Document:

PURCHASE AGREEMENT

PURCHASE AGREEMENT

THIS AGREEMENT is dated for reference the 11th day of April, 2008

BETWEEN:    MinQuest Inc

                       4235 Christy Way

                       Reno Nevada, 89519

(the “Vendor”)

    OF THE FIRST PART

 

AND:

ELAN DEVELOPMENT, INC.

           a Nevada corporation with its registered address at

                      Suite 880, 50 West Liberty Drive

                      Reno, Nevada  89501

(“ELAN”)

OF SECOND PART

WHEREAS:

A.

The Vendor is the owner of an undivided 100% right, title and interest in and to mineral claims described in this Agreement;

B.

Elan wishes to acquire the purchase to acquire a 100% interest in the Vendor’s property (the EXCALIBUR Property) on the terms and subject to the conditions contained in this Agreement;

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and the mutual covenants and agreements hereinafter contained, the parties hereto agree as follows:

1. DEFINITIONS

1.1

In this Agreement, the following terms will have the meaning set forth below:

(A)

"Exploration and Development" means any and all activities comprising or undertaken in connection with the exploration and development of the Property, the construction of a mine and mining facilities on or in proximity to the Property and placing the Property into commercial production;

(B)

"Property" means and includes:

(i)

all rights and appurtenances pertaining to the mining claims listed in Schedule A, including all water and water rights, rights of way, and easements, both recorded and unrecorded, to which the Vendor is entitled;

(A)

"Property Expenditures” means all reasonable and necessary monies expended on or in connection with Exploration and Development as determined in accordance with generally accepted accounting principles including, without limiting the generality of the foregoing:

(i)

the cost of entering upon, surveying, prospecting and drilling on the Property;

(ii)

the cost of any geophysical, geochemical and geological reports or surveys relating to the Property;

(iii)

the cost, including rent and finance charges, of all buildings, machinery, tools, appliances and equipment and related capital items that may be erected, installed and used from time to time in connection with Exploration and Development;

(iv)

the cost of construction and maintenance of camps required for Exploration and Development;

(v)

the cost of transporting persons, supplies, machinery and equipment in connection with Exploration and Development;

(vi)

all wages and salaries of persons engaged in Exploration and Development and any assessments or levies made under the authority of any regulatory body having jurisdiction with respect to such persons or supplying food, lodging and other reasonable needs for such persons;

(vii)

all costs of consulting and other engineering services including report 

preparation;

(viii)

the cost of compliance with all statutes, orders and regulations respecting environmental reclamation, restoration and other like work required as a result of conducting Exploration and Development; and

(ix)

all costs of searching for, digging, working, sampling, transporting, mining and procuring diamonds, other minerals, ores, and metals from and out of the Property;

2. PURCHASE

2.1 The Vendor hereby grants to Elan the exclusive right and purchase to acquire an undivided 100% right, title and interest in and to the Property, with a 3% Net Smelter Return Royalty, (See Schedule D) in favour of MinQuest for an aggregate total of 97% (the “Purchase”) for total consideration consisting of cash payments to the Vendor totalling $100,000USD, stock options totalling 200,000 shares, and property expenditures totalling $275,000USD, as set out in Schedule B; and to reimburse all holding costs set out in Schedule C.

    

2.2 Upon making the cash payments, Property Expenditures, and Stock options as specified in Paragraph 2.1, Elan shall have acquired an undivided  net 97%% right, title and interest in and to the Property..

2.3 Elan at its option may buy back 50% of the NSR (Net Smelter Royalty) from the Vendor for the sum of $2,000,000 USD.

3. TRANSFER OF TITLE

3.1 Upon execution of this Agreement, Elan shall be entitled to record this Agreement against title to the Property.

3.2 Upon making the cash payments, Property Expenditures, and Stock options as specified in Paragraph 2.1, the Vendor shall deliver to Elan a duly executed bill of sale or quit claim deed and such other executed documents of transfer as required, in the opinion of Elan's lawyers, for the transfer of an undivided 97% interest in the Property to Elan.

4. RIGHT OF ENTRY

4.1 During the currency of this Agreement, Elan, its servants, agents and workmen and any persons duly authorised by Elan, shall have the right of access to and from and to enter upon and take possession of and prospect, explore and develop the Property in such manner as Elan in its sole discretion may deem advisable for the purpose of incurring Property Expenditures as contemplated by Section 2, and shall have the right to remove and ship there from ores, minerals, metals, or other products recovered in any manner there from.

5. COVENANTS OF ELAN

5.1               Elan covenants and agrees that:

(A)

during the term of this Agreement, Elan shall keep the Property clear of all liens, encumbrances and other charges and shall keep the Vendor indemnified in respect thereof;

(B)

Elan shall carry on all operations on the Property in a good and workmanlike manner and in compliance with all applicable governmental regulations and restrictions including but not limited to the posting of any reclamation bonds as may be required by any governmental regulations or regulatory authorities;

(C)

during the term of the purchase herein, Elan shall pay or cause to be paid any rates, taxes, duties, royalties, workers’ compensation or other assessments or fees levied with respect to its operations thereon and in particular Elan shall pay the yearly claim maintenance payments necessary to both federal and county agencies to maintain the claims in good standing. If Elan holds the property beyond June 1st of any year Elan will be responsible for paying claim maintenance fees for that year;

(D)

Elan shall maintain books of account in respect of its expenditures and operations on the Property and, upon reasonable notice, shall make such books available for inspection by representatives of the Vendor;

(E)

Elan shall allow any duly authorised agent or representative of the Vendor to inspect the Property at reasonable times and intervals and upon reasonable notice given to Elan, provided however, that it is agreed and understood that any such agent or representative shall be at his own risk in respect of, and Elan shall not be liable for, any injury incurred while on the Property, howsoever caused;

(F)

Elan shall allow the Vendor access at reasonable times to all maps, reports, sample results and other technical data prepared or obtained by Elan in connection with its operations on the Property;

(G)

Elan shall indemnify and save the Vendor harmless of and from any and all costs, claims, loss and damages whatsoever incidental to or arising out of any work or operations carried out by or on behalf of Elan on the Property, including any liability of an environmental nature.

