EXHIBIT 6.1
ALLIANCE AGREEMENT
THIS AGREEMENT made as of the 1st day of March, 1997.
BETWEEN:
NATIONAL RESEARCH COUNCIL OF CANADA
- and -
ENERGY VENTURES INC.
WHEREAS NRC and EVI wish to enter into a strategic alliance to further
develop certain lithium ion technology patented by NRC and to reflect joint
venture arrangements with respect to other technology;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
mutual covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1.0 DEFINITIONS
In this agreement, unless the context otherwise requires, the following
terms shall have the meanings set opposite the same:
"Base LI Technology" means collectively the EVI Base LI Technology and the NRC
Base LI Technology;
"Energy Materials Field" means Technology related to a broad variety of battery
formats, fuel cell formats, related materials (including, without limitation,
separators, electrolytes, electrodes, packaging etc.) and associated production,
processes and testing;
"Energy Ventures Inc. (Delaware)" means O.P.D. Acquisitions, Inc. a corporation
incorporated under the laws of the State of Delaware on June 24th 1996 whose
shares are to be listed on the OTC Bulletin Board which is run by The NASDAQ
Stock Market, Inc.
"Enhancement" means any invention, idea, concept, formula, design modification
or development relating to any battery Technology or the Energy Materials Field
resulting from the collaboration between the parties and from any collaboration
of either party with a third party where the rights of the parties, as
established in this agreement, are protected, including NRC's collaboration with
Samsung Electronics Company, during the Technical Collaboration Period;
"Enhancement Patents" in respect of any Enhancement means any patent
applications filed or caused to be filed anywhere in the world;
"EVI" means Energy Ventures Inc., its successors and assigns;
"EVI Base LI Technology" means all rights, as of the date hereof, to patents,
research, development and application of inventions, patents, technical
information, advice, Know-How and data owned by EVI or an EVI Group Company and
which relate to lithium ion technology or which have application in connection
with Base LI Technology;
"EVI Group Company" means EVI and each of its affiliates, subsidiaries and
associated companies as those terms are defined in the Business Corporations Act
(Ontario), as amended, and its designates, and their successors and assigns;
"Know-How" in relation to any project means all knowledge, designs, results,
data, experiences, information and advice directly related thereto;
"LI" means lithium ion;
"Licensee" means EVI or such EVI Group Company as is from time to time
designated by EVI to be the licensee under the NRC LI Technology Licence;
"Licensing Revenues" means:
(a) in the case of an arms' length transaction for a licence or a sub-
licence of any Technology:
(i) all licence fees and royalties received by any EVI Group
Company under such licence or sub-licence; and
(ii) any other monetary consideration (or the monetary value of
non-monetary consideration) that may be considered to have
been received in exchange for the granting of the licence or
sub-licence rights;
(b) in the case of a non-arms' length transaction for a licence or a
sub-licence of any Technology, an amount equal to the fees, royalties
and other consideration which would have been received by any EVI Group
Company under an arms' length equivalent commercial transaction, as
agreed to by the parties or failing agreement as determined by
Arbitration;
in each case after deducting all taxes, allowances, discounts and other
adjustments;
"Net Sales Value" means in respect of products Sold in the ordinary course of
business:
(a) to an arms' length customer and not returned the gross invoice price
for each separate Sale, net of trade, promotional, quantity or cash
discounts actually allowed, rebates granted and taken, any direct
sales tax, customs duty, insurance, special packing and freight
charges set out separately in the invoice but inclusive of all
indirect sales, manufacturers' or value-added taxes incorporated into
the price of the goods, the whole interpreted in accordance with
generally accepted accounting principles (where applicable); and
(b) in respect of products Sold or transferred to any Person not at arms'
length the value, computed in accordance with the above, which would
have been charged on an equivalent Sale to an arms' length customer;
(c) If a product is incorporated as part of an article, the price of the
product will, where reasonably possible, be identified separately on
any invoice. When a distinct price for a product 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
products, and if there are no such Sales, then the price of the
product shall be deemed to be that portion of the Sale price of the
article as manufacturing cost of the product relates to the
manufacturing cost of the article. Licensee shall, upon request,
provide evidence satisfactory to NRC, acting reasonably, of such
manufacturing costs;
(d) If a product is bartered, the Sales price shall be that agreed to by
the parties or failing agreement shall be determined by Arbitration;
"NRC" means the National Research Council of Canada, its successors and assigns;
"NRC Base LI Technology" means the NRC LI Patents and all rights of the NRC as
of the date hereof, to all research, development and application of inventions,
patents, technical information, advice, Know-How and data relating to LI battery
technology excluding NRC's coin cell hardware Know-How;
"NRC Entitlement" means:
