OPTION AGREEMENT
THIS AGREEMENT is made and effective as of the 1st day of October, 0000
X X X X X X X:
THE GOVERNING COUNCIL OF THE UNIVERSITY OF TORONTO, a corporation vested with the government, management and control of the University of Toronto by the University of Toronto Act, 1971 and having offices at MaRS Centre, Heritage Building, 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx X0X 0X0, Xxxxxx
(hereinafter “UT”)
- and -
MANTRA ENERGY ALTERNATIVES LTD., a corporation having offices at 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, X.X. X0X 0X0, Xxxxxx
(hereinafter the “Optionee”)
WHEREAS Xxxxxxxx Xxxx Irvani and Xxxxxx Xxxxxx Ghartemani (each an “Inventor” and collectively, the “Inventors”), while employed by UT have made an Invention (as hereinafter defined);
WHEREAS by Assignments of Rights from UT dated October 7, 2004, UT assigned its entire right, title and interest in the Invention to the Inventors on terms and conditions set out therein;
WHEREAS by Assignments of Rights from Xxxxxx Xxxxxx Ghartemani (“Ghartemani”) dated October 7, 2004, Ghartemani assigned his entire right, title and interest in the Invention to Xxxxxxxx Xxxx Irvani (the “Owner”) on terms and conditions set out therein;
WHEREAS by a Technology Owners’ Agreement dated October 12, 2004 the Owner retained the University of Toronto Innovations Foundation (“UTIF”) as his exclusive agent for the exploitation of the Invention, including the patenting and licensing thereof;
WHEREAS UTIF, on behalf of the Owner, has filed patent applications in relation to the Invention as listed in Schedule “A” hereof;
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WHEREAS effective May 1, 2006, UTIF ceased to operate its business and it transferred and assigned all of its business and assets to UT;
WHEREAS the Optionee is a company whose purpose is to commercialize, develop, manufacture, market, distribute and sell useful products; and
WHEREAS UT, on behalf of the Owner, is willing to grant to the Optionee an option to negotiate and acquire the exclusive right to develop, manufacture, market, distribute and sell products which may be derived in whole or in part from the practice of the Technology.
NOW THEREFORE in consideration of the premises and the mutual covenants, terms, conditions and agreements contained herein, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Agreement, the following terms have the meanings set forth below:
“Agreement” means this Option Agreement including all attached schedules, as the same may be supplemented, amended, restated or replaced in writing from time to time by mutual agreement of the Parties;
“Confidential Information” means this Agreement and its terms and conditions, the Know-how, and any information, which is non-public, confidential or proprietary in nature, including, without limitation, business information, trade secrets, and any information related to the Technology, whether written, oral or in electronic form, provided that tangible materials are marked as confidential, and provided that information given orally or by visual inspection is identified as confidential at the time of disclosure, and confirmed as confidential in writing within fifteen (15) days, but shall not include information that:
| (a) |
is or becomes generally available to the public other than as a result of any act by a receiving Party to this Agreement; | |
| (b) |
is rightfully received from a third party without similar restriction or without breach of this Agreement; | |
| (c) |
a receiving Party is able to demonstrate, in writing, was known to it on a non-confidential basis; or | |
| (d) |
a receiving Party can show through tangible evidence was independently developed by a Party without the use of any of the Confidential Information. |
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“Copyright” means the rights prescribed in the Copyright Act (Canada), including those copyright registrations and applications relating to the Technology identified in Schedule “A” herein;
“Draft License Agreement” shall mean the technology license agreement in relation to the Technology attached hereto as Schedule “B”;
“Effective Date” shall mean the date first shown in this Agreement;
“Intellectual Property Rights” means all Patents, Copyright, trade-names and other intellectual property rights relating to the Invention, whether registered or not, owned by or licensed to the Owners (or any of them);
“Invention” means the invention titled “A Novel System for Detection and Extraction of Useful Signals in Three-Phase Power Systems” as more fully described in the University of Toronto Confidential Intellectual Property Disclosure attached hereto as Schedule “C”;
“Know-how” means any and all trade secrets, technical expertise, knowledge, confidential information and know-how, whether patentable or unpatentable relating to the Invention, whether in written, machine readable, drawing or oral form, including, without limiting the generality of the foregoing, all technical information, raw material, data, product specifications, processes and designs, operating and production data, calculations, computer programs, instructions and techniques, quality control and other standards, and drawings relating thereto which are developed by the Owner and which exist at the Effective Date;
“Parties” means UT and the Optionee collectively, and “Party” means any of them;
“Patents” means the patents listed in Schedule “A” appended hereto, and shall include any divisional, re-examination, renewal, or continuation applications based on the said patent applications, any patents which may issue on, from or as a result of any of the foregoing, including all foreign patents, and any reissue of said patents; and
“Technology” means the Invention, the Know-how and all Intellectual Property Rights relating to the Invention.