6. REPRESENTATIONS AND WARRANTIES

6.1            The Vendor hereby represents and warrants that:

(A)

the Property is in good standing with all regulatory authorities having jurisdictions and all required claim maintenance payments have been made;

(B)

it has not done anything whereby the mineral claims comprising the Property may be in any way encumbered;

(C)

it has full corporate power and authority to enter into this Agreement and the entering into of this Agreement does not conflict with any applicable laws or with its charter documents or any contract or other commitment to which it is party; and

(D)

the execution of this Agreement and the performance of its terms have been duly authorised by all necessary corporate actions including the resolution of its Board of Directors.

6.2            Elan hereby represents and warrants that:

(A)

it has full corporate power and authority to enter into this Agreement and the entering into of this Agreement does not conflict with any applicable laws or with its charter documents or any contract or other commitment to which it is party; and

(B)

the execution of this Agreement and the performance of its terms have been duly authorised by all necessary corporate actions including the resolution of its Board of Directors.

7.  ASSIGNMENT

7.1   With the consent of the other party, which consent shall not be unreasonably withheld, Elan and the Vendor have the right to assign all or any part of its interest in this Agreement and or in the Property, subject to the terms and conditions of this Agreement.  It shall be a condition precedent to any such assignment that the assignee of the interest being transferred agrees to be bound by the terms of this Agreement, insofar as they are applicable.  

8.  CONFIDENTIALITY OF INFORMATION

8.1   Each of Elan and the Vendor shall treat all data, reports, records and other information of any nature whatsoever relating to this Agreement and the Property as confidential, except where such information must be disclosed for public disclosure requirements of a public company or as directed by a court of law.

9. TERMINATION

 

9.1 Until such time as Elan has acquired an undivided 100% interest in the Property pursuant to Section 2, this Agreement shall terminate upon any of the following events:

(A)

upon the failure of Elan to make  payment within the time limits prescribed by Paragraph 2.1; 

(B)

in the event that Elan, not being at the time in default under any provision of this Agreement, gives 30 day’s written notice to the Vendor of the termination of this Agreement;

(C)

in the event that Elan shall fail to comply with any of its obligations hereunder, other than the obligations contained in Paragraph 2.1, and subject to Paragraph 11.1,  and within 30 days of receipt by Elan of written notice from the Vendor of such default, Elan has not:

(i)

cured such default, or commenced proceedings to cure such default and prosecuted same to completion without undue delay; or

9.2  Upon termination of this Agreement under Paragraph 10.1, Elan shall:

(A)

transfer any interest in title to the Property, in good standing to the Vendor free and clear of all liens, charges, and encumbrances;

(B)

turn over to the Vendor copies of all maps, reports, sample results, contracts and other data and documentation in the possession of Elan or, to the extent within Elan’s control, in the possession of its agents, employees or  independent contractors, in connection with its operations on the Property; and

(C)

ensure that the Property is in a safe condition and complies with all environmental and safety standards imposed by any duly authorised regulatory authority.

Upon the termination of this Agreement under Paragraph 10.1, Elan shall cease to be liable to the Vendor in debt, damages or otherwise save for the performance of those of its obligations which theretofore should have been performed, including those obligations in Paragraph 2.1.

Upon termination of this Agreement, Elan shall vacate the Property within a reasonable time after such termination, but shall have the right of access to the Property for a period of six months thereafter for the purpose of removing its chattels, machinery, equipment and fixtures.

10. FORCE  MAJEURE

10.1 The time for performance of any act or any expenditure required under this Agreement except fees to federal and county authorities to keep the claims in good standing, shall be extended by the period of any delay or inability to perform due to fire, strikes, labour disturbances, riots, civil commotion, wars, acts of God, any shortages of labour, equipment or materials, or any other cause not reasonably within the control of the party in default, other than lack of finances 

11. REGULATORY APPROVAL

11.1 If this Agreement is subject to the prior approval of any securities regulatory bodies, then the parties shall use their best efforts to obtain such regulatory approvals.

12.   NOTICES

12.1  Any notice, election, consent or other writing required or permitted to be given hereunder shall be deemed to be sufficiently given if delivered or mailed postage prepaid or if given by telegram, telex or telecopier, addressed as follows:

In the case of the Vendor:

MinQuest Inc

                                           4235 Christy Way

                                          Reno Nevada, 89519

In the case of Elan:  Elan Development, Inc.

 Suite 880, 50 West Liberty Drive

 Reno, Nevada, USA 89501

and any such notice given as aforesaid shall be deemed to have been given to the parties hereto if delivered, when delivered, or if mailed, on the third business day following the date of mailing, or, if telegraphed, telexed or telecopied, on the same day as the telegraphing, telexing or telecopying thereof.  Any party may from time to time by notice in writing change its address for the purposes of this Paragraph 13.1.

13. GENERAL TERMS AND CONDITIONS

13.1 The parties hereto hereby covenant and agree that they will execute such further agreements, conveyances and assurances as may be requisite, or which counsel for the parties may deem necessary to effectually carry out the intent of this Agreement.

13.2 This Agreement shall constitute the entire agreement between the parties with respect to the Property.  No representations or inducements have been made save as herein set forth.  No changes, alterations or modifications of this Agreement shall be binding upon either party until and unless a memorandum in writing to such effect shall have been signed by all parties hereto.  This Agreement shall supersede all previous written, oral or implied understandings between the parties with respect to the matters covered hereby.

13.3   Time shall be of the essence of this Agreement.

13.4   The applicable law for the purposes of this agreement shall be that of the State Of Nevada

13.5 The titles to the sections in this Agreement shall not be deemed to form part of this Agreement but shall be regarded as having been used for convenience of reference only.