(a) 40% of receipts in respect of Licensing Revenues from the LI
Technology and of revenues from other LI related sales of services, in
each case for the first three years of the Term, and a percentage, to
be negotiated in good faith by the parties and failing agreement
determined by Arbitration, of such Licensing Revenues and revenues
from other LI related sales of services for the subsequent years, such
Licensing Revenues and other LI related sales of services being net of
EVl's patent costs and related expenses, reasonable sales agents'
commissions fees and expenses, scientific costs including revenue
entitlements of scientists and other Persons, direct costs related to
supplying services, costs of product development and testing, legal
and other contracting costs, Technical Assistance Costs as per
Sub-Section 4.8 and other expenses including other marketing costs
approved by both parties, subject to Sub-Section 6.1 herein; and
(b) a Royalty of 2% of the Net Sales Value of Sales of products using Base
LI Technology and any LI Enhancement, subject to Sub-Section 6.1
herein:
"NRC LI Patents" means the patents and applications set out on Schedule 1
hereto;
"NRC LI Technology Licence" means the licence and rights granted to EVI by NRC
pursuant to Sub-Section 2.1 herein;
"Other Technology" means Technology other than LI Technology and includes all
Enhancements and Know-How related thereto;
"Person" means an individual, corporation, partnership and any other legal
entity;
"Royalty" means a percentage of the Net Sales Value of products manufactured or
produced by an EVI Group Company;
"Sale" means every disposition of a product, including selling, renting,
leasing, licensing, and bartering of a product, according to generally accepted
accounting principles. It is considered to occur when a product is delivered. A
Sale exists irrespective of the collection of any debt (regardless of any
accounting principle), but not if money received is refunded. "Sell" and "Sold"
have corresponding meanings.
"Specified Uses" means rights to use in the field of research and development,
marketing, commercial production and in any other manner relating to
electrochemical power sources, cells, batteries, battery packs, electronics and
including the right to manufacture and Sell products embodying or made by the
use of Technology and to sublicence in whole or in part any of such uses to
third parties worldwide;
"Technical Collaboration Period" means the period of technical collaboration
described in Sub-Section 4.0 herein;
"Technical Representatives" means, in the case of EVI, Xx. Xxxx Xxxxxxxx and Xx.
Xxxx X. Xxxxxx, and in the case of NRC, Xx. Xxxxxxxx X. XxXxxxxx or such other
persons as the parties may name from time to time as their respective technical
representatives for the purposes hereof;
"Technology" includes:
(a) patents, research development and Know-How;
(b) the application of inventions, patents, technical information, advice,
Know-How and data; and
(c) all Enhancements and Enhancement Patents;
"Term" means the term of the NRC LI Technology Licence described in Sub-Section
2.4 herein.
2.0 LICENCE
2.1 Grant
NRC hereby grants to the Licensee a non-exclusive worldwide licence to
use the NRC Base LI Technology for the Specified Uses with rights to sub-licence
worldwide, on the terms stated herein.
2.2 Disclosure
NRC agrees to disclose and provide information related to the NRC Base
LI Technology to the Licensee to the extent required to enable the Licensee to
use the NRC Base LI Technology for the purposes stated herein, subject to the
provisions of Sub-Sections 4.7 and 4.8 herein.
2.3 Consideration
The Licensee will pay to the NRC on May 5th 1997 the sum of $10,000
(plus applicable Goods and Services Tax) as consideration for the NRC LI
Technology Licence.
2.4 Term
The NRC LI Technology Licence will commence on August 1st 1997 and will
expire on the date upon which the last of the NRC Base LI Technology patents and
LI Enhancement Patents in use by the Licensee or any of its sublicensees
expires.
2.5 Sublicences
2.5.1 The Licensee will have unfettered rights to sublicence the NRC
Base LI Technology and to establish the commercial and other terms of any such
sublicence.
2.5.2 The Licensee agrees to advise NRC of all sublicences granted of
the NRC Base LI Technology and to provide to the NRC a copy of
same within a reasonable period of time after the grant of any
such sublicence.
3.0 OTHER TECHNOLOGY
3.1 Proposals for Other Technology
In order to provide a framework for research, development and marketing
activities respecting Other Technology, the parties have agreed to basic terms
related thereto, without creating any obligation of either party to enter into a
research & development joint venture with the other party or to enter into a
research and development joint venture on the terms hereof.
3.2 Basic Terms
For each Other Technology Project submitted by EVI in its discretion,
the terms set out in the rest of this Section 3.0 and in Sections 1.0 and
Sections 7 to 11 inclusive shall apply, except where otherwise agreed by the
parties hereto. The parties will also agree on the other terms, which may or may
not be the same as the terms of this agreement. Such other terms, in addition to
any amendments to the terms set out in this Section 3.0, shall be set out in a
separate document which will form part of Schedule 3 to be attached hereto.
3.3 Enhancements and Patents
3.3.1 Any intellectual property arising out of Other Technology
projects will be jointly owned by EVI and NRC and any patents
related thereto will be applied for jointly by EVI and NRC.