1.2 Captions
The division of this Agreement into articles, sections, subsections and schedules and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. The article, section, subsection and schedule headings in this Agreement are not intended to be full or precise descriptions of the text to which they refer and are not to be considered part of this Agreement. All uses of the words “hereto”, “herein”, “hereof”, “hereby” and “hereunder” and similar expressions refer to this Agreement and not to any particular section or portion of it. References to an Article, Section, Subsection or Schedule refer to the applicable article, section, subsection or schedule of this Agreement.
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1.3 Currency
Unless specified otherwise, all statements of or references to dollar amounts in this Agreement are to lawful money of Canada.
1.4 Schedules
The following schedules are attached to and incorporated by reference into this Agreement:
| Schedule A | Intellectual Property Rights |
| Schedule B | Draft License Agreement |
| Schedule C | Invention |
ARTICLE 2
TECHNOLOGY OPTION
2.1 Grant of Option
| (a) |
UT (solely as agent of the Owner) hereby grants to the Optionee an exclusive option to negotiate and obtain an exclusive, worldwide license to the Technology in all fields of use (the “Option”), upon and subject to the terms and conditions hereinafter set forth. | |
| (b) |
UT (solely as agent of the Owner) hereby grants to the Optionee, during the term of this Agreement, a non-exclusive right to use the Technology for internal research purposes. | |
| (c) |
Nothing in this Agreement grants the Optionee the right to use the Technology for the purpose of making, using or selling a commercial product. | |
| (d) |
The Optionee may exercise its Option hereunder at any time during the term of this Agreement or any extension thereof. | |
| (e) |
In the event that the Optionee exercises its Option hereunder, the Optionee and UT agree to execute a technology license agreement containing substantially similar terms and conditions as set forth in the Draft License Agreement. | |
| (f) |
In the event that the Optionee fails to exercise the Option within the term of this Agreement or within any extension thereof, or if this Agreement is terminated pursuant to Section 6.2 herein, UT may offer exclusive worldwide licenses in relation to the Technology to third parties. |
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ARTICLE 3
CONSIDERATION
3.1 Upfront Fees
| (a) |
In consideration for the Option granted herein, the Optionee shall pay to UT a non-refundable upfront fee (the “Option Fee”) of twelve thousand dollars ($12,000) on or within thirty (30) days following the Effective Date. | |
| (b) |
In the event that the Optionee fails to exercise the Option within the term of this Agreement or if this Agreement is terminated in accordance with section 6.2 hereof, the Parties hereto acknowledge and agree that the Option Fee shall be forfeit by the Optionee and shall remain the property of UT. |
ARTICLE 4
INTELLECTUAL PROPERTY
4.1 Patent Prosecution
During the term of this Agreement, UT shall:
| (i) |
file, prosecute and maintain the Patents in the name of Owner as assignee; | |
| (ii) |
pay all third party charges relating to the filing, prosecution and maintenance of the Patents; and | |
| (iii) |
keep the Optionee reasonably advised of the progress of prosecution and of any actions UT proposes to take or has taken in connection with the prosecution or maintenance of the Patents. |
4.2 Confidentiality
| (a) |
All Confidential Information will remain the property of its owner or the party that furnished it as the case may be. | |
| (b) |
For a period of five (5) years from the date of disclosure of Confidential Information, each Party agrees to maintain in confidence all Confidential Information disclosed with the same degree of care as it normally takes to preserve its own confidential information of similar grade, but in any event, no less than a reasonable degree of care. | |
| (c) |
Each Party may only disclose Confidential Information to persons with a “need to know” who shall be made aware of, and be required to observe and comply with the covenants and obligations contained herein, and the |
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|
Confidential Information shall only be used to carry on or facilitate business as contemplated under this Agreement. | ||
| (d) |
A Party may disclose Confidential Information pursuant to the requirements of a government agency or pursuant to a court order, provided that the Party shall take all reasonable steps, including, but not limited to the seeking of an appropriate protective order, to preserve the confidentiality of the Confidential Information provided. | |
| (e) |
If this Agreement is terminated for any reason, any Party in receipt of Confidential Information shall promptly deliver or destroy all Confidential Information of the disclosing Party without retaining copies thereof, except that the receiving Party may retain in the office of its legal counsel one (1) copy of written Confidential Information for record purposes only. | |
