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EXHIBIT NUMBER 10.12
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AGREEMENT FOR RESEARCH,
DEVELOPMENT AND LICENSING OF TECHNOLOGIES
BETWEEN
ENERGY VENTURES INC. (CANADA)
AND
PACIFIC LITHIUM LIMITED
PLL
OCTOBER 13, 1999
Agreement for Research, Development and Licensing of Technologies,
dated October 13, 1999 1
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AGREEMENT FOR RESEARCH, DEVELOPMENT
AND COMMERCIALISATION OF TECHNOLOGIES
PARTIES
1. ENERGY VENTURES INC. (CANADA) a duly incorporated company having its
registered office in Canada (with its affiliates, called "EVI") and
2. PACIFIC LITHIUM LIMITED a duly incorporated company having its
registered office in New Zealand (with its affiliates, called "PLL")
BACKGROUND
A. EVI is the sole and exclusive world-wide licensee and/or owner of the
proprietary rights in certain valuable Products and Processes
comprising lithium manganese oxide compounds for use as cathodes in
battery applications developed and/or owned by National Research
Council of Canada ("NRC") which proprietary rights include patents,
copyright and confidential information.
B. EVI wishes NRC and PLL to carry out additional research and development
on the Products and Processes to develop them into commercially
feasible processes and products.
C. In the event that NRC and PLL are able to work together to develop
their respective Products and Processes to produce commercially
feasible Products and Processes, PLL will elect to exercise the License
Rights to be granted by EVI under this Agreement.
D. EVI grants PLL the rights to the Licensed Products set out in this
Agreement on the terms and conditions in this Agreement.
THE PARTIES AGREE
1. The terms set out in Parts 1, 2 and 4 of this Agreement shall apply as
from the Commencement Date.
2. The terms set out in Parts 1, 2, 3 and 4 of this Agreement shall apply
in the event that the preconditions set out in Part 3 are satisfied.
Agreement for Research, Development and Licensing of Technologies,
dated October 13, 1999 2
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THIS AGREEMENT WAS EXECUTED as of the 13th day of October 1999
SIGNED by PACIFIC LITHIUM
LIMITED in accordance with its
Constitution:
/s/ Xxxxx X. Xxxxxxxxx /s/ Xxxxx Xxxxx
Signature of authorised person Signature of authorised person
MANAGING DIRECTOR DIRECTOR
Office held Office held
XXXXX X. XXXXXXXXX XXXXX XXXXX
Name of authorised person (print) Name of authorised person (print)
SIGNED by ENERGY VENTURES INC. (CANADA)
in accordance with its Constating Documents:
/s/ D. Xxxxx Xxxxxxxx /s/ Xxxxx X. Xxxxxx
Signature of authorised person Signature of authorised person
President and Chief Executive Officer Vice President of Finance and Treasurer
D. Xxxxx Xxxxxxxx Xxxxx X. Xxxxxx
Name of authorised person (print) Name of authorised person (print)
Agreement for Research, Development and Licensing of Technologies,
dated October 13, 1999 3
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PART 1
INTERPRETATION
PRESUMPTIONS OF INTERPRETATION
1.0 Unless the context otherwise requires, a word which denotes:
1.1 The singular denotes the plural and vice versa;
1.2 Any gender denotes the other genders; and
1.3 A person includes an individual, a body corporate and a
government.
2.0 Unless the context otherwise requires, a reference to:
2.1 Any legislation includes any regulation or instrument made
under it and where amended, re-enacted or replaced means that
amended, re-enacted or replacement legislation;
2.2 Any other agreement or instrument where amended or replaced
means that agreement or instrument as amended or replaced;
2.3 A Clause, Schedule or annexure is a reference to a clause of,
annexure to, schedule to or exhibit to this Agreement;
2.4 A group of persons includes any one or more of them;
2.5 A party or parties is a reference to a party to or the parties
to this Agreement; and to their affiliates ("affiliate" having
the same meaning given to it in section 1(4) of the Ontario
Business Corporations Act); and
2.6 A thing or amount is a reference to the whole and each part of
it.
JOINT AND SEVERAL
3.0 An Agreement warranty representation or obligation which binds or
benefits 2 or more persons under this Agreement binds or benefits those
persons jointly and separately.
SUCCESSORS AND ASSIGNS
4.0 A person includes the trustee, executor, administrator, successor in
title and assign of that person. This Clause must not be construed as
permitting a party to assign any right under this Agreement.
Agreement for Research, Development and Licensing of Technologies,
dated October 13,1999. 4
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BUSINESS DAY
5.0 A business day is a day during which banks are open for general banking
business in Ontario.
6.0 Unless the context otherwise requires, a term of this Agreement which
has the effect of requiring anything to be done on or by a date which
is not a business day must be interpreted as if it required it to be
done on or by the next business day.
DEFINITIONS
7.0 Where commencing with a capital letter:
"COMMENCEMENT DATE" means 9 August 1999
"CONFIDENTIAL INFORMATION" means, in respect to each disclosing party,
all information provided by that party including its Intellectual
Property, and all other information relating to its processes, business
and products where knowledge of such information is not in the public
domain and might reasonably be regarded by the receiving party to be
confidential.
"CONFIRMATION DATE" means the date on which PLL gives notice of its
intention to take up its License Rights under Clause 20 but in any
event shall be not later than 31 March 2000.
"CONTRACT YEARS" refers to the 12 month periods commencing on 1 April
2000.
"INTELLECTUAL PROPERTY" means, in respect to each party, all
intellectual property of such party and of any related entity including
the patents, patents pending, copyright, secret information and
processes, all trade marks, trade names, know-how and all other
information which is commercially sensitive or commercially valuable to
that party;
"LICENSE RIGHTS" means the rights for PLL to take a license of the
Licensed Products in accordance with the terms of Part 3 of this
Agreement.
"LICENSE TERM" means the period starting on 1 April 2000 and continuing
until the last expiry date of the Patents.
"LICENSED PRODUCTS" means all Intellectual Property and Confidential
Information with respect to the Products and Processes owned by EVI or
licensed or assigned to it and/or owned by NRC, either wholly or
jointly with PLL or any other persons.
"MINIMUM GUARANTEED ROYALTY FEES" means the Minimum Guaranteed Royalty
Fees payable by PLL set out in column 4 of SCHEDULE D.