13.6 Unless otherwise noted, all currency references contained in this Agreement shall be deemed to be references to United States funds.

13.7 Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision shall be prohibited by or be invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

13.8 The Schedules to this Agreement shall be construed with and as an integral part of this Agreement to the same extent as if they were set forth verbatim herein. 

13.9 Defined terms contained in this Agreement shall have the same meanings where used in the Schedules.

13.10 This Agreement shall be governed by and interpreted in accordance with the laws of the state of Nevada applicable therein.

13.11 This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns.

WITNESS WHEREOF this Agreement has been executed by the parties hereto as of the day and year first above written.

MinQuest Inc

by its authorized signatory

___/s/ Richard Kern_________________

Signature of Authorized Signatory

__Richard Kern____________________

Name of Authorized Signatory

___President_____________________ 

Position of Authorized Signatory

ELAN DEVELOPMENT INC.

by its authorized signatory:

____/s/ Colleen Ewanchuk_______

Signature of Authorized Signatory

__ Colleen Ewanchuk___________

Name of Authorized Signatory

__Secretary, Treasurer__________

Position of Authorized Signatory

2

SCHEDULE “A”

                                          EXCALIBUR PROPERTY DESCRIPTION

                                           

 Sections 18 and 19, T5N, R34E, MDB&M, MINERALCOUNTY NEVADA USA

     

List of Claims

	CLAIM NUMBERS

  UNITS

	TOWNSHIP/AREA

	CURRENT EXPIRY DATE

	MM 1

NMC #887042

MM 2

NMC #887043

MM 3

NMC #887044

MM 4 

NMC #887045

MM 5

NMC #887046

MM 6

NMC #887047

MM 7

NMC #887048

MM 8

NMC #887049

  

  

	MINERAL COUNTY

	 
	 	 

3

                                                            SCHEDULE B

           At signing, Elan paying the sum of $20,000 USD to the Vendor by way of cash,  and reimburse all holding costs and expenses of location of mining claims, such expenses to be identified in Schedule “C”;

(a)

On or before the First Anniversary

(i)        Elan incurring Expenditures of $50,000 USD on the 

property; 

(ii)

 Elan paying $20,000 USD and issuing 50,000 shares of stock options based on “Fair Market Price” to the Vendor;

(b)

On or before Second Anniversary

(i)

 Elan incurring Expenditures of $50,000 USD on the 

Property in addition to the expenditures referred to in clause

(b)(i);

(ii)

 Elan paying $20,000 U.S and issuing 50,000 shares of stock options based on “Fair Market Price” to the Vendor;

(c)

On or before Third Anniversary

(i)

Elan incurring Expenditures of $75,000 USD on the

Property in addition to the expenditures referred to in clauses

(b)(i) and (c)(i) hereof; and

(ii)

Elan paying $20,000 USD and issuing 50,000 shares of stock options based on “Fair Market Price” to the Vendor;

(d)

On or before Fourth Anniversary

                          (i)

Elan incurring Expenditures of $100,000 USD on the

Property in addition to the expenditures referred to in clauses

(b)(i) and (c)(i) hereof; and

(ii)

Elan paying $20,000 USD and issuing 50,000 shares of stock options based on “Fair Market Price” to the Vendor;

4

 

                                                                  SCHEDULE C

Claims Expenses - 8 claims @ $100/claim 

  

   $800.00

BLM+ County Filing Fees first year $205x8 

$1,640.00

Annual fees BLM & County 2005 thru 2007 $134x8x3 

 $3,216.00

Total

            $5,656.00

                                                                 SCHEDULE D

 

“Net Smelter Return” shall mean the aggregate proceeds received by Elan from time to time from any smelter or other purchaser from the sale of any ores, concentrates, metals or any other material of commercial value produced by and from the Property after deducting from such proceeds the following charges only to the extent that they are not deducted by the smelter or other purchaser in computing the proceeds:

(a)

The cost of transportation of the ore, concentrates or metals from the Property to such smelter or other purchaser, including related insurance; 

(b)

Smelting and refining charges including penalties; and 

 Elan shall reserve and pay to the Vendor a NSR equal to three (3%) percent

of Net Smelter Return.

Payment of NSR payable to the Vendor hereunder shall be made quarterly within thirty 

(30) days after the end of each calendar quarter during which  Elan receives 

Net Smelter Returns in USD dollars or in kind bullion at the discretion of the Vendor. 

Within (60) days after the end of each calendar quarter for which the NSR for such

year shall be audited by  Elan and any adjustments in the payments of NSR

to the Vendor shall be made forthwith after completion of the audit. All payments of

NSR to the Vendor for a calendar year shall be deemed final and in full satisfaction of

all obligations of Elan in respect thereof if such payments or the calculations

thereof are not disputed by the Vendor of the same audited statement.  Elan

shall maintain accurate records relevant to the determination of the NSR and theVendor

or its authorized agent, shall be permitted the right to examine such records at all 

reasonable times.Converted by EDGARwiz

INTELLECTUAL PROPERTY LICENSE AGREEMENT

THIS AGREEMENT is made effective the 15th day of April, 2008 (the “Effective Date”)

BETWEEN:

Canadian Integrated Optics International Limited, a corporation incorporated under the laws of the Isle of Man, having its office at 8 St. Georges Street, Douglas, Isle of Man,  IM1 1AH.

(the “Licensor”)

-AND-

QV, Quantum Ventures Inc., a corporation incorporated under the laws of Nevada, U.S.A. having its office at:

16 Midlake Boulevard, Suite 312 SE Calgary Alberta, CanadaT2X 2X7

(the “Licensee”)

(collectively, the “Parties”)

WHEREAS:

A.

The Licensor has developed inventions, know-how, trade-secrets relating to the use of an optical rectenna for converting solar energy into electrical energy;

B.

The Licensee desires a license to use and commercially exploit the Licensor’s Technology for use in the manufacturing and sales of rectenna based solar panels.

C.

