreement. Termination shli be effective without notice to or action by any court or other lgal 1" authority. Upon termination ofthis Agreement, all rights in and all obligations under the Subject Agreement shall revert to YMV,

10. FrrsherAsruronces, VHllVsalitakestjchictiansu VIBVin&yrçasonably' rctjudst in order to secure, perfect or protect the rights Of VmV under this Agreement or arty Subject Agreement, including, without limitation, executing such documents as vmvms request in C nnectionth rights in patents,t nby,tmdesccrcts, know-how, marks,and

-'her proprietary rights under the Subject Ags-aeroerit or any reversionary interest of VIBV' .t1owing teornoation of this Agreement.

11. Amendment and JVais'er. VHSV shall not amend the Subject Agreement, or waive the enforcement of any provision thercst. without the express, prios' written conSCtt of VIBY, No amendrnertt or waiver of this Agreement, or any provision thcreo& shall be effective unless signed by the party against whom enforcement of such amendment or waiver is souSht

12 Scvensbitity. Ifaiyoneomnreoftheproviaionscontained inthisAgreament shall for any reason be held to be invalid, ihlegnl or unenforceable in any respect in any jurisdlctibn, 'such invaiidity, illegality or unenlorceability shell not act any other provision of thin Agreement In such Jurisdiction, but this Agreement shall be re-formed a nd construed in such jurisdiction so as to bt valid, legal, and enforceable to the maximum extent permitted in such jurisdiction.'

13. Sstccessois arid Assigns. This Agreement shall be unconditionally assignable by

VIBV. VIIBV shall not assign tds Agreement or any right theraurider without the priovtitttu

consent of VIBV. This Agreement shall inure to the benefit of VmV and its successors and

assigns, and sh1I be binding tpoa VHBV and its successors and assigns ,

]N W1NESS WHERO the wderstgned havèecutd This Agteement s an tnimexit under sea.

VELCRO MUM= BV.

• •• •• ____

•PauwIavannbek-Rond Date: -1 I° Managing Dkeztor

• VEL • GS?V

4

-4-

ExbitA.

Ut.ense Agreethent dated Ootober 1, 1997, by and btwen VIBY arid Vetro Cazzda Ltd., a Umited1iabity crnnpay orpracd twde the tms of Canada, aa amended by the parties frqnt ttme to time.

-5-

5

APPENDIX C

Septeither 29, 1997

Velcro Canada Inc. 114 BaatDrive &mptrm, Ontaslo L6T id - Canada-

Attèntion: W. RoyVtte -

Lkense Agreeme t between Velcro Jndusties BV. and Velcro Caiada elT'ettjve Oètober 1, 1987 - Pakuts, Tradernan-ks Trade Nane VELCROandVher, pràprktary property. -

Dear Mr. Verstraete;

?s you know, under Section'M-A, of our License Agreement, its initial-term expires Sptembei 30, 1997. Neither company has given notice to the other that the Agreement . N01 expire as of that date. C onsequantly the third veyear term will commence cm Octàber 1, 1997.

Hwever, we rdmhd yau that udet Stion lIJ.-:, ppbn termination ofourAgreement, fdr any reasoh whatsoever:

1 All rights aiil licenses granted hereunder shall ceate;

:2. Llccnee shalt any and all ee cisO orti ights and licenses grantd hreundeç

3, Licensee shall make available to Licnsor, upcnl Linensor's requesi, 0 rec&ds, tiles andmezioranda relathg to the sates aid distribution of the Licensed Products;

4. Ucensor may cancel any registration of the, license granted hereunder and asly registration ofLicenre as a Regiaered User made pursuant to Sectb3n V.B. thereot and shall have the full codperaiion cdLice.riset in effectingsuch cancellations; and.

5. Licensee shafl ofrer to sell to Licensor at appraised fair muerkt vahc (0 all maohixery and eqUipment then iri posssion oLicensee which is covered by afly' existing patent, trade secret or other propiletary InfOrmatio3 qfLiotnsor, including without limitation Ioomscirttinrnavhines and extrusion eqpipnant; and (ii) all or any part of Licensee's inventor es ofjjcertsed Products and raw materials,used in the production of Licensed Products. Liceasor may purchase -at such appraised fair market value any portion or afl of the items described above, h Licensor's sole

•

and absolute discretion, For the purpoe of this pargraph, appraised market value" means fair market vahme as determined by an independent appraiser ør

LL7L7

epteznber29, 1997 Page 2

) appraisers mutually acceptable toLiceusor and Licenee, ot ifthe parts cannot so agree, as settled by Lal and bThding arbitration in acçordaicevith the provisions of Section XElY. hereof-.

Additionally, upon tennination you are requircd.to delete the word VELCRO from youi -. corporation title,

AlthoUgh the A8rement has automatiray renewed for a new frye year .terrnpursüant to Section IJILA, we respectfiully request confirxnatiott of this renewal. Your confirmation of the aforesaid and Understainding of yur ob1igtioo; 'will b sithfied by the return to us bf the copy of this letter duly executed by you in the space below próvided'

Sincerely.

VELCRO ItDUSTR1 B .Y.

Pauwli van Sarnbeek4,6nde - managimgDirector

Understd, con&med and agreed this day ofc'e r 1997.

VELCRO CAI(ADA INC

YRQYVV qn LeIm 6:E::: Managing Director

2

APPENDIX D

THIS AOREEhNT is mada effective as of the let day of October, 2003, by and betwrei VELCRO INDTJSTRJBS 13.V., a piiv4e limited liability company organized and existing under the lawa of The r1ands, with its principal place of business at Castorweg 22-24, Curacao, Netherlands Antilles and registered under number 72161 (the "Licensor"), and VELCRO CANADA INC., a corporation orgahizerl under the laws of Canada, located at 114 East flxive, &atnpton, Ontario, Canada L6T 1CI (the "Licensee").

WIB1BAS liceusor owns certain patents, trademarks, trade secrete, copyrib1e and other proprietary rights and intellectual properties the use of which it wishes to license to Licensec under the terms and cdnditiois of tilis Agreerneot,

)

WTEEREAS Licensee wishes to obtain such a license pursuant to such terms and conditions; and

WIIERBAS Licensor and Licensee are parties to one or more license agreements, which pilot agreements they have agreed to amend with effect as of October 1, 2003 and Licensor and Licensee now desire to memorialize their agreement as more specifically set forth herein and to reptace and supersede any and all such prior agreexuenta with the Icons and conditions set forth herein;

NOW, ThIllREFORB, in consideration of the wutual promises hereto contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the pties agree as follows:

Definitions

A. "Aiiate" shall mean any parent or subsidiur' company or ether company under direct or indirect conmca ownership and controL The Velcro Companies are Affiliates of

D D. "Authorized De1este" shall mean an Affiliate of Licensor. provided that, and

only for so tong as, the Affiliate is directly or indirectly authorized by Licensor to use Licensed Trademarks in one or more countries.

