Department of
Trade and Industry
B.156
Harwell
Didcot
Oxon
OX11 OQJ
e-mail graham.dale@aeat. co.uk
Direct line 01235 432406
Local fax 01235 433566
Our ref B/724
Your ref
Date 24 January 2001
Border Biofuels Ltd
The Tweed Horizons Centre
Newtown St Boswells
Melrose
Roxburghshire
TD6 OSG
FOR THE ATTENTION OF Dr Adrian Bowles
Dear Sir
PROJECT REFERENCE NO. B/T2/00724/00/00
PROJECT TITLE: INTEGRATED BIOFUEL, PYROLYSIS AND ENERGY CONVERSION
DEMONSTRATION PLANT
1. I am pleased to inform you that subject to the terms and conditions of
this letter the Secretary of State for Trade and Industry ("the Secretary
of State") is prepared to pay Border Biofuels Ltd ("the Company") a grant
not exceeding 1,161,300 pound sterling under Section 5 of the Science and
Technology Act 1965 for the installation of an Integrated Biofuels,
Pyrolysis and Energy Conversion DEMONSTRATION Plant ("the Project") at
The Tweed Horizons Centre, Newtown St Boswells, Melrose, Roxburghshire
TD6 OSG in accordance with the following details:
The full Application dated 26 June 2000
A letter from Border Biofuels Ltd dated 20 November 2000 to Nick Hall-
Stride
A Revised Budget Spreadsheet (replacing the spreadsheet attached to
Border Biofuels Ltd letter dated November 2000
as submitted to the Department of Trade and Industry("the Department")
under the New and Renewable Energy Programme.
Framework and Conditions of the Offer
2. The general rules attaching to this offer are defined in the Framework
for Collaboration ("the Framework"), a copy of which is attached to this
letter. Should there be any conflict between the terms of the Framework
and those set out in the terms of this letter, the terms of the letter
shall prevail.
3. The Project is to be carried out in collaboration with Dynamotive Europe
Ltd and Orenda Aerospace Corporation (together with the Company "the
Participants") in accordance with the terms of a collaboration agreement
between the Participants in terms consistent with the requirements set
out in the Framework and signed by all the Participants ("the
collaboration Agreement").
4. This offer is conditional on the Department receiving within two months
of the date of this letter the grant offer acceptance duly signed by
those Participants to be supported by the Department and a copy of the
Collaboration Agreement. If these conditions are not met, the grant offer
will lapse automatically. The grant offer may be renewed or extended at
the discretion of the Secretary of State.
Financial
5. The grant will be 25% of the net eligible costs (as defined and detailed
in Schedule 1) incurred and defrayed on or after 9 January 2001 and will
be payable by installments on submission by the Company of a statement of
monies expended (as defined in Schedule 1) by the Company and the
Participants on the Project. Unless the Secretary of State otherwise
agrees, payments will be made in accordance with the payment schedule
below:-
Deliverable INSTALLMENT Limit Date
FEED contract
Power purchase contract 85,943 pound sterling March 2001
Order for long lead items placed
Preliminary pre construction
Due Dilligence report 204,523 pound sterling June 2001
Evidence of statutory position
Delivery of fuel processing equipment 269,544 pound sterling September
2001
Delivery of all main plant and
equipment complete
Evidence inventory of fuel 194,019 pound sterling December 2001
Installation Completion Certificate
Interim report detailing snagging etc. 47,269 pound sterling March 2002
Cold Commissioning Certificate
Preliminary report from Due
Diligence Assessments 47,915 pound sterling June 2002
Completion Certificate issued 91,296 pound sterling September 2002
Preliminary Test Report 68,546 pound sterling December 2002
Interim Test Report 68,546 pound sterling March 2003
Final Report 83,699 pound sterling June 2003
Any overpayment of grant must be refunded forthwith to the Secretary of State
on his first demand or upon the Company becoming aware that grant has been
overpaid, whichever first occurs.