3.3.2 EVI shall have the sole right to use and the exclusive right
to licence and sublicence the Other Technology. The
determination of the countries in which any Other Technology
patents will be registered will be solely in the discretion of
EVI and all costs associated therewith will be borne by EVI,
subject to its right to deduct such costs from Other
Technology Licensing Revenues.
3.4 Patent Applications
3.4.1 Each of EVI and NRC agrees to provide to the other free of
payment, all information or explanations, data, computer
materials, software, patents and all other material related to
Other Technology which might be necessary to facilitate and
enable a patent application.
3.4.2 Each of EVI and NRC agrees to have itself and any Person
involved in the development of the Other Technology co-operate
in any way necessary to complete all papers and documents that
are reasonably necessary for the filing, processing and
issuance of intellectual property protection therefor in the
name of EVI or an EVI Group Company and the NRC and will
assign and maintain itself in a position to be able to assign
as contemplated in this agreement its intellectual property
rights free of charge as may be necessary or desirable in
order to permit intellectual property protection to be issued
as aforesaid.
3.5 NRC Research
NRC shall undertake research and development relating to Other
Technology in respect of joint ventures between EVI and NRC at 50% of its
standard billing rate.
3.6 Third Party Involvement
NRC agrees in relation to a project involving Other Technology it will
not, nor will it permit any of its affiliates (as defined in the Business
Corporations Act (Ontario)) to, enter into any agreement or otherwise deal with
a Person introduced to it by EVI in relation to the Other Technology where such
agreement or dealing or could reasonably be considered to be prejudicial to the
business arrangements between EVI and such Person.
3.7 Specific Terms
For each Other Technology project, the terms of the separate document
referred to in Sub-Section 3.2 herein will include the following terms:
3.7.1 The rights, if any, of NRC to any payment other than
Development Funding;
3.7.2 The definition of the Other Technology and the research and
development plan related thereto;
3.7.3 The arrangements if any between NRC and any party other than
EVI relating to the such Other Technology; and
3.7.4 The term of the arrangements if different from the Term of
this agreement.
4.0 TECHNICAL COLLABORATION
4.1 Technical Collaboration Period
A technical collaboration period (the "Technical Collaboration Period")
between the Licensee and NRC will commence on August 1st 1997 and continue for
each year thereafter during the Term ("Agreement Year") subject to the
provisions of Sections 5.0 and 6.0.
4.2 Development Funding
During the Technical Collaboration Period:
4.2.1 The Licensee will provide to NRC funding of a minimum of
$100,000 and a maximum of $500,000 each Agreement Year
("Development Funding") for purposes of ongoing collaborative
research and development in LI technology, Other Technology
and the Energy Materials Field. For the Agreement Year which
will commence on August 1st 1997 the minimum funding shall,
however, be limited to $50,000.
4.2.2 The Development Funding will be invoiced by NRC and payable in
quarterly instalments or alternatively in accordance with the
Research Plan (as defined below).
4.2.3 For each Agreement Year during the Technical Collaboration
Period, the parties will develop and establish the parameters
for the ongoing research and development program to be
undertaken during such year, such parameters and the ongoing
research and development program, however, to be reviewed and
revised by both parties no less frequently than quarterly
based on progress reports (the "Research Plan").
4.2.4 The Research Plan will identify the specific Technology
project, set out the statement of work, objectives,
milestones, deliverables, costs and payment requirements for
the work to be undertaken under the Research Plan. Where the
specific Technology project involves Other Technology, the
parties will agree upon the specific terms of such project in
accordance with Sub-Section 3.7 herein and execute an addendum
to this agreement to be attached to and form part of Schedule
3 hereto.
4.2.5 NRC agrees that it will be responsible for undertaking the
research and development work contemplated by each Research
Plan and that it will contribute annually scientific research
and development resources at 50% of the standard billing rate
it normally charges to execute the Annual Research Plan, being
a minimum of $200,000 and a maximum of $1,000,000 of work
annually (at standard billing rates). NRC further agrees to
provide such detailed statements to EVI as EVI may reasonably
require evidencing the research and development work NRC
undertakes pursuant to this Sub-Section 4.2.
4.2.6 Both parties agree that their respective responsibilities
under this Sub-Section 4.2 may, with the approval of the other
party, be provided in kind rather than in cash. They further
agree that the maximum EVI Development Funding referred to in
Section 4.2 and the related NRC responsibilities under
Sub-Section 4.2.5 may, with the approval of both parties, be
increased.
4.3 Additional Development Funding and NRC Entitlement
4.3.1 EVI will pay to the NRC, as additional research and
development funding the sum of $90,000, payable $40,000 on May
5th 1997 and $50,000 on December 31st 1998 after invoicing by
NRC ("Additional Development Funding"). NRC shall invoice and
EVI shall pay, in addition to the above, all applicable taxes
including Goods and Services Tax.
