Document:

FOURTH AMENDMENT TO AMENDED 

STOCK EXCHANGE AND PLAN OF MERGER AGREEMENT 

 

THE STOCK EXCHANGE AND PLAN OF MERGER AGREEEMNT (the “Agreement”) entered into on the 8th day of September 2006, and as subsequently amended, by and among GALTECH SEMICONDUCTOR MATERIALS CORPORATION, a Utah corporation (“GALTECH”) and CBM GROUP, INC., a Nevada corporation (“CBM”), is hereby further Amended as follows: 

 

WITNESSETH

 

WHEREAS, Wells Fargo Bank, Scott Garrett, and the Chapter 11 Trustee, Linda Bloom, in Case No. 04-17704, have all entered into a Stipulated Motion to Approve Compromise of Controversy, wherein Linda Bloom purports to have the authority to have Hydroscope ® IP and related assets purchased by CBM Group, Inc. from Hydroscope Canada, Inc. to revert in ownership to the Bankruptcy Estate the Cooks, Case No. 04-17704; 

 

WHEREAS, this purported action by Linda Bloom, accomplished in concert with Wells Fargo, Scott Garrett, to disgorge CBM Group, Inc. of its Hydroscope IP and related assets, has now interfered with this Agreement closing and clouded the legal ownership of CBM Group, Inc.’s assets; and

 

WHEREAS, CBM Group, Inc. has filed an Adversary Action in Bankruptcy Case No. 04-17704, seeking a Declaratory Judgment against Linda Bloom, declaring Linda Bloom’s purported actions of disgorging Hydroscope IP and related assets from CBM Group, Inc. to be null and void; and

 

WHEREAS, all others terms of the proposed Stock Exchange and Plan of Merger have been completed and or waived by Management of CBM Group, Inc. and GALTECH; and

 

WHEREAS, both CBM Group, Inc. and GTSM agree additional time is required to effectuate a closing because of the illegal actions of Linda Bloom; and

 

THEREFORE IT IS RESOLVED, the terms of the Agreement executed on September 8, 2006 and as previously Amended, are further Amended in accordance with the above statements and the Closing Date of the Agreement, as defined in Article VII, unless otherwise amended by the parties hereto, shall be no later than sixty (60) days after the effective date of this Amendment of the Agreement, unless otherwise mutually extended, notwithstanding a closing can take place as soon the disgorgement of CBM Group, Inc. IP is resolved. If Closing does not take place within sixty (60) days from the effective date hereon, unless the parties mutually agree to extend it, this Agreement as Amended shall be null and void and shall have no further force or effect upon the parties.  

 

 

 

 

 

 

	
            PARTIES:  
 	
            Effective Date: April 19, 2006
 

 

	
             
 	
            CBM Group, Inc.
 	
             

	
             
 	
            a Nevada Corporation
 

 

	
             
 	
            ----------/s/----------  
 	
             

	
             
 	
            By___________________________
 
	
             
 	
            Daniel W. Cook, President
 	
             

						

 

 

	
             
 	
            GALTECH SEMICONDUCTOR
 

MATERIALS CORPORATION 

	
             
 	
            a Utah Corporation
 

 

	
             
 	
            ---------/s/----------
 	
             

	
             
 	
            By____________________________
 
	
             
 	
            Garrett Quintana, President
 	
             

						

 

 

 

2Exhibit 4.1

 

	
  Common
  Stock

  	
  Common
  Stock

  
	
   Par
  Value $.001

  	
  This Certificate
  is Transferrable in 

  
	
   

  	
  New York, NY or
  Chicago, IL

  
	
  Certificate
  

  	
  Shares

  
	
  Number

  	
   

  

 

[Starent
Networks, Corp. Logo]

 

Starent
Networks, Corp.

 

INCORPORATED UNDER
THE LAWS OF THE STATE OF DELAWARE

 

CUSIP 85528P 108

SEE REVERSE FOR CERTAIN DEFINITIONS

 

THIS
CERTIFIES THAT

 

is the
owner of

 

FULLY-PAID
AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF

 

Starent Networks, Corp.
(hereinafter called the “Company”), transferable on the books of the Company in
person or by duly authorized attorney, upon surrender of this Certificate
properly endorsed. This Certificate and the shares represented hereby, are
issued and shall be held subject to all of the provisions of the Articles of
Incorporation, as amended, and the By-Laws, as amended, of the Company (copies
of which are on file with the Company and with the Transfer Agent), to all of
which each holder, by acceptance hereof, assents. This Certificate is not valid
until countersigned and registered by the Transfer Agent and Registrar.

 

Witness the facsimile
seal of the Company and facsimile signatures of its duly authorized officers.

 

	
   

  	
  Dated:

  
	
   

  	
   

  
	
  /s/ Ashraf M. Dahod 

  	
   

  	
  [Seal]

  	
   

  
	
  Director, President and
  Chief 

  	
   

  
	
  Executive Officer

  	
   

  
	
   

  	
   

  
	
  /s/ Kevin F. Newman 

  	
   

  	
   

  
	
  Vice President, General
  Counsel and 

  	
   

  
	
  Secretary

  	
   

  
				

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COUNTERSIGNED
  AND REGISTERED:

  
	
   

  	
   

  	
  COMPUTERSHARE
  INVESTOR SERVICES, LLC.

  
	
   

  	
   

  	
  (Chicago)

  
	
   

  	
   

  	
  Transfer Agent
  and Registrar

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signature

  

 

Starent
Networks, Corp.

 

 

The following
abbreviations, when used in the inscription on the face of this certificate,
shall be construed as though they were written out in full according to
applicable laws or regulations: 

 

	
  TEN COM

  	
  -

  	
  as tenants in common

  	
  UNIF GIFT MIN
  ACT

  	
  -

  	
                 
  Custodian                

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (Cust)

  	
  (Minor)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TEN ENT

  	
  -

  	
  as tenants by the
  entireties

  	
   

  	
   

  	
  under Uniform Gifts to
  Minors 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Act 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
         (State)

  
	
  JT TEN

  	
  -

  	
  as joint tenants with
  right of

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  survivorship and not as

  	
  UNIF TRF MIN ACT

  	
  -

  	
                  
  Custodian (until age    )            
  

  
	
   

  	
   

  	
  tenants in common

  	
   

  	
   

  	
  (Cust)

  	
  (Minor)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  under Uniform Transfers
  to Minors Act 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (State)

  
											

 

Additional abbreviations
may also be used though not in the above list.

 

THE COMPANY WILL FURNISH
WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS, A SUMMARY OF THE POWERS,
DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
SPECIAL RIGHTS OF EACH CLASS OF STOCK OF THE COMPANY AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND RIGHTS, AND THE VARIATIONS
IN RIGHTS, PREFERENCES AND LIMITATIONS DETERMINED FOR EACH SERIES, WHICH ARE
FIXED BY THE ARTICLES OF INCORPORATION OF THE COMPANY, AS AMENDED, AND THE
RESOLUTIONS OF THE BOARD OF DIRECTORS OF THE COMPANY, AND THE AUTHORITY OF THE
BOARD OF DIRECTORS TO DETERMINE VARIATIONS FOR FUTURE SERIES. SUCH REQUEST MAY
BE MADE TO THE OFFICE OF THE SECRETARY OF THE COMPANY OR TO THE TRANSFER AGENT.
THE BOARD OF DIRECTORS MAY REQUIRE THE OWNER OF A LOST OR DESTROYED STOCK CERTIFICATE,
OR HIS LEGAL REPRESENTATIVES, TO GIVE THE COMPANY A BOND TO INDEMNIFY IT AND
ITS TRANSFER AGENTS AND REGISTRARS AGAINST ANY CLAIM THAT MAY BE MADE AGAINST
THEM ON ACCOUNT OF THE ALLEGED LOSS OR DESTRUCTION OF ANY SUCH CERTIFICATE. 

 

	
   

  	
  PLEASE INSERT
  SOCIAL SECURITY OR 

  
	
   

  	
  OTHER
  IDENTIFYING NUMBER OF 

  
	
   

  	
  ASSIGNEE

  
	
   

  	
   

  
	
  For value received,                            hereby
  sell, assign and transfer unto

  	
   

  

 

 

 

(PLEASE PRINT OR
TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE)

 

 

                                                                                                                                                                                                   
Shares of the capital stock represented by the within Certificate, and
do hereby irrevocably constitute and appoint 

 

                                                                                                                                                                                                   
Attorney to transfer the said stock on the books of the within named
Corporation with full power of substitution in the premises.

 

	
  Dated
                                          20,
                     

  	
   

  
	
   

  	
  Signature(s) Guaranteed:
  Medallion Guarantee

  
	
   

  	
  Stamp

  
	
   

  	
  THE SIGNATURE(s)
  SHOULD BE GUARANTEED

  
	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
					

 

 

	
  Signature:

  	
   

  	
   

  	
   

  	
  BY AN ELIGIBLE
  GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and
  Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION
  PROGRAM PURSUANT TO S.E.C. Rule 17Ad-15

  
	
  Notice:
  The signature to this assignment must correspond with the name as written
  upon the face of the certificate, in every particular, without alteration or
  enlargement, or any change whatever.EXHIBIT 10.51

    
      

    

    EXHIBIT
      10.51

    
 

    LICENSE
      AGREEMENT 

     

    

      
        	
                BETWEEN:

              	 	 
	 	
                THE
                  UNIVERSITY OF BRITISH COLUMBIA, a
                  corporation continued under the University
                  Act of
                  British Columbia with its administrative
                  offices at 2075 Wesbrook Mall, Vancouver, British Columbia,
                  V6T 1W5

              	 
	 	 	
                ("UBC")

              
	
                AND:

              	 	 
	 	
                GLOBAL
                  HYDROFUEL TECHNOLOGIES INC., a
                  corporation incorporated
                  under the laws of the Province of British Columbia, with
                  a registered office at 1750 - 750 West Pender Street, Vancouver,
                  British
                  Columbia, V6C 2T8

              	 
	 	 	
                (the
                  "Licensee")

              
	
                WHEREAS:

              	 	 

      

    

     

    A. UBC
      has
      been engaged in research during the course of which it has invented,
developed
      and/or acquired certain technology relating to methods of generating hydrogen
      from water,
      which research was undertaken by Dr. A.C.D. Chakiader ("Chaklader")
      with
      contributions
      by Dr. Tom Troczynski ("Troczynski")
      in
      the
      Department of Metals and Materials at
      UBC
      (collectively, the "Investigators");

     

    B. It
      is
      UBC's objective to exploit its technology for the public benefit, and to
      generate further research in a manner consistent with its status as a
      non-profit, tax exempt educational institution;

     

    C. Chaklader
      is a Emeritus Professor at UBC and is no longer an employee of UBC; and

     

    D. The
      Licensee and UBC have agreed to enter into this license on the terms and
conditions
      set out in this Agreement.

