Exhibit 10.01

 

 

LICENSE AGREEMENT

 

This License Agreement (this "Agreement") is entered into effective as of this
December 31st 2014 (the "Effective Date"), by and between CANNABICS
PHARMACEUTICALS INC., a corporation organized and existing under the laws of the
State of Nevada or any of its subsidiaries (hereinafter referred to as
"Cannabics"), and A. BARAK guarding & security LTD, a corporation organized and
existing under the laws of the State of Israel, or any affiliated company of its
group (hereinafter referred to as "BARAK").

 

WHEREAS,Cannabics has developed and is the owner of the Cannabics Technology (as
defined below); and

 

WHEREAS,BARAK wishes to acquire the exclusive right to manufacture, market, sell
and commercialize Cannabics SR Capsules based on the Cannabics Technology in
certain territories as defined infra, all pursuant to the terms set forth in
this Agreement;

 

NOW, THEREFORE, the parties hereby agree as follows:

 

1. Definitions

 

In addition to capitalized terms defined elsewhere in this Agreement, the
following terms shall have the meanings set forth opposite each one of them:

 

1.1"SR Capsules" means orally-ingested capsules containing cannabis extract that
are manufactured using the Cannabics Technology.

 

1.2"Cannabics Technology" means all intellectual property (whether registered or
unregistered) and trade secrets controlled by or available to Cannabics related
to the method of manufacturing orally-ingested capsules containing
cannabis-extract infusion.

 

1.3"Trademarks" means all trademarks, registered or not, and trademark
applications in Israel, that are now owned or licensed, or hereafter acquired or
licensed during the term of this Agreement, by or on behalf of Cannabics that
may be adopted or used in connection with the promotion or sale of SR Capsules.

 

1.4"Territory'' means: the state of Israel and the Czech Republic.

 

2. Exclusive License

 

2.1Subject to Section 2.2 and the terms and conditions of this Agreement,
Cannabics hereby grants to BARAK throughout the Term, a non-transferable,
non-assignable and non-sublicensable exclusive license to use the Cannabics
Technology solely for the manufacture, market, sell and commercialize of SR
Capsules in the Territory and under the Trademarks (the "License").

 

 

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2.2Prior to manufacturing, BARAK shall have to obtain Cannabics' written
approval of the manufacturing facility and its quality standards, attached as
appendix A

 

2.3Other than the License expressly granted under Section 2.1 of this Agreement,
no other rights or interests whatsoever are transferred or granted by Cannabics
to BARAK, and Cannabics retain all rights not expressly granted hereunder. BARAK
agrees that the ownership of the Cannabics Technology and Trademarks shall
always remain vested in Cannabics and BARAK shall not obtain any rights with
respect to them, other than the rights expressly set forth herein. Without
limiting the foregoing, BARAK shall not, during the Term, (i) manufacture any
orally-ingested capsules containing a cannabinoid extract which are not based on
the Cannabics Technology; or (ii) use the Cannabics Technology for any purpose
other than for the purpose of the License granted under this Agreement.

 

3. Marketing and Commercialization

 

3.1BARAK is solely responsible for commercialization of the SR Capsules in the
Territory and will bear all associated costs thereto, including without
limitation promotion, marketing, sales, regulatory expenses, all necessary lab
equipment, raw materials and any required labor.

 

3.2In all marketing and selling of the SR Capsules, BARAK shall refer to
Cannabics as the source of the Cannabics Technology and shall place the
proprietary trademarks of Cannabics on every single package of SR Capsules, in a
manner to be agreed upon by the parties. In any event, upon termination of this
Agreement or the requirement by Cannabics, for any reason whatsoever, BARAK
shall cease all display, advertising, and/or use of all Trademarks.

 

3.3BARAK shall be responsible for addressing consumer appeals and complaints.

