CONFIDENTIAL
AGREEMENT
BETWEEN: UNIVERSITE DU QUEBEC A TROIS-RIVIERES, a corporate body
incorporated by virtue of the laws of Quebec, with its head
office at 0000, xxxx. Xxx Xxxxxx, Xxxxx-Xxxxxxxx (Xxxxxx), X0X
0X0, herein represented by Xx. Xxxxx Xxxxxxx and Xx. Xxxxxx
Xxxxxx, hereinafter referred to as the "University"
AND: HYDROGEN ENGINE CENTER, a corporate body incorporated by
virtue of the laws of Iowa, with its head office at 000 Xxxx
Xxxx Xxxxxx, Xxxxxx, Xxxx 00000, herein represented by Xxx
Xxxxxxxxx, hereinafter referred to as the "Company" or "HEC"
Hereinafter referred to as the "Parties"
IN CONSIDERATION OF THE MUTUAL COVENANTS AND PROMISES CONTAINED HEREIN THE
PARTIES AGREE AS FOLLOWS:
1. OBJECT
1.1 The present Agreement governs the realization at the University of tasks
described in the research proposal entitled Development of multi-fuel internal
combustion engines for stationary electrical power generation, hereinafter
designated as "the Project", which constitutes Appendix 1 of the present
Agreement.
1.2 The scientific direction of the Project is the responsibility of, Xx. Xxxxx
Xxxx director of the Hydrogen research Institute, hereinafter the "Principal
Investigator".
1.3 The reports or services to be rendered as well as the timetable of the
realization of each of the stages of the Project are described in Appendix 1.
2. DURATION OF THE AGREEMENT
The Agreement takes effect on, February 1, 2005, and ends on January 31, 2015,
for a total duration of ten (10) years, unless sooner terminated pursuant to the
terms of this Agreement
The parties agree to meet one (1) year prior to the expiration of the capture
period to negotiate in good faith for a renewal of the Agreement However,
nothing in this paragraph or this Agreement obligates either party to renew this
Agreement, enter into any other Agreements or grant any other licenses now or in
the future.
3. FINANCING AND PAYMENT CONSIDERATIONS
3.1 Upon the execution by the University of the tasks it has agreed to
within the Project, Company shall pay it the sum of 20 000$, in
Canadian currency, and 10 000$ in kind.
This amount shall be paid in instalments, by cheque to the order of the
University, according to the following invoicing schedule:
o at the Agreement's signature: 5 000$;
o completion of task 1 of Appendix 1: 5 000$;
o completion of task 3 of Appendix 1: 5 000$;
o at the end of Project (after delivery of the final report):
5000$;
3.2 These amounts are payable within thirty (30) days following receipt of
the University's invoicing.
4. EQUIPMENT AND SUPPLIES
The equipment and supplies purchased by the University for the purposes
of the Project remain its property.
5. CONFIDENTIALITY
5.1 Confidential information is any information provided in writing or
in any other form, marked with the word "Confidential " or "Secret",
and must include a disclosure date. When provided orally, the
Confidential Information must be confirmed in writing within a
reasonable period of time, marked with the word, "confidential" or
"secret" and dated.
5.2 The Company and University recognize that either Party may disclose
Confidential Information to the other in order to allow for the
realization of the Project. The Party receiving disclosure will not
obtain rights or interests therein and such transfer of Confidential
Information shall not be construed as a grant of any right or license
with respect to the information delivered, these rights remaining the
property of the disclosing Party.
5.3 Each Party agrees:
5.3.1 to use the Confidential Information solely for the purposes mentioned
in this Agreement, unless prior written consent has been obtained from
the Party owning the Confidential Information;
5.3.2 not to disclose the Confidential Information or allow it to be
disclosed to a third party. In addition, each Party agrees to restrict
disclosure of the Confidential Information within its own organization
to those employees, administrators, managers or agents who specifically
need to know this Confidential Information for the purposes set out by
this Agreement and who agree to respect all the obligations;
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5.3.3 not to reproduce nor use the Confidential Information to produce, sell,
have produced or have sold marketable products or technologies unless a
license to this effect takes place between the Parties;
5.3.4 to give back the Confidential Information to the other Party, following
written request to this effect, after it has finished its evaluation
and to destroy any copy or transcript, in whole or in part, that it may
have made of the Confidential Information;
5.3.5 to handle the Confidential Information in the same manner and with the
same diligence that it applies to its own Confidential Information,
including all reasonable care required.