     

    THE
      PARTIES AGREE AS FOLLOWS:

     

    
      1.0DEFINITIONS:
        

    

     

    1.1 In
      this
      Agreement:

     

    
      	 	
              (a)

            	
              "Accounting"
                means
                an accounting statement setting out in detail how the amount of Revenue
                was determined;

            

    

     

    
      	 	
              (b)

            	
              "Affiliated
                Company' or "Affiliated Companies" means
                two or more corporations
                where the relationship between them is one in which one of them is
                a
                subsidiary of the other, or both are subsidiaries of the same corporation,
                or fifty percent
                (50%) or more of the voting shares of each of them is owned or controlled
                by the same person, corporation or other legal
                entity;

            

    

     

    
      	 	
              (c)

            	
              "Confidential
                Information" means
                all information, regardless of its
                form:

            

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    -2-

     

     

    
      	 	
              (i)

            	
              designated
                by UBC as confidential, whether orally or in writing, including
                without
                limitation all information related to the Technology (including all
                derived analyses and conclusions) and the terms and conditions of
                this
                Agreement;
                and

            

    

     

    
      	
            	(ii)	
              disclosed
                by UBC to the Licensee, whether before or after the Start Date,
                or

            

    

     

    
      	 	
              (iii)

            	
              disclosed
                by the Licensee to UBC and which is clearly identified in writing
                as
                "Confidential" either at the time of disclosure or within thirty
                (30) days
                thereafter,

            

    

     

    •
except
      that "Confidential Information" does not include information:

     

    
      	 	
              (iv)

            	
              possessed
                by the recipient (the "Recipient") prior to receipt from the disclosing
                party (the "Discloser"), other than through prior confidential disclosure
                by the Discloser, as evidenced by the Recipient's business
                records;

            

    

     

    
      	 	
              (v)

            	
              published
                or available to the general public otherwise than through a breach
                of this
                Agreement;

            

    

     

    
      	 	
              (vi)

            	
              obtained
                by the Recipient from a third party with a valid right to disclose
                it,
                provided
                that the third party is not under a confidentiality obligation to
                the
                Discloser
                in respect of the same; or

            

    

     

    
      	 	
              (vii)

            	
              independently
                developed by employees, agents or consultants of the Recipient who
                had no
                knowledge of or access to the Discloser's information as evidenced
                by the
                Recipient's business records;

            

    

     

    (d) "Effective
      Termination Date" the
      date
      on which this Agreement is terminated under
      Article 18;

     

    (e) "First
      Use of the Technology" means
      the
      earlier of either:

     

    
      	 	
              (i)

            	
              the
                first use by a third party of the Technology or any Improvement,
                including
                the delivery to a third party or use by a third party of a prototype
                which
                uses the Technology or Improvements,
                or

            

    

     

    
      	 	
              (ii)

            	
              the
                first sale of a Product,

            

    

     

    in
      exchange for valuable consideration;

     

    (f) "Improvements"
      collectively
      UBC Improvements and Licensee Improvements;

     

    (g)
      "Improvement
      Revenue": all
      revenues, receipts, monies, and the fair market value of any shares or other
      securities and all other consideration directly or indirectly collected or
      received whether by way of cash, credit or other value received by the Licensee
      (but not including any Improvement Sublicensing Revenue)
      from the marketing, manufacturing, sale or distribution of the Licensee
Improvements;

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      -3-

    

     

    
      	 	
              (h)

            	
              "Improvement
                Sublicensing Revenue": all
                revenues, receipts, monies, and the fair
                market value of any shares or other securities and all other consideration
                directly
                or indirectly collected or received whether by way of cash, credit
                or
                other value
                received by the Licensee from any sublicensees pursuant to each sublicense
                or sub-sublicense relating to the Licensee Improvements or any
                products
                manufactured or provided in connection with the use of all or some
                of
                the
                Licensee Improvements. For greater clarity, it is confirmed that
                Improvement Sublicensing
                Revenue will include all:

            

    

     

    
      	
            	(i)	
              milestone
                payments, royalties, license fees, distribution rights;
                and

            

    

     

    
      	
            	(ii)	
              research
                or development fees in excess of the direct reimbursement for the
                actual costs of such research and development incurred by the Licensee
                pursuant to a written research plan and
                agreement,

            

    

     

    received
      by the Licensee or any sublicensee from any sublicensee or sub-sublicensee
      relating to the Licensee Improvements;

     

    
      	 	
              (i)

            	
              "Licensee
                Improvements" means improvements, variations, updates, modifications
                and enhancements made and/or acquired by the Licensee which relate
                to the Technology and which can not be practised without infringing
                those
                patents
                set out in Schedule "A" at any time after the Start
                Date;

            

    

     

    
      	
            	(j)	
              "Licensee
                Technology
                Revenue": all
                revenues, receipts, monies, and the fair market
                value of any shares or other securities and all other consideration
                directly or
                indirectly collected or received whether by way of cash, credit or
                other
                value received
                by the Licensee (but not including any Licensee Technology Sublicensing
                Revenue) from the marketing, manufacturing, sale or distribution
                of
                Licensee
                Technology;

            

    

     

    
      	
            	(k)	
              "Licensee
                Technology
                Sublicensing Revenue": all
                revenues, receipts, monies,
                and the fair market value of any shares or other securities and all
                other
                consideration
                directly or indirectly collected or received whether by way of cash,
                credit
                or other value received by the Licensee from any sublicensees pursuant
                to
                each
                sublicense or sub-sublicense relating to the Licensee Technology
                or any
                products
                manufactured or provided in connection with the use of all -or some
                of
                the
                Licensee Technology. For greater clarity, it is confirmed that Improvement
                Licensee
                Technology Sublicensing Revenue will include
                all:

            

    

     

    
      	 	
              (i)

            	
              milestone
                payments, royalties, license fees, distribution rights;
                and

            

    

     

    
      	 	
              (ii)

            	
              research
                or development fees in excess of the direct reimbursement for the
                actual costs of such research and development incurred by the Licensee
                pursuant to a written research plan and
                agreement,

            

    

     

    received
      by the Licensee or any sublicensee from any sublicensee or sub-sublicensee
      relating to the Licensee Technology;

     

    
      	
            	(l)	
              "Licensee
                Technology": means
                any technology which is invented, discovered, licensed or acquired
                by the
                Licensee and which does not relate directly or indirectly
                to the Technology or Improvements and which can be practised without
                infringing
                those patents set out on Schedule
                "A";

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    -4-

     

    
      	
            	(m)	
              "Post
                Termination Period":means
                the period of two (2) years commencing upon
                exercise of the Licensee's right to acquire the Technology and UBC
                Improvements pursuant to Article
                14.3;

            

    

     

    
      	
            	(n)	
              "Product(s)"
                means
                goods or services manufactured or provided in connection with
                the use of all or some of the Technology and/or any UBC
                Improvements;

            

    

     

    
      	
            	(o)	
              "Revenue":
                all
                revenues, receipts, monies, and the fair market value of any shares
                or other securities and all other consideration directly or indirectly
                collected
                or received whether by way of cash, credit or other value received
                by the
                Licensee (but not including any Sublicensing Revenue) from the marketing,
                manufacturing,
                sale or distribution of the Technology and any UBC Improvements,
                and/or any Products, less direct sales taxes and customs duties
                applied
                on the sales of Products;

            

    

     

    
      	
            	(p)	
              "Royalty
                Due Dates": the
                last working day of March, June, September and December of each year
                during the term of this Agreement;

            

    

     

    
      	
            	(q)	
              "Start
                Date" means
                February 3
                , 2003;

            

    

     

    
      	
            	(r)	
              "Sublicensing
                Revenue": all
                revenues, receipts, monies, and the fair market value
                of any shares or other securities and all other consideration directly
                or
                indirectly collected or received whether by way of cash, credit or
                other
                value received
                by the Licensee from any sublicensees pursuant to each sublicense
                or
                sub-sublicense
                agreement relating to the Technology and any UBC Improvements,
                and/or any Products. For greater clarity, it is confirmed that
                Sublicensing Revenue will include
                all:

            

    

     

    
      	
            	(i)	
              milestone
                payments, royalties, license fees, distribution rights;
                and

            

    

     

    
      	 	
              (ii)

            	
              research
                or development fees in excess of the direct reimbursement for the
                actual costs of such research and development incurred by the Licensee
                pursuant to a written research plan and
                agreement,

            

    

     

    received
      by the Licensee or any sublicensee from any sublicensee or sub-sublicensee
      relating to the Technology, Improvements or any Products;

     

    
      	
            	(s)	
              "Technology":
                all
                knowledge, know-how and/or technique or techniques invented,
                developed and/or acquired, before the Start Date by UBC relating
                to,
                and
                including, the technology described in Schedule "A" of this Agreement,
                as
                amended
                from time to time, including, without limitation all related research,
                data, specifications,
                instructions, manuals, papers or other related materials of any
                nature
                at all, whether written or otherwise, and UBC's Confidential
                Information;

            

    

     

    
      	
            	(t)	
              "UBC
                Improvements" means
                improvements, variations, updates, modifications and enhancements
                made
                and/or acquired by UBC directly relating to the Technology at any
                time
                after the Start Date; and

            

    

     

    
      	
            	(u)	
              "UBC
                Trade-marks": any
                mark, trade-mark, service mark, logo, insignia, seal, design,
                symbol or device used by UBC in any manner at
                all.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      -5-

    

    
       

      2.0PROPERTY
        RIGHTS IN AND TO THE TECHNOLOGY: 

    

     

    2.1
      The
      Licensee acknowledges and agrees that UBC owns all right, title and interest
      in
      and to
      the Technology and all UBC Improvements. UBC agrees that the Licensee shall
      own
all
      right, title and interest in and to the Licensee Improvements and Licensee
      Technology, subject to the provisions of Article 5.

     

    2.2 The
      Licensee will, at the request of UBC, sign all documents as may be
      required to
      ensure
      that ownership of the Technology and any UBC Improvements remain with
      UBC.

     

    2.3
      On
      the last working day of June and December of each year during the term of
this
      Agreement, the Licensee will give notice to UBC of the details of all
      improvements which the
      Licensee and any sublicensees of the Licensee have developed and/or acquired
      during the previous
      six (6) month period.

     

    3.0 GRANT
      OF LICENSE: 

     

    3.1
      Subject to Article 3.4, UBC grants to the Licensee an exclusive world-wide
      license
      to use and sublicense the Technology and any UBC Improvements and to
      manufacture, distribute,
      and sell the Products on the terms and conditions set out in this
      Agreement.

     

    3.2 The
      license granted under this Agreement is granted only to the Licensee
      and not
      to
      any Affiliated Companies.

     

    3.3 The
      Licensee will not cross-license the Technology or any Improvements
      without the
      prior
      written consent of UBC.