"PATENTS" means the patents for the Products set out in SCHEDULE A and
such other patents owned by EVI or NRC which are added by mutual
agreement with PLL to Schedule A during the License Term.
Agreement for Research, Development and Licensing of Technologies,
dated October 13,1999. 5
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"PROCESSES" means the processes relating to the synthesis of Products
and "PLL'S PROCESSES" shall mean the processes developed by PLL prior
to, during and after the Research and Development Program which enable
or will enable it to synthesise the Products on a commercial basis.
"PRODUCTS" means lithium manganese oxide-based products for use as
cathodes in battery applications which have been made using the
Processes developed by or licensed or assigned to EVI or by PLL and EVI
during the conduct of the Research and Development Program or R&D
program, and such other products as the parties may from time to time
include but which shall exclude Products developed by PLL prior to or
outside of the Research and Development Program or R&D program.
"R&D" means the research and development program referred to in Clause
13.2.
"RESEARCH AND DEVELOPMENT CONTRIBUTIONS" means fees payable by PLL to
EVI on account of NRC's costs in carrying out the Research and
Development Program pursuant to Clause 13.1.
"RESEARCH AND DEVELOPMENT PROGRAM" means the research program set forth
in SCHEDULE B.
"ROYALTY FEES" means the fees or share of revenue payable by PLL to EVI
on the Licensed Products set out in SCHEDULE C.
"$" and "DOLLARS" mean US dollars.
"TERRITORY" means the World
EXTENSION OF DEFINITIONS
8.0 Where a word or phrase is given a defined meaning, another part of
speech or other grammatical form in respect of that word or phrase has
a corresponding meaning.
Agreement for Research, Development and Licensing of Technologies,
dated October 13,1999. 6
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PART 2
RESEARCH AND DEVELOPMENT OF PROCESSES AND PRODUCTS
CONDUCT OF RESEARCH AND DEVELOPMENT PROGRAM
9.0 PLL shall use its best efforts to conduct the Research and Development
Program with NRC and EVI in accordance with the timetable, protocols,
objectives and procedures set out in Schedule B.
10.0 The Research and Development Program shall be carried out by the
personnel set out in Schedule B or by such other persons who shall be
acceptable to PLL, NRC and EVI.
11.0 The Research and Development Program shall be carried out at PLL and
NRC's respective research centres and PLL shall give the researchers
access to all necessary facilities to enable the Research and
Development Program to be conducted efficiently. EVI shall ensure that
NRC cooperates with PLL in relation to the Research and Development
Program.
12.0 PLL shall appoint one person to an Oversight Committee and EVI shall
ensure NRC also appoints one person. The Oversight Committee shall
supervise the conduct of the Research and Development Program and shall
be responsible for resolving all issues relating to the day to day
conduct of the Research and Development Program.
COSTS OF THE RESEARCH AND DEVELOPMENT PROGRAM AND OF R&D
13.0 PLL shall pay EVI:
13.1 The Research and Development Contributions in respect to the
Research and Development Program at the rate of $22,225 per
calendar month commencing on Commencement Date and monthly
thereafter, terminating on the expiry of three month's notice
given by PLL of its intention to cease participation in the
Research and Development Program, such notice not to be given
before 1 January 2000, such that the total Research and
Development Contributions required to be paid by PLL in
respect to the Research and Development Program shall be not
less than $200,000; and
13.2 In respect of R&D required by PLL to be carried out by NRC,
following the completion of the Research and Development
Program, for further research and development of the Licensed
Products, such fee amount, not to be less than $100,000 per
Contract Year, as is stipulated by PLL, and such further
amounts per Contract Year as PLL and EVI shall agree PROVIDED
THAT if PLL wishes to stipulate an amount below $100,000 in
any Contract Year, it shall only be entitled to license any
new Products developed by EVI or NRC in and after that
Contract Year on the commercial terms that EVI shall determine
and PROVIDED FURTHER that
Agreement for Research, Development and Licensing of Technologies,
dated October 13,1999. 7
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all R&D must be documented in a manner similar to that of
Schedule B and agreed to by both EVI and NRC.
GRANT OF RIGHTS TO LICENSED PRODUCTS
14.0 EVI grants to PLL and PLL accepts the following:
14.1 The sole and exclusive rights to exploit those Licensed
Products exclusively licensed or assigned to EVI by NRC as at
the Commencement Date.
14.2 The non-exclusive rights to exploit those Licensed Products
which are licensed to EVI or jointly owned by EVI with any
other party following license or assignment to EVI by NRC as
at the Commencement Date.
for a term commencing on the Commencement Date and terminating on the
later of 31 March 2000 or the date of effective termination of this
Agreement. During this term, EVI shall not itself use for commercial
purposes (except for research and development) nor shall it license
any of the rights granted to PLL under this Agreement to any other
person and shall ensure that NRC shall do the same.
OWNERSHIP OF JOINTLY DEVELOPED PRODUCTS
15.0 Any new Products conceived or first reduced to practice in the course
of or as a result of the Research and Development Program or the R&D
program shall, subject to Clause 13.2, be assigned into the joint
ownership of PLL and EVI and shall either be licensed exclusively to
PLL pursuant to this Agreement if PLL exercises its License Rights or
may be used by PLL and EVI independently of each other if PLL does not
exercise its License Rights PROVIDED THAT where the Products have been
developed using the intellectual property rights of any third person,
the parties shall be subject to the rights of such third person as to
the ownership and rights to the new Products.
For further clarification, prior to 1 April 2000, PLL agrees not to
sell Licensed Products or Products in commercial quantities to any
person, without the written permission of EVI.
PROTECTION OF THE INTELLECTUAL PROPERTY IN THE JOINTLY DEVELOPED PRODUCTS
16.0 PLL shall either at its discretion or at the request of EVI, file and
keep current in the joint names of EVI and PLL such patent applications
as are reasonably required to protect the interests of EVI and PLL in
the Intellectual Property for the jointly developed Products in the
countries that the parties consider appropriate. The costs of applying
for, prosecuting and maintaining such patent applications shall be
borne by PLL.
17.0 EVI shall at the request of PLL, provide PLL with all documents
required by PLL to effect the filing of the patent applications and
shall ensure NRC provides the same, including assignments of rights
signed by the inventors employed by NRC.