5.4 Company recognizes that the University is a public teaching and
research institution and cannot be held accountable for any
unintentional breach of confidentiality. The University agrees,
however, to protect the Confidential Information by using the same
degree of care that it takes to protect its own Confidential
Information.
5.5 The Parties recognize that the following information is not subject to
this Agreement when:
5.5.1 the information is currently in the public domain or becomes a part of
the public domain through no fault of the Parties;
5.5.2 a Party was legally in possession of the information before receiving
it from the other Party and did not acquire it directly or indirectly
from the latter;
5.5.3 the information was legally provided to the Party in good faith by a
third party at arm's length;
5.5.4 the disclosure was necessary by virtue of a law, regulation or by order
of a court.
5.6 The obligations of the Parties by virtue of the present article shall
continue to have full effect for three (3) years after the end of the
Agreement.
5.7 The Parties agree that the terms and conditions of this Agreement are
confidential.
6. DISCLOSURE OF RESULTS
6.1 The Parties recognize that the disclosure of information for teaching
and research purposes is part of the University's role. However, they
agree that the premature disclosure of certain results may put at risk
their potential commercial value. Disclosure includes theses,
memorandums, scientific articles, seminars and other written and oral
presentations.
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6.2 The University reserves the right to authorize students to prepare
masters as well as doctoral theses regarding the Results of the
Project, and as the case may be, to request outside experts to
evaluate, as members of the jury, said theses.
6.3 Any disclosure of results must nonetheless be authorized beforehand in
writing by the Principal Investigator as well as the Company's
representative, according to the following provisions:
6.3.1 the University submits to Company any projected information disclosure
regarding the Project, at least forty-five (45) days before its
presentation or publication;
6.3.2 if Company does not contest this disclosure in writing within fifteen
(15) days of the reception of the projected disclosure, it shall be
presumed to have given its approval and the University may then
disclose the information;
6.3.3 if Company contests the projected disclosure, in writing and within the
aforementioned time period, the Parties must then negotiate an
acceptable version of the projected disclosure, including the date of
disclosure in that case, within the above-mentioned forty-five (45) day
time period of subparagraph
6.3.4 Company cannot refuse to give its approval unless the projected
disclosure puts at risk the protection and potential commercial value
of the Project's Results. In the event that such proposed disclosure
involves the disclosure of any invention that Company or University may
wish to evaluate for patenting, Company or the University agree to
defer any such disclosure or publication for an adequate period of time
but no longer than six (6) months from the date the material was first
submitted to allow for the preparation and filing of any desired patent
applications. The disclosure shall be authorized as soon as the patent
application is completed.
6.3.5 Subject to the respect of the provision of article 5 (Confidentiality),
any postponed disclosure cannot exceed six (6) months following the end
of the Agreement.
7. OWNERSHIP OF PROJECT RESULTS
7.1 Project Results include, without limitation, copyrights, rights
stemming from inventions, including know-how, technical information,
models, patterns, designs, drawings and plans, specifications,
prototypes, software and other documents, fine-tuned or developed
within the context of the Project in accordance with the tasks
described in Appendix 1 and which may or may not be subjected to any
form of intellectual property protection.
7.2 All titles and rights on the Project Results shall belong to the
University. Article 8 (Commercial Exploitation) defines the conditions
giving access to the commercial exploitation of the Project Results.