     

    3.4
      The
      Licensee acknowledges and agrees that UBC may use the Technology and
any
      Improvements without charge in any manner at all for research, scholarly
      publication, educational and all other non-commercial uses.

     

    3.5
      UBC
      will register a financing statement regarding this Agreement under the
Personal
      Property Security Act of
      British Columbia, the Uniform Commercial Code (U.S.) and/or under
      similar legislation in those jurisdictions in which the Licensee carries on
      business and/or has
      its
      chief place of business. The Licensee will pay the sum of $500.00 on account
      of
      the costs associated with such registrations.

     

    3.6
      The
      Licensee will give notice to UBC if it is carrying on business and/or locates
      its
      chief
      place of business in a jurisdiction outside British Columbia before starting
      business in that
      other jurisdiction. If UBC has registered a financing statement under Article
      3.5 and provides
      the Licensee with notice of same, the Licensee will file within fifteen (15)
      days of any change
      in
      jurisdiction, the appropriate documents in the Personal Property Registries
      or
      similar registries
      outside of British Columbia to document the change in jurisdiction and will
      provide UBC
      a
      copy of the verification statement regarding each filing within fifteen (15)
      days after receiving the verification statement. The Licensee will pay for
      all
      costs associated with the registrations under this Article 3.6.

     

    4.0
      SUBLICENSING:
      

     

     4.1
      The
      Licensee will not grant sublicenses of the Technology and any UBC Improvements
      to Affiliated Companies or other third parties without the prior written consent
      of UBC,
      which consent will not be unreasonably withheld. After obtaining UBC's consent,
      the

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      -6-

    

     

    Licensee
      will provide UBC with a copy of the proposed sublicense prior to being signed
      by
      all parties
      to the sublicense, which UBC acknowledges shall constitute Confidential
      Information.

     

     4.2
      Any
      sublicense granted by the Licensee will be granted only to the sublicensee
      and
      cannot be assigned. All sublicenses and sub-sublicenses must contain covenants
      by each sublicensee and sub-sublicensee to observe and perform terms and
      conditions similar to those contained in this Agreement respecting the
      indemnification of UBC, insurance, the treatment of Confidential
      Information, and the handling of complaints regarding the alleged infringement
      of third
      party rights.

     

     4.3
      Before executing a sublicense, the Licensee will give notice to UBC of the
      jurisdictions
      in which the sublicensee is carrying on business. If the Licensee, during the
      term of the
      sublicense, becomes aware of the sublicensee carrying on business in another
      jurisdiction, then the Licensee will give notice to UBC within five (5) days.
      If
      UBC has registered a financing statement
      under Article 3.5, the Licensee will, immediately after executing the
      sublicense, register a financing change statement under the Personal
      Property Security Act of
      British Columbia, the Uniform Commercial Code (U.S.) and/or any similar
      legislation in those jurisdictions
      in which each sublicensee carries on business and has its chief place of
      business to
      add
      each sublicensee to the registration referred to in Article 3.5, and will
      provide UBC with a copy
      of
      the verification statement within fifteen (15) days after receiving the
      verification statement.
      If any sublicensee changes the jurisdiction within which it is carrying on
      business and/or
      the location of its chief place of business, the Licensee will file the
      appropriate documents
      in the Personal Property Registries or similar registries within or outside
      of
      Canada to
      document the changes in jurisdiction. The Licensee will pay for all costs
      associated with the filings
      under this Article 4.3.

     4.4
      If
      any sublicense of the Licensee is in material breach of its sublicense with
      the
Licensee
      and such breach is not cured within sixty (60) days of Licensee's receipt of
      notice from UBC
      of
      same, then Licensee shall terminate any such sublicense.

     

    5.0
      ROYALTIES.
      EQUITY AND LICENSE FEE: 

     

    5.1
      In
      consideration of the license granted under this Agreement, the Licensee
      will pay
      to
      UBC:

     

    (a) a
      royalty
      of 1.5% of the Revenue; and

     

    (b) a
      royalty
      of 10% of the Sublicensing Revenue.

     

    5.2
      In
      consideration of the license granted under this Agreement, the Licensee
      will pay
      to
      UBC:

     

    (a) a
      royalty
      of 0.75% of the Improvement Revenue; and

     

    (b) a
      royalty
      of 5% of the Improvement Sublicensing Revenue.

     

    5.3
      In
      consideration of the license granted under this Agreement, the Licensee
      will pay
      to
      UBC:

     

    (a) a
      royalty
      of 0.25% of the Licensee Technology Revenue; and

     

    (b) a
      royalty
      of 1.67% of the Licensee Technology Sublicensing Revenue.

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      -7-

    

     

     5.4
      In
      the event that the Licensee uses the Technology and/or UBC Improvements in
      combination
      with either the Licensee Improvements or the Licensee Technology (the "Combined
      Technology"),
      the Licensee shall pay to UBC a royalty comprised of:

     

    (a) Technology
      and/or UBC Improvements, Licensee Improvements, and Licensee Technology:

     

    (i) 0.83%
      of
      Revenue, and

     

    (ii) 5.56%
      of
      Sublicensing Revenue.

     

    (b) Technology
      and/or UBC Improvements and Licensee Technology:

     

    (i) 0.88%
      of
      Revenue, and

     

    (ii) 6.25%
      of
      Sublicensing Revenue.

     

    (c) Licensee
      Improvements and Licensee Technology:

     

    (i) 0.5%
      of
      Revenue. and

     

    (ii) 3.34%
      of
      Sublicensing Revenue.

     

    (d) Technology
      and/or UBC Improvements and Licensee Improvements:

     

    (i) 1.13%
      of
      Revenue, and

     

    (ii) 7.5%
      of
      Sublicensing Revenue.

     

    5.5
      The
      royalty is due and payable within thirty (30) days of each respective Royalty
      Due
      Date
      and is to be calculated with respect to the Revenue and the Sublicensing Revenue
      in the
      three
      (3) month period immediately before the applicable Royalty Due
      Date.

     

    5.6
      All
      royalties paid by the Licensee to UBC under this Agreement will be in
Canadian
      dollars without any reduction or deduction of any nature or kind at all. If
      the
      Licensee receives any Revenue or Sublicensing Revenue in a currency other than
      Canadian dollars, the currency
      will be converted to the equivalent in Canadian dollars on the date that any
      amount is payable to UBC, at the rate of exchange set by the Bank of Montreal
      for buying that currency. The
      amount of Canadian dollars resulting from the conversion is to be included
      in
      Revenue or Sublicensing
      Revenue.

     

    5.7
      Products are to be deemed to have been sold by the Licensee and included in
      the
      Revenue when the consideration for the same has been received. The Licensee
      is
      deemed to
      receive Sublicensing Revenue when the consideration has been
      received.

     

    5.8
      Any
      transaction, disposition, or other dealing involving all or part of the
Technology
      or any Improvements or Products, between the Licensee and another person that
      is
not
      made
      at fair market value is deemed to have been made at fair market value, and
      the
      fair 'market
      value of the transaction, disposition, or other dealing will be added to and
      deemed part of
      the
      Revenue or the Sublicensing Revenue, as the case may be, and will be included
      in
      the calculation
      of royalties under this Agreement.

     

    5.9
      For
      a
      period of eight (8) years from the Start Date of this Agreement, the Licensee
      shall have the right to prepay all royalties due and payable to UBC pursuant
      to
      Articles

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    -8-

     

    5.1,
      5.2,
      5.3 and 5.4 of this Agreement by paying the sum of $7,500,000.00 less all
      royalties paid by the Licensee to UBC from the Start Date to the date of such
      prepayment (the "Prepayment
      Amount"). Upon
      receipt by UBC of the Prepayment Amount, all royalties due pursuant
      to Articles 5.1, 5.2, 5.3 and 5.4 of this License shall be deemed to be fully
      paid for the balance
      of the term of this Agreement.

     

    5.10
      Equity

     

    
      	 	
              (a)

            	
              As
                part of the consideration of the rights granted by UBC to the Licensee
                hereunder,
                the Licensee shall deliver forthwith on execution of this Agreement
                to UBC
                the number of common voting shares equal to at least eight percent
                (8%) of
                the
                total shares in the capital of the Licensee (the "Shared') issued
                and
                outstanding
                as of the date of execution of this Agreement calculated on the basis
                that
                all share rights of conversion or of options or warrants have been
                exercised so that UBC would have eight percent (8%) on a fully diluted
                basis, of the equity of
                the Licensee so calculated.

            

    

     

    
      	 	
              (b)

            	
              The
                Licensee represents that the Shares have a nominal value as of the
                date of
                this
                License Agreement and the Licensee further agrees that UBC will be
                transferring
                a total of fifty percent (50%) of the Shares to the Investigators
                (the
                "Investigators'
                Shares") and
                that it shall undertake such resolutions and record such
                transfer as are reasonably required to effect such transfer of shares.
                UBC
                will
                retain fifty percent (50%) of the Shares (the "UBC
                Shares").

            

    

     

    5.11
      Subject only to Article 5.12, UBC and the Investigators' percentage interest
      in
      the common
      share capital of the Licensee shall not be diluted by the issuance of additional
      shares or
      new
      classes of shares to less than four percent (4%) with respect to the UBC Shares
      and four
      percent (4%) with respect to the Investigators' Shares. Subject to Article
      5.12,
      if at any time subsequent
      to the execution of this Agreement the Licensee issues shares to any person,
      corporation
      or other entity, the Licensee shall forthwith issue to UBC and the Investigator,
      at a price
      of
      $0.001 per share, the number of common shares required to keep UBC and the
      Investigators'
      Shares total percentage of the outstanding share capital of the Licensee at
      four
percent
      (4%) with respect to the UBC Shares and four percent (4%) with respect to the
      Investigators' Shares after the issuance of any new shares.

     

    5.12
      The
      obligation of the Licensee to deliver additional shares to UBC and the
Investigators
      under Article 5.11 shall terminate after the Licensee has received a total
      of
      more than
      $400,000.00 in equity financing for the purchase of its shares subsequent to
      the
      date of this
      Agreement. For greater certainty it is confirmed that UBC and the Investigators
      shall be entitled to receive additional shares in accordance with Article 5.11
      in connection with any equity
      financings undertaken by the Licensee up to and including any equity financing
      resulting in
      the
      achievement by the Licensee of the $400,000.00 threshold. Notwithstanding the
      foregoing, the Licensee agrees that UBC and the Investigators' percentage
      interest in the common share capital of the Licensee shall not be diluted to
      less than fifty percent (50%) of their original shareholdings up to the date
      on
      which the Licensee has raised a total of $2,000,000.00
      equity investment into the Licensee subsequent to the date of this Agreement.
      In
the
      event
      the UBC Shares and the Investigators' Shares are diluted beyond that permitted
      by this
      Article, the Licensee shall issue additional shares to UBC and the Investigators
      in the manner set out in Article 5.11. For greater certainty, it is confirmed
      that UBC and the Investigators shall be entitled to receive additional shares
      in
      accordance with Article 5.11 in connection
      with any equity financing undertaken by the Licensee up to and including any
      equity financing
      resulting in the achievement  by
      the
      Licensee of the $2,000,000.00 threshold if the

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
        -9-

      

       

    

    result
      of
      such equity financing is that the UBC Share's and the Investigators' Shares
      are
      diluted to
      less
      than two percent (2%) each of the then issued and outstanding share capital
      of
      the Licensee.
      By way of example, if the Licensee raises $2,500,000.00 in its first equity
      financing then
      UBC
      and the Investigators will each be protected at the 4% threshold on the first
      $400,000.00,
      at the 2% threshold (50% of UBC and the Investigators' original shareholdings)
      on the
      next
      $1,600,000.00 and the remaining $500,000.00 will not be subject to Article
      5.11
      and this
      Article 5.12.