OWNERSHIP OF PROCESSES
18.0 EVI acknowledges:
Agreement for Research, Development and Licensing of Technologies,
dated October 13,1999 8
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18.1 as at the date of execution of this Agreement, PLL is the
owner of PLL's Processes and that neither EVI nor NRC have
developed their know-how to the point that they can synthesise
the Products on a commercially viable basis.
18.2 for itself and NRC, that all additions to PLL's Processes
conceived or first reduced to practice in the course of or as
a result of the Research and Development Program shall be
assigned into the sole and exclusive ownership of PLL.
Agreement for Research, Development and Licensing of Technologies,
dated October 13,1999 9
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PART 3
LICENSING OF PROCESSES AND PRODUCTS
CONFIRMATION OF UPTAKE OF LICENSE RIGHTS
19.0 This Part 3 shall commence and be in full force and effect if PLL in
its absolute discretion determines that the jointly developed Processes
and Products are capable of producing processes and products which meet
PLL's target specifications (which include performance, price, ability
to be commercially manufactured, stability and other factors) and gives
notice to EVI that it takes up the License Rights hereunder.
PART 3 CONDITIONAL
20.0 The application of this Part 3 is conditional upon PLL confirming its
wish to take up the License Rights on or before 31 March 2000 or such
later date agreed by EVI, failing which, this Part 3 shall have no
effect.
GRANT OF LICENSE RIGHTS
21.0 EVI or, at the election of EVI any related company of EVI, in respect
of any part of the following rights, grants to PLL and PLL accepts the
following for the License Term:
21.1 The sole and exclusive rights to exploit the Licensed Products
owned by EVI or exclusively licensed or assigned to EVI by NRC
as at the Confirmation Date.
21.2 The non-exclusive rights to exploit the Licensed Products
owned by EVI or jointly owned by EVI with any other party or
non-exclusively licensed or assigned to EVI by NRC as at the
Confirmation Date.
21.3 The exclusive rights to exploit the Licensed Products and
Processes either owned by EVI or licensed or assigned to EVI
by NRC or jointly owned by EVI with PLL following licensing or
an assignment to EVI by NRC which exist at 1 April 2000 or
which arise at any time during the License Term, subject to
the provisions of Clause 13.2.
Should EVI elect that the grant of the above rights be in part or in
total by a related company of EVI, the parties agree, in such event, to
execute such appropriate other agreement or agreements containing the
terms herein agreed.
CONSIDERATION FOR LICENSE RIGHTS
22.0 PLL shall pay to EVI the following:
22.1 The Minimum Guaranteed Royalty Fee for the first Contract Year
of $100,000 which shall be paid within 90 days of the
Confirmation Date; and
Agreement for Research, Development and Licensing of Technologies,
dated October 13, 1999. 10
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22.2 Either:
(a) The Royalty Fees calculated on the license fees and
royalties or on the net sales of manufactured
Licensed Products and Products in each Contract
Year, as set out in SCHEDULE C, subject to adjustment
pursuant to Clauses 25 and 26; or
(b) The Minimum Guaranteed Royalty Fees of each Period or
Contract Year as set out in Column 4 of SCHEDULE D.
whichever shall be the greater
PROVIDED THAT
(c) respecting the first Contract Year only, the amount
so computed shall be reduced by the $100,000 to be
paid as per Clause 22.1;
(d) the amounts paid by PLL to EVI in respect of R&D as
per Clause 13.2 shall be credited to PLL as
non-refundable payments on account of the Minimum
Guaranteed Royalty Fees of the Contract Year of
receipt of payment;
(e) The Minimum Guaranteed Royalty Fees payable
respecting any Contract Year shall be adjusted to
reflect the actual selling price of Licensed Products
or Products and of battery cells utilising the
Licensed Products or Products.
23.0 The Royalty Fees, shall be calculated quarterly and payable no later
than 30 days following the end of each Contract Year quarter. The
payment respecting the final quarter of any Contract Year shall be
adjusted as required to attain at least the Minimum Guaranteed Royalty
Fees for that Contract Year.
24.0 Research and Development Contributions shall be treated by EVI as
non-refundable advance payments of the Minimum Guaranteed Royalty Fees
through 31 March 2000. Amounts paid by PLL to EVI in respect of R&D as
per Clause 13.2 shall be credited to PLL as non-refundable payments on
account of the Minimum Guaranteed Royalty Fees as set out in Column 4
of Schedule D of the applicable Contract Year or on account of Royalty
Fees of such year.
ADJUSTMENT TO ROYALTY FEES
25.0 EVI acknowledges that:
25.1 PLL is the licensee of products and processes developed and
owned by third parties (including Massachusetts Institute of
Technology) and that there may be advantages in combining
those third parties' know-how with the Licensed Products;
25.2 It will join in negotiations with PLL and such third parties
and shall in good faith, use its best efforts to agree on the
amount of Royalty Fees or royalties to be paid by PLL to EVI
and the third parties provided that the total Royalty Fees or
royalties
Agreement for Research, Development and Licensing of Technologies,
dated October 13, 1999. 11
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payable by PLL to all parties shall not exceed the Royalty
Fees that would have been payable to EVI if the third parties
know-how had not been used. Multiple Royalty Fees shall not be
due to EVI if the sale, use, lease or manufacture of any
Licensed Products or Products is covered by more than one of
the Patents. Nothing in this Clause shall oblige EVI to accept
a reduction in the Royalty Fees due to it.
26.0 If PLL funds R&D as per Clause 13.2 in an amount below $100,000 for any
Contract Year within the first five years of the License Term, the
license set out in this Agreement shall cease to be "sole and
exclusive" for Contract Years subsequent to such year and the Minimum
Guaranteed Royalty Fees as set out in Column 4 of Schedule D shall
reduce by:
26.1 one third for the sixth to tenth Contract Years of the License
Term; subsequent to such year
26.2 two thirds for the eleventh to fifteenth Contract Years of the
License Term subsequent to such year;
and thereafter be at zero.
PAYMENT OF PATENT COSTS
27.0 PLL shall manage the prosecution, grant and continuing registration of
all patents filed or required by the parties to be filed in respect to
the Licensed Products or Products and shall promptly pay all such
costs.