4.3.2 EVI will pay to the NRC, the NRC Entitlement for each
Agreement Year provided that in any year the Licensee will be
entitled to reduce the amount owing to the NRC under this
provision by an amount equal to the Development Funding
actually paid in cash or kind by EVI to NRC for the Agreement
Year as set out in Sub- Section 4.2 herein. Any amount owing
to the NRC hereunder in respect of any Agreement Year will be
paid to the NRC within 90 days following the end of such
Agreement Year and will be accompanied by a report setting out
the manner in which the amount owing was calculated. EVI will
add to such payments all applicable taxes including Goods and
Services Tax.
4.3.3 In consideration of the rights granted to EVI hereunder, EVI
agrees to cause Energy Ventures Inc. (Delaware) to allot and
issue to NRC, as fully paid and non-assessable, 200,000 shares
of common stock of Energy Ventures Inc. (Delaware) (the
"Shares"), which the parties agree are valued at an aggregate
of U.S. $450,000. EVI further agrees to cause Energy Ventures
Inc. (Delaware) to issue to NRC, options respecting the issue
of 20,000 shares of common stock of Energy Ventures Inc.
(Delaware), such options to be exercisable prior to December
31st 2001 at U.S. $2.25 per share (the "Options"). NRC
acknowledges that the issue to it of Shares and Options will
be subject to applicable securities laws, including (without
limitation) a prohibition on the resale of such Shares and
Options within Ontario in the absence of an applicable
exemption and a hold period relating to the Shares in the
United States. The foregoing share numbers and share values
assume a 1 for 10 consolidation of the common shares of Energy
Ventures Inc. (Delaware)
4.3.4 At the direction and written request of NRC, EVI agrees:
(a) to pay any portion of the sums payable to NRC under
Sub-Sections 2.3 and 4.3.1 to another Person or
Persons; and
(b) to issue any common shares of Energy Ventures Inc.
(Delaware), upon the exercise of any Option, to
another Person or Persons, subject to compliance with
applicable securities laws.
4.4 Limit on Third Party NRC Licences
NRC agrees that during the Technical Collaboration Period it will not
for the Specified Uses grant any further licences or other rights to any third
parties in relation to either the NRC Base LI Technology or LI Enhancements
except that, in respect to only the NRC Base LI Technology as at the date
hereof, the NRC may grant rights without the right to sublicence to the NRC's
existing and proposed eligible licensees and users as set out in Schedule 2
attached hereto. With regards to LI Enhancements, the NRC may grant rights
including the right to sublicence in countries other than Canada to Samsung
Electronics Company ("Samsung") respecting LI Enhancements which are Arising
Intellectual Property as that term is defined in the agreement to be made
between NRC and Samsung, subject to the limitations on such right to licence to
be set out in such agreement.
4.5 LI Enhancements and Patents
4.5.1 Any intellectual property in the LI Enhancements other than
Arising Intellectual Property will be jointly owned by EVI and
NRC and any patents related thereto will be applied for
jointly by EVI and NRC. Patents respecting Arising
Intellectual Property will be applied for by NRC and Samsung.
4.5.2 The Licensee shall have the sole right to use and the
exclusive right to licence and sublicence the LI Enhancements
other than Arising Intellectual Property and respecting such
Arising Intellectual Property the Licensee shall have a non-
exclusive right to licence and sublicence for the Specified
Uses for countries other than South Korea.
4.5.3 The determination of the countries in which any LI Enhancement
Patents will be registered will be solely in the discretion of
the Licensee and all costs associated therewith will be borne
by the Licensee, subject to its right to deduct such costs
from Licensing Revenues and revenues from other LI related
sales of services as provided in the definition of the NRC
Entitlement in Section 1 herein.
4.5.4 In the event that EVI is not interested in patenting or
commercially exploiting a specific LI Enhancement, altogether
or in specific countries, EVI shall advise NRC of such fact
within 60 days from the date the particular LI Enhancement was
disclosed to EVI by NRC, or sooner if necessary to avoid the
loss of patent rights.
4.5.5 At NRC's request, EVI will then assign or assign back to NRC
all its rights or, if EVl's decision concerns only specific
countries, its rights for those specific countries, in such LI
Enhancement and EVI shall then not be entitled to use or
commercially exploit such LI Enhancement anywhere or in the
countries for which EVI assigned or assigned back its rights
to NRC.
4.5.6 Each of EVI and NRC agrees to provide to the other free of
payment, all information or explanations, data, computer
materials, software, patents and all other material related to
LI Enhancements which might be necessary to facilitate and
enable a patent application.
4.5.7 Each of EVI and NRC agrees to have itself and any Person
involved in the development of the LI Enhancements co-operate
in any way necessary to complete all papers and documents that
are reasonably necessary for the filing, processing and
issuance of intellectual property protection therefor in their
joint names and will assign and maintain itself in a position
to be able to assign as contemplated in this agreement its
intellectual property rights free of charge as may be
necessary or desirable in order to permit intellectual
property protection to be issued jointly.