     

    5.13
      In
      consideration of entering into this Agreement and contributing the Technology
      and
      any
      Improvements to the Licensee, the Licensee shall issue to UBC and the
      Investigators the
      same
      class of shares in the capital of the Licensee that are issued by the Licensee
      to its founders
      (the "Founders'
      Shares") under
      the
      equivalent rights and restrictions attached to such shares. For clarity, the
      UBC
      Shares and the Investigators' Shares shall in all material respects have
      special rights and restrictions identical to the special rights and restrictions
      attached to the Founders'
      Shares whether such rights are attached to the Founders' Shares or are conferred
      under
      the
      terms of a shareholders' agreement.

     

    5.14
      Subject to compliance with applicable securities laws, the Licensee will use
      commercially
      reasonable efforts to cause all of the UBC Shares and the Investigators' Shares
      to be
      issued
      free from any pooling, escrow or other trading restrictions placed on such
      shares by the
      Licensee. The Licensee acknowledges and agrees that, subject to compliance
      with
applicable
      securities laws, UBC shall have the right to transfer any or all of the UBC
      Shares to a company
      or society of which UBC is the sole shareholder in the case of a company or
      of
      which UBC
      controls the membership, in the case of a society and the Licensee shall take
      all steps or do
      such
      acts as may be reasonably required to allow such transfer.

     

    5.15
      The
      Licensee acknowledges and agrees that it will comply with all applicable
laws
      and
      legislation with respect to the issuance and any transfer of the UBC Shares
      and
      the Investigators'
      Shares.

     

    5.16
      The
      UBC Shares and the Investigators' Shares shall be deemed to be fully paid
for
      as of
      the date of issuance and shall be the absolute property of UBC and the
      Investigators, respectively.
      Subject to the terms of this Agreement, neither all nor any portion of the
      UBC
      Shares and the Investigators' Shares shall be refundable to the Licensee under
      any circumstances.

     

    5.17
      Until the Licensee becomes a reporting issuer for equity securities under the
      Securities
      Act of
      British Columbia, or under the applicable securities legislation in any other
      jurisdiction which has jurisdiction over the issuance of shares by the
      Licensee:

     

    
      	 	
              (a)

            	
              the
                Licensee shall provide to UBC within twenty (20) days after the last
                day
                of each
                quarter, financial statements, including a balance sheet and a statement
                of income
                as of the last date of each such quarter, a cumulative statement
                of
                income
                from the first day of the then current year to the last day of such
                quarter, and a cumulative cash flow analysis from the first day of
                the
                then current year to the
                last day of the then current year;

            

    

     

    
      	
            	
              (b)

            	
              the
                Licensee shall provide to UBC within ninety (90) days after the end
                of
                each fiscal year of the Licensee, unaudited financial statements
                prepared
                pursuant to a
                review of engagement by the Licensee's accountants;
                and

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    -10-

     

    
      	
            	(c)	
              the
                Licensee shall provide to UBC at least forty-five (45) days prior
                to the
                beginning
                of each fiscal year of the Licensee, an operating plan with monthly
                and
                quarterly
                financial breakdowns for such fiscal
                year.

            

    

     

     5.18
      Any
      shareholders' agreement or other relevant transaction document entered into
      by
      the
      Licensee and its other shareholders, shall include an agreement between UBC
      and
      such other
      shareholders of the Licensee, that prevents such shareholders (each a
"Selling
      Shareholder ") from
      selling any shares in the capital stock of the Licensee to any third party
      unless
      the UBC Shares are included at the option of UBC, in such sale, pro rata based
      on the total
      number of shares owned by the Selling Shareholder and UBC, and on the same
      terms
      and conditions
      as those offered to the Selling Shareholder. The same terms and conditions
      relating to
      the
      UBC Shares in connection with this Article 5.18 shall also apply with respect
      to
      the Investigators' Shares.

     

    5.19UBC
      hereby grants to the Licensee an option to purchase a portion of the
      UBC Shares
      on
      the following terms and conditions:

     

    
      	 	
              (a)

            	
              subject
                to paragraph 5.19(d), the Licensee shall have an option to acquire
                eighty
                percent
                (80%) of the shares of the Licensee owned by UBC, which for greater
                certainty
                do not include the Investigators' Shares (the "Optioned
                Shares");

            

    

     

    
      	 	
              (b)

            	
              the
                option shall expire on the sooner of five (5) years from the date
                of this
                Agreement
                and three (3) years from the date on which the shares of the Licensee
                begin trading on a public stock exchange (the "Option
                Period");

            

    

     

    
      	 	
              (c)

            	
              the
                option price for the Optioned Shares shall be $3,200,000.00 (the
                'Option
                Price");

            

    

     

    
      	 	
              (d)

            	
              during
                the Option Period, UBC has the right to give the Licensee notice
                (the
                "Sale
                Notice") of its intention to sell all or a portion of the Optioned
                Shares
                (the "Offered
                Shares") whereupon the Licensee shall have fourteen (14) days (the
                "Notice
                Period") to purchase such shares being offered for sale by UBC at
                a price
                calculated
                by dividing the Option Price by the number of Offered Shares. The
                Licensee
                shall pay fifty percent (50%) of the purchase price for the Offered
                Shares
                upon exercise of the option and the balance within ninety (90) days
                thereafter; and

            

    

     

    
      	 	
              (e)

            	
              If
                any of the Offered Shares remain unaccepted by the Licensee after
                the
                expiry of
                the Notice Period, then UBC shall have the option to sell all, but
                not
                less than all,
                of the Offered Shares to a third party provided
                that:

            

    

     

    
      	 	
              (i)

            	
              such
                sate is effected at a price which is not less than the price and
                on
                terms
                and conditions no more favourable (from a purchaser's perspective)
                than those set forth in the Sale Notice
                hereunder;

            

    

     

    
      	 	
              (ii)

            	
              UBC
                shall not sell any of the Offered Shares to a third party who is
                a
                competitor
                of the Licensee unless the Sale Notice originally delivered by UBC
                attached a detailed written offer from the competitor for the Offered
                Shares;
                and

            

    

     

    
      	 	
              (iii)

            	
              such
                sale is completed within a 90 day period following the expiry of
                the
                Notice
                Period (after which period has expired UBC must again
                comply

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    -11-

     

    with
      this
      Article 5.16 before selling any of the shares of the Licensee owned by UBC
      to
      any third party).

     

    5.20
      UBC
      agrees that it shall not sell more than ten percent (10%) of the UBC Shares
      in
      each
      of the two (2) years after the date on which the shares of the Licensee begin
      trading on a
      public
      stock exchange, without first complying with paragraph 5.19(d).

     

    5.21
      As
      part of the consideration for the rights granted by UBC to the Licensee
hereunder,
      the Licensee agrees to pay to UBC as an initial license fee the sum of
      $5,000.00. The said sum shall be paid concurrently with the execution of this
      Agreement. Neither all nor any
      portion of the said sum shall be refundable to the Licensee under any
      circumstances.

     

    5.22
      UBC
      shall have the right to appoint an observer (the "Observer") who shall,
subject
      to the Observer executing a confidentiality and non-disclosure agreement with
      the Licensee,
      receive notice of and be entitled to attend all meetings of the board of
      directors of the Licensee.
      The Observer shall be a person acceptable to the Licensee, acting reasonably.
      The right
      of
      UBC to appoint the Observer will terminate on the earlier of (i) the date that
      immediately precedes
      the date on which the shares of the Licensee begin trading on a public stock
      exchange, or (ii) the date that all right, title and interest in and to the
      Technology and Improvements
      has been assigned to the Licensee in accordance with Article 14.3, or (iii)
      the
date
      UBC
      ceases to be a shareholder of the Licensee.

     

    6.0 ANNUAL
      PAYMENTS: 

     

    6.1
      The
      Licensee will pay to UBC, in addition to all other amounts due under this
Agreement,
      an annual maintenance fee of $1,000.00 (the "Annual
      Maintenance Fee"). The
      Annual Maintenance Fee is payable on or before January 2nd
      of
      each
      year during the term of this
      Agreement, starting on January 2, 2004 and will not be refunded to the Licensee
      (in whole or
      in
      part) under any circumstances. This fee is distinct from any payments required
      under royalties.

     

    7.0 PATENTS:
      

     

    7.1
      The
      Licensee may identify any process, use or products arising out of the
Technology
      and any Improvements that may be patentable and UBC will, on the request of
      the
Licensee,
      take reasonable steps to apply for a patent in the name of UBC provided that
      the
Licensee
      pays all costs of applying for, registering and maintaining the patent in the
      jurisdictions in
      which
      the Licensee designates that a patent is required. Notwithstanding the
      foregoing, any significant
      patent costs shall require the prior written approval of the Licensee to be
      provided promptly.
      The Licensee will on UBC's request pay to UBC a reasonable payment as an
advance
      against expected patent expenses. In the event the Licensee does not approve
      any
proposed
      patent costs, UBC shall be under no obligation to incur such costs.

     

    7.2
      On
      the
      issuance of a patent obtained under Article 7.1, the Licensee
      becomes the
      licensee of the patent on the terms and conditions set out in this
      Agreement.

     

     7.3
      Within thirty (30) days of presentation of receipts and/or invoices by UBC
      to
      the Licensee,
      the Licensee will reimburse UBC for the balance of all costs incurred to date
      regarding
      any patents or patent applications relating to the Technology and any
      Improvements licensed
      under this Agreement, subject to Article 7.1.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    -12-

     

    7.4
      The
      Licensee will not contest the validity or scope of any patents relating to
      the Technology
      and any Improvements licensed under this Agreement.

     

    7.5
      The
      Licensee will ensure proper patent marking for all uses of the Technology
and
      any
      Improvements licensed under this Agreement and will clearly mark the appropriate
      patent
      numbers on any Products made using the Technology and any
      Improvements.