C. "Confidential Information" shall mean all data or infonuation (and any tangible evidence, record or representation thereof), whether acquired, prepared, conceived, or developed by or for Licensor or received by or licensed to Licensor by an outside source, which is not generally known outside of the Velcro Companies, and which is maintained in confllence by Licensor and the Velcro Companies. Without limiting the generality of the foregoing,

oriMentialThfonnation shall inchide:

1 any idea, improvement, invention, irmovalion, development, ecknical data, design, fonnula, device, paftern, concept, computer program, oaodel, diagram, equipment,

tool, training or service tnaiival, product specification, pLan ir a new or revised product or service, compilation ol'thfortuatiott or woiic in process, and any saul all revisions and improvements relating to arty of the foregoing (in each OaSc whether or not reduced to tanbje form); and

2. the name of any customer 1 employee, prospective customer or consultant; any sales or marketing material, plan or rurvcy, any business plan or opportunity any product or devclopmcnt pian or specificafion; any business proposal, financial record, or business record and all other nonpublic records and infonuation relating to the present or proposed business of Licensor or any orte or more of the Ve1ro Companies.

Notwithstanding the foregoing, the term 'Confldential Infonua1io' shall not apply to information which Lioei3sor or one of the Velcro Companies have voluntarily disclosed to the public without restriction, ox which has otherwise lawfully entered the public dn*in.

D. "LicertsedProduct" shall niesu a product that embodies or is made through the use of "Ucensed Technology."

B. " edecicplogy" shall mean all methods, fonuul, systems, inventions, discoveries, improvements, and works of autborahip or invention, and all patent apl1catioas, patents, trade secrets, copyrights, copyright registrations, Confidential faibivation, know-how ' and other forms of intellectual or industrial property, owned by or licensed to Licensor in the Tethtoxies." Upon the expiration of any patent or cop yiight, or the detennination by a court or

other competent authority that a patent or copyright is invalid orunexiforce&ole, such patent or copyright, as the case may be, shall cease to be "Licensed Technology" for purposes of this Agreement.

F. "Uoensed Tx dernark" shall man all tadernarits, service ma2ice, trasin names and other indications of origin owned by or registered in the name of Licensor in connection with Licensed Products or any business related to Licensed Technology, and the registrations and applications for registration thereof, including the marks listed in Schedule C.

G. "Net Sales" shall mean the amounts invoiced by Licensee for all of its sales of Ucensed Products, less the arnourtts of arty sales tax, VAT, shipping cost, discount, or refonds, regardless of whethar such anrounts are actually collected by Licensee. In order to avoid duplicate royalty paanmts, Licensee's sales of Licensed Products to an Authorized Delegate shall not be included in the ealcuiatlort of Licensee's Net Sates if the Authorized Delegate is obhgatct to pay a royalty to Licensor with respect to the Authorized Delegate's resale of such Licensed Product. gales in the Territories by Authorized Delegates shall not be included in the calculation of LIcensee's Not Sales. Forpurposes of calculating "Net Sales," the amount of any sale of a Licensed Product by Licensee to an AfEliatt shall be no loss than the aanotmt that would be invoiced in an arm's lcgth transaction for sale of such LiCensed Product with comparable specifications, qualities and quantities.

a "Tetorieg" shall mean the Bxclusive Teriitory and Non-Exclusive Territory. 'ye'to' shall bean the courthy or countries specied in Schedule A hereto. "Jp

Exclusive Terxitor/' shall mean thronghout the world, excluding only the conny or countries specified in Schedule B hereto.

L 'Ynlo Companies" shall mean 11w third-psity, Velcro Industries N.Y., its subsidiaries and all other companies iindei its director indirect rontroL

11 License

A. thiring the term of this Agreement, and subject to all the terms and cooditiona hereol Licensor hereby grants to Licensee a non4ranstërable license within the Territories to use Licensed Technology to manufacture, sell and distribute Licensed Products and to nse Licensed Trademarks in connection with the promotion, sale and distilbution of Licensei Ptoductz.

E. Liusee's rights under the foregoing license shall be exclusive in the Exclusive Territrn-y and non-excLusive in the Non-Etc1uaive Territory,

C. Licensee's use of Licensed Trademarks under this license shall inure to the sole benefit of Licensor. Licensee's use of the Licensed Trademacts shall at alt times confonn to the provisions of Section LX hereof. Any domain name incotporating a Ucensed Trademark is subj ccl to this license, and Licensee's regisnation of such a domain name shall be on behalf of and fi,r the benefit of Licensor.

D. Licensee shall not attempt to transfer, sublicenac or assign its rights under this liccoac, in whole or iii part, without Licenso?s prior written oonset4which consent may be withheld at Licenser's sole discretion, except that (1) Licensee may engage third parties as distributors or resellers of Licensed Products, (ii) Licensee may permit third parties to refer to a Licensed Tradematk on paclaging and in promotional materials solely for the purpose of accorately identifying a Licensed Product that is used with or incorporated into another product, and (iii) Licensee may permit en Authorized Delegate topromote, distribute end sell Licensed Products in the Exclusive Teiritory, in at) cases, Licensee shall remain directly liable for performance of, this Agreement by such third parties within liw Territories and by any Authorized Delegates within the Exclusive Territory,

S. This Agreement does not grant to Licensee any rig1t to use the Licensed Technology for the purpose ofresesich or development, or to use Licensed Trademarks with any products or services other than Licensed Products.