The Licensor has agreed to grant the Exclusive Right and worldwide license to the Licensee for the use and commercial exploitation of the Technology for the manufacture and sale of solar panels only, upon terms and conditions set out in this Agreement. 

NOW THEREFORE, IN CONSIDERATION of entering into this Agreement, the mutual covenants, conditions and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties covenant and agree as follows:

1

DEFINITIONS

Wherever used in this Agreement, the following words and terms shall have the respective meanings ascribed to them as follows:

“Accounting Period” means each consecutive period of one year after the Effective Date, provided that Licensor shall have the right to change the “Accounting Period” to the fiscal year of the Licensee at any time upon giving 90 days advance written notice thereof to Licensee.

“Accrued” means when payment is received by the Licensee or is to accrue on record pursuant to accounting system.

“Agreement” means this Intellectual Property License Agreement, and includes authorized amendments and schedules, if any.

“Certification” means a sworn or affirmed statement under oath in the form of Schedule A to this Agreement.

“Confidential Information” means all information, in whatever form, that is not generally available to third parties or the public, including without limitation, all research, data, specifications, technical information, devices, concepts, compilations, programs, designs, tooling, plans, drawings, prototypes, models, documents, recordings, instructions, manuals, papers, business practices and strategies, financial information, business plans, know-how including, but not limited to the Know-How, inventions (whether patentable or not), techniques, processes, methods of doing business, software, personnel data, contracts, purchase requirements, forecasts and market strategies, data on equipment sold and serviced, plans production processes, product specifications and formulas, methods, technical and product bulletins, surveys, research and development programs, sales reports, or other materials, of any nature or embodiment whatsoever written or otherwise, relating to same, as well as the existence of this Agreement and its terms and conditions.

Confidential Information does not include any information which is publicly available at the time of disclosure or subsequently becomes publicly available through no fault of the recipient party, or is rightfully acquired by the recipient party from a third party who is not in breach of an agreement to keep such information confidential.

“Effective Date” means the date of at the top of the first page of this agreement.

“Exclusive Right” means  the right granted solely to the Licensee for the Licensed Use, and that the Licensor will not, subject to the conditions specified in this Agreement, grant to any third party, any rights which would overlap the rights granted to the Licensee, but reserving to  the Licensor however the full right to use the Technology and its Improvements for its own purposes and exploitation other than for the Licensed Use.

“Improvements” means improvements, modifications and developments relating to the subject matter of the Technology, including patentable inventions.

“Know-How” means the information, knowledge, the plans and drawings, and the Trade-Secrets of the Licensor relating to the Technology.

 “Licensed Use” means the right to use and commercially exploit the Technology for the Licensee’s Products for use with solar panels.

“Licensee’s Products” means any product or service made, used, sold, offered for sale, or otherwise distributed by the Licensee that includes the Technology.

“Patent Rights” means issued patents and pending patent applications in any country in respect of an invention owned by the Licensor relating to the Technology, including provisionals, continuations-in-part, continuations, divisionals, re-issues and extensions of those issued patents and pending patent applications, including inventions described in the specifications of United States Patent Application Numbers 60/911,847, 60/911,815, 60/911,823 and 60/911837 filed on April 13, 2007.

“Royalty” means 5% of Sales Revenue for each Accounting Period. 

“Sale” means every disposition or provision of goods or services to a person at arm’s length from the seller for any consideration, including renting, leasing, lending and bartering of any product or service involving the use of the Technology.

“Sales Revenue” means the total of the following:

a)

the aggregate of Licensee’s invoice prices for the Sale of Licensee’s Products for all bona fide arm’s length Sales net of sales taxes and GST, where applicable; and

b)

for every Sale of Licensee’s Products that is either not at arm’s length with Licensee and associates and affiliates of Licensee, that is not bona fide, or that is a barter for other goods or services, the “Sales Revenue” shall be deemed to be a typical recent price or a reasonable fair market value of the product or service that is the subject of the Sale, or their equivalent, whichever is higher;

all net of bona fide returns, andin accordance with generally accepted accounting principles where applicable, and  irrespective of collection of any such  invoice prices, values or other amounts referred to above.

“Technology” means unpatented inventions, the Confidential Information, the Patent Rights, the Know-How, and the Trade-Secrets. 

“Territory” means worldwide. 

“Trade-Secrets” means written or oral information, including formulae, patterns, compilations, programs, devices, methods, know-how including, but not limited to Know-How, techniques, process or business information that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.   

1

GRANT AND TERM OF THE LICENSE

GRANT 

Subject to the terms of this Agreement, the Licensor hereby grants to the Licensee the Exclusive Right to the Technology for the Licensed Use in the Territory and the   right to improve, modify and develop the Technology for the Licensed Use in the Territory.

1.1

The Licensee shall promptly, within five (5) business days, disclose in writing to the Licensor the Improvements it may discover or acquire during the term of this Agreement.

1.2

The Licensee understands and agrees that all the Improvements it discovers or acquires are hereby assigned to Licensor and that Licensee shall cooperate with Licensor by acknowledging or assuring to Licensor or others the assignment thereof.

1.3

The Licensee agrees to incorporate into all contracts, with all of its employees and contractors, with a provision that all the Improvements discovered or acquired during the term of this Agreement be assigned to the Licensee.  The Licensee understands and agrees that upon the request of the Licensor the Licensee shall provide to the Licensor the Certification that they have complied with this obligation.

1.4

The Licensor shall grant to the Licensee a right to use the Improvements in respect of the Licensed Use in the Territory. 

 

1.5

The Licensee agrees to execute all necessary documents and provide assistance during and subsequent to the term of this Agreement to enable the Licensor to perfect and maintain its right, title and interest in and to all the Improvements, including the preparation, filing and prosecution of any patentable invention.

1.6

The Licensee shall make best efforts to use, promote, market, sell, improve, development, modify and otherwise commercially exploit the Technology and the Licensee’s Products. 

