EXHIBIT 6.5/B
LICENCE AGREEMENT
THIS AGREEMENT made as of the 22nd day of October 1998,
between
ASTRIS ENERGI INC.
0000 Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxx,
X0X 0X0
and
ENERGY VENTURES INC. (CANADA)
00 Xxxxxxxxxx Xxxxxx,
Xxxxx Xxxx, Xxxxxxx,
X0X 0X0
LICENSOR and LICENSEE hereby agree as follows:
1. Definitions
In this agreement the following terms are used as mentioned below:
ALKALINE FUEL CELLS means fuel cells (i.e. electrochemical cells utilizing fuel
and oxidizer) with alkaline electrolyte.
GROSS SALES means in respect of LICENSED ARTICLES sold in the ordinary course of
business:
(a) to a customer and not returned the gross invoice price for each
separate sale (considered to occur when a product is delivered), net of trade,
promotional, quantity or cash discounts actually allowed, rebates granted and
taken, any direct sales tax including Goods and Services Tax, customs duty,
insurance, special packing and freight charges set out separately in the
invoice; and
(b) If a LICENSED ARTICLE is incorporated as part of a product, the
price of the LICENSED ARTICLE will, where reasonably possible, be identified
separately on any invoice. When a distinct price for a LICENSED ARTICLE is not
identified on an invoice, the sale value shall be calculated as above, using an
average of prices billed in typical recent sales of equivalent LICENSED ARTICLES
or products, and if there are no such sales, then the price of the LICENSED
ARTICLE shall be deemed to be that portion of the sale price of the product as
manufacturing cost of the LICENSED ARTICLE relates to the manufacturing cost of
the product. LICENSEE shall, upon request, provide evidence satisfactory to
LICENSOR, acting reasonably, of such manufacturing costs;
LICENSED ARTICLES of this contract are alkaline fuel cells, alkaline fuel cell
systems and their composite parts such as alkaline fuel cell electrodes any
other alkaline fuel cell or alkaline fuel cell system components embodying or
otherwise utilizing the TECHNOLOGY.
LICENSEE means Energy Ventures Inc. (Canada), its successors and assigns.
LICENSOR means Astris Energi Inc. and Astris Inc., their successors and assigns.
SPECIFIED USES means rights to use in the field of manufacturing, research and
development, marketing and commercial production including the right to
sublicence in whole or in part any of such uses to third parties worldwide.
TECHNOLOGY means the technology of ALKALINE FUEL CELLS developed by the
LICENSOR, comprising know-how, procedures, recipes, designs and patterns, as
well as patents and patent disclosures other relevant documents as provided by
the LICENSOR and set out in a Schedule attached hereto.
2. Grant of licence
LICENSOR grants to LICENSEE a nonexclusive worldwide licence to use the
TECHNOLOGY for the SPECIFIED USES.
3. Access to TECHNOLOGY
LICENSOR agrees to disclose and provide information related to the
TECHNOLOGY to the LICENSEE, to the extent required to enable the LICENSEE to use
the TECHNOLOGY for the purposes stated herein. LICENSOR further agrees to direct
their officers, directors, employees and consultants (and particularly Xxxx X.
Nor) to disclose and provide such information as such person or persons possess.
4. Royalties
LICENSEE agrees to pay LICENSOR a ROYALTY as follows:
(a) basic royalty of $25,000 (twenty five thousand dollars), on the day
of execution of this agreement, on account of royalties payable respecting year
one of the agreement;
(b) royalty on
(i) GROSS SALES of LICENSED ARTICLES manufactured by
LICENSEE; and
(ii) licence fees and royalties received by LICENSEE
for a sublicense of TECHNOLOGY;
calculated as follows:
2.5% during the first four years,
2% during the next six years.
LICENSEE agrees to pay the royalties accrued in the course of a
calendar year in the first 90 days of the calendar year following. For purpose
of this agreement, year one will be the period beginning on the effective date
of this agreement and ending on 31 December 1999 and years two to ten shall be
2000 to 2008 respectively.
(c) Beginning with year two, alternate minimum royalty of $10,000 shall
be payable if the royalties accrued under Clause 4(b) do not reach or exceed
this amount.
(d) The obligation of the LICENSEE to pay royalties will cease at the
end of year 10 (on 31 December 2008) or when the royalties paid to LICENSOR
reached the sum of $5,000,000 in the aggregate, whichever happens first. From
that point on, the LICENSEE will enjoy a perpetual, fully paid, royalty free
licence.
(e) LICENSEE shall pay to LICENSOR or remit to the appropriate taxation
authority the Goods and Services Tax respecting ROYALTIES provided LICENSOR is a
GST registrant and provides LICENSEE with the information necessary to claim an
input tax credit.
5. Additional Licences
LICENSOR shall be free to grant further licences concerning the
TECHNOLOGY, except to parties sublicensed by LICENSEE.
6. Secrecy
Neither LICENSEE nor LICENSOR (each a "Receiving Party") shall directly
or indirectly, disclose or use, at any time, either during the currency of this
agreement or for five years subsequent to its termination, any secret or any
confidential information concerning the other party's processes, methods,
formulae, apparatus specifications, materials and sources of supply thereof,
customers, their identities and requirements, discoveries, inventions, patents
(including applications and rights in either), contracts, finances, personnel,
their duties and capabilities, research plans, policies and intentions,
including matters not technically trade secrets ("Proprietary Information"), the
dissemination of knowledge whereof might prove prejudicial to the other party,
other than to their employees,
associates, consultants, independent contractors, customers, licensees,
sub-licensees, joint venturers and partners who have a need to know the
information disclosed in the course of their duties who shall be advised of
these confidentiality requirements and agree to be bound thereby. The disclosing
party is responsible for any improper use or disclosure by such persons.