TARGET SALES
28.0 PLL shall use its best endeavours to:
28.1 Construct and commission a pilot plant capable of producing
commercial quality Products on or before the Confirmation
Date; and
28.2 Achieve the target sales of Products set out in SCHEDULE D.
INFORMATION AND AUDIT
29.0 EVI shall be entitled to receive:
29.1 Quarterly reports from PLL detailing research and development,
manufacturing, marketing and sales activities in the preceding
Contact Year quarter, within 30 days of the end of such
quarter;
29.2 Such information that EVI may reasonably require to calculate
the amount of Royalty Fees computed as per Schedule C; and
29.3 Advice of all sublicenses granted by PLL respecting Licensed
Products or Products and, within a reasonable period of time
after the grant of any such sublicense, a certified copy of
such sublicense agreement.
Agreement for Research, Development and Licensing of Technologies,
dated October 13, 1999. 12
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30.0 EVI may from time to time, by its representative or by an independent
accountant or auditor, examine or audit the records of PLL relating to
any information which PLL has provided to EVI or which PLL is required
to have provided to EVI but has failed to do so.
31.0 EVI shall pay the cost of any inspection or audit carried out pursuant
to the immediately preceding Clause if the audit or inspection
establishes that information provided by PLL to EVI was complete and
correct.
32.0 PLL shall pay the cost of any inspection or audit carried out pursuant
to Clause 30 if the audit or inspection is required to obtain
information which PLL has failed to provide or if the audit or
inspection establishes that information provided by PLL to EVI was
incorrect or incomplete other than in a particular which is trivial or
minor.
COLLABORATIVE MARKETING
33.0 PLL acknowledges that EVI wishes PLL to sublicense the use of the
Licensed Products or Products by battery manufacturers for maximum
generation of Royalty Fees. PLL and EVI agree to collaborate on the
identification, presentation and marketing of sub-licenses of the
Licensed Products or Products to battery manufacturers and such other
potential sub-licensees as the parties consider appropriate from time
to time. PLL shall not refuse to grant a sub-license of the License
Rights to any person who meets the criteria reasonably set by PLL and
EVI for a suitable licensee except with the prior approval of EVI, such
approval not to be unreasonably withheld.
TERMINATION OF EXCLUSIVITY OF LICENSE RIGHTS
34.0 The exclusivity of the License Rights may be reduced to non-exclusive
License Rights by:
34.1 EVI, in the event that PLL fails to meet a) the Minimum
Guaranteed Royalty Fees in any two consecutive Contract Years
and b) the accumulative Minimum Guaranteed Royalty Fees of the
same two consecutive Contract Years, or
34.2 PLL, in the event that it reasonably believes that it will be
unable to meet the Minimum Guaranteed Royalty Fees respecting
Contract Years ending 31 March 2003 or later,
and in such circumstances:
(a) the Minimum Guaranteed Royalty Fees shall reduce in
accordance with Clause 26 PROVIDED THAT if PLL has
paid EVI Royalty Fees of at least $1,000,000 as at
that date, the Minimum Guaranteed Royalty Fees shall
then not apply to PLL; and
(b) EVI may grant License Rights to any other person or
persons on such terms and conditions as it considers
appropriate.
Agreement for Research, Development and Licensing of Technologies,
dated October 13,1999. 13
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(c) where EVI grants License Rights to another person on
terms and conditions more favourable than those
applying to PLL under this Agreement, EVI shall
extend the more favourable terms and conditions to
PLL.
Agreement for Research, Development and Licensing of Technologies,
dated October 13,1999. 14
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PART 4
GENERAL TERMS AND CONDITIONS
OWNERSHIP OF INTELLECTUAL PROPERTY
35.0 PLL acknowledges and agrees that EVI has license or other rights to the
Intellectual Property in respect to EVI's and NRC's Processes and
Products. In order to protect and maintain EVI's and NRC's rights in
the above, PLL shall:
35.1 Use EVI's and NRC's Intellectual Property solely in accordance
with this Agreement and in accordance with all instructions,
rules and procedures prescribed by EVI and NRC from time to
time;
35.2 Not orally or in writing attack or contest, including by or in
any administrative or judicial action or proceeding before any
governmental authority, the ownership of EVI's or NRC's
Intellectual Property nor will PLL orally or in writing
disparage the name, the Intellectual Property or the
reputation of EVI or NRC.
36.0 EVI acknowledges and agrees on behalf of itself and NRC, that PLL has
sole and exclusive rights to the Intellectual Property in respect to
PLL's Processes and Products. In order to protect and maintain PLL's
rights in the above, EVI shall (and shall ensure that NRC shall also):
36.1 Use PLL's Intellectual Property solely in accordance with this
Agreement and in accordance with all instructions, rules and
procedures prescribed by PLL from time to time;
36.2 Not orally or in writing attack or contest, including by or in
any administrative or judicial action or proceeding before any
governmental authority, the ownership of PLL's Intellectual
Property nor orally or in writing disparage the name, the
Intellectual Property or the reputation of PLL.
37.0 EVI warrants and undertakes to PLL that EVI and/or its related
companies have full right, power and entitlement to grant to PLL the
License Rights over all of NRC's Licensed Products and Products and
NRC's Processes set out in this Agreement and NRC shall provide PLL
with such evidence as PLL shall reasonably require to establish such
claim.
RIGHTS IN THE INTELLECTUAL PROPERTY UPON TERMINATION OF THIS AGREEMENT
38.0 On termination of this Agreement PLL and EVI will:
38.1 Immediately cease to use the Intellectual Property of the
other (including, in the case of PLL ceasing to use the
Intellectual Property of NRC), except for Intellectual
Property jointly owned by PLL and EVI;
Agreement for Research, Development and Licensing of Technologies,
dated October 13,1999. 15
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38.2 Not thereafter do or display or suffer or permit to be done or
displayed any act matter or thing which may lead or induce or
shall be calculated or likely to lead or induce members of the
public to believe that the parties are still connected or
associated in any way with each other or are still entitled to
market or distribute the Products
and EVI shall ensure that NRC shall also comply with the obligations of
this Clause as if it were EVI.
39.0 If any party fails to comply with Clause 38.2 then the other party by
its employees and agents may enter the defaulting party's premises and
remove all of its Intellectual Property and material relating to its
Intellectual Property. All costs and expenses incurred in so doing
shall be recoverable as a debt owing by the defaulting party.
CONFIDENTIALITY
40.0 No party will (and EVI shall ensure that NRC shall not) disclose to any
person any Confidential Information, unless that disclosure is
expressly authorised in writing by the owner of such Confidential
Information.