A. The term of this Agreement shall commence m the date first written above and shall extend for five years thereafter, The term shall autoniatically renew for additional five year terms thereafter, imlesa:

Licensee ceases to be an AftIliate of Licenser,

2, llither party gives the other party written notice of termination 30 days prior to the expiration of the then-current teen of this Agreement;

The parties agresin wdting to terminate this Agrecnieutor

This Agreement is terminated pursuant to Section X below,

B. Effective lnimedia±elyiipon termination or expiration of this Agreement for any reason:

I. All rights and licenses granle4 hereunder shall cease;

2. Licensee shall cease to manufac,ire promote and distribute any arid all ,jnsed prodnets and ceaSe to otherwise excicise ally of the sights and licenses granted

hereunder;

3. Licensee s)aafl thkc all action necessary to transfer to Licenser any registration held by Liceusoc of a domain name that ineotporates a Licensed Trademark;

4. Licensee shall cease all use of this licensed Trademarks and all domain names incorporating any Licensed Tradema&s;

5. Licensee shall make available to Licenser, upon Licenser's request, all records, flies and memoranda relathg to The manufacthre, sale and distribution of the Licensed Products;

6. Licenser may cancel any registration ot'the license granted bemunder and any regis atioc of Licensee as a rogisterod user or licensee that was made pursuanita Section yB. hereof Licenser shall have the full cooperation of Licensot in effbcthag such nceUations and

7. Licensee shall offer o sell to Licenser ax appraised fair market value (1) all machinery and equipment then in th possession of Licensee which is oo'ercd by any Licensed Technology e,dstin& including Ioonxs, cutting machines and extrusion equipment; and (ii) all or any part of Licensee's inventories of Licensed Products and raw mateilals used iii the produ000 of Licensed Produc. Licenser may purchase at such appraised fair market value any portion or all of the items described ahoy; in Licensee's sole and absolute discretion. For the purpose of this paragraph, "appraised fair market valpe" means fair market value as determined by an independent appraiser or appraisers mutually acceptable to Licenser and License; or, if the parties cannot so agree, as settled by final and binding arbitration'in accordance with the previsions ofSection Xli E hereof.

C. The provisions of this Ag tementregarding the ownership aadprotection of Licensed Technology, Licensed Trademarks, and ConMsntial Information shall survive any non-renewal, expiration or termination of this Auemcnt, regardless of the cause reason or circumstances of such non-rcne'aval, expiration or terminations, including the provisions of Sections III, V, and VUUiereo

IV. Poyaltieg

A. Amount of Ravalties Owing

I. In exchange for the licenses granted hereunder, Licenses shall pay to Licenser a royalty on all sales by Licensee of Licensed Products in the Territories, in an anount eqml to 5% of Net Sales

2. All withholding taxes, tariffs, duties or imposts imposed by any govenmient upon Licerisor with respect to the payment of royalties hereunder, shall be withheld and paid to the government by Licenser on behalf of the Licensor and shall be deducted from the amounts owed to Liensor hereunder.

3. 11 Licenser engages Licensee to provide any services on behalf of Linensor, or if Licensor purchases any Licensed Products from Licensee. Li censor may, in its discretion, set off anioiirits owed by Licensee hereunder. against the anirnmt of compensation for such services or price of such Licensed Products,

B. Time andMethodofPavment

I Licensee shall pay all royalties monthly, within thirty days following the end of cacti month of Licensee a fiscal year, or at such other times as the parties may from time to time agree.

2. All royalty payments shall be wade in such currency and at such place as may be spenified by Licenser from time to time,

3 Licensee shall keep thie and accurate books of aôcounts showing all operations that arc subject to this Agreement. Licenser shall have the right to inspect, or to cause an aocomtant or other authorized agcut or a8ents to inspect, Licease&s books and records to verify that Licensee has paid all royalties owing to Ucerzsor.

Rights in Licensert Technology and licensed Trademarks

A. All iights in the Licensed Technology and Licensed Trademarks, including patent, copyright, trade secret dghf.c, and tradcmz&rigbts thrcughont the Tertituries, Shall at all times belong to Licenser. Licensee shall not under any ciremustazices assert rights in the Licensed Technology or Licensed Trademarks, or in any part thereof nor shall Licensee take any action that n:ruld in any way challenge, din*iish, alter or aect adversely Licansor's tights in the Licensed Technology and Licensed Tt -ademarks. Licensee shall not. adopt, use or attempt to register any name, mark or domain name that is similar to, or likely to be confused with, a Liccned Trademark.

B Licensee shall cooperate in the execution of any documents, and the taking of any other action, that Licenser reasonably requests to create, record or perfect Liccnsors solo and excluivc omerahip of the Licensed Technology and Licensed Trademarks, including to the foregoing: execution and ding of appropriate documents to qualify Licensee as a restared user

or Licensee in any jurisdicons in which auth qu$iñcation is neceesay or desirable; pracce of invention ard f.littg of jocuments in any jurisdictions in which woTkimg of patents is teqinred or desirable; and taking any and all actions necessary to assist Licenser to apply for or obtain patents, trade stir registrations or copyright restratjms. Licensee 511811 advise Licenser of any actions that Lioenaor has not taken but that would, in the judnent Cd Licensee, be neoessary or advisable to create, record or perfect, Licereor'a rights in the Liecnacd Tecimolagy and Licensed Trademarks,

C. Ltoonsor shall have tile sole and exclusive thscretion with respect to, and shall bear all expenses related to, the prosecution of all applications, payment of all aimuities, the filing of all extensions and renewals, and all oth*acs necessary to obtain, protect orniaimain rights in tlfz Licensed Technology and Licensed Trademarks during the term of this Agreenent. Licensor shill reinihorse Liensee fur any such expanse that niay be reasonably incurred by Licensee.

Vi Protection of Licensed Technology and Licensed Tradensath

Lkexisccshau promptly advise Licensor of any third-party's misuse or infringement or possible infringement of the Licensed Technology or Licensed Trademarks of which Liccrisan becones aware. Licenser shall decide, in its sole arid exclusive discretion, what action to take or not to take in respbnse to any such misuse or infringement, and Licenseo shall take no action in response to any such misuse or inflir gernent unless instructed to do by Licensor. Any action so taken by Licensee to protect the Unensed Technology or Licensed Trademarks shall be decmd taken onbehaif of and for the benefit of Licensor. All expenses incined in connection with any action taken to protect or enforce rights in the Licensed Technology or Licensed Trademarks shall be borne exclusively by Licensor. Licenser shaU reimburee Licensee far any such expense that may be requested by Licenser or otherwise reasonably incurred by Licensee.

VII. 3ty,pjclahner, Indemnification anl Limitation of Litjjy

A Licensor warrants that the Licensed Technology and Licensed Trademarks do not infringe the patent, copyright, trade secret, or other propietsry right of any third party in the Territories.