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8. COMMERCIAL EXPLOITATION OF THE RESULTS
8.1 The University grants to Company, an exclusive license,
non-transferable, worldwide, with the right to sublicense with respect
to the rights granted to the University in this Agreement, to use the
Project Results. The term of the license shall expire considering the
following conditions whether the Projects results are patentable or not
patentable.
o If the Project Results are patentable, the license shall remain in
full force and effect until January 31, 2015 upon the respect of
the conditions provided in paragraph 8.4;
o If the Project Results are not patentable, the license shall
remain in full force and effect until January 31, 2010. I4EC shall
have the option to extend the license until January 31, 2015 upon
written notice to the University given no later than six (6)
months prior to the last day of the initial term and after having
demonstrated to the University, commercially reasonable efforts
and diligence to proceed with the development, manufacture, and
sale of the Project Results and to diligently develop a market for
the Project Results.
8.2 As consideration for the rights granted, HEC shall pay to the
University the following fees and royalties:
o upon completion of the tasks in Appendix 1 HEC will pay a three
percent (3%) royalty on gross revenues from sales of Project
Results. The royalty payment will be made quarterly and will be
due by the 20th day after the completion of each calendar quarter.
8.3 Gross revenues means all sales revenues, receipts and monies received
by NEC and its affiliated companies from the sale or other transfer of
the Project Results.
8.4 1-IEC shall reimburse the University for any and all expenses
reasonably incurred by the University in connection with the
preparation, filing and prosecution of all patent applications and
maintenance of patents for the Project Results.
8.5 On or before the twentieth (20th) day after the completion of each
calendar quarter during the Contract Term, HEC shall deliver to the
University a written statement, certified to be true and correct by the
Chief Financial Officer of HEC, setting forth the Gross revenue from
sales for each Project Results during the preceding calendar quarter
and a calculation of the Royalties payable under this Agreement for
such period.
8.6 Not more than once in any 12 month period, the University may have
HEC's relevant books and records for the prior 12-month period audited,
by an independent certified public accounting firm of the University
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choosing and reasonably acceptable to HEC, to verify the accuracy of
HEC's royalty payments. The independent certified public accounting
firm must enter into a confidentiality agreement reasonably acceptable
to HEC and may not disclose any information learned in the course of
such audit other than the existence and amount of underpayment, if any.
Such audit must be conducted during HEC's normal business hours in a
manner that does not unduly interfere with HEC's normal business
activities. If any audit discloses underpayment of royalties, HEC shall
promptly pay the University the royalties due plus interest at an
annual rate of 6%. The University is responsible for all expenses it
incurs in connection with any audit unless the audit discloses an
underpayment of royalties in excess of 15%, in which case, HEC shall
promptly reimburse the University for all of such audit expenses.
9. INDEMNITY AND LIABILITY
9.1 Company undertakes to indemnify and hold harmless the University, its
trustees, officers, agents and employees from any and all direct
liability, direct loss or direct damage they may suffer as the result
of claims, demands, costs or judgments, and to take up their defence,
with regard to any action or lawsuit arising out of the activities to
be carried out pursuant to the Project or from the use by the actual.
or eventual holders of rights granted to Company by virtue of articles
7 (Ownership) and 8 (Commercial Exploitation) of this Agreement
9.2 The University undertakes to indemnify and hold harmless Company, its
trustees, officers, agents and employees of any and all liability, loss
or damage they may suffer as the results of claims, demands, costs or
judgments, and to take up their defence, with regard to any action or
lawsuit arising out of injuries (including death) to the individuals
participating in the Program and under the administrative control of
the University (including individuals hired by the Principal
Investigator to realize certain tasks related to the Program)
concerning damages to the property of the University or Company, by
these individuals, within the realization of the Program (including
within the premises leased by the University, or which have been lent
by third parties not part of this Agreement).
9.3 As the case may be, the University undertakes to assume the civil
liability which devolves to an individual hired by the Principal
Investigator to realize certain tasks related to the Project, in the
case of bodily, material or moral injury caused by this individual, as
long as said damages result from the execution of the Agreement.
10. TERMINATION OF AGREEMENT
10.1 A Party is in default if one or another of its obligations set out in
this Agreement is not carried out when required by virtue of this
Agreement and this Party has not remedied this default within thirty
(30) days of receiving a written notice from the other Party. The
Agreement is then automatically terminated and considered terminated at
the date of the notice.