6. Unless the Secretary of State otherwise agrees, each claim for payment
must be accompanied by:-
(i) a report on the Project covering:-
(a) progress on the Project. The report should cover progress against
the output measures/deliverables and relevant milestones agreed;
(b) any change in the nature or scale of the Project including an
assessment of any change in the prospects of technical success;
(c) any change in the ownership of or beneficial interest in any asset
provided for the Project;
(ii) the latest annual accounts of each Participant supported by the
Department, unless these have already been supplied to the Department
in connection with the application for assistance or an earlier claim
for payment. If these accounts relate to a period ending more than nine
months before the date of the claim for payment, management accounts
for the later period must be included;
(iii) an up-to-date estimate of the Project costs indicating any significant
variations in the amount or timing of payment of these costs.
7. In addition, confirmation is required that the Company has expended the
sums in respect of which claims are made in the period. For this purpose,
reports from an independent accountant must be provided with each claim.
Reports must be in the form set out in Schedule 3 and must be made by an
independent accountant who is qualified under the terms of Section 25 of
the Companies Acts 1989 for appointment as auditor of the Company. A
person eligible under Section 34 (1) of the Companies Act 1989 for
appointment as auditor of a non-quoted company (as defined in that
section) may only report on grant claims made by such a company or by a
business not incorporated under the Companies Acts.
8. The Secretary of State may also require a report from an independent
accountant to be submitted in exceptional circumstances including:-
(i) withdrawal of any Participant from the Project or termination of the
Project;
(ii) a claim disclosing expenditure substantially greater than was
anticipated for the period in question;
(iii) a claim being made which covers an unusually long period or relates
mainly to monies expended in a previous financial year;
(iv) change in the accounting reference date or accounting practice of any
Participant.
9. Despite the provisions of paragraph 5, the Secretary of State is under no
obligation to pay more than 85% of the grant specified in paragraph 1 until
the Project has been completed to his satisfaction.
10. All claims must be accompanied by full documentation. The Secretary of
State shall be under no obligation to make any payment on claims received
after 8 January 2004 and there will be a general presumption against paying
claims received after this date, unless he has previously agreed in writing
to an extension.
11. Once a fully documented claim has been received, grant will normally be
posted, or the claim rejected, within 30 days, unless it is necessary for the
Department to seek further information to support the claim.
CHANGES AFFECTING THE PROJECT
12. Subject to the prior written agreement of the Participants and the
Secretary of State an additional participant or participants may be accepted
into the Project in conformity with the Framework. In the event of a
participant withdrawing the Participants will cooperate with the Secretary of
State in securing an alternative participant or participants, if it is
necessary in the Secretary of State's view in order to complete the Project.
13. While the Department in supporting the Project recognizes the inherent
technical and financial risks, there may be occasions when the Secretary of
State considers that the payment of grant should cease or that grants already
paid should be reclaimed. The Secretary of State shall be under no obligation
to pay the grant, and any grant already paid may become repayable, in whole
or in part, at his discretion, if:
(i) he considers that collaboration between the Participants is not
evident and effective;
(ii) he considers that the future of the Project is in jeopardy;
(iii) in his opinion progress towards completion of the Project is
unsatisfactory or if the Project is not completed by 8 July 2003 or, in
the opinion of the Secretary of State there is no longer any reasonable
prospect of the Project being completed by that date, unless he has
previously agreed in writing to an extension;
(iv) there is a change in the nature or scale of the Project which in his
opinion is substantial and to which he has not given his prior written
agreement;
(v) in his opinion the steps taken by the Participants during the period
referred to in paragraph 27 for the exploitation of the results of the
Project are inadequate;
(vi) an asset, the cost of which has been included in the net eligible
costs, is not used for the purpose of the Project, except as previously
agreed by him in writing;
(vii) if within the period commencing on the date specified in paragraph 5
and ending 3 years after the date on which the final payment of grant is
made:
(a) any Participant becomes the subject of a proposal for a
voluntary arrangement or has a petition for Administration Order or
a petition for a winding-up Order brought against it or passes a
resolution for a winding-up or makes any composition, arrangement,
conveyance or assignment for the benefit of its creditors, or
purports to do so, or if a receiver or any other person is
appointed in respect of its undertaking or of all or any of its
property or if the Participant does or suffers anything
substantially equivalent to any of the foregoing.