41.0 Other than may be necessary to reasonably carry out either party's day
to day commercial activities, neither party shall (and EVI shall ensure
that NRC shall not) disclose the terms of this Agreement nor issue any
promotional material or other public announcement or disclosure in
respect to the existence or nature of the relationship between PLL, EVI
and NRC without the prior approval of all of such persons in writing.
SPECIFIC SECRECY OBLIGATIONS
42.0 Each of the Parties shall (and EVI shall ensure that NRC shall):
42.1 Treat as confidential and keep absolutely secret, all the
Confidential Information received by it from the other party;
42.2 Take all proper and effective precautions to prevent the
disclosure of the Confidential Information and to preserve the
secrecy and confidentiality of the Confidential Information
including, without limitation, taking all necessary action to
prevent unauthorised persons from obtaining access to the
Confidential Information whether by a direct or indirect
exposure to it or otherwise;
42.3 Take all reasonable steps to ensure that its employees or
agents also observe the secrecy requirements of this
Agreement; and
42.4 Return to the owner all physical or written records containing
the Confidential Information or documentation relating to or
concerning the Confidential Information including copies of
documentation then in existence immediately upon the
termination or expiration of this Agreement.
Agreement for Research, Development and Licensing of Technologies,
dated October 13, 1999 16
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CIRCUMSTANCES WHEN DISCLOSURE OF CONFIDENTIAL INFORMATION IS PERMITTED
43.0 A party is relieved of its obligations to preserve the confidentiality
of the Confidential Information if and only to the extent that:
43.1 Such Confidential Information is or becomes generally publicly
available other than as a result of a breach of this Agreement
by the party; or
43.2 Such Confidential Information was developed independently by
the party; or
43.3 Specific disclosure was required by law.
BEST ENDEAVOURS
44.0 Each of the parties shall do (and EVI shall ensure that NRC will do)
all things necessary to carry out the terms of this Agreement to the
fullest effect in accordance with best business practice. In
particular, each of the parties shall:
44.1 Diligently and fully exploit (or support the exploitation of)
the License Rights under this Agreement; and
44.2 Keep free from conflicting enterprises or any other activities
which would be detrimental to or interfere with the conduct of
this Agreement.
PROHIBITIONS
45.0 None of the parties shall (and EVI shall ensure that NRC shall not):
45.1 Use the Intellectual Property of the other parties except in
the manner permitted in this Agreement;
45.2 Be a party to the doing of any act whereby the goodwill trade
or business of the other party may be prejudicially affected;
45.3 Hold itself out as an affiliate of the other;
45.4 Pledge the credit of the other party;
INDEMNITY AND WARRANTIES
46.0 Each of the parties unconditionally and irrevocably indemnifies the
other against any loss, liability, costs or expenses which the other
party may incur because it or NRC:
46.1 Fails to pay any moneys due and payable to the other party (or
within any applicable period of grace) or in the manner
required;
46.2 Fails to perform any of its obligations under this Agreement
or under any other contractual arrangement between it and the
other party;
Agreement for Research, Development and Licensing of Technologies,
dated October 13, 1999 17
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46.3 Has infringed the intellectual property rights of any other
person.
And it will on demand pay to the other party the amount of that loss,
liability, cost or expense.
RIGHT TO PROSECUTE INFRINGEMENTS OF THE INTELLECTUAL PROPERTY
47.0 PLL shall have the right under its control and at its own expense to
prosecute any third party infringements of EVI or NRC's Intellectual
Property so long as it is the sole and exclusive licensee of EVI's and
NRC's Intellectual Property. EVI shall cooperate with PLL (and shall
ensure NRC's cooperation) on any action brought by PLL under this
Clause subject only to PLL paying EVI and NRC's reasonable costs.
48.0 Nothing in Clause 47 shall oblige PLL to take any action that it does
not consider to be in its best interests. However, in such
circumstances, EVI may at its discretion and cost, take such action and
any recovery obtained by EVI shall be the property of EVI. PLL shall
cooperate with EVI on any action brought by EVI under this Clause
subject only to EVI paying PLL's reasonable costs.
TERMINATION
49.0 PLL shall have the right to terminate this Agreement at the end of any
Contract Year for any reason upon at least 12 month's written notice to
EVI.
50.0 Either Party may elect to terminate this Agreement by giving notice in
writing to the other party of its intention to do so if the other
party:
50.1 Commits a breach of any of the provisions of this Agreement
and fails to rectify the breach (if capable of being
rectified) within 30 days of being required to do so in
writing other than, in the case of PLL, a failure to meet the
target sales as set out in Schedule D;
50.2 Commits an act of bankruptcy or fails to contest within ten
working days of service of any petition in liquidation;
50.3 Becomes the subject of any proceedings to obtain an order or
resolution for its winding up (except as part of a bona fide
reconstruction scheme);
50.4 Has a receiver/manager, official manager or provisional
liquidator appointed over the whole or part of its
undertakings or assets;
50.5 Has an execution or other process of any court or authority or
any distress levied upon any of its property without it being
paid out, set aside or withdrawn within 14 days of its issue;
50.6 Has a substantial part of its assets resumed, confiscated or
forfeited;
Agreement for Research, Development and Licensing of Technologies,
dated October 13, 1999 18
20
50.7 Agrees with the other party in writing to terminate this
Agreement at the end of any Contract Year; or
50.8 After remedying any default in respect to which notice
requiring it to remedy such default was given, continues to
engage in the same non-compliance whether or not corrected
after such notice.
CONSEQUENCES OF TERMINATION OR EXPIRATION
51.0 In the event that this Agreement expires or is terminated:
51.1 All rights of PLL under this Agreement will terminate;
51.2 PLL will forthwith;
(a) Pay to EVI any outstanding Research and Development
Contributions, or fees in respect of R&D, or Royalty
Fees or Minimum Guaranteed Royalty Fees, or charges
due to NRC or EVI at the effective date of
termination or expiration within 30 days of the
effective date of termination or expiration;
(b) Cease to hold itself out as a licensee of the
Licensed Products or that it is associated with NRC
or EVI in any way;
(c) Cease using NRC's or EVI's Intellectual Property and
the Licensed Products except those Licensed Products
or Products jointly owned by PLL;
(d) Return to NRC and EVI all documents and other
material or matters relating to their respective
Intellectual Property and the Licensed Products or
Products except those Licensed Products or Products
jointly owned by PLL.