| (f) |
In the event that a Party becomes aware of, or perceives any threat that, any Confidential Information may be disclosed contrary to the provisions of this Section 4.2, or in the circumstances referred to in Subsection 4.2(d) hereof, such Party shall immediately provide written notice thereof to the other Party. |
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND INDEMNITY
5.1 Representations and Warranties of Parties
The representations of the Optionee and UT, one to the other are as follows:
| (a) |
The Optionee is a corporation duly organized, validly existing and in good standing, and it has the right and authority to enter this Agreement, and do all acts and things as required or contemplated to be done, observed and performed by it hereunder; | |
| (b) |
the execution, delivery and performance of this Agreement does not contravene any law, rule or regulation of any Party or of the jurisdiction in which it is incorporated; and | |
| (c) |
UT is a corporation duly organized, validly existing and in good standing, and it has the right to grant the Option as provided herein and that such grant is not in conflict with any other agreement to which it is a party. |
EXCEPT FOR THE FOREGOING REPRESENTATIONS AND WARRANTIES PROVIDED IN THIS SECTION 5.1, UT DISCLAIMS ALL REPRESENTATIONS, WARRANTIES AND CONDITIONS OF ANY KIND, WHETHER EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION ALL REPRESENTATIONS, WARRANTIES AND CONDITIONS AS TO QUALITY, MERCHANTABLE QUALITY, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, SCOPE, PATENTABILITY, VALIDITY OR
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ENFORCEABILITY OF THE TECHNOLOGY OR THAT THE TECHNOLOGY IS SAFE FOR ANY USE OR PURPOSE WHATSOEVER, OR THAT THE TECHNOLOGY DOES NOT INFRINGE THE RIGHTS OF ANY THIRD PARTY.
5.2 Indemnity
Except to the extent when caused by the gross negligence of UT, the Optionee shall indemnify and hold harmless the Inventors, the Owner, their respective successors and assigns, and UT, its parents, subsidiaries, affiliates, attorneys, agents, officers, directors, employees, administrators, predecessors, successors or assigns (collectively, the “Indemnitees”) from and against any and all claims, threats, loss, liability, damage or expense, including reasonable lawyers’ fees, by reason or arising out of any acts or failure to act by or out of any use of the Technology by the Optionee or its servants, agents, affiliates, officers, directors, stock-holders, or employees. The party seeking indemnification shall give the Optionee prompt notification of any such claim, threat, loss, liability, damage or expense. The indemnity provided herein shall survive any termination or assignment of this Agreement without time limit. The Optionee acknowledges that UT is entering this Agreement and obtaining the foregoing indemnification as agent for other Indemnitees and is holding the rights contained in this paragraph in trust for the other Indemnitees.
ARTICLE 6
TERM AND TERMINATION
6.1 Term
This Agreement shall come into effect upon the Effective Date, and unless earlier terminated, shall terminate twelve (12) months following the Effective Date.
6.2 Termination
| (a) |
This Agreement may be terminated for material breach by any of the Parties upon at least thirty (30) days prior written notice (in accordance with the notice provisions of Section 7.1 hereof) to the Party asserted to be in breach thereof. | |
| (b) |
Termination shall be effective on the date set forth in the notice, unless prior to that date the Party in breach has cured the breach. | |
| (c) |
The Optionee may terminate this Agreement, at is sole discretion, at any time upon thirty (30) days prior written notice to UT. | |
| (d) |
If a Party: | |
|
(i) is adjudicated insolvent or a bankrupt, |
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| (ii) |
is the subject of any proceedings relating to its liquidation, insolvency or for the appointment of a receiver or similar officer for it, or | |
| (iii) |
makes a general assignment for the benefit of all or substantially all of its creditors, or enters into an agreement for the composition, extension or re-adjustment of all or substantially all of its obligations, |
|
then the other Party, within the conditions of applicable law, may immediately terminate this Agreement by giving written notice. | ||
| (e) |
Termination as set forth in this Section shall not relieve any of the Parties of any obligations accrued under this Agreement prior to the date of termination. The following provisions shall survive termination of this Agreement: Sections 1.1 (Definitions); 4.2 (Confidentiality); 5.2 (Indemnity); Subsection 6.2(e) (Survival); and Article 7 (General Provisions). |
ARTICLE 7
GENERAL
7.1 Notices
All notices required and permitted under this Agreement shall be in writing, and service of all such notices shall be sufficient and complete if and when sent by registered mail, postage prepaid addressed to the party to be notified, at the address given above or at other addresses of which the parties have notice in writing.