         TERM

This Agreement shall become effective on the Effective Date, and shall extend for an           initial term of five (5) years (the “Term”) with an additional option for another five years at the sole discretion of the Licensee ( 10 years without notice required ) or other longer period that is mutually agreed upon by both parties in writing and shall automatically be renewed on an annual basis unless, either of the Parties by notice in writing at least thirty (30) days before the expiration of the initial term or any renewal hereof, shall advise the other party of its desire to terminate.

        

2

INSPECTION AND QUALITY STANDARDS

2.1

The quality of the Licensee’s Products shall meet a standard of reasonable quality and service, which shall be determined in the sole discretion of the Licensor (the “Reasonable Quality and Service”).

2.2

The Licensor may request in writing a sample of the Licensee’s Products, at the Licensor’s sole expense, to determine whether they meet the Reasonable Quality and Service.  If the Licensor requests a sample of the Licensee’s Products and Licensee has such Product or Products in its possession, the Licensee shall promptly provide the sample to Licensor no later than thirty (30) days following receipt of such written request.

2.3

In the event that the Licensor determines that the Licensee’s Products do not meet the Reasonable Quality and Service, the Licensor shall give the Licensee notice, within fourteen (14) days of receiving the sample of the Licensee’s Products pursuant to clause 3.2 of this Agreement.  The notice shall outline the deficiencies and provide that within thirty (30) days from the date that the Licensee receives the notice the Licensee shall remedy the deficiencies outlined in the notice.  If the deficiencies are not cured within this thirty (30) day period, the Licensor may deliver written notice to the Licensee terminating this Agreement.  

2.4

The Licensee shall, at their own cost, provide a proprietary notice on the Licensee’s Products, and the Licensee’s Products promotional material and product catalogues.  The proprietary notice shall be determined, from time to time set out in written notice to the Licensee by the Licensor acting reasonably.   

3

SUB-LICENSE

3.1

The Licensee shall not be entitled to grant sub-licenses to any person without the written permission of the Licensor. Such permission will not be unreasonably withheld.

4

USE OF THE TECHNOLOGY

4.1

The Licensee shall comply with all laws applying to the Technology, the Improvements and the Licensee’s Products. 

5

OWNERSHIP OF THE TECHNOLOGY

5.1

The Licensee acknowledges that all right, title, interest, ownership and any goodwill in and to the Technology, the Confidential Information, the Improvements, inventions and other intellectual property shall at all times remain with the Licensor and nothing herein conveys any of such rights to the Licensee.

6

CONSIDERATION AND PERFORMANCE MILESTONES

6.1

The grant of the license, contained in this Agreement, is conditional on the Licensee meeting the following performance obligations and milestones within the specified time periods:

a)

The Licensee is currently listed on the OTCBB and will submit a listing application  to be listed on one the following higher exchanges in the next twelve months: Nasdaq Global Market, the Nasdaq Capital Market, American Stock Exchange. Should the Licensee not submit a listing application within the allotted time on the above named exchanges, on reasonable grounds an extension  will be granted;  

b)

Licensee shall pay to Licensor a Royalty of 5% of Sales Revenue in each Accounting Period, payable on or before the day that is thirty (30) days after the end of each Accounting Period;. 

                        

c)  On or before the earlier of:

(i) sixty (60) days after the Effective Date or

(ii) the day that is thirty (30) days after public announcement of the existence of this Agreement by or on behalf of Licensee, 

Licensee shall allot and issue to Licensor a sufficient number of fully paid and non-assessable common shares in the capital of Licensee that will constitute not less than 49% of the shares of the Licensee, fully diluted, at the time of issuance; and

d)  On request by Licensor from time to time, Licensee shall provide to Licensor complete information, particulars, documents and records of or related to Licensee’s use of the Technology, its manufacturing, selling, licensing and other dispositions of Licensee’s Products, and of its Sales Revenue.

a.1

The Licensee shall provide to the Licensor on or before thirty (30) days after the end of each Accounting Period, complete particulars of the Sales Revenue for each Accounting Period that has just ended.

a.2

The Licensee agrees to keep and maintain records in sufficient detail for the purpose of determining the Sales Revenue for each Accounting Period (the “Sales Revenue Records”). 

a.3

 The Licensee shall keep and preserve the Sales Revenue Records for the Term and any renewable term of this Agreement and for a period of seven (7) years thereafter.  If the Licensee fails to keep and preserve the Sales Revenue Records for this period of time the Licensor may deliver written notice to the Licensee terminating this Agreement.  

a.4

The Licensor may request inspection of the Sales Revenue Records, at the sole expense of the Licensor.  If the Licensor requests inspection of the Sales Revenue Records, the Licensee shall promptly provide reasonable access to enter the Licensee’s premises to inspect and commission audits on the Licensee’s books and records by an independent auditor to verify payment made by the Licensee to the Licensor according to clause 7 of this Agreement, or any other clause in this Agreement.  

a.5

If the Licensee refuses to provide to the Licensor the Sales Revenue Records, fails to keep and maintain the Sale Revenue Records, or refuses access to the Licensee’s  premises to inspect and commission audits the Licensor may deliver written notice to the Licensee terminating this Agreement.  

a.6

The Licensee shall be liable for interest at a rate of twelve(12%) percent compounded annually on any overdue payment under clause 7 of this Agreement, or any other payment payable under this Agreement, commencing on the date that the payment becomes dues.

a.7

The Licensor may terminate this Agreement upon delivery of written notice to the Licensee if the Licensee has not fulfilled its obligations under clause 7.1 or 7.2 of this Agreement, and such obligations are not fulfilled within sixty (60) days following delivery to the Licensee by the Licensor of written notice identifying the non-fulfilment and stating its intention to terminate this Agreement if the obligations are not fulfilled within the sixty (60) days.

a.8

The Licensee’s obligation to pay the Licensor pursuant to clause 7 of this Agreement, or payment pursuant to any other clause in this Agreement, shall continue to remain after the termination of this Agreement.