     

    8.0
      DISCLAIMER
      OF WARRANTY: 

     

    8.1
      UBC
      makes no representations, conditions or warranties, either express or
implied,
      regarding the Technology or any Improvements or the Products. Without
      limitation, UBC
      specifically disclaims any implied warranty, condition or representation that
      the Technology or
      any
      Improvements or the Products:

     

    
      	
            	(a)	
              correspond
                with a particular description;

            

    

     

    
      	
            	(b)	
              are
                of merchantable quality;

            

    

     

    
      	
            	(c)	
              are
                fit for a particular purpose; or

            

    

     

    
      	
            	(d)	
              are
                durable for a reasonable period of
                time.

            

    

     

    UBC
      is
      not liable for any loss, whether direct, consequential, incidental or special,
      which the Licensee
      or other third parties suffer arising from any defect, error or fault of the
      Technology or any Improvements or Products, or their failure to perform, even
      if
      UBC has been advised of the possibility
      of the defect, error, fault or failure. The Licensee acknowledges that it has
      been advised by UBC to undertake its own due diligence regarding the Technology
      and any Improvements
      and that the Licensee has had a third party complete a technical assessment
      of
the
      Technology prior to executing this License.

     

    8.2
      Nothing
      in this Agreement:

     

    
      	 	
              (a)

            	
              constitutes
                a warranty or representation by UBC as to title to the Technology
                and/or
                any Improvement or that anything made, used, sold or otherwise disposed
                of
                under the license granted in this Agreement is or will be free from
                infringement of patents, copyrights, trade-marks, industrial design
                or
                other intellectual property rights;
                or

            

    

     

    
      	 	
              (b)

            	
              imposes
                an obligation on UBC to bring, prosecute or defend actions or suits
                against third parties for infringement of patents, copyrights,
                trade-marks, industrial designs or other intellectual property or
                contractual rights.

            

    

     

     8.3
      Notwithstanding Article 8.2, if there is an alleged infringement of the
      Technology or
      any
      improvements or any right with respect to the Technology or any Improvements,
      the Licensee may, on receiving the prior written consent of UBC (which will
      not
      be delayed or withheld
      unreasonably), prosecute litigation designed to enjoin infringers of the
      Technology or any
      Improvements. Provided that it has first granted its prior written consent,
      UBC
      agrees to reasonably
      co-operate to the extent of signing all necessary documents and to vest in
      the
Licensee
      the right to institute the litigation, provided that all the direct and indirect
      costs and expenses
      of bringing and conducting the litigation or settlement are paid by the Licensee
      and in this
      case
      all recoveries are for the benefit of the Licensee.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      -13-

    

     

    8.4
      If
      any complaint alleging infringement of any patent or other proprietary rights
      is
made
      against the Licensee or a sublicensee of the Licensee regarding the use of
      the
Technology
      or any Improvements or the manufacture, use or sale of the Products, the
      following procedure
      will be adopted:

     

    
      	 	
              (a)

            	
              the
                Licensee will promptly notify UBC on receipt of the complaint and
                will
                keep UBC
                fully informed of the actions and positions taken by the complainant
                and
                taken
                or proposed to be taken by the Licensee on behalf of itself or a
                sublicensee;

            

    

     

    
      	 	
              (b)

            	
              except
                as provided in Article 8.4(d), all costs and expenses incurred by
                the
                Licensee
                or any sublicensee of the Licensee in investigating, resisting, litigating
                and
                settling the complaint, including the payment of any award of damages
                and/or
                costs to any third party, will be paid by the Licensee or any sublicensee
                of the
                Licensee, as the case may be;

            

    

     

    
      	 	
              (c)

            	
              no
                decision or action concerning or governing any final disposition
                of the
                complaint will be taken without full consultation with, and approval
                by,
                UBC. UBC will not unreasonably delay or withhold any such
                approval;

            

    

     

    
      	 	
              (d)

            	
              UBC
                may elect to participate as a party in any litigation involving the
                complaint to the
                extent that the court may permit, but any additional expenses generated
                by
                such
                participation will be paid by UBC (subject to the possibility of
                recovery
                of some
                or all of the additional expenses from the
                complainant);

            

    

     

    
      	 	
              (e)

            	
              notwithstanding
                Article 8.2, if the complainant is willing to accept an offer of
                settlement
                and one of the parties to this Agreement is willing and able to make
                or
                accept
                the offer and the other is not, then the unwilling party will conduct
                all
                further
                proceedings at its own expense, and is responsible for the full amount
                of
                any
                damages, costs, accounting of profits and settlement costs in excess
                of
                those provided in the offer, but is entitled to retain for itself
                the
                benefit of any litigated
                or settled result giving a lower payment of costs, damages, accounting
                of
                profits
                and settlement costs than that provided in the offer;
                and

            

    

     

    
      	 	
              (f)

            	
              the
                Licensee will pay all royalties payable under this Agreement to UBC
                in
                trust from the' date UBC receives notice of the complaint and until
                a
                resolution of the complaint
                has been finalized. If the complainant is successful, then the royalties
                paid
                to UBC in trust under this Article 8.4(f) will be returned to the
                Licensee, provided that the amount being returned to the Licensee
                is no
                more than the amount paid by the Licensee to the complainant in the
                settlement or other disposition of the complaint. If the complainant
                does
                not succeed, then UBC retains all royalties paid to it under this
                Article
                8.4(f).

            

    

     

    9.0
      INDEMNITY
      AND LIMITATION OF LIABILITY: 

     

    9.1
      The
      Licensee indemnifies, holds harmless and defends UBC, its Board of Governors,
      officers, employees, faculty, students, invitees and agents against any and
      all
      claims (including
      all associated legal fees and disbursements actually incurred) arising out
      of
      the exercise
      of any rights under this Agreement, including without limitation against any
      damages or losses,
      consequential or otherwise, arising in any manner at all from or out of the
      use
      of the Technology
      or any Improvements or Products licensed under this Agreement by the Licensee,
      its
      sublicensees, sub-sublicensees or their customers or end-users.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
        -14-

      

       

    

    9.2
      Subject to Article 9.3, UBC's total liability, whether under the express or
      implied terms
      of
      this Agreement, in tort (including negligence) or at common law, for any loss
      or
      damage suffered by the Licensee, whether direct, indirect or special, or any
      other similar damage
      that may arise or does arise from any breaches of this Agreement by UBC, its
      Board of Governors, officers, employees, faculty, students or agents, is limited
      to the amount of the initial license
      fee paid to UBC under Article 5.21.

     

    9.3 The
      Licensee acknowledges and agrees that UBC will not be liable for consequential
      or incidental damages arising from any breach or breaches of this
      Agreement.

     

    9.4
      Notwithstanding the termination or expiry of this Agreement, the obligations
      set
out
      in
      this Article 9 will survive and continue to bind the Licensee and its successors
      and assigns.

     

    10.0 PUBLICATION
      AND CONFIDENTIALITY:

     

    10.1
      Each
      party will keep and use the other party's Confidential Information in
confidence
      and will not, without the other party's prior written consent, disclose the
      other party's Confidential
      Information to any person or entity, except to the party's directors, officers,
      employees,
      faculty, students and professional advisors who require the Confidential
      Information to
      assist
      such party in performing its obligations and exercising its license rights
      under
      this Agreement.
      The Licensee will maintain an appropriate internal program limiting the
      distribution of
      UBC's
      Confidential Information to only those officers, employees, consultants and
      professional
      advisors who require such Confidential Information in performing the Licensee's
      obligations
      and exercising the Licensee's license rights under this Agreement and who have
      signed
      appropriate confidentiality and non-disclosure agreements. The Licensee shall
      mark all documentation
      and correspondence "Confidential", as directed by UBC from time to
      time.

     

    10.2
      Any
      party required by judicial or administrative process to disclose the other
      party's
      Confidential Information, will promptly notify the other party and allow it
      reasonable time to
      oppose
      the process before disclosing the Confidential Information.

     

    10.3
      UBC
      is not restricted from presenting at symposia, national or regional professional
      meetings, or from publishing in journals or other publications, accounts of
      its
research
      relating to the Technology and any Improvements, provided that with respect
      to
      the Confidential
      Information only, the Licensee is provided with copies of the proposed
      disclosure at least
      sixty (60) days before the presentation or publication date and does not, within
      thirty (30) days
      after delivery of the proposed disclosure, give notice to UBC indicating that
      it
      objectsto the proposed
      disclosure. Any objection to a proposed disclosure will specify the portions
      of
      the proposed disclosure considered objectionable (the "Objectionable Material").
      On receiving notice
      from the Licensee that any proposed disclosure contains Objectionable Material,
      UBC and the Licensee agree to work together to revise the proposed disclosure
      to
      remove or alter the
      Objectionable Material in a manner acceptable to both the Licensee and UBC,
      in
      which case the
      Licensee will withdraw its objection. UBC is not restricted from publishing
      or
      presenting the proposed
      disclosure as long as the Objectionable Material has been removed. Any
Objectionable
      Material will not be disclosed for six (6) months from the date UBC delivered
      the proposed
      disclosure to the Licensee. After six (6) months from the date UBC delivered
      the
      proposed disclosure to the Licensee, UBC is free to present and/or publish
      the
      proposed disclosure whether or not it contains Objectionable Material, unless
      any such proposed disclosure contains Confidential Information of the
      Licensee.

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      -15-

    

     

    10.4
      The
      Licensee requires of UBC, and to the extent permitted by law UBC agrees,
that
      this
      Agreement, and each part of it, is confidential and will not be disclosed to
      third parties, as
      the
      Licensee claims that the disclosure would or could reveal commercial, scientific
      or technical
      information and would significantly harm the Licensee's competitive position
      and/or interfere
      with the Licensee's negotiations with prospective sublicensees. Notwithstanding
      anything
      contained in this Article 10, the parties acknowledge and agree that either
      party may identify
      the title of this Agreement, the parties to this Agreement and the names of
      the
      inventors of
      the
      Technology and any Improvements.

     

    10.5Notwithstanding
      the termination or expiry of this Agreement, the obligations set out
      in
      this Article 10 survive and continue to bind the parties, their successors
      and
      assigns.

     

    11.0
      PRODUCTION
      AND MARKETING: 

     

    11.1
      The
      Licensee will not use the UBC Trade-marks or make reference to UBC or its
name
      in
      any advertising or publicity, without the prior written consent of UBC. Without
      limitation, the
      Licensee will not issue a press release regarding this Agreement or the
      Technology or any Improvements
      without first obtaining UBC's written approval. Notwithstanding the foregoing,
      if the
      Licensee is required by law to act in breach of the foregoing provisions, the
      Licensee will be permitted to do so but will make all reasonable efforts to
      provide UBC with sufficient prior notice to
      permit
      UBC to bring an application or other proceeding to contest the
      requirement.