52.0 Termination or expiration of this Agreement shall be without prejudice
to any claim any party may have against the other or others under this
Agreement as at the date of effective termination or expiration.
GENERAL ACKNOWLEDGEMENTS
53.0 Each of the parties acknowledges that:
53.1 This Agreement contains all the terms conditions and
obligations of the parties.
53.2 It shall make, do perform and execute all documents acts
matters and things required to ensure that no term of this
Agreement shall be breached by it.
Agreement for Research, Development and Licensing of Technologies,
dated October 13, 1999 19
21
NOTICES
54.0 Any notice, demand or other document under or relating to this
Agreement will be sufficiently served if delivered personally or if
sent by E-mail, fax, or prepaid registered letter to the party to be
served at the address of such party at such address as may from time to
time be notified in writing by such party to the other parties.
55.0 Any notice, demand or other document will be deemed to have been served
at the time of delivery or, if service is effected in any other manner
described, at the time when it would in the ordinary course be
delivered.
AMENDMENT
56.0 This Agreement may only be varied by the written agreement of the
parties.
APPROVALS AND CONSENT
57.0 Except when the contrary is stated in this Agreement, a party may give
or withhold an approval or consent to be given under this Agreement in
that party's absolute discretion and subject to those conditions
determined by the respective party.
58.0 A party is not obliged to give its reasons for giving or withholding a
consent or for giving a consent subject to conditions.
COUNTERPARTS
59.0 This Agreement may be executed in a number of counterparts and if so
executed, the counterparts taken together constitute one Agreement.
NO WAIVER
60.0 No failure by a party to exercise any power given to it or to insist
upon the strict compliance by the other or others with any obligations
or conditions and no customary practice of the parties or variances
with the terms of this Agreement shall constitute a waiver of that
party's right to demand exact compliance with the terms of this
Agreement other than in relation to breaches which have been waived nor
shall a waiver by it of any particular default affect or impair its
right in respect of any subsequent default of the same or different
nature, nor any delay or omission by that party to exercise any right
arising from default shall affect or impair its rights as to the said
default or any subsequent default.
FURTHER ASSURANCE
61.0 Each party shall promptly execute all documents and do all things that
another party from time to time reasonably requests to effect, perfect
or complete this Agreement and all transactions incidental to it.
LEGAL COSTS
62.0 The Parties shall each pay all their own legal and other expenses
relating directly or indirectly to the negotiation, preparation and
execution of this Agreement and all documents incidental to it.
Agreement for Research, Development and Licensing of Technologies,
dated October 13, 1999 20
22
SEVERANCE
63.0 In the event of illegality, each of the terms of this Agreement is
severable from the other terms of this Agreement and the severance of
one term does not affect the other terms.
DISPUTE RESOLUTION
64.0 The parties agree that any dispute arising out of or relating to this
Agreement shall be resolved solely by:
64.1 Negotiation between the chief executive officers of the
parties in good faith discussions, such discussions to be held
within 5 working days of one party notifying the other of a
dispute and the nature of such dispute;
64.2 If the parties fail to resolve the dispute through mediation
within 120 working days, either party shall have the right to
pursue any other remedies available to it.
65.0 Should PLL confirm its wish to take up the License Rights as per this
Agreement, PLL shall, after the Confirmation Date and after receipt of
the sum of $1 to be paid by EVI to PLL, issue to EVI 100,000 fully paid
Class B ordinary shares in the capital of PLL in consideration for the
support provided to PLL by EVI. Such 100,000 fully paid Class B shares
of PLL are as presently constituted, adjusted as appropriate to give
effect to share subdivisions, consolidations, mergers and
amalgamations, stock dividends, distributions in property and other
corporate changes.
66.0 This Agreement shall be governed by the laws of the Province of
Ontario, Canada, except that any questions affecting the construction
or effect of any of the Patents shall be determined by the law of the
country in which the Patent shall have been granted.
Agreement for Research, Development and Licensing of Technologies,
dated October 13, 1999 21
23
SCHEDULE B
RESEARCH AND DEVELOPMENT PROGRAM
DEVELOPMENT OF COMMERCIAL Li(x)CR(y)Mn(z)O(2) CATHODE MATERIALS
TIMESCALE:
9 months
OVERALL GOAL:
To prepare reproducible pilot plant batches (200 kg) of Li(x)Cr(y)Mn(z)O(2)-
based cathode material meeting or exceeding the following market-driven
requirements:
- 200 mAh/g capacity at 25 (degree)C using a 0.2C rate
- 140 mAh/g capacity at -20 (degree)C using a 0.2C rate
- capacity at 1C rate >90% of capacity at 0.2C rate
- maximum charging voltage of 4.3 V
- smooth discharge curve between ca. 4.2 and 2.8 V
- fade rate <10% at 55 (degree)C over 100 cycles
- safety better than LiCoO(2)
- cost of production lower than LiCoO(2)
CORE PERSONNEL RESOURCES:
NRC
- Xxx XxXxxxxx (Project Manager for NRC)
- Xxxxxx Xxxxxxxx (Senior Research Officer) 75%
- Yves Grincourt (Research Assistant-Electrochemical) 75%
- Post-doctoral fellow 100%
- Technical Officer 1 100%
- Technical Officer 2 100%
PLL
- Xxxx Xxxxxxxxx (Project Manager for PLL)
- Xxxxx Xxxxxxxxx (Materials Development) 75%
- Research Scientist (Materials Development) 75%
- Xxxx Xxxxxxxxxxx (Electrochemical) 60%
- Research Technician 1 (Synthetic) 100%
- Research Technician 2 (XRD-structural analysis) 75%
- Research Technician 3 (Electrochemical) 90%
- Research Technician 4 (Electrochemical) 90%
- Xxxxx Xxxxxxx (Process Engineering) 75%
- Process Engineer 100%
- Process Technician 1 100%
- Process Technician 2 100%
Agreement for Research, Development and Licensing of Technologies, dated October
13, 1999
23
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This project will be jointly managed between NRC and PLL. NRC's representative
will be Xx Xxx XxXxxxxx and PLL's representative will be Xx Xxxx Xxxxxxxxx. Xx
XxXxxxxx will be responsible for work performed at NRC, Xx Xxxxxxxxx will be
responsible for work performed at PLL
LABORATORY AND EQUIPMENT RESOURCES:
NRC
- Preparative labs
- Laboratory furnaces
- Benchtop spray dryer
- Electrochemical testing facility
- AC impedance spectrometer
- X-ray diffraction (XRD)
- Thermal analysis (TGA-DSC)
- Accelerated rate calorimeter (ARC)
- AA
- BET surface area
- Particle sizer
- Gas pycnometer
- Scanning electron microscope (SEM)
- X-ray photoelectron spectrometer (XPS)
PLL
- Preparative labs
- Laboratory furnaces
- Large-scale furnaces
- Electrochemical testing facility
- AC impedance spectrometer
- X-ray diffraction
- AA and ICP
- High-resolution SEM (University of Auckland)
PROGRAM
The program is divided into inter-related tasks. Each task has well-defined
objectives and to each task are assigned persons who will be overall responsible
for guiding and coordinating the task to ensure that the objectives are met
within the timescale, and that relevant information is communicated to those
responsible for related tasks. While responsibility for individual tasks has
been assigned variously to the NRC and PLL, it is nonetheless envisaged that
work will be cooperative with contributions from both parties to all tasks.