B. LICENSOR DISCLAIMS ANY AND ALL WAUKNTS OTHER THAN ThOSE EXPRESSLY SET FORTH IN SECTION VIL, WHETHER EXPRESS OR IMPLIED, NCLUDING WAANTIES OP MER rABU.rrY, WA RAItS OP FITNESS FOR A PARTICULAR PURPOSE, AND WAB.RANTIES OF NON- - 1NYRINGEMENT,

C. Licensee shall promptly inform Licenser of any claim or threatened claim thai a.ny part of the Licensed Technology or any Licensed Trademaric infringes any claimcd right of any third party. Licensor shall have the ri.ht to defend or to settle in its sole and exclusive disuretlo; any such claim or threatened claim. Licensor ahail indemnify and hold Licensee harrnlcs from and against any final, non-appealable award of damages that may be entered

apinst Licensee in conneotion with any such claim, provided, that (a) Licensor is notified promptly in writing by Ljciee of each notice and conmiwication reganling such claim and is given the autlwiity, infornirtien and assistance necessary or advisable to defend andrespond to such claim, and (ii) Lkerjsor shall have the sole and exclndve control of the defense of any such claim and of ail negotiations for its settlement or compromise.

a The provisions of Scotion VII state jicensor's sole, oxclusivc and entire liability to Licensee, and Licensee's aol; cxcuLve and entire remedy, for any claim relating to the Licensee's use of the Licensed Technology or IJoensed Tradeeearks, including claims of patent, copyright, wade secret, or other proprioth ightaithingement ormisuse.

E. IN NO EVENT SHALL LICENSOR BE LIABLE FOR SPECIJaL, INDIRECT op., CONSEQUENTIAL DA1AGES, EVEN IF LICENSOR HAS BEEN ADVISED OP THE POSSIBILITY OF THE SAME. UCENSOR.'S UABILIT'f HEREUNDER WiTh RESPECT TO ANY ONE CLAIM SHALL NOT EXCEED LICENSEE'S ACTUAL, OUT-OP-POCKET LOSSES INCURRED IN CONNECTION WITH SUCH CLAIM, ANI) LICENSOR'S CUMULATIVE LIABILITY HEREUNDER SHALL NOT AT ANY TIME EXcEED TILE CTJMULATIVE AMOUNT THAT LICENSEE HAS PAll) TO UCE'SOR HEREUNDER

VIL' CfldoUnformation

A. Licensee acknowledges that all Coufidential Initirmatlon is a valuable asset of Licenser, the value of which would be substantially diminished or dzstroytd by unauthorized disclosure,

B. Liccrizco shall not disclose any Confidential lnfotms.tiotito any vendors, customers, or other persons without the consent ofLicensor, excepting only disclosure to one of the Velcro Companies.

C. Licensee shall enter into written conddentiality o'rnondisclos'ure agreements and, where approptiats, non-competition agreements with Licensee's employers, with vendors to Licensee, and with anyone else to whom Corthdeutiai Information is or may be disclosed, Such agreements shell be in a form and substance satiathetory to Licenser.

D. LIcensee shall take all othct iistious reasonably necessary or advisable to protect and maintain Li censor's rights in all Confidential Information. These actions shall include, without limitation:

1, Establishment and maintenance of security procedures at all of Licensee's loat1ons at which Confidential Information is kept or used;

• 2. Informing Uccnse&s employees that Confdential Information is confIdential, proprietary and secret;

3. Informing Licensee's employees on a periodic basis of the importance of • maintaining the secrecy of all ConEderitial Infomirtion; and

4. Such other actions ssLicensormayrcasonabIyreqaestto naimthin the ecrey of sit Coiilidenjial Inlonnatiora.

X. lops Reazding Uc ~onsod Tradornzrks and censed Products

A. Licensee's use of the Licensed Tradeanarjcs Bhall at all thnea be in aecordaitce vith the standanis for trademark usage that arc established from time to time by Licenser. These ncinde witho'.it limitation, the follewin

1. Lãccnsee shall use theLicensed Trademimcs only onor in connactionwith ,rodncta made using the Licensed Tecbnology an&sueh other products as may be approved b y Liceusor from time to time; and

2. All products nianjifactured, distributed or sold by Licensee uoder or in connention with the Licensed Trademarks shall meet or exceed Licensor's stmdqtds of quality, as may be established from time to time by Ucensor.

B. Licensor may inspect licensee's products, packaging, advertising, and premises upon reasonable notice to ensure compliance with The foregoing requirements.

C. All benefrta and rights arising froth use of the Licensed Trademsrks by Licensee shaU inure to the beuet ofLiecusor. licensor shall own all rights in the Licensed Trademarks and the associated goodwill, and Licensee shall not retain or claim any rits therein or challenge Licensor's rights therein.

I), Licensee shall mark Licensed Trademarks wit]3 the appropriate symbol Tm or Tas directed by Licenser. All of Licensee's advertising, promotion, and packaging of Licensed Products shall bear the appropriate Licensed Trademark and the related appropriate patent and tradsmerk legends, each as specied by Licenser, iwluftg by way of exanple, the foilowin "The mait is owned by Velcro Industries, B,V,," or TJ,S. patent no. and patentapending."

X. Teration

A. This Agreement may be tenninated by Licensor;

1. if Licensee defaults in any ot' its obligations hereunder and fhils to clam the default within 30 days after notice by Licenser; or

2. if Licensee is insolvent or becomes involved in voluniall or involuntary bankruptcy or similar proceedings.

B. Any termination under Section X shall be effective immediately upon Licensor gMng written notice thereof to Licensee.

)fL Aagt

A. Lioensar may assign this Agreement, and all of its rights and obligations hereunder, at any thue arid, upon such zssignment Ucensor shall provide notice to licensee,' Followirig any auth assignment, Licenser's assignee shall have all the rights and obligations of Licensor, mcludng the right of assignment under this Section XLA. Without lhrdtatioa to the

foregoirg, Liccnsormaynaaka an metrttovelcroHolthnga B.V. or any otbet of the Velcro Companies substantially in the lbrm oftxhibitlhereb.

B. Ucensee shall riot assign this Agreement, or any part hereof; without the prior written consent ofLicensor. -

ICIL General

A. This Agreement, Irigother with all Schedules hereto, constitutes the entire agreement of the parties with respect to its subject mater, superseding all negotiations and prior agreements. The parties intend for this Agreement to supersede and terminate the License Agreement dated October 1, 1997, and all addenda thereto,

B, The failure of Licensor to enforce its rights or remedies under any part of this Agreement shall riot waive its right to enfonc the same part at a different time, or to enforce otherparts of this Agreenreol.