2

LICENSOR REPRESENTATIONS AND WARRANTIES

2.1

The Licensor represents and warrants that the Licensor has the power, authority, and capacity to enter into this Agreement and other agreements and instruments to be executed by the Licensor as contemplated by this Agreement and to grant the rights intended to be granted to the Licensee under this Agreement and to perform the Licensor’s obligations under this Agreement.

3

LICENSEE REPRESENTATIONS AND WARRANTIES

3.1

The Licensee represents and warrants that:

a)

the Licensee has the power, authority, and capacity to enter into this Agreement and other agreements and instruments to be executed by the Licensor as contemplated by this Agreement and to grant the rights intended to be granted to the Licensee under this Agreement and to perform the Licensor’s obligations under this Agreement;

b)

the Licensee has the ability and authority to use and commercially exploit the Technology in the Territory;

c)

the Licensee has the ability and authority to distribute, sell and market the Licensee’s Products in the Territory;

d)

the execution of this Agreement is duly and validly authorized by all necessary authorities and all necessary approvals have been sought;

e)

the execution of this Agreement is not inconsistent with, restricted by or in breach or violation of any other contract, instrument or obligation of the Licensee; 

f)

this Agreement constitutes a legal, valid and binding obligation of the Licensee enforceable against the Licensee;  

g)

the Licensee is not an insolvent person within the meaning of applicable bankruptcy, reorganization, insolvency or fraudulent conveyance law and will not become an insolvent person as a result of the transactions contemplated by this Agreement or any of the other agreements or instruments to be executed by the Licensee as contemplated by this Agreement; and  

h)

the Licensee shall not dispute or contest, directly or indirectly, the validity, ownership or enforceability of the Licensor’s right, title and interest in and to the Technology, and shall not take any other steps to the detriment of the validity of the Technology during the term of this Agreement.

1

CONFIDENTIAL INFORMATION AND TRADE-SECRETS

1.1

The Parties agree to keep the Confidential Information and the Trade-Secrets provided to each other under this Agreement confidential and not to disclose to any person or to use it for any purpose, except as may be necessary in the proper discharge of their obligations under this Agreement. 

1.2

 Prior to disclosing any Confidential Information to any person, Licensee shall first obtain or cause to be obtained, written confidentiality agreements incorporating all of the terms of part 10 of this Agreement with necessary changes, from each and every person to whom such Confidential Information is to be disclosed, including without limitation all directors, officers, employees and contractors of Licensee, and all directors, officers and employees of contractors of Licensee to whom any Confidential Information is to be disclosed.  Without limiting the foregoing, the Licensee agrees to incorporate into all contracts, with all of its employees and contractors, the obligation to keep the Confidential Information and the Trade-Secrets provided to it by the Licensor confidential.

1.3

The Licensee agrees and understands that if the Licensee discloses the Confidential Information or Trade-Secrets, pursuant to clause 10.1 or 10.2 of this Agreement, the Licensee shall be responsible for:

a)

ensuring that the recipient party of this information understands and maintains its confidentiality; and

b)

keeping a list of all persons to whom this information is disclosed to.

a.1

Upon request of the Licensor, the Licensee shall provide the Licensor with the list referred to in clause 10.2(b) of this Agreement, and the Certification that this is a complete and accurate list.

a.2

 Upon request of the Licensor, the Licensee shall provide to the Licensor the Certification that they have complied with the obligation contained in clause 10.2(a) of this Agreement.

a.3

The Confidential Information and the Trade-Secrets may only be disclosed as is required to comply with binding orders of governmental entities or courts of law that have jurisdiction over it, provided that the receiving party:

a)

gives the disclosing party reasonable written notice to allow the disclosing party to seek a protective order or other appropriate remedy;

b)

discloses only such information as is required by the governmental entity or the court of law; and

c)

uses commercially reasonable efforts, at the disclosing party’s cost and expense, to obtain confidential treatment for any of the disclosing party’s Confidential Information and the Trade-Secrets so disclosed.

a.1

The Licensor may terminate this Agreement immediately upon delivery of written notice to the Licensee if the Licensee breaches the confidentiality obligations contained in this Agreement, or does not provide the Certification when requested to do so.

a.2

The Licensee shall use the same or greater degree to prevent any unauthorized disclosure or use of the Confidential Information and the Trade-Secrets as it uses to protect its own confidential information of a like nature.

a.3

The Licensee’s obligation not to disclose and to prevent the disclosure of the Confidential Information and the Trade-Secrets shall continue to remain after the termination of this Agreement.

a.4

Upon termination of this Agreement, the Licensee shall return to the Licensor all the Confidential Information and the Trade-Secrets, in its possession, custody or control.  The Licensee shall also provide the Licensor with the Certification that the Licensee has complied with this obligation.

2

PROTECTION AND PRESERVATION OF THE TECHNOLOGY

2.1

The Licensor and the Licensee mutually covenant that they will at all times use their best efforts to preserve the value and validity of the Technology.

2.2

The Licensee shall promptly give notice to the Licensor of any conflicting use, act of infringement, appropriation, and any action or threatened action by any person alleging that the use of the Technology infringes the rights of a third person (the “Unauthorized Use”).

2.3

If, after three (3) months from the time the Licensor has knowledge of the Unauthorized Use, the Licensor declines or fails to defend or protect the Technology, the Licensee may provide the Licensor with an opinion as to the substantial likelihood of success from an independent competent counsel in the field of intellectual property (the “Opinion”).

2.4

If, after three (3) months from the time the Licensor receives the Opinion, the Licensor declines or fails to defend or protect the Technology, the Licensee shall have the right, at its own cost, to prosecute, defend or assume conduct of the prosecution or defence of the Technology provided that the Licensee:

a)

retains the legal counsel approved by the Licensor; and

b)

regularly consults the Licensor’s designated Attorney in privilege communication in order to: 

i.

keep the Licensor fully informed of the progress of the proceedings;

ii.

consult the Licensor on all legal matters pertaining to the proceedings; and

iii.

provide the Licensor with copies of all pleadings and correspondence pertaining to the proceedings.