4.5.8 EVI agrees to advise NRC of all licences or sub-licences
granted of LI Enhancements and to provide NRC a copy of same
within a reasonable period of time after the grant of any such
licence or sublicence.
4.6 Right of First Refusal
The NRC agrees, subject to pre-existing obligations to third parties,
to first offer to the Licensee any opportunities which may arise through the NRC
relating to any battery related technology, Energy Materials Field or other
energy-related technologies developed at the Institute for Chemical Process and
Environmental Technology.
4.7 One-Time Technical Assistance Grant
NRC agrees that at any time during the first three years of the Term it
will provide on a one-time basis at the Licensee's request free of charge up to
$25,000 (calculated at standard NRC rates) of technical assistance in connection
with the NRC Base LI Technology.
4.8 Technical Assistance Costs
Where the services of the NRC are utilized to provide technical
assistance in relation to the granting of rights to any third party, such
services will be provided at NRC's rates to EVI plus disbursements. Where such
costs are borne by the Licensee ("Technical Assistance Costs"), the Licensee
will be entitled to deduct these costs from any Licensing Revenues.
4.9 Technical Office Facilities
NRC agrees that during the Technical Collaboration Period it will
provide EVI at no charge with office facilities to be located initially at Room
000, Xxxxxxxx X-0, Xxxxxxxx Xxxx, Xxxxxx, for use by EVI's Technical
Representatives from time to time. NRC additionally agrees to provide to EVI,
commencing January 1, 1999, at a gross annual rental of $9.00 per square foot,
paid monthly in advance, with no further obligation for taxes, utilities or
other occupancy costs, a facility of approximately 4000 square feet in Building
M16 for the purpose of establishing an EVI battery research laboratory. Both of
such facilities shall be subject to EVI's signing NRC's licence of occupation,
the form of which is attached hereto as Schedule 4.
5.0 TERMINATION
5.1 Termination without cause
EVI may give six months notice in writing at any time that it wishes to
terminate the Technical Collaboration Period and its obligations under
Sub-Section 4.2 herein, such termination to be effective at the end of the
Agreement Year next following the expiry of the notice period. In such event,
the Technical Collaboration Period and each party's respective obligations under
Sub-Section 4.2 will end on the last day of such Agreement Year, without
prejudice to rights accrued thereunder.
If NRC becomes unable to continue the technical collaboration because
of circumstances beyond its reasonable control, including government decisions
or actions, NRC may give six months notice in writing at any time that it wishes
to terminate the Technical Collaboration Period and its obligations under
Sub-Section 4.2 herein, such termination to be effective at the end of the
Agreement Year next following the expiry of the notice period. NRC may also give
six months notice in writing at any time that it wishes to terminate the
Technical Collaboration Period and its obligations under Sub-Section 4.2 herein
for any other reason, and termination in such event shall be effective at the
end of the Agreement Year next following the expiry of the notice period but no
earlier than July 31st 2008. In both of such events, the Technical Collaboration
Period and each party's respective obligations under Sub-Section 4.2 will end on
the last day of such Agreement Year, without prejudice to rights accrued
thereunder.
5.2 Termination with cause
5.2.1 In the event that one party defaults or breaches any of the
provisions of this agreement, the other party shall have the
right to terminate this agreement by giving written notice to
the defaulting party, but this act shall not prejudice the
right of a party to recover any sum due at the time of such
termination and shall not prejudice any cause of action or
claim of the terminating party accrued or to accrue on account
of any breach or default by the other party. However, if the
defaulting party cures the breach within sixty (60) days after
the notice is given, this agreement shall continue in full
force and effect.
5.2.2 This agreement, at the option of NRC, may be terminated
forthwith by NRC if:
a) EVI becomes bankrupt, or insolvent, or has a receiver
appointed to continue its operations, or passes a
resolution for winding up, or takes the benefit of any
statute relating to bankrupt or insolvent debtors or the
orderly payment of debts; or
b) EVI assigns any of its right under this agreement in any
manner and for any purpose, except as may be expressly
provided in this agreement, without the prior written
consent of NRC; or
c) the royalties, or any other amounts due under this
agreement are not paid as required and remain unpaid 60
days after notice of default has been given by NRC.