C. if any prevision of this Agreement is unenforceable, it shall be severed from the balance of the Agreornent, which shall remain in full force and effect To the extent that any provision of this Agreement maybe deemed excesalvolybroad in duration, scope or any other aspect, it shall 'be enforced to the maximtmi extent consistent with applicable Lew,

D. This Agreement may be executed in two or more counterparts, each of which shall be considered an original.

B. Any difference, dispute or claim that may arise under this Agteemenl shall be submitted to binding arbitration. Such arbi'ation shall be held in accordance with the UNCITRL Arbitration Rules then in effect by three (3) arbitators appointed in accordance with such rules. Such arbitration shall take place in the EnIish language. The dcizion of inch arbitration shall be binding on both parties, and a judgment on an award rendered may be entered in any eourt of competent jurisdiction.

F. Licensor and Licensee axe independent ecutractors and are net, and shaiLnot represent themselves as, principal and agent, partners or joint venturers.

10

IN WMN28S WBROP, thc. parties have 11iog1i thcir authorized eptave5 cxeorted amd deIivtcd this Agreement undtr se1 '1i effect as of the date ir.t Written thive;

VELCRO INDUS S D.V.

(SBAL)

B Name; Roksi I. liuyzcn t Ma Dfrecr Date: 15 Septepber 2004

VELCRO CANADA. NC.

(SEAL)

Title: Presidett

10

MY

Je'EdujvTerrjçr:

11

12

he 'No ri-Exclusive Tcrrjtrv" includes WUjWcs throhqut the world, excluding only tb 0110—y&R CQUUtII

Canada

dAna

Europeariljthon, wioh curmntly includeAnstia, Beluin. Cypna, Czech Republic, Decmark, P.sioriia, Rulaad, France, Gennany, Greece, Hungary, Ieiax4 Italy, Latvia, Lithuania, Luxembourg, Malta, Th Netherlands ) Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, aadUnitodKingdom.

Mexico

Unitcd States

12

13

"Ucenet1 Trdemaits" include, without llmitaliøn, the marks llted oj~ tho aftcbcd

VELCRO

VELCOJN

EL-LOOP

VEL-TAB

VETSTRA?

VELSTRBTCH

ONE-WRAP

mxAcRo

ULTRA-MATE

13

• This Assignment, Assumption and License Agreement, affecttvc as of October 1,2003,

,etween Velcro thdustes B.V. ("VIBV"), a private limited liability company organized and xg under the laws of The Netherlands, with its principal place ofbusineas at C.astorweg 22-

14, Curacao, Netheriands Antilles and reghtered undes'number 72161, and Ve'ka'o Holdings B.V. (W1BV"), P, Nlerlexids private limited liability COrnpanP located at A1nsteldijk 166, 1079 UI Amsterdam, The Netherlands, ....-

W11RBAS, VIBV has entered into a certain License Agreement, effective as of October 2003, with Velcrc Canada Inc. (the Ikcnsee thereunder) relating to the licensing of Licensed

'cohriology and Licccaed Trademarks (the "ubjectAgreement');

WRSAS, VIBV wishes to assigil and delegate, and VEBV wishes to obtain and me, certain Tights and obligations under the Subject Agreement; and

WIiERIEAS, the parties wish to provide for the payment of royalties by VEBY to VIBV;

NOW, TEEREFORE, in consideration of the mutual promisca herein contained, and for r good and valuable considtiou, the receipt and sufficiency of which are hereby

nowledged VIBV and VIBV hereby agree as fo]1ow;

1. Asjeut and Licnse, VIBV hereby assigaa sets over, transfers and conveys, WIBV hereby accepts, the Subject Agreement and all rights ofV1BV under the Subject eement, other than the rights retained by VIBY as set forth in Section 3 of this Agreement. Whereby grants to VHBV the right to grant sublicenses under the patents, technology, trade rots, know-how, and maiics owned by VIBY and identified in the Subject Agreement, solely suant to the licenses set forth in the Suject Agreement

2, Aemmpii. YIBV hereby delegates, and \11BV hereby assumes, all obligaons I duties of V]BV under the Subject Agreement.

3, lUghts eta1ned by VIBV. VIBY is sod aball remain owner of all right, title and xost in and to all patents, patent applications, technology, trade secrets, know-bow, marks, istratinz of marks, appliretions lbr the regisfradou of rnsrk, goodwill and other proprietary hts licensed coder this Agreement or the Subject Agreatnent, including the "Lioensed thnology" and "Liocnsed Trademarks," as those terms are deed in the Subject Agroement. thing in this Agreoment shall be construed to assign, set over, h'anafer or convey any right ating to the ownership of any of the foregoing to VBBV. Without limiting the generality of foregoing, all rights in such marks and all rights under the Subject Agreement respecting hmax1cs shnll remsin at all tites the solepropertyofVlBV, andaliuse ofsuohmarksby BV or any party to the Subjoct Agreement shell inure to the benefit of VTEBV. VEBY agrees

assist in application for such patents and registration of such marks in the name oIVIBV in y country where VIBV may so request, in renewal and maintenance of such patents and such

14

14

strations, and in such recording oIVHBV or the third party to the Subject Agreement as a VIBV may request, Nothing in this Areeineat shall be conetosed as granting VIIBV a

use under any other patent s technology, trade Secret, 1ow-how, mait or other prcpiiet&y in 0fVV or a license to grant rublenses, other than pursuant to the Subject Agrecment.

4. Sn greemei VHBV shall diligently [orce all terms and conditions of the Subject Agreement, VV shall promptly inform VIBV any breach or attempted breach of.term.s and conditions of the Subject Agreement by arty ty1nreto or the unanthoized disclosure by any party thereto of Coxxfldeiatial Information, d shall, unless directed otherwist by VIBV, thkepropriate steps to remedy any snob breaeh unauthorized disclosure. Without limiting the generality of the foregoin VBV ahell police use of the patenia, tecbnology, trade secrets, knsw-how and marks licensed under tim

bject Agreement so as to maintain VIBV's bigh standards of quality in the goods or services connection with which any of the foregoiiig proprietary rights are used, and VBBV shall force the obligations of any party to the Subjtct Agreenlent regarding thecreation, ordation, securing, perfection or protection otthe sights of VTIBV under the Subject. reeme including rights regarding assisting VIBV in registration of marks in Iho name of BV in any country where VIBV may so request, in renewal and maintenance of sutht giatrations and in such recording of such party as a user as VIBV may request VBV shall cc such action as VtBV may direct in order to exercise any right to audit under the Subjcet greenient, otto taire any action regarding the infringement or alleged infringement of the oprietary right of any third party by VIIBV or any party to the Subject Agreement or the fringement by any third party of any proplietary right of VIBV.