 

3.4BARAK undertakes throughout the term of this Agreement, to make its best
efforts to market and sale the SR Capsules in the Territory and to invest
resources and efforts to ensure that the SR Capsules penetrate the market and
become a leading product.

 

3.5BARAK shall solely be responsible to obtain all governmental licenses,
permits and approvals necessary or desirable in connection with the exercise of
the license rights granted under Section 2.1. Cannabics shall not be under any
responsibility to certify or get any approval, license or permit but shall
reasonably cooperate with BARAK for the purpose of BARAK's obtainment of the
above and will provide any required document and/or information accordingly to
the Israeli Ministry of Health.

 

3.6BARAK shall keep Cannabics promptly informed on a regular basis relating to
(i) any problems encountered with the SR Capsules and the Cannabics Technology
(including any product recall), and any resolutions arrived at for those
problems; and (ii) general information about its distribution of the SR
Capsules.

 

 

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 BARAK shall be solely responsible and liable for any and all SR Capsules it
manufactures under this Agreement including but not limited to the quality,
safety and reliability of the SR Capsules.

 

4. Consideration

 

4.1As sole consideration for the grant of the License, BARAK shall pay Cannabics
50% of the gross profit that will be generated through the commercialization of
Cannabics SR capsules in the territory. The gross profit will be calculated as
Cannabics SR capsules sales revenues minus COGs (Cost of Goods) and the direct
expenses BARAK bare for manufacture and marketing of Cannabics SR capsules (the
"Cost"). It is agreed that the IP license fee paid by BARAK to Cannabics shall
not be less than $10 per patient per month during the term of this agreement. It
is further agreed that following 12 months of operations from the effective
date, the patties shall meet to discuss and reconsider the consideration
structure for the next period of engagement between the parties, including a
consideration of possible G&A costs sharing structure.

 

4.2Within thirty (30) days after the end of each calendar month during the Term,
BARAK shall submit to Cannabics a detailed report setting forth for the
preceding calendar month, the amount of the SR Capsules sold, delivered or
otherwise transferred to any third party within the Territory and the amount of
the Consideration accordingly due.

 

4.3The Consideration shall be paid on a monthly basis, not later than thirty
(30) days from the end of each calendar month. The consideration report required
by Section 4.2 shall accompany each such payment, and a copy of such report
shall also be mailed to Cannabics at its address first set forth above.

 

4.4Cannabics shall be solely responsible for any and all other taxes or payments
required to be made to any governmental or state authority with respect to the
Consideration received hereunder.

 

5. Audit

 

5.1BARAK shall maintain all records necessary for Cannabics to determine whether
it has been paid the proper amount of consideration. Cannabics shall be entitled
to audit these records as it sees fit upon reasonable notice to BARAK. In the
event the audit reveals an underpayment, BARAK shall be responsible for the cost
of the audit and shall immediately pay to Cannabics the amount of the
underpayment. In the event the audit reveals an overpayment, Cannabics shall be
responsible for the cost of the audit and the amount of the overpayment shall be
set off against future consideration payments to Cannabics.

 

6. Term and Termination

 

6.1.The initial term of this Agreement will be for l year from the Effective
Date ("the Term") and shall be open for extension upon written agreement by both
parties.

 

 

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6.2Any patty may terminate the agreement in the event that regulatory changes in
any of the parts of the Territory make it commercially infeasible to continue
operations, or to comply with the changes to applicable laws.

 

6.3Without derogating from the above, in the event that a party commits any
material breach or default of any of its obligations under this Agreement,
including without limitation the timely payment of the Consideration (the
"Breaching Party"), the other party hereto (the "Non-Breaching Party") may give
the Breaching Patty written notice of such breach or default and demand that
such breach or default be cured. In the event that the Breaching Party fails to
cure such breach or default within thirty (30) days after the date of such
written notice, the Non-Breaching Party may terminate this Agreement immediately
upon giving written notice of termination to the Breaching Party. Termination of
this Agreement in accordance with this Section 6.3 shall not affect or impair
the Non-Breaching Patty's right to pursue any legal remedy, including the right
to recover damages for all harm suffered or incurred as a result of the
Breaching Patty's breach or default hereunder. In the event that Cannabics
exercises its rights granted in this Section 6.3, the Parties shall cooperate
reasonably with respect to any matter which either Party reasonably deems
necessary to successfully accomplish the winding down, including but not limited
to access to BARAK personnel, technical specifications and vendors.