Proprietary Information does not include:
a) Information which can be established as having been known by the
Receiving Party prior to the disclosure of such information by the other party;
b) Information which can be demonstrated to have been in the public
domain at the time of disclosure, or which has subsequently been made a part of
the public domain by the disclosing party or others, without the fault of the
Receiving Party;
c) Information disclosed by one party and specified in writing as not
constituting Proprietary Information; or
d) Information subsequently disclosed to the Receiving Party by a third
party having no obligation of secrecy to the disclosing party.
(e) Information required to be disclosed at law.
7. Term and Termination
This contract comes into force on the effective date when signed by
both parties, and will terminate on 31 December 2008 or when the aggregate
royalty amount of $5,000,000 had been reached as outlined in 4(d). In either
case the licence will become a perpetual, fully paid, royalty free licence and
will survive this contract without limitation.
Either party may terminate this agreement where the other party is in
material breach (including non payment of any ROYALTIES) of any of the terms of
this agreement and such other party does not remedy the breach within 30 days of
receipt of written notification of the nature of the breach or if the other
party is subject to an execution or any other process of any Court which becomes
enforceable against the other party or if a distress or analogous process shall
be levied upon the property of such other party or if such other party shall
become insolvent or commit an act of bankruptcy or make an assignment in
bankruptcy or bulk sale of its assets or a bankruptcy petition is filed or
presented against the other party or if the other party shall cease to carry on
business in the ordinary course. If the LICENSOR shall become insolvent or
commit an act of bankruptcy or
make an assignment in bankruptcy or bulk sale of its assets or a bankruptcy
petition is filed or presented against it or if LICENSOR shall cease to carry on
business in the ordinary course, then the licence will become a perpetual, fully
paid, royalty free licence and will survive this contract without limitation.
8. Succession in Title
This contract is also valid for and binding upon the legal successors
of both parties.
9. Alteration
Alterations and supplements to this contract are valid only if they
have been agreed upon by both parties in the form of a written and signed
contract.
10. Relevant Law, Jurisdiction
This contract is subject to the Laws of the Province of Ontario,
Canada. All disputes under this contract shall be settled by arbitration
conducted in the Municipality of Metropolitan Toronto, in accordance with the
provisions of the Arbitration Act, 1991 (Ontario).
For the purposes of the foregoing Section 10, the following provisions
shall govern any arbitration hereunder:
Either party may by written notice to the other party request that the
disagreement be referred to arbitration with the reference being to a single
arbitrator mutually agreed to by the parties provided that, if the parties are
unable to agree on an arbitrator within fifteen days of deemed receipt of the
written notice, the arbitration shall be to three arbitrators, one of whom shall
be appointed by LICENSOR and one shall be appointed by the LICENSEE within
twenty days of deemed receipt of the written notice (and each party shall
provide notice to the other party of the arbitrator so appointed within twenty
days of the deemed receipt of the written notice requesting the arbitration) and
the third arbitrator shall be appointed by the arbitrators appointed by the
parties and such third arbitrator shall be the chairman provided further that if
either party fails to give notice of the appointment of an arbitrator as herein
provided the reference shall be to any arbitrator appointed in accordance with
this clause and such arbitrator shall be considered to have been mutually agreed
to by each of the parties;
The award may be made by the majority of the arbitrators where the
reference is to three or more arbitrators. If the arbitrators have allowed their
time or extended time for making
an award, as provided in the Arbitration Act, to expire without making an award
or if the chairman shall have delivered to the parties to the arbitration a
notice in writing stating that the arbitrators cannot agree or if there is not a
majority of the arbitrators in agreement, any party to the arbitration may apply
to the courts or to a Judge thereof to appoint an umpire who shall have the like
power to act in the reference and to make an award as if they had been duly
appointed by all the parties to the submission and by the consent of all the
parties who originally appointed the arbitrators thereto. If an umpire is
appointed pursuant to this paragraph, such umpire shall make his or her award
within one month after the original or extended time appointed for making the
award of the arbitrators has expired or on or before any later date to which the
parties to the reference agreed in writing, or if the parties have not agreed,
then within such time as the court or judge appointing such umpire may deem
proper.
The decision arrived at by the arbitrator shall be final and binding
and no appeal shall lie therefrom except as to matters of law.
11. Notice
Any notice or communication to be given or made under this agreement
must be in writing and will be deemed to be properly given or made on the
earliest of the following:
(a) actual delivery;
(b) seventy-two hours after being sent by commercial courier
service; and
(c) the business day following which any telegram or telecopier
message is sent.
if sent to the addresses and to the attention of the persons set out
below:
If to LICENSEE:
Energy Ventures Inc. (Canada)
00 Xxxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx,
X0X 0X0
Attention: D. Xxxxx Xxxxxxxx, President
Telecopier number: (000) 000-0000
and to:
Xxxxxxx Xxxxx & Xxxxxxxxx,
Suite 2100, Scotia Plaza,
00 Xxxx Xxxxxx Xxxx,
Xxxxxxx, Xxxxxxx,
X0X 0X0
Attention: Xxxxx Xxxxx
Telecopy: (000) 000-0000
If to LICENSOR:
Astris Energi Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxx,
X0X 0X0
Attention: Xxxx X. Nor, P. Eng., President
Telecopier number: (000) 000-0000
Addresses may be changed by notice given in accordance with this
provision.
AGREED TO this 22nd day of October 1998.
ASTRIS ENERGI INC.
per ________________
ENERGY VENTURES INC. (CANADA)
per _______________
per _______________
