EXCLUSIVE LICENSE AGREEMENT
This Agreement is dated for
reference the 30th day of November, 2003
BETWEEN:
COOL CAN TECHNOLOGIES, INC.
,
a Minnesota corporation having an address at
Suite 311 - 698 Seymour Street
Vancouver, BC V6B 3K6
(the
“Licensor”)
OF THE FIRST PART
AND:
BALSAM VENTURES, INC.
,
a Nevada corporation having an address at
Suite 200, 810 Peace Portal Drive
Blaine, Washington 98230
(the
“Licensee”)
OF THE SECOND PART
WHEREAS:
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A.
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The Licensor
holds patents covering a proprietary technology (the
“Technology”) for self-chilling beverage
containers.
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B.
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The Licensee
wishes to acquire the exclusive worldwide license to use,
commercialize and license the Technology on the terms and subject
to the conditions contained of this Agreement.
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C.
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The Licensee
and the Licensor had previously entered into an agreement dated
June 5, 2002 and certain amendments to that Agreement (the
“Prior Agreements”).
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D.
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The parties
wish to terminate the Prior Agreements and have their relationship
governed by this Agreement.
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NOW THEREFORE THIS AGREEMENT
WITNESSES that in
consideration of the mutual covenants and agreements contained
herein, the parties hereto agree as follows:
1.
DEFINITIONS
In this Agreement, the following
words and phrases shall have the following meanings:
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(A)
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”Apparatus” means any apparatus for
a self-cooling beverage container described in the Cool Can Patent
or that incorporates any of the Cool Can Patent, the Know-how
and/or the Intellectual Property;
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(B)
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"Cool Can
Patent" means United States Patent #J,609,038 (self-chilling
beverage container and parts therefore) and any improvements,
modifications or variant of the patents and patent and any
apparatus or invention incorporating, or any improvement,
modification or variant to any Apparatus incorporating the Patent,
all know how and intellectual property relating to the Patent;
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(C)
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“Gross
License Revenues” means any license revenues or other
payments or royalties received by the Licensee from any license of
the Technology, Inventions, Patent, Know-how and Intellectual
Property;
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(D)
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“Gross
Profits” means the gross sales of the Apparatus or Products
realized by the Licensee, less costs of goods sold of the Apparatus
or Products and shipping, marketing and related costs attributable
to sales of the Apparatus, each as determined in accordance with
generally accepted accounting principals (for greater certainty, no
sales made by sub-licensees shall be included in the calculation of
Gross Profits);
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(E)
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“Improvement” means any modification
or variant of the Apparatus and the Invention, whether patentable
or not, which, if manufactured, used, or sold, would fall within
the scope of the Apparatus, the Invention or at least one claim of
the Cool Can Patent.
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(F)
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“Intellectual Property” means all
copyrights, patent rights, trade secret rights, trade names,
trademark rights, process information, technical information,
designs, drawings, inventions and all other intellectual and
industrial property rights of any sort related to or associated
with Invention and the Apparatus;
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(G)
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“Inventions” means the inventions
described in the Cool Can Patents and embodied in the
Apparatus;
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(H)
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“Inventor” means Edward M.
Halimi;
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(I)
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“Know-how” means all know-how,
knowledge, expertise, inventions, works of authorship, prototypes,
technology, information, know-how, materials and tools
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relating thereto or to the design, development,
manufacture, use and commercial application of the Invention and
the Apparatus;
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(J)
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“NAFTA” means the North American
Free Trade Agreement;
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(K)
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“NAFTA
Countries” means the countries that are or may in the future
become parties to the North American Free Trade Agreement;
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(L)
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“Prior
Agreements” means the agreement between the parties dated
June 5, 2002 and any amendments thereto;
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(M)
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“Products” means commercial goods or
products incorporating the Apparatus;
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(N)
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“Technology” means the Cool Can
Patent, the Intellectual Property, the Know How and the
Inventions;
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(O)
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“Trademarks” means any trademarks
relating to or associated with the Invention or Apparatus that the
Licensor has or may in the future have.
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2. GRANT
OF EXCLUSIVE LICENSE
2.1 The Licensor grants to the
Licensee the exclusive right and license for the geographic regions
set out in Schedule “A” (the “Exclusive
Regions”) to enjoy, commercialize and exploit the Technology
and to manufacture, use and sell throughout the Exclusive Regions,
Apparatus and Products embodying the Technology (the
“Exclusive License”).
2.2 In consideration of the grant
of the Exclusive License, the Licensee agrees to
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a.
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issue 5,000,000
common shares of its capital stock (the “Balsam
Shares”) to the Licensor; and
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b.
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pay royalties
set out in Article 4.
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2.3 The Shares to be issued
pursuant to this agreement will be “restricted shares”,
as contemplated under United States Securities Act of 1933 ,
and the certificates representing the Shares will be endorsed with
the following legend:
“ THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT"), AND HAVE BEEN ISSUED IN
RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE
ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR
OTHERWISE TRANSFERRED UNLESS
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THEY ARE REGISTERED UNDER THE
APPLICABLE PROVISIONS OF THE ACT OR ARE EXEMPT FROM SUCH
REGISTRATION. ”
2.4 The Exclusive License will be
for a term of 40 years unless sooner terminated in accordance with
the provisions of this Agreement or extended for a further period
by mutual written Agreement.