     

    11.2
      The
      Licensee represents and warrants to UBC that it has the
      infrastructure, expertise
      and resources to:

     

    
      	 	
              (a)

            	
              develop
                and commercialize the Technology and any
                Improvements;

            

    

     

    
      	 	
              (b)

            	
              track
                and monitor on an ongoing basis performance under the terms of each
                sublicense entered into by the
                Licensee;

            

    

     

    
      	 	
              (c)

            	
              monitor
                on a world wide basis patent infringement regarding any patent relating
                to
                the Technology and any Improvements licensed under this Agreement;
                and

            

    

     

    
      	 	
              (d)

            	
              handle
                the Technology and any Improvements with care and without danger
                to
                the
                Licensee, its employees, agents, or the
                public.

            

    

     

    11.3
      The
      Licensee represents and warrants to UBC that it will, throughout the term of
      this
      Agreement use commercially reasonable efforts to promote, market and sell the
      Products and
      exploit the Technology and any Improvements and to meet or cause to be met
      the
      market demand
      for the Products and the use of the Technology and any
      Improvements.

     

    11.4
      Without
      limiting the generality of Article 11.3, the Licensee
      will
      undertake the following
      activities with respect to the Technology and Improvements:

     

    
      	
            	(a)	
              for
                the period commencing on the Start Date and terminating on the earlier
                of
                (i) the
                date that is five (5) years from the Start Date; (ii) the date that
                immediately precedes
                the date on which the shares of the Licensee begin trading on a public
                stock
                exchange, or (ii) the date that all right, title and interest in
                and to
                the Technology
                and Improvements has been assigned to the Licensee in accordance
                with
                Article 14.3, provide to UBC a comprehensive written report every
                six (6)
                months
                during the term of this Agreement documenting the activities undertaken
                by
                the Licensee pursuant to Articles 11.3 and
                11.4;

            

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      -16-

    

     

    
      	 	
              (b)

            	
              the
                Licensee shall use its best efforts to produce a prototype for continuous
                production
                of hydrogen at a rate sufficient to power a 0.5kW fuel cell or
                equivalent
                engine for four (4) hours at the end of eighteen (18) months or
                sooner;

            

    

     

    
      	 	
              (c)

            	
              the
                Licensee shall use its best efforts to produce a prototype for continuous
                production
                of hydrogen at a rate sufficient to power a 1.0kW fuel cell or
                equivalent
                engine for twenty-four (24) hours at the end of thirty-six (36) months
                or
                sooner;

            

    

     

    
      	 	
              (d)

            	
              the
                Licensee shall raise not less than $2,000,000.00 in equity investment
                in
                the Licensee
                within three (3) years of the anniversary date of this Agreement,
                with
                sixty
                percent (60%) of such funds to be spent in connection with the Technology
                in the first eighteen (18) months and the balance of such funds shall
                be
                spent in connection
                with the Technology in the following eighteen (18) months;
                and

            

    

     

    
      	 	
              (e)

            	
              in
                addition to the amounts required to be raised by paragraph 11.4(d),
                the
                Licensee
                shall raise a further equity investment of at least $5,000,000.00
                within
                thirty-six
                (36) months of the date of this Agreement for use in connection with
                the
                Technology.

            

    

     

    11.5
      If
      UBC is of the view that the Licensee is in breach of Articles 11.3 or 11.4,
      UBC
may
      give
      notice to the Licensee under Article 18.3. Within fifteen (15) days of receiving
      UBC's notice,
      the Licensee shall provide notice to UBC of its decision to either:

     

    
      	 	
              (a)

            	
              proceed
                with remedying the breach in accordance with Article
                18.3;

            

    

     

    
      	 	
              (b)

            	
              dispute
                the breach ("Dispute") and refer the Dispute to mediation in accordance
                with
                Articles 11.6. The parties will then appoint a mutually acceptable
                mediator ("Mediator);
                or

            

    

     

    
      	 	
              (c)

            	
              accept
                the breach.

            

    

     

    If
      the
      Licensee elects to proceed with remedying the breach, then the Licensee will
      be
      deemed to
      have
      waived any right to refer the matter to mediation in accordance with Article
      11.6. If the Licensee
      either fails to make an election, or fails to respond to UBC, in accordance
      with
      this Article,
      then the Licensee will be deemed to have accepted the breach and UBC may
      terminate this
      Agreement.

     

    11.6
      Unless
      the parties agree otherwise, the following rules and procedures
      govern the
      conduct of the parties and the Mediator before and during the mediation of
      a
      Dispute:

     

    
      	 	
              (a)

            	
              within
                fifteen (15) days of the appointment of the Mediator, the Licensee
                will
                provide
                to the Mediator and UBC a written summary of its position and copies
                of
                all
                documents on which it intends to rely in presenting its position
                before
                the Mediator. On receiving the Licensee's summary and documents,
                UBC has
                fifteen
                (15) days to submit to the Licensee and the Mediator a summary of
                UBC's
                position
                along with the documents on which UBC intends to
                rely;

            

    

     

    
      	 	
              (b)

            	
              after
                each of the Licensee and UBC has provided its summary and documents
                under
                Article 11.6(a), but not more than sixty (60) days from the appointment
                of
                the
                Mediator, the parties agree to meet in the presence of the Mediator
                with a
                view
                to resolving the Dispute. The role of the Mediator will be to assist
                in

            

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      -17-

    

     

    negotiating
      a resolution of a Dispute and the Mediator will not make a decision that
      is
      binding on a party unless that party has so agreed in writing;

     

    
      	
            	(c)	
              the
                mediation of a Dispute may be terminated by either party, by giving
                notice
                to the
                other party:

            

    

     

    
      	 	
              (i)

            	
              if
                the parties cannot agree on a mutually acceptable Mediator within
                fifteen
                (15) days from the Licensee electing to refer the Dispute to mediation
                under Article 11.5(b);

            

    

     

    
      	 	
              (ii)

            	
              if
                the other party fails to comply with its obligations under this Article
                11.6; or

            

    

     

    
      	 	
              (iii)

            	
              if
                the parties cannot agree on a resolution of the Dispute within sixty
                (60)
                days
                from the appointment of the
                Mediator;

            

    

     

    
      	
            	(d)	
              any
                information or documents disclosed by either party under this Article
                11.6
                must
                be kept confidential and must not be used except to attempt to resolve
                the
                Dispute;
                and

            

    

     

    
      	
            	(e)	
              each
                party must bear its own costs of complying with this Article 11.6
                and
                the parties
                must bear equally the costs of any Mediator
                engaged.

            

    

     

    11.7
      If
      the parties cannot agree on the resolution of the Dispute within sixty (60)
      days
from
      the
      appointment of the Mediator, or if the mediation of the Dispute has been
      terminated under
      Article 11.6(c), then the Licensee will (counting from the end of the sixty
      (60)
      day period) have
      a
      further thirty (30) days to remedy the breach in accordance with Article
      18.3(a). If the Licensee fails to remedy the breach within such thirty (30)
      day
      period then subject to Article 15.2,
      UBC
      may at its option, either terminate this Agreement or change this Agreement
      from
      an exclusive
      license to a non-exclusive license.

     

    12.0
      ACCOUNTING
      RECORDS: 

     

    12.1
      The
      Licensee will maintain at its principal place of business, or another place
      as
may
      be
      most convenient, separate accounts and records of all Revenues and Sublicensing
      Revenues
      and all business done in connection with the Technology or any Improvements.
      The
accounts
      and records will be in sufficient detail to enable proper returns to be made
      under this Agreement
      and the Licensee will cause its sublicensees to keep similar accounts and
      records.

     

    12.2
      The
      Licensee will deliver to UBC on the date thirty (30) days after each and every
      Royalty Due Date, together with the royalty payable under this Agreement, the
      Accounting substantially in the form attached as Schedule "B" and a report
      on
      all Sublicensing activity, including
      an accounting statement setting out in detail how the amount of Sublicensing
      Revenue was
      determined and identifying each sublicensee and the location of the business
      of
      each sublicensee.

     

    12.3
      The
      calculation of royalties will be carried out in accordance with generally
accepted
      Canadian accounting principles ("GAAP"), or the standards and principles adopted
      by the
      U.S.
      Financial Accounting Standards Board ("FASB") applied on a consistent
      basis.

     

    12.4
      The
      Licensee will retain the accounts and records referred to in Article 12.1 for
      at
least
      six
      (6) years from when they were made and will permit any duly authorized
      representative of
      UBC to
      inspect or audit the accounts and records during normal business hours of
      the

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      -18-

    

     

    Licensee
      at UBC's expense. The Licensee will provide to the representative all reasonable
      evidence
      as the representative deems necessary to verify the Accounting and will permit
      the representative
      to make copies of or extracts from the accounts, records and agreements at
      UBC's
      expense. If an inspection or audit of the Licensee's records by UBC shows an
      under-reporting
      or underpayment by the Licensee of any amount to UBC, by more than five percent
      (5%)
      for
      any twelve (12) month period, then the Licensee will reimburse UBC for the
      cost
      of the inspection or audit as well as pay to UBC any amount found due (including
      any interest) within thirty
      (30) days of notice by UBC to the Licensee.

     

    12.5
      During the term of this Agreement and after its expiry or termination UBC will
      use reasonable
      efforts to ensure that all information provided to UBC or its representatives
      under this
      Article remains confidential and is treated as confidential by UBC.

     

    13.0
      INSURANCE:
      

     

    13.1
      During the term of this Agreement, the Licensee will procure and maintain
insurance
      (including public liability and commercial general liability insurance), as
      would be acquired
      by a reasonable and prudent businessperson carrying on a similar line of
      business.

     

    13.2
      Notwithstanding Article 13.1, one (1) month before the First Use of the
Technology
      or any Improvement, the Licensee will give notice to UBC of the terms and amount
      of the product liability, public liability, and commercial general liability
      insurance and such other types
      of
      insurance which it has placed. This insurance will:

     

    
      
        	
              	(a)	
                be
                  placed with a reputable and financially secure insurance
                  carrier;

              

      

    

     

    
      	 	
              (b)

            	
              include
                UBC, its Board of Governors, faculty, officers, employees, students
                and
                agents
                as additional insureds;

            

    

     

    
      	 	
              (c)

            	
              provide
                primary coverage regarding all activities under this
                Agreement;

            

    

     

    
      	 	
              (d)

            	
              include
                a waiver of subrogation against UBC, and a severability of interest
                and
                cross-liability
                clauses; and

            

    

     

    
      	 	
              (e)

            	
              provide
                that the policy cannot be cancelled or materially altered except
                on at
                least thirty (30) days' prior notice to
                UBC.