6.0 OTHER EFFECTS OF TERMINATION
6.1 Termination without cause
6.1.1 Upon the issuance of a Termination Notice pursuant to Sub-Section 5.1, the
NRC Entitlement under Sub-Section 4.3.2 will decline as follows:
(a) if the Termination Notice was issued by EVI:
6.1.1.1 for the 18 months following the
effective date of termination - 100% of NRC Entitlement
6.1.1.2 for the next 18 months - 80% of NRC Entitlement
6.1.1.3 for the next 18 months - 60% of NRC Entitlement
6.1.1.4 for the next 18 months - 40% of NRC Entitlement
6.1.1.5 for the next 18 months - 20% of NRC Entitlement
6.1.1.6 thereafter - 0% of NRC Entitlement
(b) if the Termination Notice was issued by NRC:
6.1.1.7 for the 18 months following the
effective date of termination - 50% of NRC Entitlement
6.1.1.8 for the next 18 months - 40% of NRC Entitlement
6.1.1.9 for the next 18 months - 30% of NRC Entitlement
6.1.1.10 for the next 18 months - 20% of NRC Entitlement
6.1.1.11 for the next 18 months - 10% of NRC Entitlement
6.1.1.12 thereafter - 0% of NRC Entitlement,
6.1.2 Upon the issuance of a Termination Notice pursuant to Sub-Section 5.1, if
the effective date of termination is earlier than July 31st 2008, NRC in
addition to the deceline in the NRC Entitlement as described in Sub-Section
6.1.1, will also transfer back to Energy Ventures Inc. (Delaware) 20,000 Shares
per year for every year remaining until July 31st 2008.
6.1.3 After the effective date of termination of the Technical Collaboration
Period:
6.1.3.1 NRC will be entitled to licence any third party without
restriction worldwide to use the NRC Base LI Technology except
that no party may be granted the right to sublicence and the
NRC agrees not to grant a licence for any country respecting
which the Licensee has funded in whole or in part the
registration of patents relating to the NRC Base LI
Technology.
6.1.3.2 At such time that the NRC's entitlement has declined to nil
pursuant to Sub- Section 6.1 herein, the NRC will be entitled
to licence without the right to sublicence third parties to
use the LI Enhancements except in countries where existing
sublicences issued by the Licensee are in effect.
6.1.4 Subject to the terms of Sub-Section 6.2 herein, the Licensee's rights
under the NRC LI Technology Licence will continue in accordance with the terms
set out herein notwithstanding the termination of the Technical Collaboration
Period.
6.2 Termination with cause
6.2.1 After termination of this agreement by NRC pursuant to
Sub-Section 5.2, EVI shall not be entitled to use or commercially exploit any
NRC Base LI Technology anywhere (subject to Sub-Section 6.2.3 below). If such
termination occurs during the Technical Collaboration Period, said Technical
Collaboration Period and each party's respective obligations under Sub-Section
4.2 will also end upon termination.
6.2.2 Upon termination of this agreement by NRC pursuant to Sub-Section
5.2, licensees or sub-licensees of EVI of the NRC Base LI Technology shall also
be informed by written notice of the termination of this agreement. Such
licences or sub-licences shall not automatically terminate, provided that such
licensees or sub-licensees notify NRC, within sixty (60) days of receipt of the
above notice, of their desire to have their licence converted into a direct
licence from NRC on terms and conditions not more onerous than those of the said
licence or sub-licence. For any period before termination or conversion of said
licences or sublicences, EVI shall continue to pay NRC the full NRC Entitlement
for Licensing Revenues from said licences or sub-licences.
6.2.3 Upon termination of this agreement by NRC pursuant to Sub-Section
5.2, EVI shall deliver a detailed statement to NRC of the inventory of all
products which use the NRC Base LI Technology then existing and not Sold by EVI
as at that date. EVI shall retain the right to Sell such products and shall pay
the NRC Entitlement on such Sales for a period of one year. At the end of that
year, any remaining inventory of such products shall be destroyed.
6.2.4 Upon termination of this agreement by either party pursuant to
Sub-Section 5.2, any provisions of this agreement that were intended to survive
termination shall survive such termination, particularly provisions on
warranties, confidentiality, indemnification and arbitration.
7.0 REPRESENTATIONS AND WARRANTIES
7.1 NRC represents and warrants that:
7.1.1 It has the capacity, right and authority to enter into this
agreement;
7.1.2 The NRC LI Patents described in Schedule 1 have been either
issued by or filed as the case may be with the appropriate
authorities within the jurisdictions indicated in Schedule 1
hereto.
7.1.3 To the best of its knowledge and belief, the NRC Base LI
Technology does not infringe any patents, trade marks, trade
names, copyright or other industrial, intellectual or
proprietary rights owned by any third parties; and
7.1.4 The entering into of this agreement will not result in a
contravention of its constating documents or a breach of, or
default under, any law, regulation, agreement, commitment or
undertaking by which it or any of its affiliates is bound.
7.2 EVI represents and warrants that:
7.2.1 It has been duly incorporated and is currently in good
standing under the law of its jurisdiction of incorporation
and has the capacity, right and authority to enter into this
agreement; and
7.2.2 The entering into of this agreement will not result in a
contravention of its constating documents or a breach of, or
default under, any law, regulation, agreement, commitment or
undertaking by which it or any of its affiliates is bound.