 

6.4Subject to applicable law, either Party may terminate this Agreement by
written notice in the event: (i) the other Party voluntarily enters into
bankruptcy proceedings; (ii) the other Party makes an assignment for the benefit
of creditors; (iii) a petition is filed against the other Party under a
bankruptcy law, a corporate reorganization law, or any other law for relief of
debtors or similar law analogous in purpose or effect, which petition is not
stayed or dismissed within sixty (60) days of filing thereof; or (iv) the other
Patty enters into liquidation or dissolution proceedings or a receiver is
appointed with respect to any assets of said Party, which appointment is not
vacated within sixty (60) days.

 

7. Rights after Termination

 

7.1Upon termination or expiration of this Agreement, the License is terminated
and BARAK will immediately cease from all further manufacture, marketing, sell,
commercialization or other preparation of the SR Capsules, except only for SR
Capsules irretrievably in process or en route, which may be marketed for
additional 30 days following termination.

 

8. Cannabics Technology Information

 

8.1.Cannabics hereby represents and warrants that all of the Cannabics
Technology, Trademarks and Confidential Information included in the information
furnished by Cannabics to BARAK shall be correct in all material respects and
shall contain such information as is necessary or appropriate to enable BARAK to
manufacture, sell and promote the SR Capsules in accordance with the terms and
conditions of this Agreement.

 

 

 

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8.2The preparation, filing, prosecution and maintenance of Cannabics' patent
applications and trademarks in the Territory in Cannabics' name are upon
Cannabics' sole responsibility, judgment and at its own expense.

 

 Cannabics shall keep Barak reasonably informed, with respect to the filing,
prosecution and maintenance of its patent applications and trademarks in the
Territory.

 

9. Warranties and Limitation of Liability

 

9.1Cannabics warrants to BARAK that: (i) it is the owner of the Cannabics
Technology, and (ii) to its knowledge, the Cannabics Technology does not
infringe the valid rights of any third party. EXCEPT AS EXPRESSLY SET FORTH IN
THIS AGREEMENT, THE CANNABICS TECHNOLOGY IS LICENSED TO BARAK "AS IS" WITHOUT
ANY WARRANTIES, CONDITIONS OR OTHER TERMS OF ANY KIND, EXPRESS OR IMPLIED,
STATUTORY OR OTHERWISE INCLUDING, WITHOUT LIMITATION, ANY TERMS AS TO THE
CONDITION, QUALITY, MERCHANTABILITY, PERFORMANCE OR FITNESS FOR PURPOSE.

 

9.2Without derogating from any of its other representations or obligations in
this Agreement, BARAK hereby warrants to Cannabics that it has all governmental,
state and regulative licenses, permits and approvals necessary or desirable for
the manufacture, market, sell and commercialization of SR Capsules in the
Territory, that it complies, and shall continue to comply at all times, with any
and all of the terms of such licenses, permits, approvals and regulations that
apply to the License and its execution and that it shall immediately notify
Cannabics regarding any breach (whether alleged or possible) or communication
received from any authority in that respect.

 

9.3BARAK and Cannabics each represent and warrant for itself that (i) it is a
corporation duly organized and validly existing under the laws of the state of
its incorporation; (ii) it has the full right, power, and authority to execute
and perform this agreement; (iii) this Agreement does not conflict with or
otherwise result in a breach of any agreement to which such Party is a party or
to which it is bound; and (iv) this Agreement represents a valid, legally
binding obligation of it, enforceable against it in accordance with its terms.