2.5 The Licensor shall keep the
Cool Can Patent and the Trademarks in good standing in the
Exclusive Region as defined in Schedule “A”. The cost
for same shall be for the account of the Licensee and shall be paid
for by the Licensee within 30 days of receipt of an invoice for
same.
3.
PRIOR
AGREEMENTS
3.1 Upon execution of this
Agreement, the Prior Agreements shall be terminated and be of no
further force or effect. Without limiting the generality of the
foregoing, the Licensee will have no further obligations to make
expenditures as required by the Prior Agreements.
4.
ROYALTIES
4.1 The Licensee shall pay to the
Licensor royalties (the “Royalties”) on the following
basis:
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a.
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a Sales Royalty
on the sale of Apparatus or Products by the Licensee equal to 2% of
Gross Profits; and
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b.
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a License
Royalty on revenues to the Licensee from sub-licensing equal to 5%
of Gross License Revenues.
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4.2 The Royalties shall be
payable on a quarterly basis within 52 days of the end of the
Licensee’s fiscal quarter provided that the Royalties payable
with respect to the last quarter of each fiscal year will be
payable within 107 days of the end of the Licensee’s fiscal
year.
4.3 Notwithstanding that there
may be no Gross Profits or Gross License Revenues the Licensee
shall pay minimum royalties to the Licensor on the 15 th
day of each month commencing on January 15, 2006 of $5,000 per
month, which minimum royalty payments shall be credited to any
royalties that may become payable in the fiscal quarter in which
they are paid.
5. RIGHT
TO SUB-LICENSE
5.1 The Licensee shall have the
right during the continuance of this agreement to enter into
agreements with other persons, firms or corporations, giving and
granting to them or
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any of them the right, within the
Exclusive Regions, to manufacture, use and sell Products embodying
the Technology on such terms as the Licensee shall deem proper,
except that in no case shall such terms, covenants and conditions
impose a greater obligation on the Licensor than is provided by
this Agreement.
5.2 The Licensee shall, prior to
entering into any sub-license agreement, advise the Licensee of its
intention to enter into the sub-license agreement and shall
immediately after entering into any sub-license agreement provide a
copy of the agreement to the Licensor.
6. TITLE
TO INTELLECTUAL PROPERTY / IMPROVEMENTS
6.1 The Technology and the Cool
Can Patent and trademarks included in the Technology shall remain
the property of the Licensor subject to the Exclusive License
granted by this Agreement. The Licensor shall, upon demand, execute
and deliver to the Licensee such documents as may be deemed
necessary by counsel for the Licensee for filing in appropriate
government offices to evidence the granting of the Exclusive
License.
6.2 In the event the Licensee
shall make any Improvements said Improvements and any applications
and patents therefor shall likewise come under this Agreement and
be subject to all the terms and provisions thereof.
7. RIGHT
OF FIRST REFUSAL
7.1 The Licensor shall not
transfer, sell, convey or assign (or license in geographic areas
outside the Exclusive Region and NAFTA Countries), the Technology
or any component of it otherwise than in accordance with this
Article.
7.2 Should the Licensor intend to
dispose of the Technology or any of its interest in it other than
by way of license, the Licensor shall first give notice in writing
to the Licensee of such intention together with the terms and
conditions on which the Licensor intends to dispose of the
Technology or its interest in it. Should the Licensor intend to
license the Technology for any geographic region other than the
Exclusive Regions or NAFTA Country the Licensor shall first give
notice in writing to the Licensee of such intention together with
the terms and conditions on which the Licensor intends to license
the Technology.
7.3 If the Licensor receives any
offer to dispose of all or any portion of the Technology or its
interest in it, which it intends to accept, it shall not accept the
same unless it has first offered to sell such interest to the
Licensee on the same terms and conditions as in the offer received
and the same has not been accepted by the Licensee. If the Licensor
receives any offer to license the Technology for any geographic
region other than the Exclusive Regions or any NAFTA Country, which
it intends to accept, it shall not accept the same unless it has
first offered to license such region to the Licensee on the same
terms and conditions as in the offer received and the same has not
been accepted by the Licensee.
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7.4 Any communication of an
intention to sell pursuant to sections 7.2 and 7.3 (the "Offer")
shall be in writing and shall:
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(a)
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set out in
reasonable detail all of the terms and conditions of any intended
sale;
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(b)
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if it is made
pursuant to section 7.3, include a photocopy of the Offer; and
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(c)
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if it is made
pursuant to section 7.3, clearly identify the offering party and
include such information as is known by the Licensor about such
offering party;
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and such communication will be
deemed to constitute an Offer by the Licensor to the Licensee to
sell the Licensor's interest to the Licensee on the terms and
conditions set out in such Offer.
7.5 Any Offer made as
contemplated in section 7.4 shall be open for acceptance by the
Licensee for a period of 30 days from the date of receipt of the
Offer by the Licensee.
7.6 If the Licensee accepts the
Offer within the period provided for in section 7.5, such
acceptance shall constitute a binding agreement between the
Licensor and the Licensee, for the Interest on the terms and
conditions set out in such Offer.
7.7 If the Licensee does not
accept the Offer within the period provided for in section 7.5, the
Licensor may complete a sale and purchase or license of its
Interest or a portion thereof on terms and conditions no less
favorable to the Licensor than those set out in the Offer and, in
the case of an Offer under section 7.3, only to the party making
the original offer to the Licensor and in any