            

    

     

     13.3
      UBC
      may from time to time require reasonable amendments to the terms or the
amount
      of
      coverage contained in the Licensee's insurance policy. The Licensee will provide
      to UBC
      for
      its approval certificates of insurance evidencing the coverage seven (7) days
      before the First
      Use
      of the Technology. The Licensee will not:

     

    
      	 	
              (a)

            	
              allow
                the First Use of the Technology or any Improvement to occur before
                the
                certificate
                is provided and approved by UBC; or

            

    

     

    
      	 	
              (b)

            	
              sell
                any Product or allow any third party to use the Technology, at any
                time
                unless the insurance outlined in Article 13.3 is in
                effect.

            

    

     

    13.4
      The
      Licensee will also require each sublicensee to procure and
      maintain:

     

    
      	
            	(a)	
              public
                liability and commercial general liability insurance and such other
                types
                of insurance
                as would be acquired by a reasonable and prudent businessperson carrying
                on a similar line of business;
                and

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      -19-

    

     

    
      	
            	(b)	
              in
                any event, one (1) month before the First Use of the Technology or
                any
                Improvement
                by the sublicensee, product liability, public liability and commercial
                general
                liability insurance in reasonable amounts, with a reputable and
                financially secure
                insurance carrier.

            

    

     

    The
      Licensee will use its best efforts to ensure that all sublicensees' policies
      of
      insurance contain a waiver of subrogation against UBC, its Board of Governors,
      faculty, officers, employees, students and agents.

     

     13.5
      During the Post Termination Period the Licensee will procure and maintain public
      liability
      and commercial general liability insurance which provides coverage in respect
      of
      claims made
      during the Post Termination Period. This insurance will:

     

    
      	 	
              (a)

            	
              be
                placed with a reputable and financial secure insurance
                carrier;

            

    

     

    
      	 	
              (b)

            	
              include
                UBC, its Board of Governors, faculty, officers, employees, students
                and
                agents
                as additional insured;

            

    

     

    
      	 	
              (c)

            	
              provide
                coverage for actions arising during the period commencing upon First
                Use
                of the Technology and expiring upon commencement of the Post Termination
                Period;

            

    

     

    
      	 	
              (d)

            	
              include
                a waiver of subrogation against UBC, and a severability of interest
                and
                cross-liability
                clauses; and

            

    

     

    
      	 	
              (e)

            	
              provide
                that the policy cannot be cancelled or materially altered except
                on at
                least thirty (30) days' prior notice to
                UBC.

            

    

     

    14.0
      ASSIGNMENT
      & CHANGE OF CONTROL:

     

    14.1
      The
      Licensee will not assign, transfer, mortgage, pledge, financially encumber,
      grant
      a
      security interest, permit a lien to be created, charge or otherwise dispose
      of
      any or all of the
      rights granted to it under this Agreement without the prior written consent
      of
      UBC, which consent
      will not be unreasonably withheld.

     

    14.2
      Subject to compliance with applicable securities laws, UBC will have the right
      to assign
      its rights, duties and obligations under this Agreement to a company of which
      it
      is the sole
      shareholder, or a society which it has incorporated or which has purposes which
      are consistent
      with the objectives of UBC, provided that UBC has also so assigned the
      Technology and
      any
      UBC Improvements to any such entity. If UBC makes such an assignment, the
Licensee
      will release and discharge UBC from all obligations or covenants, provided
      that
      the company
      or society, as the case may be, signs a written agreement which provides that
      the company
      or society assumes all obligations or covenants from UBC and that the Licensee
      retains all rights granted to the Licensee under this Agreement.

     

    14.3
      UBC
      hereby grants to the Licensee the right to acquire all right, title and
      interest in
      and to
      the Technology and UBC Improvements for the sum of $1.00 upon the receipt by
      UBC
of
      the
      aggregate amount of $11,500,000.00 on account of all monies received
      from:

     

    
      	 	
              (a)

            	
              the
                sale of shares in the Licensee, whether through the purchase by the
                Licensee
                or otherwise;

            

    

     

    
      	 	
              (b)

            	
              payment
                of royalties pursuant to Articles 5.1, 5.2, 5.3 and
                5.4;

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      -20-

    

     

    
      	
            	(c)	
              the
                Prepayment Amount paid pursuant to Article 5.9;
                and/or

            

    

     

    
      	
            	(d)	
              the
                voluntary payment of cash by the Licensee to
                UBC.

            

    

     

    Upon
      the
      Licensee's due exercise of its right to acquire all right, title and interest
      in
      and to the Technology
      and UBC Improvements under this Article 14.3, UBC shall assign such Technology
      and UBC Improvements to the Licensee and this Agreement shall terminate except
      that Articles 9.1,10.1,12.4
      and 13.5 shall survive and continue in full force and effect.

     

    14.4
      In
      the
      event all right, title and interest in and to the Technology and UBC Improvements
      is assigned to the Licensee pursuant to Article 14.3:

     

    
      	 	
              (a)

            	
              the
                Licensee shall grant to UBC an irrevocable royalty-free license to
                the
                Technology
                and Improvements for the purposes of research, scholarly publication,
                educational and all other non-commercial uses;
                and

            

    

     

    
      	 	
              (b)

            	
              UBC
                shall immediately transfer all shares of the Licensee then owned
                by UBC,
                which have not been sold in accordance with this Agreement and accounted
                for under
                paragraph 14.3(a).

            

    

     

    15.0
      GOVERNING
      LAW:

     

    15.1
      This
      Agreement is governed by, and will be construed in accordance with, the
laws
      of
      British Columbia and the laws of Canada in force in that province, without
      regard to its conflict
      of law rules. All parties agree that by executing this Agreement they have
      attorned to the
      jurisdiction of the Supreme Court of British Columbia. The parties agree that
      the British Columbia Supreme Court has exclusive jurisdiction over this
      Agreement.

     

    15.2
      In
      the event of any dispute arising between the parties concerning this
Agreement,
      its enforceability or the interpretation thereof, the same shall be settled
      by a
      single arbitrator
      appointed pursuant to the provisions of the Commercial
      Arbitration Act of
      British Columbia,
      or any successor legislation then in force. The place of arbitration shall
      be
Vancouver,
      British Columbia. The language to be used in the arbitration proceedings shall
      be English.
      Notwithstanding the foregoing, either party may seek injunctive relief in
      respect of any dispute arising between the parties by way of court application
      at any time prior, during or after any
      arbitration proceeding.

     

    16.0
      NOTICES:

     

    16.1All
      payments, reports and notices or other documents that a party is required
      or may
      want
      to deliver to any other party will be delivered:

     

    
      	 	
              (a)

            	
              in
                writing; and

            

    

     

    
      	 	
              (b)

            	
              either
                by personal delivery or by registered or certified mail (with all
                postage
                and other
                charges prepaid) at the address for the receiving party as set out
                in
                Article 16.2
                or as varied by any notice.

            

    

     

    Any
      notice personally delivered is deemed to have been received at the time of
      delivery. Any notice
      mailed in accordance with this Article 16.1 is deemed to have been received
      at
      the end of the
      fifth
      day after it is posted.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
      -21-

    

     

    16.2 Addresses
      for delivery of notices:

     

    
      	
              If
                to UBC:<?xml:namespace prefix = o />

            	
              The
                Director

            
	
               

            	
              University
                - <?xml:namespace prefix = st1 />IndustryLiaisonOffice

              University
                of British Columbia

              #103
                – 6190 Agronomy Road

              Vancouver,
                British Columbia

              V6T
                1Z3

            
	
               

            	
              Telephone:
                (604) 822-8580 

              Fax:     
                (604) 822-8589

            
	
               

            	
               

            
	
              If
                to the Licensee:

            	
              Dilbagh
                S. Gujral

            
	
               

            	
              Global
                Hydrofuel Technologies Inc. 

              Suite
                402 -750 West Pender Street

              Vancouver,
                British Columbia

              V6C
                2T7

            
	
               

            	
              Telephone:
                (604) 688-0044 

              Fax:(604)
                684-2439

            
	
              <?xml:namespace
                prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 

            	
               

            

    

     

    17.0
      TERM:

     

    17.1
      The
      term of this Agreement starts on the Start Date and ends on the expiry or
invalidity
      of the fast patent licensed under this Agreement, unless terminated earlier
      under Article 18.

     

    18.0
      TERMINATION
      OF AGREEMENT: 

     

    18.1
      This
      Agreement automatically and immediately terminates without notice to the
Licensee
      if any proceeding under the Bankruptcy
      and Insolvency Act of
      Canada, or any other statute of similar purpose, is commenced by or against
      the
      Licensee and the same is not withdrawn or dismissed within forty-five (45)
      days
      of any such commencement.

     

    18.2
      UBC
      may,
      at its option, terminate this Agreement with immediate effect by
      giving notice
      to
      the Licensee if one or more of the following occurs:

     

    
      	 	
              (a)

            	
              the
                Licensee becomes insolvent, as evidenced, for example (without limitation)
                by the appointment of a receiver, a receiver manager, the issuance
                of
                financial statements which according to GAAP would render the Licensee
                insolvent, the termination
                of a majority of the Licensee's employees, the vacation of the Licensee's
                chief place of business or the Licensee ceasing or threatening to
                cease
                carrying on business;

            

    

     

    
      	 	
              (b)

            	
              any
                execution or other process of any court becomes enforceable against
                the
                Licensee,
                or if any similar process is levied on the rights under this Agreement
                or
                on
                any money due to UBC and is not released or satisfied by the Licensee
                within thirty
                (30) days from the process becoming enforceable or being
                levied;

            

    

     

    
      	 	
              (c)

            	
              any
                resolution is passed or order made or other steps taken for the winding
                up, liquidation
                or other termination of the existence of the
                Licensee;

            

    

     

    
      	 	
              (d)

            	
              the
                Technology or any Improvements becomes subject to any security interest,
                lien,
                charge or encumbrance in favour of any third party claiming through
                the
                Licensee;

            

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      -22-

    

     

    
      	 	
              (e)

            	
              if
                the Licensee breaches any of Articles 4.1, 11.1 or 13.2;
                or

            

    

     

    
      	 	
              (f)

            	
              If
                any sublicensee of the Licensee is in breach of its sublicense with
                the
                Licensee and
                the Licensee does not take reasonable steps to cause the sublicensee
                to
                cure the breach within thirty (30) days of receipt of notice from
                UBC;

            

    

     

    
      	 	
              (g)

            	
              if
                the Licensee is in material breach of any other agreement between
                the
                Licensee
                and UBC and the breach has not been cured within the time provided
                for
                the curing of such breach under the terms of the other
                agreement.

            

    

     

     18.3
      Other than as set out in Articles 18.1 and 18.2, either party may terminate
      this
Agreement
      for any breach which is not remedied after providing the following notice to
      the
      party in
      breach:

     

    
      	 	
              (a)

            	
              thirty
                (30) days notice in the case of any breach which can reasonably be
                remedied within thirty (30) days of the delivery of such notice;
                or

            

    

     

    
      	 	
              (b)

            	
              if
                the breach cannot be remedied within thirty (30) days and the breach
                is
                not remedied
                within such further period as may be reasonably necessary, or within
                ninety
                (90) days after receipt of notice, whichever is
                sooner.