5. Third-Party Beneficiary, The pties hereby agree that VIBV is an express Third-arty beneficiary of the provisions of the Subject Agreement aaigued to VHBV, and VIBV shall a entitled to exercise the rights of the licenor and enforce the obligations of the licensee imder ic Subject Agreement VIBV shall have the right to enforce such rights under the Subject Lgreemcnt on its own behalf in ita sole discretion. VHBV shall provide VIBV such assistance a VIBY requests in connection with the enforrenient of any such dghta

6. Royai.lics. VHBY shall collect royalties from the third-party licensee under the act Agreement (referred to therein as the "Licensee"). VHBV shall pay to VIBV an amount

to the royalties collected, less the amount approved by the Netherlands tax authorities to r V}IBV'S related costs, Each party agrees 1.0 separately notify the other of all tax rulings ad to royalties and the Subject Agreement

• 7. PaMaot Terms. MI amounts owing under this Agrocnient shall be paid-tn VIBV in thirty days of receipt of payment by VHBV by ohedk orwfre transferto abank account guaie4 by VIBV, in the cinrdñcy in whinhthe royalties are received by VEBY. VEBV shall all fee; sales, use, value added or other taxes or governxnexital charges of any 1±4 assessed a or lit connection with the transactions contemplated by this Agreement as required by lerlancla law. To the extent that any such taxes or charges are paid by VBBV by way of ihulding or deduction for Or on aceorixtt of VIBV, such paynients shall be deducted by VHBV a the amount owed under this A&eenient,

15

15

16

g • Books and Reco Audit Thviighout the term oHda Agreement, and for a period of sevet years thereafter, VBBV shall maintain books sad records sufücient to determine the amounts owing hereundcr and \1EBV's compliance with the terms and conditions of this Agreement. VIBV shall have the right to inspect and sudit all such books and records to ensure compliance with the tenis of this Agreement. Any such audit shall be conducted only by VIIBY a representative ofVIBV, or an independent aaitor designated by VLBV, and all audits shall be conducted during regular business hours. In the event that during such audft it is determined that the unpaid fees owed to VIBV exceed five percent (5%) of the fees actually paid by VHBV to vmv since the time of the previous audit (or the beginning of this A reement if such audit is the fIrst audit hereunder), then YHBV shall pay the costs of such audit.

9. VIBV may terminate this Agreertient far any reason, or for no reason, thirty (30) days following VIBV's written notice of termination sent to VHV and upon VIBV's assumption of all rights, duties, obligations and liabilities under the Subject Agreement. in addition this Agreement shall terminate automatically and without notice upon termination of the Subject Agreement. Termination shall be effective without notice to or action by any court or other legal authority. Upon tvrminatioz of this Agreement, all rights in and all oUgations tinder the Subject Agreement shall revert to VIBV,

10. Furthet Assurances. VHV shall take such actions as VLBV may reasonably request in order to secure, perfect or protect the rights of YIBV under this Agreesneirt or any Subject Agreement, including withaut limitation, executing such documents as VtV may request in connection with rights in patents, technology, &dda secrets, hnow-how, marks, and other proprietsr9 rights under the Subject Agreement or any reversionary interest OIVIBV following termination of this Agreement.

11, Amendment and Waiven VIIBY shall not amend the Subject Agreenien±,or waive the enforcement of any provision thereof, without theexpress, prior writteo consent of V13V No amendment or waiver of this Agreement, or arty provision thereof, shall be effective unless signed by the party aathst whom enforcement of such amendment or waiv& is sought,

12, Sevcmbilitv. If any one or mere of the provisions contaizcd in this Agreement shall for any reason be held to be invalid, illegal or uiienIbrceable itt any respect in any jurisdiction, such invalidity, illegality or unenlbrceabthty shall not affect arty other provision of this Agreement in such juiisdictio; but this Agreement shall be reformed and conatmed in such

Ijurisdiction so attn be valid, logal, and enforceable to the maxim6m extcntpcmdtted in such

13. Sue essors and Assigns. This Agreement shall be unconditionally assiiable by VIBV. VBBV shall not assign this Agreement or any right thereunder without the prior writtert consent of VTBV. Ths Agreement shall inure to the benefit ofVIBV and its successors and assigns, and shall be binding upon VEBV and its successors and assigns.

16

IN WITNESS W8RRBOF, the partIes have through their duly aiathoxized repimentativrB executed and dcEved thia Aeement under seal wit1 effect as of the date first written above:

VELCRO INDUStRIES H.V.

SEAL)

B {aiebrtJ.Ktiyzeu

Tit1e Managing r.}iyect(z Date

VELCRO HOLDINGS B.V,

(SEAL) By_______________________ Nama:PeteH,Bosse. Title; Managing Director Date:

AW1edgd and Agr

VEO CANADA INC.

B) - (SEAL) Name: Patrick D. Todidil Title: Prsidcnt Date; -

17

17

Seen for legalization.,

tthe signature appoaxinq on the attethed. &cutnent of Mr. ROBIcRT j. reaiding in Curçao, Nethr.and Antilles, acting in his capacity of managing director cf the limited liability company vztcto mrze LV., estnbl&Bhemi in Curagao,

by no, Gerard Christoffel Antonius Sneets, a civillaw notaryv residing in Curçao, on this steerth day of gep er two- thousand four.

APPENDIX E

ASSIGNLM4PT1ON AND LICENSE AGREERr

This Aasigxunent, Assumption and License Agreement, effective as of October 1,2003, between Velcro Indnstr1s B.V. ("VIBV"),a pTinte limitedliabii±ty ceiupan} organized and. existing ijzidøi the laws of The Netherlands, with its principal ptzce of business at Caatorweg 22-24, Curaçae, Netherlands Mfliflas and registered under number 72161, and Velcro Holdings B.V, ('YHBV"), a Netherlands private limited liability conopany loc&tsd at Mistnldijk 166, 1079 LII Amsterdam, The Ncilw1ands.