For approximately the first half of the program, a strong effort at both centres
will be directed toward materials development at the laboratory scale and
electrochemical test cell development. In the second half of the program,
resources at PLL will be more focussed on scale-up of process and production,
with the NRC both contributing to this and continuing materials development.
TASK 1: DEVELOP COMPOSITIONS
Coordinators Xxxxxx Xxxxxxxx (NRC) & Xxxxx Xxxxxxxxx (PLL)
Key objectives:
Agreement for Research, Development and Licensing of Technologies, dated October
13, 1999
24
25
- Prepare Li(x)Cr(y)Mn(z)O(2)-based compounds with controlled composition and
particle size/structure designed to exceed the minimum market-defined
criteria for rate-related capacity and stability of capacity.
- Determine the best composition for scale-up and commercialisation.
WORK PLAN
1.1 ESTABLISH CHEMICAL COMPOSITION RANGE FOR MATERIAL
- PLL to reproduce Li(x)Cr(0.5)Mn(0.5)O(2) by coprecipitation, and to
optimise coprecipitation procedure (including temperature/time/gas
requirements for subsequent processing) to produce material showing
equivalent or better electrochemical properties compared with spray-dried
samples.
- NRC to optimise spray-drying procedure (including
temperature/time/atmosphere requirements for subsequent processing).
- Parallel exploration of varying composition using spray drying (NRC) and
coprecipitation (PLL).
1.2 ESTABLISH INFLUENCE OF SYNTHESIS ROUTE AND CONDITIONS
- Simplify synthetic procedure
- investigate formation and stability of compositions as a function
of temperature/time/atmosphere.
- analysis of each process step by XRD, AA and TGA
- Investigate alternative process routes using readily available dry
precursors.
1.3 INVESTIGATE ALTERNATIVE FORMULATIONS
- Investigate partial and total substitution of Cr by Ni, Fe, Co, Ti, V or
Al.
TASK 2: EXAMINE CRYSTAL STRUCTURE AND PARTICLE MORPHOLOGY
Coordinators Xxxxxx Xxxxxxxx (NRC) & Xxxxx Xxxxxxxxx (PLL)
Key objectives:
- Obtain data relevant to Task 1 and feed back to Task 1 observations and
correlations in combination with electrochemical data from Task 3.
WORK PLAN
2.1 DETERMINE EFFECT OF COMPOSITION ON CRYSTAL STRUCTURE
- XRD
2.2 DETERMINE EFFECT OF SYNTHESIS ROUTE AND REACTION CONDITIONS ON CRYSTAL
STRUCTURE AND PARTICLE MORPHOLOGY
- XRD, SEM, particle size analysis, BET, oxidation state analysis
2.3 DETERMINE INFLUENCE OF ALTERNATIVE FORMULATIONS ON CRYSTAL STRUCTURE AND
PHASE STABILITY
- XRD
TASK 3: ELECTROCHEMICAL CHARACTERISATION AND TESTING OF SAMPLES
Coordinators Xxxx Xxxxxxxxxxx (PLL) & Yves Grincourt (NRC)
Key objectives:
- Obtain data relevant to Task 1 and feed back to Task 1 observations and
correlations in combination with structural/morphological data from Task 2.
Agreement for Research, Development and Licensing of Technologies, dated October
13, 1999
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WORK PLAN
3.1 ESTABLISH REPRODUCIBILITY OF ELECTROCHEMICAL DATA BETWEEN NRC AND PLL.
- Optimise electrode formulation and cell configuration.
- Exchange of electrodes, cells, and cell hardware between NRC and
PLL
3.2 OPTIMISATION OF TEST CELL ASSEMBLY
- Investigate electrochemical conditions to increase rate-related capacity
and minimise capacity fade
- Optimise stack pressure
- Optimise for Li metal and Carbon anodes
3.3 INVESTIGATION OF INTERCALATION MECHANISMS AND RATE-LIMITING FACTORS
- In-situ pulse experiments on different time scales during charge-discharge
- AC impedance specroscopy
- dQ/dV plots
- XRD, chemical analysis, and thermal stability of cycled materials at
various states of charge and as a function of first charge conditions
3.4 EXTENDED CYCLING TESTS
- Determine influence of composition and synthesis conditions on temperature-
and rate-related capacity, and on cycling stability.
TASK 4: DEVELOP SYNTHETIC PROCEDURES TOWARD PRODUCTION PROCESS
Coordinator Xxxxx Xxxxxxxxx (PLL)
Key objectives:
- Reproduce compounds prepared in Task 1 (retaining electrochemical
performance characteristics) using commercially viable synthesis procedures
streamlined toward scale-up and production.
TASK 5: SCALE-UP TRIALS (100 g TO 5 kg)
Coordinators Xxxxx Xxxxxxx and Xxxxx Xxxxxxxxx (PLL)
Key objectives:
- Prepare Li(x)Cr(y)Mn(z)O(2)-based compounds developed in Task 1 (and Task
9) as reproducible 100 g and 5 kg batches.
TASK 6: SCALE UP TO 100 T PER ANNUM PILOT PLANT
Coordinator Xxxxx Xxxxxxx (PLL)
Key objectives:
- Produce reproducible 200 kg batches of the selected material (retaining
electrochemical performance characteristics of the small batch samples) in
the pilot plant.