The Licensee and Licensor agree that the proceeds and any damages awarded in these proceedings shall be considered the Royalty after the Licensee’s legal and attorney costs have for such action have been deducted from such proceeds or damages awarded. 

a.1

In all such proceedings, each of the Parties shall cooperate and assist the other to the fullest extent possible on any such negotiations and proceedings.

a.2

If the Licensor is a party to proceedings, referred to in clause 11 of this Agreement, the Licensor may in its sole discretion settle any dispute with any third party at any time without notice or compensation to the Licensee.

1

TERMINATION 

1.1

The Licensor may terminate this Agreement:

a)

For cause immediately upon delivery of written notice to the Licensee if the Licensee materially breaches this Agreement, and such breach is not cured within sixty (60) days following delivery to the Licensee by the Licensor of written notice identifying the breach and stating its intention to terminate this Agreement if the breach is not cured within the sixty (60) days or some other mutually agreed upon time frame. Agreement will not be unreasonably withheld by the Licensor.

b)

immediately upon delivery of written notice to the Licensee if bankruptcy or insolvency proceedings have been initiated for the distribution of the assets of the Licensee;

c)

immediately upon delivery of written notice to the Licensee if there is a Change of Control (subsequently defined) in respect of the Licensee without the prior written consent of the Licensor;

d)

immediately upon delivery of written notice to the Licensee if the Licensee assigns or attempts to assign this Agreement or any rights granted hereunder without the prior written consent of the Licensor; and

e)

The Licensor shall have the right of first refusal to purchase all or part of the assets of the Licensee should they come up for sale for any reason, and Licensee shall give reasonable prior notice to Licensor of any such proposed sale and shall provide Licensor with reasonable opportunity to purchase such assets on the same terms on which Licensee is prepared to sell them to another party.

a.1

Upon the termination of this Agreement the Licensee shall deliver to the Licensor all the Licensee’s Products, and cease using the Technology.

2

NOTICES

2.1

Any notice, consent, or other communication required or authorized under this Agreement to be given by either party to the other party shall be in writing, shall be deemed to be properly given when actually transmitted or delivered, and shall be delivered to the Parties at their respective addresses as set out below or at such other address as may be designated by written notice of the Party:

a)

in the case of the Licensor to:

Canadian Integrated Optics International, Inc.

8 St. Georges Street

Douglas

Isle of Man, IM1 1AH

Attention:  Caisey Harlingten

Fax Number: ___________________

and 

b)

in the case of the Licensee to:

QV, Quantum Ventures Inc.

16 Midlake Boulevard, Suite 312 SE

Calgary, Alberta  T2X 2X7

Attention:  _____________________

Fax Number: ___________________

1

LICENSOR’S DESIGNATED ATTORNEY

1.1

Upon the request of the Licensee, the Licensor shall within seven (7) business days provide the Licensee with the name of their designated Attorney and his/her contact information.

GUARANTEE AND INDEMNITY

1.2

The Licensee shall indemnify and undertake to defend the Licensor and its affiliates, shareholders, directors, officers, employees and agents and hold them harmless against all claims, suits, proceedings, demands, actions of any nature or kind whatsoever, damages, judgments, costs, expenses and fees (including, but without limitation, reasonable legal expenses) arising out of or in any way connected with the manufacture, use marketing or sale of the Licensee’s Products and the Technology.

1.3

The Licensee agrees to cooperate fully with and assist the Licensor in the defence of such claim and execute such documents and does such acts and things as in the opinion of the Licensor may be reasonably necessary.

2

FURTHER ASSURANCES

2.1

The Parties shall from time to time, at its own expense, execute and deliver all such other and further deeds, documents, instruments and assurances as may be necessary or required to carry out and to put into effect the purpose and intent of this Agreement.

15.2

The Licensee shall cooperate with and assist Licensor in defence of any claims and shall execute documents and do such other things as in the opinion of the Licensor are reasonably necessary.

3

RELATIONSHIP OF PARTIES

3.1

Nothing in this Agreement is intended, nor shall it be deemed, to confer on or constitute either party as the agent of the other or to create a partnership, subsidiary, joint venture, franchise or similar relationship between the parties.  

3.2

Neither party shall have the power to obligate or bind the other party in contract, tort or otherwise howsoever except as provided in this Agreement.

4

SURVIVAL

4.1

All obligations of the Licensor and the Licensee which expressly or by their nature survive the termination or expiration of this Agreement shall continue in full force and effect. 

5

FORCE MAJEURE

5.1

Neither party shall be responsible to the other for the non-performance or delay in performance (other than the payment of money) occasioned by any causes beyond its control including, without limitation, acts of civil or military authority, strikes, lockouts, embargoes, insurrections, acts of God or acts of terrorism.

5.2

If any such delay occurs, any applicable time period shall be extended for a period equal to the time lost, provided that the party affected makes reasonable efforts to mitigate the consequences of such an event and gives the other party prompt notice of any such delay.

6

ASSIGNMENT AND CHANGE OF CONTROL

6.1

This Agreement and the license rights granted hereunder, or any part thereof, may not be assigned or transferred by the Licensee without the prior written consent of the Licensor.

6.2

Any change in the control or identity of the Licensee, be it direct or indirect, including without limitation, by sale of all or a substantial portion of the assets of the Licensee, any shareholder selling or transferring any of the shares in the Licensee (except by the Licensor or any subsequent holders of Licensor’s shares), share issuance of the Licensee, merger, material change in control and management of the Licensee or otherwise, shall be deemed to be an assignment (“Change of Control”). 

7

AGREEMENT BINDING ON SUCCESSORS AND ASSIGNS

7.1

This Agreement shall enure to the benefit of and is binding upon the Parties and their respective affiliates, successors and permitted assigns. 