7.3 Limited Warranties
7.3.1 Each of EVI and the NRC warrants that it will perform the
obligations required herein in a professional manner
conforming to generally-accepted practices for scientific
research and development, provided that because of the nature
of such endeavours, no specific result is promised.
7.3.2 Neither EVI nor the NRC will provide to the other, without so
stating, any technical information the use of which is known
by them to infringe the rights of others, provided that
neither EVI nor the NRC warrants that technical information
conveyed to the other does not infringe the rights of others
under a present or future patent.
7.3.3 Neither EVI nor the NRC warrants the validity of patents under
which rights may be granted pursuant to this agreement, or
makes any representation as to the scope of patents or that
inventions may be exploited without infringing the rights of
others.
7.3.4 Neither EVI nor the NRC warrants the correctness or accuracy
of data supplied, advice given or opinions expressed.
8.0 CONFIDENTIALITY
8.1 Non-Disclosure of Proprietary Information
Neither EVI nor NRC ( each a "Receiving Party") shall directly or
indirectly, disclose or use, at any time, either during the currency of this
agreement or 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.
8.2 Exclusions from Proprietary Information
Proprietary Information does not include:
8.2.1 Information which can be established as having been known by
the Receiving Party prior to the disclosure of such
information by the other party;
8.2.2 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;
8.2.3 Information disclosed by one party and specified in writing as
not constituting Proprietary Information; or
8.2.4 Information subsequently disclosed to the Receiving Party by a
third party having no obligation of secrecy to the disclosing
party.
8.3 Receiving Party's Responsibilities
The Receiving Party will receive and maintain the Proprietary
Information at all times as confidential and will safeguard the Proprietary
Information in the same manner as that in which it protects its own confidential
information.
8.4 Return of Proprietary Information
All samples, drawings, specifications, written materials, notes and
other data forming part of the Proprietary Information made by the Receiving
Party will be and remain the property of the other party, and will be returned
to the other party forthwith upon demand. At the request of either party, the
other party will deliver a statutory declaration signed by a senior officer to
the effect that all of this property has been returned.
8.5 Legal Requirement to Disclose
This agreement will not operate to prevent disclosure by the Receiving
Party as required by law, provided that, forthwith upon becoming aware of a risk
of being required to make disclosure by law, the Receiving Party will advise the
disclosing party of the alleged requirement.
9.0 INDEMNIFICATION
9.1.1 EVI shall indemnify and save harmless Her Majesty and the NRC,
their employees and agents, from and against, and be
responsible for, all claims, demands, losses, costs including
solicitor and client costs, damages, actions, suits or
proceedings, all in any manner based upon, arising out of,
related to, occasioned by or attributable to any acts or
conduct of EVI, its employees, agents, whether by reason of
negligence or otherwise arising directly from the
manufacturing, distribution, shipment, offering for sale or
sale of the Licenced LI Technology or any Other Technology.
9.1.2 NRC shall have the right to defend any such action or
proceeding with counsel of its own selection.
9.1.3 Notwithstanding Sub-Section 9.1.1, EVI shall not be liable for
negligence or wrongful acts of the NRC and its employees or
agents and the NRC shall indemnify and save harmless EVI for
such negligence or wrongful acts of the NRC and its employees
or agents.
10.0 ARBITRATION
10.1 In the event that any disagreement arises between the parties hereto with
reference to this Agreement or any matter arising hereunder and upon which
the parties cannot agree, then every such disagreement shall be referred
to arbitration pursuant to the provisions of the Commercial Arbitrations
Act (Canada) ("Arbitrations Act") and in accordance with the provisions of
this section.
10.2 For the purposes of the foregoing Sub-Section 10.1, the following
provisions shall govern any arbitration hereunder:
10.2.1 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 all of 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 EVI and one shall be appointed by the NRC
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 NRC or EVI 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;
10.2.2 The award may be made by the majority of the arbitrators where
the reference is to three or more arbitrators;
10.2.3 If the arbitrators have allowed their time or extended
time for making an award, as provided in the Arbitrations 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; and
10.2.4 If an umpire is appointed pursuant to the foregoing Sub-Section
10.2.3, 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.
10.3 There shall be no appeal from the award of the arbitrators or umpire in
accordance with the provisions of the Arbitrations Act.
11.0 OTHER TERMS
11.1 Announcements
Neither EVI nor NRC will make any public announcement or statement
regarding the arrangements contemplated herein without the prior consent of the
other, and both parties will consult with each other upon any jointly issued
news release with respect to such arrangements, unless either party is compelled
to make such statements by judicial or administrative process or, in the opinion
of its respective legal counsel, by the requirements of law or the applicable
regulations of any stock exchange or governmental authority.
11.2 Assignment
EVI may assign any or all of its rights and obligations hereunder to an
EVI Group Company and, upon such assignment and notification of the same to NRC,
EVI will be relieved of all obligations under this agreement.