TASK 7: VERIFY REPRODUCIBILITY OF COMPOSITION, STRUCTURE & MORPHOLOGY FOR
SCALE-UP SAMPLES
Coordinators Xxxxxx Xxxxxxxx (NRC) & Xxxxx Xxxxxxxxx (PLL)
Agreement for Research, Development and Licensing of Technologies, dated October
13, 1999
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Key objectives:
- Obtain data for samples produced in Tasks 5 & 6 and feed back to Tasks 5 &
6 observations and correlations.
TASK 8: ELECTROCHEMICAL TESTING OF SCALE-UP SAMPLES
Coordinator Xxxx Xxxxxxxxxxx (PLL)
Key objectives:
- Obtain data for samples produced in Tasks 5 & 6 and feed back to Tasks 5 &
6 observations and correlations.
WORK PLAN
8.1 EXTENDED CYCLING TESTS
- Determine reproducibility and influence of synthesis conditions on
temperature- and rate-related capacity, and on cycling stability.
TASK 9: CONTINUED MATERIAL DEVELOPMENT TO ENHANCE PROPERTIES
Coordinator Xxxxxx Xxxxxxxx (NRC)
Key objectives:
- Continue development of Li(x)Cr(y)Mn(z)O(2)-based compounds to further
improve electrochemical characteristics after achievement of initial
performance goals.
- Feed new developments into the loop of scale-up to commercial product.
Agreement for Research, Development and Licensing of Technologies, dated October
13, 1999
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28
Xxxxx Chart: Development of commercial Li(x)Cr(y)Mn(z)O(2) cathode materials
Task 1 (compositions) NRC+PLL........... Aug '99 - Dec '99
Task 2 (structure-morphology) NRC+PLL... Aug '99 - Dec '99
Task 3 (electrochemical) NRC+PLL........ Aug '99 - Apr '00
Task 4 (commercial synthetic procedures)
NRC+PLL................................ Sep '99 - Dec '99
ms stable rate-related capacity
objectives achieved.................... Dec '99
ms composition for scale-up
determined............................. Dec '99
ms precursor preparation defined for
scale-up............................... Dec '99
Task 5 (pre-scale-up trials 100 g to
5 kg) PLL................................ Aug '99 - Apr '00
Task 6 (scale up to pilot plant) PLL.... Jan '00 - Apr '00
Task 7 (reproducibility of scale-up
samples) PLL........................... Aug '99 - Apr '00
Task 8 (electrochemical testing scale-up
samples) PLL........................... Aug '99 - Apr '00
ms reproducible pilot plant batches
produced............................... Mar '00
Task 9 (continued material development)
NRC.................................... Jan '00 - Apr '00
Agreement for Research, Development and Licensing of Technologies, dated October
13, 1999
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SCHEDULE C
ROYALTY FEES
ROYALTY FEES OF EACH CONTRACT YEAR TO BE CALCULATED AS:
a) 33% of the license fees earned by PLL from the sub-licensing to a third
party of the rights to the Licensed Products whether such fees are paid by
the sub-licensee in one sum or by installments, and
b) 4% of Net Sales where Licensed Products or Products are manufactured by
PLL, any related party of PLL or by any other party.
PROVIDED THAT
1) When the amount of Royalty Fees payable by PLL to EVI re any Contract Year
reaches the higher of $1 million or the Minimum Guaranteed Royalty Fees for that
Contract Year, the percentage of the license fees payable by PLL to EVI under
paragraph a) above shall then reduce from 33% to 25% on the balance of the
license fees upon which Royalty Fees are payable to EVI during that Contract
Year; and
2) "Net Sales" shall mean gross sales of Licensed Products or Products less
sales taxes, freight, insurances, reasonable sales persons' or agents'
commissions and packaging costs; and
3) In the event that PLL or any related party of PLL uses the Licensed
Products or Products in its manufacture of cells or batteries, the Royalty Fees
payable to EVI shall be the higher of (1) 4% of the best price that PLL or any
related party of PLL or any licensed manufacturer of the Licensed Products or
Products sells the Licensed Products or Products calculated on the Licensed
Products or Products used by PLL or any related party of PLL in its
manufacturing process, or (2) 1% of the Net Sales of cells or batteries
utilising the Licensed Products or Products which are sold by PLL or any related
party of PLL.
Agreement for Research, Development and Licensing of Technologies, dated October
13, 1999
29
30
SCHEDULE D
TARGET SALES
PERIOD OR CONTRACT YEAR ENDING GUARANTEED CELL CELL VALUES BASED ON GUARANTEED MINIMUM
31 MARCH VOLUMES CONTAINING THE GUARANTEED CELL ROYALTY FEES BASED ON
LICENSED CATHODE. VOLUMES AT A COST OF CELL COST OF $2.00 PER
$2.00 PER CELL. CELL.
(See Note 1 below) (See Note 1 Below) (See Note 1 Below)
------------------ ------------------ ------------------
2000 Nil Nil $ 200,000
2001 Nil Nil $ 100,000
2002 500,000 $ 1,000,000 $ 100,000
2003 5,000,000 $10,000,000 $ 200,000
2004 10,000,000 $20,000,000 $ 400,000
2005 25,000,000 $50,000,000 $1,000,000
2006 50,000,000 $100,000,000 $2,000,000
2007 75,000,000 $150,000,000 $3,000,000
2008 and thereafter (See Note 2 below) (See Note 2 below) (See Note 2 below)
NOTES:
1. An indicative cell cost value of $2.00 per cell has been used in
calculating the Minimum Guaranteed Royalty Fees. If the cell cost
values reduce to below $2.00 per cell and there is no corresponding
increase in the sale volumes of the cells so that the Minimum
Guaranteed Royalty Fees are achieved, then the parties shall negotiate
in good faith to either reduce the Minimum Guaranteed Royalty Fees or
to convert this Agreement to a non-exclusive arrangement. The term
"cost" means the aggregate of the raw materials cost, costs of
conversion and other costs including production overheads incurred in
the manufacture of the cell.
2. The above targets shall, in Contract Years ending 31 March 2008 and
later, increase each Contract Year by a percentage equivalent to the
overall world market $ of sales increase of similar Products, applied
to the previous Contract Year's actual values.
This is the final page of the Agreement.
Agreement for Research, Development and Licensing of Technologies, dated October
13, 1999
30