8

ENTIRE AGREEMENT AND NO WAIVER OF RIGHTS

8.1

This Agreement constitutes the entire Agreement between the Parties with respect to the subject matter herein and supersedes all prior agreements, understandings, negotiations, discussions, and representations, written or oral, between the Parties with respect thereto.  

8.2

There are no representations, promises, warranties, covenants or undertakings other than those contained in this Agreement, which together represent the entire understanding of the Parties.  

8.3

This Agreement may not be released, amended or modified by the Parties in any matter except by written instrument signed on behalf of each of the Parties by their duly authorized officers or representatives.

8.4

The failure of or delay on the part of any party hereto to enforce any of its rights under this Agreement shall not be deemed to be a continuing waiver or a modification by such party of any of its rights under this Agreement, and any party, within the time provided by the applicable law, may commence appropriate legal proceedings to enforce any or all of its rights under this Agreement, and any prior failure to enforce or delay in enforcement shall not constitute a defence.

8.5

This Agreement may not be amended except by written agreement between the Parties.

9

COUNTERPARTS

9.1

This agreement may be executed in any number of counterparts, and may be delivered by facsimile.  All of these counterparts shall for all purposes constitute one agreement, binding on the parties, notwithstanding that all parties are not signatory to the same counterpart.

10

HEADINGS, CONSTRUCTION AND INTERPRETATION

10.1

The headings in this Agreement are for convenience of reference only and shall have no legal effect in the interpretation of the terms hereof.

10.2

The Parties acknowledge that this Agreement has been the subject of full opportunity for negotiation and amendment and that the party who has taken the role of drafter shall not suffer any adverse construction of any terms or language of this Agreement because of such role.

11

SEVERABILITY

11.1

In the event that any part, section, article, clause, paragraph or subparagraph of this Agreement shall be held to be indefinite, invalid, illegal or otherwise voidable or unenforceable (the “Invalid Provision”), the entire Agreement shall not fail on account thereof, and the balance of this Agreement shall continue in full force and effect.  

11.2

The Parties agree to negotiate to replace the Invalid Provision with a valid provision which follows the original intent of the Invalid Provision as closely as possible.

12

GOVERNING LAW

12.1

This Agreement shall be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada in force therein without regard to its conflict of law rules, except that the issues of any securities hereunder shall be governed by United States federal securities laws.

12.2

The Parties agree that by executing this Agreement they have submitted to the exclusive jurisdiction of a court of competent jurisdiction within the Province of Alberta.  Nothing in this Agreement excludes the Parties from seeking injunctive and equitable relief in a court of competent jurisdiction.

13

ARBITRATION

13.1

Subject to the provision of section 26.2 in the event of a disagreement or dispute between the parties or any other issue relating to this Agreement, whether in respect of its interpretation or application, or the alleged nullity of same, in whole or in part, or in respect of the respective rights and obligations of the Parties, such matter shall be submitted, to the exclusion of any recourse before the courts of general jurisdiction (except where recourse may be made to the Courts as set out in section 26.2), to arbitration in accordance with the applicable provisions of the Commercial Arbitration Act, R.S.B.C. 1996, c. 55, except to the extent modified by the following provisions:

a)

the matter shall be submitted to arbitration before a single arbitrator;

b)

the party requesting arbitration shall send the other party an arbitration notice which shall include the name of its proposed arbitrator;

c)

upon written request by one party to the other party within ten (10) business days of the receipt of the notice transmitted in accordance with clause 26.1(b) of this Agreement, any identical or related matters shall be heard and judged at the same time, before the same arbitrator;

d)

within fifteen (15) days of the sending of the arbitration notice under clause 26.1(b) of this Agreement, the other party may object to the choice of the arbitrator proposed by the party requesting arbitration. If no such objection is made within said period, the other party shall be deemed to have agreed on the choice of the single arbitrator designated under clause 26.1(a) of this Agreement and to have recognized the independence and impartiality of the arbitrator designated under clause 26.1(a) of this Agreement;

e)

if the other party has objected to the proposed arbitrator within the period provided in clause 26.1(d) of this Agreement, the party requesting arbitration and the other party shall designate an arbitrator mutually acceptable to them within ten (10) business days after expiration of the period provided in clause 26.1(d) of this Agreement. If they fail to agree upon an arbitrator within such ten (10) business days period, an arbitrator, who shall not be a related party to any party to such arbitration and who has substantial professional experience with regard to corporate legal matters, shall be appointed by a Judge of the Supreme Court of Alberta as soon as practicable;

f)

the arbitration sessions shall be held in Calgary, Province of Alberta, or in such other place that is mutually agreed upon in writing;

g)

the arbitrator shall have the power to establish his own procedure and will render his decision in writing; 

h)

the allocation of the arbitration fees shall be as determined by the arbitrator and failing such determination, they shall be shared equally;

i)

the arbitrator shall render his/her decision and notify the Parties as soon as possible;

j)

the decision of the arbitrator shall be final and not subject to appeal and shall be binding on the Parties, and shall be enforceable by any court of competent jurisdiction; and

k)

the arbitrator may arbitrate informally as amiable compositeur if invited to do so by the Parties in writing, otherwise, he/she shall settle the dispute according to the rules of law.

a.1

Notwithstanding section 26.1 of this Agreement, if Licensor wishes to make any claim for any breach or default by Licensee of any matters referred to section 6.1, section 7.2, Part 10 or Part 11 of this Agreement, Licensor may, at its option, make such claims in or before a court of competent jurisdiction, and may claim injuctive relief or any other extraordinary recourse from such court, if such relief is available in the circumstances.

IP License Agreement

IN WITNESS WHEREOF the Parties have executed this Agreement with effect as of the Effective Date. 

Canadian Integrated Optics International Limited

Per: ___/s/ Ross Hill_______________________

Name: __Ross Hill ______________________

Title: ___Director______________________

QV, Quantum Ventures, Inc.

Name of Licensee

Per: __/s/_Desmond Ross_______________________

Name: ____Desmond Ross____________________

 

Title: __President_______________________

2

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