(b) any Participant ceases to be a subsidiary (as defined in the
Companies Act 1985) of any company of which it is a subsidiary at
the date of this letter or becomes a subsidiary (as so defined) of
a company of which it is not a subsidiary at the date of this
letter, and such change of status is likely in the opinion of the
Secretary of State to affect adversely the Project or the
exploitation in accordance with the provisions of this letter.
(viii) any Participant does not comply with or observe any
condition of this letter.
14. The Company shall inform the Department promptly in writing of any
cessation of work on the Project and of any event or circumstance likely to
affect significantly the satisfactory completion of the Project. The Company
shall also inform the Department promptly in writing if any of the events
referred to in paragraph 13 (vi), (vii) or (viii) take place.
GENERAL
15. The Company shall manage the Project in accordance with the terms of the
Collaboration Agreement.
16. The Company shall carry out the duties of Lead Company which are as
follows:
(i) to use its best endeavours to ensure that the Participants do
everything which is requisite to enable the terms and conditions of this
letter and the Framework to be fulfilled;
(ii) to receive grant payments on behalf of itself and of other
Participants, and upon receipt of such payments to make corresponding
payments to other Participants in respect of those monies expended by
them to which the grant payments relate.
17. The Secretary of State and his representatives and advisers shall have
the right to inspect the Project at any time and &om time to time and to
require such further information to be supplied as he or they see 6t. Such
further information may include but is not limited to information concerning
the financial position of the Participants to be supported by the Department.
In addition the Secretary of State and his representatives and advisers shall
have the right to call and attend meetings with the Participants if
necessary.
18. The Secretary of State shall be entitled to withhold payment and/or claim
repayment of grant together with interest under this letter to the extent of
the amount of any grant or other payment which has been received, or is, in
the opinion of the Secretary of State, likely to be received, from any public
authority and which the Secretary of State considers is payable towards the
Project. For the purposes of this paragraph "public authority" includes any
of the European Communities or their Institutions, any government department,
research council, local authority, or body wholly or partly supported by
public funds or charitable contributions. The terms of this paragraph do not
apply to grant or other payment whose availability has been disclosed by the
Participants to the Secretary of State before the date of this offer and
which has been taken into account in making this offer.
19. Notwithstanding the provision of paragraph 18 the Secretary of State may:
(i) withhold payment of grant and/or reclaim any grant paid to the extent
necessary to ensure that any assistance given under this offer letter
taken together with any other assistance which, in the opinion of the
Secretary of State, has been or is likely to be received towards the
Project is within the aid limits laid down by the European Communities;
(ii) withhold or reclaim grant if required to do so by a decision of the
Commission of the European Communities.
20. No amendment to the terms of this offer will be effective unless and
until agreed in writing on behalf of the Secretary of State.
21. The Secretary of State may provide the Commission of the European
Communities with information about assistance under the New and Renewable
Energy Programme in compliance with Treaty obligations.
22. Acknowledgement of Government input may be required, possibly through the
use of branding on any publicity materials.
23. The Company will be required to assist in the Department's evaluation of
the Programme and the Company agrees to provide information to assist the
Department in connection with its evaluation.
CONFIDENTIALITY AND INTELLECTUAL PROPERTY
24. Confidential Information relating to the Project and/or its results other
than such agreed to be included in publishable reports shall be disclosed
outside the collaboration only with the prior written agreement of all the
Participants and the Department.