 

9.4EXCEPT FOR BREACH UNDER SECTION ____ NEITHER PARTY WILL BE LIABLE TOWARDS THE
OTHER UNDER ANY LEGAL THEORY (INCLUDING, WITHOUT LIMITATION, TORT OR CONTRACT)
FOR ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT OR PUNITIVE OR EXEMPLARY DAMAGES OF
ANY KIND, INCLUDING BUT NOT LIMITED TO LOST DATA OR LOST PROFITS, EVEN IF SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. OTHER THAN FOR BREACH
DUE TO NON PAYMENT OR FOR BREACH UNDER SECTION Error! Reference source not
found., EACH PARTY'S LIABILITY UNDER OR FOR BREACH OF THIS AGREEMENT SHALL BE
LIMITED TO THE AGGREGATE CONSIDERATIONS RECEIVED BY CANNABICS FROM BARAK
HEREUNDER DURING THE TWELVE (12) MONTHS PERIOD PRECEDING THE EVENT GIVING RISE
TO THE LIABILITY.

 

 

 

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10. Confidential Information, Proprietary Rights and Non-Compete

 

10.1The parties shall execute the Non-Disclosure, Proprietary Rights and
Non-Compete Agreement in the form attached hereto as Exhibit A.

 

11. Indemnification

 

11.1.BARAK agrees to indemnify, defend and hold Cannabics and any of its
officers, directors, employees, shareholders, sales agents, successors and
permitted assigns harmless from any and all damages (including, without
limitation, amounts paid by Cannabics in judgment or in settlement with BARAK's
consent), losses, claims, demands, liabilities, costs and expenses, including,
without limitation, reasonable court costs and attorney's fees (collectively
"Losses"), based upon or arising out of any claim, demand, cause or action suit
or proceeding ("Claims") resulting from (i) any BARAK breach of a
representation, warranty, covenant or obligation in this Agreement; (ii) the
manufacturing, marketing, distributing and selling of the SR Capsules, whether
resulted in harm, injury or death of any person or not; (iii) the advertising,
promoting, marketing, distributing and selling of the SR Capsules, including,
without limitation, any deceptive misleading, manipulative or intentionally or
inaccurate marketing or sales practices of BARAK or its representatives.

  

11.2.Each Party shall give the other prompt notice of any liability of which it
becomes aware, and upon receiving notice of any such liability, each Party
shall, when possible, promptly notify the other of commencement of any action, a
general summary of the action and, when applicable, demand for indemnification
the latter, each Party shall have the right to participate in and to assume the
defense of such action with counsel of its choosing; provided, however, that the
Parties shall cooperate in such defense.

 

12. Miscellaneous

 

12.1This Agreement will be governed by and construed in accordance with the laws
of the state of Israel without regard to any conflict of laws principles that
would require the application of the laws of another jurisdiction. The parties
consent to the exclusive jurisdiction and venue of Israeli courts for any
lawsuit filed arising from or relating to the Agreement.

 

12.2Neither party may assign this Agreement without the other party’s prior
written consent, excluding assignment upon a merger or sale of all or
substantially all of the assigning party’s assets.

 

12.3This Agreement (i) states the entire agreement of the parties, merges all
prior negotiations, agreements and understandings, if any, and states in full
all representations, warranties, covenants and agreements which have induced
this Agreement; and (ii) may be modified or amended only by an instrument in
writing, duly executed by both parties.

 

12.4Any failure of a Party to comply with any covenant, agreement or condition
herein may be waived in writing by the other Party hereto but such waiver or
failure to insist upon strict compliance with such covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement through their duly
authorized representatives as of the date first written above.

 

CANNABICS PHARMACEUTICALS INC.   BARAK       By: /s/ Zohar Koren   By: /s/ Meir
Ariel Zohar Koren, CEO   Meir Ariel, CEO      

 

 

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