11.3 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 EVI or the Licensee:
Energy Ventures Inc.
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 NRC:
Institute for Chemical Process & Environmental Technology
Building X-00
Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxx
X0X 0X0
Attention: Head of Business Development
Telecopier number: (000) 000-0000
Addresses may be changed by notice given in accordance with this
provision.
11.4 Interpretation of Agreement
The inclusion of headings in this agreement is for convenience of
reference only and shall not affect the construction or interpretation hereof.
Unless the context otherwise requires, the masculine shall include the feminine
and the neuter and vice-versa and the singular shall include the plural and
vice-versa.
11.5 Invalidity of Provisions
Each of the provisions of this agreement is distinct and severable and
a declaration of invalidity or unenforceability of any provision by a court of
competent jurisdiction is not to affect the validity or enforceability of any
other provision.
11.6 Entire Agreement
This agreement constitutes the entire agreement between the parties
pertaining to the subject matter of this agreement. There are no warranties,
representations or agreements forth or referred to in this agreement. No
reliance is placed on any representation, opinion, advice or assertion of fact
made by any party or its directors, officers and agents to any other party or
its directors, officers and agents, except to the extent that the same has been
reduced in writing and included as a term of this agreement.
11.7 Waiver or Amendment
Except as expressly provided in this agreement, no amendment or waiver
of this agreement will be binding unless executed in writing by the party to be
bound thereby. No waiver of any provision of this agreement will constitute a
waiver of any other provision nor will any waiver of any provision of this
agreement constitute a continuing waiver unless otherwise expressly provided.
11.8 Governing Law
This agreement is to be governed by and construed in accordance with
the laws of the Province of Ontario, Canada.
11.9 Counterparts
This agreement may be signed in counterparts. Each counterpart will
constitute an original document and all counterparts, taken together, will
constitute one and the same instrument. IN WITNESS WHEREOF THE PARTIES HAVE
EXECUTED THIS AGREEMENT BY THEIR OFFICERS DULY AUTHORIZED TO DO SO AT THE
RESPECTIVE PLACES INDICATED WITH EFFECT AS OF THE 1ST DAY OF MARCH, 1997.
NATIONAL RESEARCH COUNCIL OF CANADA
Per: ____________________________
ENERGY VENTURES INC.
Per: ____________________________
D. Xxxxx Xxxxxxxx
President
Per: ____________________________
Xxxxx X. Xxxxxx
Vice President
SCHEDULE I
NRC PATENTS AND PATENT APPLICATIONS
1. Materials for Use as Cathodes in Lithium Ion Cells. Xxxxxx X. Xxxxxxxx,
Xxxxxxxx X. XxXxxxxx and Xxxx X. Xxxxxx. Assigned to NRC. Filed July 9,
1993; Issued 6 December, 1994. US Patent #5,370,949. Canadian patent
application #2,163,265.
2. Method of Forming a Stable Form of LiMnO2 as Cathode in Lithium Cell.
Xxxxxx X. Xxxxxxxx, Xxxxxxxx X. XxXxxxxx and Xxxx X. Xxxxxx. Filed
April 26, 1995; Issued April 9,1996. US Patent #5,506,078. Canadian
patent application #2,163,182.
3. Electrolyte for a Secondary Cell. Xxx X. Xxx, Xxxxxxxx X. XxXxxxxx and
Xxxx X. Xxxxxx. Assigned to NRC. Filed April 15, 1994; Issued June 25,
1996. US Patent #5,529,859.
4. Electrolyte for a Secondary Cell. Xxx X. Xxx, Xxxxxxxx X. XxXxxxxx and
Xxxx X. Xxxxxx. Assigned to NRC. Filed October 6, 1995; Issued November
5, 1996. US Patent #5,571,635.
5. Method of Forming a Stable Form of LiMnO2 as Cathode in Lithium Cell.
Xxxxxx X. Xxxxxxxx, Xxxxxxxx X. XxXxxxxx and Xxxx X. Xxxxxx. Filed
April 26, 1995; U.S. patent application #08/429,001. One limited usage
claim allowed and will issue in about 3 months. CIP action in progress
for broader usage claims.
Note that in number 2 above the patent is for a method and is 10
claims.
SCHEDULE 2
NRC's EXISTING AND PROPOSED ELIGIBLE
LICENSEES AND USERS OF THE NRC BASE TECHNOLOGY
The Electrofuel Manufacturing Company Limited,
00 Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx
X0X 0X0
Telephone: 000-000-0000
Fax: 000-000-0000
Attention: Xx. Xxxxxx Xxx Gupta
Westaim Technologies,
00000, 000xx Xxxxxx,
Xxxx Xxxxxxxxxxxx, Xxxxxxx
X0X 0X0
Telephone: 000-000-0000
Fax: 000-000-0000
Attention: Xx. Xxxx Xxxxxxxxxxxx