7.2 Conflict
In the event any term or any part of any term of this Agreement is determined to be void or unenforceable, such term or part of a term shall be considered separate and severable from this Agreement and the remaining terms shall continue in full force and effect.
7.3 Governing Law
This Agreement shall be governed by, and interpreted and enforced in accordance with the laws in force in the Province of Ontario and the federal laws of Canada applicable therein (excluding any conflict of laws, rule or principle which might refer such interpretation to the laws of another jurisdiction). Each Party hereby attorns and submits to the exclusive jurisdiction of the Ontario Superior Court of Justice in any action or proceeding arising out of or relating to this Agreement. Further, each Party hereby agrees that service may be made on any representative of the Parties hereto, whether in Toronto or elsewhere. Finally, each Party hereby agrees that all such claims in respect of such actions or proceedings shall be heard and determined in Toronto in such Ontario court.
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7.4 Further Assurances
The Parties agree to execute, acknowledge and deliver all such further instruments, and to do all such other acts, as may be necessary or appropriate to carry out the intent and purpose of this Agreement.
7.5 Waiver of Rights
No failure or delay on a part of a Party hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or future exercise thereof or the exercise of any other right, power or remedy. No waiver by a Party hereto of a default hereunder shall operate against such Party as a waiver of such default unless made in writing and signed by an authorized officer of such Party.
7.6 Relationship of the Parties
| (a) |
The relationship of the Optionee to UT is that of an independent contractor and neither the Optionee nor its agents or employees shall be considered employees of UT. This Agreement does not constitute and shall not be construed as constituting a partnership or joint venture or grant of a franchise between the Optionee and UT. | |
| (b) |
A Party will not use the name of any other Party, nor any member of such Party’s staff in any advertising or publicity without the prior written approval of an authorized representative of the body whose name is to be used. However, a Party may notify others of the fact that this Agreement is in effect. |
7.7 Force Majeure
No Party shall be liable to any other party for delay or failure in the performance of any of its obligations hereunder if such failure is caused by Force Majeure, as hereinafter defined. For the purposes hereof, “Force Majeure” means any act of God, action or failure to act of any government or governmental or regulatory authority, failure of supplies, materials, equipment, labour or transportation being provided by any other person, power failure or shortage, strike, lockout, work slowdown or stoppage, accident, fire, flood, explosion, storm, other natural occurrence, sabotage or other event beyond the control of the relevant party.
7.8 Entire Agreement
This Agreement, including all attached Schedules which are hereby incorporated by reference, sets forth the entire agreement and understanding of the Parties relating to the subject matter contained herein and merges all prior discussions and agreements between them, and neither Party shall be bound by any definition, condition, warranty or representation other than expressly stated in this Agreement. Any amendment to this
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Agreement shall not be effective unless it is in writing and signed by the duly authorized signing officers of each Party.
7.9 Facsimile Execution
To evidence the fact that it has executed this Agreement, a Party may send a copy of its executed counterpart to the other Party by facsimile transmission. That Party shall be deemed to have executed this Agreement on the date it sent such facsimile transmission. In such event, such Party shall forthwith deliver to the other Party the counterpart of this Agreement executed by such Party.
7.10 Assignment
This Agreement shall not be assigned by the Optionee without the prior written consent of UT, such consent not to be unreasonably withheld.
7.11 Succession
This Agreement shall be binding upon and enure to the benefit of the Parties hereto and their respective heirs, executors, administrators and other legal representatives and, to the extent permitted hereunder, their respective successors and permitted assigns.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in a legally binding manner.
THE GOVERNING COUNCIL OF THE UNIVERSITY OF TORONTO
Per: /s/ Xxx XxXxxxxxx, Ph.D.
Xxx XxXxxxxxx, Ph.D.
Interim Vice-President,
Research
Executive Director,
The Innovations Group
University of Toronto
MANTRA ENERGY ALTERNATIVES LTD.
Per: /s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
Chief Financial
Officer and Chief Operating Officer
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SCHEDULE “A”
INTELLECTUAL PROPERTY RIGHTS
| Jurisdiction: | Canada |
| Patent Title: | “Three-Phase Power Signal Processor” |
| Application Number: | 2,503,685 |
| Filing Date: | April 5, 0000 |
| Xxxxxxxxxxxx: | Xxxxxx Xxxxxx |
| Patent Title: | “Three-Phase Power Signal Processor” |
| Application Number: | 11/098,421 |
| Filing Date: | April 5, 2005 |
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SCHEDULE “B”
DRAFT LICENSE AGREEMENT
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SCHEDULE “C”
INVENTION
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