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10.2 In the event of the death, departure or physical incapacity of the
Principal Investigator, one of the Parties may terminate the Agreement
totally or partially, upon a sixty (60) day written notice to the other
Party; within this delay, the Parties may agree on the necessary means
to terminate the Project. The case arising, the Agreement is deemed
terminated from the date of the notice.
10.3 The Agreement automatically ends and the University is freed from its
obligations therein if Company declares bankruptcy or becomes
insolvent, is placed under receivership in favor of its creditors, or
if an order is rendered or a resolution adopted for the liquidation of
its assets, or it if avails itself of any law or ant concerning
insolvent or bankrupt debtors;
10.4 In the event of termination of the Agreement, all of the University's
expenses and all its reasonable obligations which relate to the Project
until the date of the termination of the Agreement must be reimbursed
to the University, to the extent that these expenses and obligations
were incumbent on the University by virtue of Appendix 1.
10.5 The University shall conserve the property rights of the Results
obtained up to the date of the termination of the Agreement and the
University shall be freed from all its obligations toward Company.
11. ACT OF GOD
One of the Parties can not be held responsible with regard to the other
as a result of any default or delay by virtue of the present Agreement
caused by circumstances beyond its control, without limitation, the
death of the Principal Investigator, natural disasters, fires, wars,
employment conflicts or certain governmental measures.
12. GOVERNING LAW
This Agreement must be interpreted in accordance with the laws of the
Province of Quebec.
13. COMPLETENESS OF AGREEMENT
The Parties agree that this Agreement contains the complete and unique
representation of the understanding reached between them regarding the
Project. The latter replaces and puts an end to all representation,
negotiation or proposal regarding the object of the present Agreement.
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14. EXTENSION OF PROVISIONS
Articles 3 (Financing), 5 (Confidentiality), and 9 (Indemnification and
Liability) will continue at the end of this Agreement in addition to
the articles that are maintained by virtue of the law.
15. VARIOUS PROVISIONS
15.1 The preamble and appendices form an integral part of this Agreement.
15.2 This Agreement is non-transferable and no right or obligation contained
in it can. be assigned or transferred in any way by one Party or the
other. The case arising, the rights and obligations of one of the
Parties in virtue of this Agreement also bind their respective
successors and assignees.
15.3 No Party can retain the personalized services of an employee of the
other Party for the accomplishment of tasks provided for in the
Project, unless prior written consent has been obtained from its
employer.
15.4 This Agreement does not make one of the Parties, the agent of the
other, nor its legal representative, joint venture partner, associate,
employee or clerk. It thus creates no fiduciary nor mandatory
relationship between the parties.
15.5 Each of the Parties recognizes and agrees that it has no authority to
assume nor create any obligation in the other's name,, either expressly
or implicitly, except that which is strictly and expressly provided for
in this Agreement. Each of the Parties also recognizes and agrees that
it has no authority to bind the other in any way, nor to incur the
other's liability.
15.6 No omission on the part of one or another of the Parties to assert
their rights resulting from nonrespect or violation of this Agreement
and no acceptance of payments can be considered as a waiver of rights.
No provision of this Agreement is presumed to have been waived by a
Party unless this Party has formulated this waiver in writing.
15.7 In the event that any provision of this Agreement or its application is
declared not valid, this will not affect the validity of the other
provisions and the Parties remain bound.
15.8 This Agreement can only be modified by a document written and signed by
all Parties of the present Agreement.
15.9 For the purposes of the present Agreement, the Parties elect domicile
in the judicial district of Trois-Rivieres.
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IN WITNESS OF WHICH THE PARTIES HEREIN HAVE SIGNED THIS AGREEMENT ON THE DATES
AND AT THE LOCATIONS INDICATED:
For Company:
/s/ Xxxxxxxx Xxxxxxxxx 2-22-05
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Xxxxxxxx Xxxxxxxxx
For the University:
/S/ Xxxxx Xxxxxxx 12-03-05 (March 12)
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Xxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxx 02-03-05 (March 2)
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Xxxxxx Xxxxxx