            

    

     

    18.4
      If
      this Agreement is terminated under Article 18.1 to 18.3, the Licensee will
      make
all
      outstanding royalty payments to UBC as set out under Article 5, and UBC may
      proceed to enforce
      payment of all outstanding royalties or other monies owed to UBC and to exercise
      any or
      all of
      the rights and remedies available under this Agreement or otherwise available
      by
      law or in
      equity, successively or concurrently, at the option of UBC. Within five (5)
      days
      of the Effective Termination Date, the Licensee will deliver to UBC all
      Technology and any Improvements in its possession or control and has no further
      right of any nature at all in the Technology
      or any Improvements. If the Licensee has not delivered up the Technology and
      any
Improvements
      within five (5) days from the Effective Termination Date, UBC may immediately
      and without notice enter the. Licensee's premises and take possession of the
      Technology and any
      Improvements. The Licensee will pay all charges or expenses incurred by UBC
      in
      the enforcement of its rights or remedies against the Licensee under this
      Article 18.4, including without limitation UBC's legal fees and disbursements
      on
      an indemnity basis, unless this Agreement has been terminated by the Licensee
      pursuant to Article 18.3.

     

    18.5
      The
      Licensee and all sublicensees will cease to use the Technology or any
Improvements
      in any manner at all or to manufacture or sell the Products within five (5)
      days
from
      the
      Effective Termination Date. The Licensee will then deliver to UBC an accounting
      within thirty
      (30) days from the Effective Termination Date. The accounting will specify,
      in
      or on such terms
      as
      UBC may in its sole discretion require, the inventory or stock of Products
      manufactured
      and remaining unsold on the Effective Termination Date. UBC will instruct that
      the
      unsold Products be stored, destroyed or sold under its direction, provided
      this
      Agreement was
      terminated under Article 18.2 or 18.3. Without limitation, if this Agreement
      is
      terminated under Article 18.1, no Products will be sold without the prior
      written consent of UBC. The Licensee
      will continue to make royalty payments to UBC in the same manner specified
      in
      Article 5
      on all
      Products that are sold in accordance with this Article 18.5, notwithstanding
      anything contained
      in, or any exercise of rights by UBC, under Article 18.4.

     

    18.6
      Notwithstanding
      the termination or expiry of this Agreement, Article 12 remains in full
      force and effect until six (6) years after:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      -23-

    

     

    
      	 	
              (a)

            	
              all
                payments of royalty required to be made by the Licensee to UBC under
                this
                Agreement
                have been made by the Licensee to UBC;
                and

            

    

     

    
      	 	
              (b)

            	
              any
                other claim or claims of any nature or kind at all of UBC against
                the
                Licensee has
                been settled.

            

    

     

    19.0
      MISCELLANEOUS
      COVENANTS OF LICENSEE: 

     

    19.1
      The
      Licensee represents and warrants to UBC that the Licensee is a corporation
      duly
      organized, existing and in good standing under the laws of British Columbia
      and
      has the power,
      authority and capacity to enter into this Agreement and to carry out the
      transactions contemplated by this Agreement, all of which have been duly and
      validly authorized by all requisite
      corporate proceedings. The Licensee covenants to remain as a corporation
      organized and existing under the laws of British Columbia or otherwise continued
      as a Canadian Federally incorporated
      company.

     

    19.2
      The
      Licensee will comply with all laws, regulations and ordinances, whether
Federal,
      State, Provincial, County, Municipal or otherwise, with respect to the
      Technology and any
      Improvements and this Agreement.

     

    19.3
      Upon
      the presentation of itemized bills to the Licensee by UBC, the Licensee will
      pay
      all
      reasonable legal expenses and costs incurred by UBC regarding any consents
      and
approvals
      required from UBC, including without limitation expenses and costs regarding
      UBC's review
      of
      any sublicenses to be granted by the Licensee.

     

    19.4
      The
      Licensee will pay all taxes and any related interest or penalty designated
      in
any
      manner at all and imposed as a result of the existence or operation of this
      Agreement, including without limitation tax which the Licensee is required
      to
      withhold or deduct from payments
      to UBC. The Licensee will provide to UBC evidence as may be required by Canadian
      authorities to establish that the tax has been paid. The royalties specified
      in
      this Agreement are exclusive
      of taxes. If UBC is required to collect a tax to be paid by the Licensee or
      any
      of its sublicensees,
      the Licensee will pay the tax to UBC on demand.

     

    19.5
      The
      obligation of the Licensee to make all payments under this Agreement is
absolute
      and unconditional and is not, except as expressly set out in this Agreement,
      affected by
      any
      circumstance, including without limitation any set-off, compensation,
      counterclaim, recoupment,
      defence or other right which the Licensee may have against UBC, or anyone else.
      for
      any
      reason at all.

     

    19.6
      All
      amounts due and owing to UBC by the Licensee pursuant to this Agreement
shall
      be
      paid in Canadian currency without any reduction or deduction of any nature
      or
      kind at all and all amounts expressed in this Agreement shall be in Canadian
      currency. The Licensee will
      pay
      interest on all amounts due and owing to UBC under this Agreement but not paid
      by the Licensee
      on the due date, at the rate of one percent (1%) per month. The interest accrues
      on the
      balance of unpaid amounts from time to time outstanding, from the date on which
      portions of the
      amounts become due and owing until payment in full.

     

    19.7
      The
      Licensee will not enter into any agreements with the United States Government
      or any other government in connection with the Technology or any Improvements
      licensed hereunder wherein such government would gain ownership of the
      Technology and/or Improvements,
      without the prior written consent of UBC.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      -24-

    

     

     

    20.0
      MANAGEMENT
      OF CONFLICTS OF INTEREST: 

     

    20.1
      The
      Licensee acknowledges that it is aware of UBC's Conflict of interest Policy
      #97,
      Patent and Licensing Policy #88 and Research Policy #87
      (http://www.policy.ubc.ca), and that
      UBC
      may amend these policies or introduce new policies from time to
      time.

     

    20.2
      Save
      and
      except as expressly agreed in a Collaborative Research Agreement entered
      into between UBC and the Licensee, the parties agree:

     

    
      	 	
              (a)

            	
              the
                facilities and research programs of the Licensee will be conducted
                independently of all UBC facilities, faculty, students or staff;
                and

            

    

     

    
      	 	
              (b)

            	
              no
                students, post-doctoral fellows or other UBC staff will participate
                or be
                involved in the Licensee's research, projects or utilize its
                facilities.

            

    

     

    21.0
      MAINTENANCE
      AND TECHNICAL SUPPORT: 

     

    UBC
      shall
      be under no obligation to provide any maintenance or technical support to the
      Licensee
      or any sublicensees. The Licensee acknowledges and agrees that Chaklader is
      no
longer
      an
      employee of UBC and therefore it is at his sole discretion to provide such
      maintenance
      or technical support for the Technology to the Licensee. Any maintenance or
      technical
      support provided by Chaklader shall be subject to a separate consulting
      agreement to be
      negotiated between Chaklader and the Licensee.

     

    22.0
      GENERAL:
      

     

    22.1
      The
      Licensee will permit UBC, during normal business hours, to enter any
premises
      of the Licensee for the purpose of ascertaining whether or not this Agreement
      has been,
      is
      being, or will be complied with by the Licensee.

     

    22.2
      Nothing contained in this Agreement is to be deemed or construed to create
      between
      the parties a partnership or joint venture. No party has the authority to act
      on
      behalf of any
      other
      party, or to commit any other party in any manner at all or cause any other
      party's name
      to
      be used in any way not specifically authorized by this Agreement

     

    22.3
      Subject
      to the limitations in this Agreement, this Agreement operates for
      the benefit
      of and is binding on the parties and their respective successors and permitted
      assigns.

     

    22.4
      No
      condoning, excusing or overlooking by any party of any default, breach or
non-observance
      by any other party at any time or times .regarding any terms of this Agreement
      operates
      as a waiver of that party's rights under this Agreement. A waiver of any term
      ,
      or right under,
      this Agreement will be in writing signed by the party entitled to the benefit
      of
      that term or right,
      and is effective only to the extent set out in the written waiver.

     

    22.5
      No
      exercise of a specific right or remedy by any party precludes it from or
prejudices
      it in exercising another right or pursuing another remedy or maintaining an
      action to which
      it
      may otherwise be entitled either at law or in equity.

     

    22.6
      Headings
      in this Agreement are for reference only and do not form a part of
      this Agreement
      and are not be used in the interpretation of this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      -25-

    

     

    22.7
      All
      terms in this Agreement which require performance by the parties after the
      expiry
      or
      termination of this Agreement, will remain in force despite this Agreement's
      expiry or termination
      for any reason.

    
22.8
      Part or all of any Article that is indefinite, invalid, illegal or otherwise
      voidable or unenforceable may be severed from this Agreement and the balance
      of
      this Agreement will continue in full force and effect.

     

    22.9
      At
      the request of UBC or the Licensee, the non-requesting party shall obtain the
      execution
      of any agreement or instrument (including from its employees, agents,
      contractors, consultants
      or representatives) that may be required to consummate the transactions
contemplated
      in this Agreement, including assigning any rights, waiving any rights or
      perfecting any
      rights in such party's name.

     

    22.10
      The
      Licensee acknowledges that the law firm of Richards Buell Sutton has acted
      solely
      for UBC in connection with this Agreement and that all other parties have been
      advised to seek
      independent legal advice.

     

    22.11
      This
      Agreement sets out the entire understanding between the parties and
      no changes
      to this Agreement are binding unless signed in writing by the parties to this
      Agreement.

     

    22.12
      Time
      is
      of the essence of this Agreement.

     

    22.13
      In
      this
      Agreement, unless the contrary intention appears, the singular
      includes the
      plural and vice versa and words importing a gender include other
      genders.

     

        SIGNED
      BY
      THE PARTIES AS AN AGREEMENT on the 9 day of July, 2003 but
      effective as of the Start Date. 

    
      
        	
                SIGNED
                  FOR AND ON BEHALF of 
THE
                  UNIVERSITY
                  OF BRITISH COLUMBIA
by
                  its
                  authorized signatories:

                 

              	 
	
                 

                /s/
                  David P. Jones

                Authorized
                  Signatory

                 

              	
                David
                  P. Jones

                Associate
                  Director

                University-Industry
                  Liaison

                 

              
	
                 

                ______________________

                Authorized
                  Signatory

                 

              	 

      

       

       

      

        
          	
                  THE
                    CORPORATE SEAL of GLOBAL
                    HYDROFUEL TECHNOLOGIES INC.

                  Was
                    hereunto affixed in the presence of:

                   

                	 
	
                   

                  /s/
                    James Matkin

                  Authorized
                    Signatory

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