WHE?EA8, VIBV has entered into a oetlain License Agreemect,.eftective as of October 1, 2003, with Velcro Canada Inc. (the Licensee thereonder) relating to the licensing ofUcensed Technology and Licensed Trademarka (the "Stthject Agreemeor); -

WImRB,AS, VIBV wishes to assign and d cgale,and VflBV wishes to obtain arid assum; certain rights and obligations under the Subject A ntet and

WHEREAS, the parifes wish to provide for the payment of royalties by VHV to VIBV;

NOW, ThBRF2ORE, in consideration of the mutual promises herein cosdaixind, atid for other good and vaivable consideration, the receipt and suoiency of which are hereby acksrowlcdgcd, VIBV and VIIBV hereby agree as follows:

1. Assignment sd Ucense, ViBVhereby asaigas, eels over, trvmafbnt aitd conveys, and VI3MV hereby accepts, the Subject Agreemnt and all rights of VIBY under the Subject Agreement, other than th: rights retained by VIBY as set forth In Section 3 of this Agreement. VIBV hereby grants to VHBV the tight to grant aiibliccnses under the patents, technology, trade secrets, imow-how, and marks owned by VJBV end 1dcn1ied in the Subject Agreement, solely pursuant to the licenses set tbrth in the Subject Agreement,

21 Manm5494 VIBV hereby delegates, and VHBV hereby asurues, all obligations and duties of VTLBV under the Subject Agreement

• 3 RIghts Retained by Y1V, VIBV is and shall remain owner of all right, title and. interest in and to all patents, patent applications, technology, t4de secrets, Imow-bow, marks, registrations of marks, applications for the registration of xarks, goodwifl amid other proptietary rights licensed under this Agreement or the Subject Agreement, including the "Licensed Technology" and "Licensed Trademarks," as those terms axe defined in the Subject Agreement. Nothing in this Agreement shall be oonstmedto assi go, set over, transfer or cunviJ any sgtt relating to the ownership, of any of the foregoing to VEBV. Without limiting the generality of the foregoing, all sights in such marks and all tights under the Subject Agreement respecting such marks shell remain at all timc the sole property of V)7BV, end all use of =h marks by VHBV or any party to the Subj cci Agreement shall inure to the benefit of VIBV. VEhY agrees to assist in application for such patents end registration of euch marks in the name of '[ISV in any coon1iycvherc VIBV may so request, in tenewal snd maintenance of such patents and such registralions, arid in such recording of VHBV ox the third party to the Subject Agreement as a user 55 V1BV may request. Nothing iii this Agreement shall be construed as granting VHBV a

/

license 'ander any other pateni, tecbnology, trade secret, know-how, mark or other propri etary right of VIBY or a license to grant sublicensea, other than pursuant to the Subjectkgreement

4, EnfbmM=t of Ojigsio Uridct Subject Areament VHBV shall diligently enforce all lens and conditious of the Subject Agreement. VRBV shall pron1y Inform VIBV ct'any breach or attempted breath of terms and conditions ot'the Subject Agreement by any

V

party thereto or the unauthorized diecloure by any party thereto of CotMcatfal Infotmalic; and shall, unless directed othetwise by '1IBV, take appropriate steps to remedy any suoh breach orünutbizd disclosure. Without liroil ig'thegenerality of the foregoing, \'BBV shall pcdioe the use of the patents, technology, trade secret,% knowhew, and maits licensed onder the Subject Agreenient so as to maintain VIBV's high standards of quality in the goods or eervices n couieetiou with which say of the foregoing proprietary tights are used, and VEBV shall enforce the obligations of any party to the Subject Agreesnent regarding the craiion, recordation, securing, perfcticm or protection of the rights of VTBV under the Subject Agreenrent, including tights regarding assisting VIBV in rogistration of marks in the nanu of VJBV in inl y country where VIBV may so request, in renewal and maintenance of such registrations and in such recording of such patty as a user as VJBY may request VIIBV shall take such action as V[BV may direct in order to exercise any right to audit under the Subject Areemeat, otto take any action regarding the iningetnant or afleged infringement of the proprietary tight of any third party by VIIBV or any party to the Sulect Agreement or the infringement by any third party of any proprietary right of VIB V.

5. Party Bm4cjm. The parties hereby agree thai YIBV is an express third- p&M beneficiary of the pnmvisicwz of the Subject Agreement assigned to VIV, and VIIBV shall be entitled to exercise the rights of the ]icensor and enforce the obligations of the licensee under the Subject Agreement VIBV shall have the right to enforce such tights under the Subject Agreement coin own behalf in its sole discretion. VHBV shall provide VIBY such assistance as 'TIBV requests in connection with the enforcement of any such righta.

6 Ryalt.in. VBBV shell collect royalties nm the third-patty licensee under the Subj ant çmfcaedtu therein as The "Licensee"). VBV shall pay to V)BV Sri amount equal to the royalties collected, less the asnoozit approved by the ]4etherlands tax authorities to cover VIIBV's related costs. Bath party agrees to separately notify the other of all tax rulings related to royalties and the Subject Agreement.

7. ?aeiiLTcrn All. amounts awing under this Agreement shall be paid to VIBY within thirty days ofreceipt of payment by VBBV by cheek or wire transfer to a bank aecdunt designated by YtBY, in the currency in which the royalties are reueied by VBBV, VItBY shall pay all fees, sake, use, value added or other taxes or govemunrentzl charges of any Idoci assessed upon or in conritotion with the transactions contemplated by this Agreement as required by Netherlands law, To the extent that any such taxes or tharges are paid by YEBV by way of withholding or deduction for or on account of Vl:BV, such payments shall be deducted by VHBV from the azziount owed under this Agreement

S. nooks ndRqordsAp4it. Throughout the terra of this Agreement, tnd for a period of seven years thereafter, VKBV shall maintain books and records sucient to deteine

/

the amounts owing hereunder and VBBVIs compliance with the terms and cuditious ofthis Agreement VIBV shall have the right to inspect and audit all such books and records to ensure compliance with the terms of this Agrçornent My such audit shall be conducted only by VIBV, a representative of VIBV, or an independent auditor designated by VIBY, and all audits shall be conducted during regular business hours, In the event that during such audit it is determined that the unpaid foes owed to V]BV exceed ffve percent (5%) of the fees actuallypadbyYBBV to VIBV since the time of the previous audit (or the beginning of this Agreement if such audit is the fizst audit hereunder), then VHBV ahailpaythe costs of sucb andit

9. Tninaiio. VIBV may terminate this Agreement for any reasons er for no reason, thirty (30) days following VU3Vs written notice of termination sent to VBBV and upon VIBV assumption of all rights, ±ilics, obligations and liabilities under the Subject Agreement In addition, this Agreement shall terminate automatically and without notice upon termination of the Subject Agreement. Termination shall be effective without notice to or action by any court or other legal authority. Upon termination cfths Agreement, all rights in and all obligations under the Subject Agreement shall revert to VIBY

10. VI{SV shall take such actions as VIBV may reaauably request in order to secure, perfect or protect the rights of VIBV under this Agreement or any Subject Agreement, including without limitation, exeouting such documents as VIBV may request in connection wth rights inpatents, technology, trade secrets, kucw-how, marks, and other proprietary rights undr the Subject Agrccment or any roversIonery interest of VIBY following tensiziation of this Agreement

11. Amendment and Waivm VHBV shall not amend the Subject Agreement, or waive the enforcement of any provision thereof, without the express, prior Written consent of V1BV. No amendment or waiver of this Agreement, or any provision thereof, shall be effective unless signed bythe party against whom enforcement of such amendment or waiver is soughL

12, Sambi If any one or more of the provisions contained in this Agreement shall for any reason be held tobe invalid, illegal crunenfcbIe in any respect in any jurisdiction, such invalidity, illegality or unenfcrceability shall not affect any other provision of this Agreement in such jurisdiction, but this Agreement shall be reformed and constroed in mcli jurisdiction so as to be valid, legal, and enforceable to the maainmurn extent permitteal in such jurisdiction.

13. Successors and Aes!g. This Agreement shalt he uncondflioxiaily assignable by VIBV. VLIBV shall not assign this Agreement or any right thereunder without the prior written cnscnt of VTBV. This Agreement shall inure to the benefit of VIBV and its successors sail assigns, and shall be binding upon VHBV aralits successors and assigns.

rd

• ' IN WNSS WHEREQF, the parties have through their luy &uoiized

• representatives executed arid delivered this A eement under seat with effect as of the dale

I first wrtteit above:

/ - VELCRO IND TRIESB.Y.

(SEAL)

Namet Robert J. Huyzen Title: Mana&S Directar Date15Sep1eiiber2OO4

VELCRO HQLINGS 13,V.

(SEAL) By__L- }ter H Bosi

Title: q=aging Director late:

Ackow1edged aid Agreed

VELCRO CADA INC.

- • (SEAL) N ckD Titlet President Dale:

4

PVr

Seen fQr 1eg1izatioz:

th iature &pperin9 or the atachd document of Mr. RDBxRT T. XUTZMq, residing in Cuao, Neth1ads Mitilleg, acting ii hiø capacity of managing director of t1e J.imited liability company VLCO nMMTRIES B,V.i established in Craçao,

by e, Gerard Christoffel mtonius Smeets, & oi7i1law notaxy, residiig in Curaçao, on this sixt.eth day of Seytettber two-thousand four.

/ CANADA

7 PROVINCE OF ONTAFO NOTARJ. CERfiFICATE OP EXECUTION

I, Cbdtopher L&leMoini, a notarpubUc in and forthe Proviee ofOntario, byRoyal authority duly appointed, piaesing at the City of Brainptcn, in the Regionai Municipality of Pee], in the Province of C)ntari, certIfy as follows:

1 L am aitnees and was present and saw the following documents executed atBranipton, Ontario c>n the 29th day of Septembcr, 2004:

(a) Assignment Assumplion and License Agreement between Velcro Industries B.V, and Velcro Holdings B.V. signed byPairick D, TodkllI.

2, PatrIck 1). TodkiU was idcntificd to me by photo identification and I verily believe thnt the person whcee signature Iwitoeased is the person of the same eimo referred to in the document

Ta Withesa Whereof Ihave Set my band and affixed my aealnotathi at the City ofBrampton in the Regional Monicipality of l'cel this 29th day of September 2004

Christopter Leslie Moon, 2erwPithflc in andfor th* Prnvrn* nfOriao

DavisWthb Sduilze & Mon, c

.4 LeV g

7

/ . NautaDutijh

Seen byrne, Wjjuand Hezsdrik &sethroe1, civil law notary iii Ansterdam the Nherlsnds,for lepliSaliDn Ofthe 8iiaturc of - ietcrEendrikBOSE. wio, according to mfamatim ohthlned fi= the Thde Riatcrofthe Chamber oICornre DfAmstudam, on the dala hereof, Ia (i.) a Mexang l)irector of VELC1W HOLflINCS BV., established in Anssterdz aid (ii) hi said apaeity aulbotized to rxescnt this etesipany acting so]cly.

This notarial cnstci±s it sticdy Nibited to tht leplisadon of a aignetere and the xnatts stated therein as the same ext on xecsgd with the aboc Chamber of Camr. In this oonocctian it sboe5ba aotcd hewcer That the acthority to reprasent the ahsv COu2paxly appearing from the Chamber of Comnieres reorda mar be limited by maflers, such as comilict ot interevt wIsra vires end certain othc legal matters, fleer of which I heve iiivesligated for the pt1rppt of the present cerhcstw,

u1NX,im lie a,.t et S 5ma,The1aThfluard$ ead Is ragizwl In lh-Cu=mmW Itagliter Is R.tterd.mWiff =Iw 24l323. Mi earnicam and ofliar work err vented outsider a eanuent fea

efraionel ,uinva ( niminreetyan cpdrect*e) with N&iitet)sri(li NY, subjx( In the rmarli soflhliInnr DWIUi.V. Theme tmuil cmxb6ons Indude, AM002 bOw pmvWw*, sU,,dtnitm of liability clause aid beac beta flIed vitb the helndsei Ce*et ii Flint Ineiseto, Thtycis be remedied aL

mi w4fl ba steaid4 S'se of cbaxs can XON Awi4477999 INO thsik59.7454,001lThtthiedi5753AO0sint Nema

w1t oematsunMsNits1astilb iV,

8202797 AMSC 15506212

/

-

APOSTILLE Cmviit 1

d L EAy du 5 ocbte 1961

1. c TUB 11th

2. 3 Acthiig !2 tho capacity

oDotwille Amgt 4 r W.R Boambmak

5. MA4 1 -

6. 7 7. By

v.1, A.yaLo(