25. The Participants shall make all reasonable enquiries concerning
copyright, design, patent and other intellectual property rights and shall
ensure that to the best of their respective beliefs there are no such rights
which are required in connection with the carrying out of the Project or the
exploitation of the Project's results save such as are owned by, or available
to, the Participants on, and will continue to be so available at all times
after the date of the start of the Project as referred to in paragraph 5.
26. If any Participant is or becomes aware of any third party patent or
patent application relevant to the exploitation of the result of the Project,
the Participant shall immediately inform the Secretary of State.
EXPLOITATION
27. During the period ending five years after the date on which the final
payment of grant is made the Participants shall take reasonable steps to
exploit the results of the Project. The Participants will cooperate with the
Secretary of State in securing an alternative participant or participants if
it is necessary in his view in order to ensure the exploitation of the
results of the Project.
28. The Participants shall not exploit the results of the Project outside
those countries which, at any time during the exploitation period, form part
of the European Economic Area during the period starting on the date of this
letter and ending five years after the date on which final payment of grant
is made, unless the Participant or Participants have previously obtained the
written consent of the Secretary of State. The exploitation of the results of
the Project shall not be deemed to include the sale outside the European
Economic Area of goods manufactured within it.
29. The Participants are required to notify the Secretary of State of the
sale or commercial use of any prototypes the costs of production of which are
included in the net eligible costs set out in Schedule 1, and to pay the
Secretary of State 25% of the sale proceeds or income, or expected income,
generated by the commercial use of any such prototypes after deducting from
those proceeds the cost of any necessary refurbishment. The Participants
shall provide an auditor's report on the sale price or commercial use and the
refurbishment costs involved. This payment is to be by refund of grant.
ACCEPTANCE OF OFFER
30. Acceptance of this offer constitutes agreement in full to the terms and
conditions set out in this letter.
31. The offer should be accepted by a Director of the Company signing the
duplicate copy of the offer letter on behalf of the Company and by a Director
of each of the other Participants to be supported by the Department accepting
on behalf of that Participant by signing the undertaking at the end of this
letter. The letter and the Participants' acceptances should then be returned
to me.
32. This offer letter shall be governed by and construed in accordance with
English law in all respects.
33. If this offer is accepted, the Project will be monitored on behalf of the
Secretary of State by MR NICK HALL-STRIDE, ETSU, BLDG. 156, HARWELL
OXFORDSHIRE. OX11 OQJ. TEL: 01235 432158, FAX 01235 432050 .
34. Please acknowledge receipt of this letter.
Yours faithfully
/Sinature/
Robert Bell
on behalf of the Secretary of State
Border Biofuels Ltd. accepts the offer set out above and in the Schedules.
Signed /Sinature/
Director for and on behalf of Border Biofuels Ltd.
Date 8th March 2001
DECLARATION BY PARTICIPATING COMPANY
[Anthony Robson ], on behalf of DYNAMOTIVE EUROPE LTD, one of the companies
participating in the Project which is the subject of the Secretary of State's
Offer letter of 22 January 2001 hereby confirm that, in consideration of the
Secretary of State's becoming bound to fulfill the obligations undertaken by
him in the above offer letter upon acceptance thereof by BORDER BIOFUELS LTD,
DYNAMOTIVE EUROPE LTD accepts all the terms and conditions set out in the
offer letter and requiring the compliance of, or imposing any obligation on
DYNAMOTIVE EUROPE Ltd as a Participant in the Project. I undertake to the
Secretary of State that DYNAMOTIVE EUROPE LTD will do all such things and
provide all such information, documentation and assistance as is required of
it or necessary to be produced by it under the terms of the offer letter.
In further undertake to the Secretary of State that Dynamotive Europe Ltd
will indemnify BORDER BIOFUELS LTD in regard to any repayment to be made to
the Secretary of State under paragraphs 5, 13,18,19 and 27 of the offer
letter to the extent of monies received by DYNAMOTIVE EUROPE LTD &om Border
Biofuels Ltd under the Project. The obligation of DYNAMOTIVE EUROPE LTD to
indemnify Border Biofuels Ltd shall only arise in the case that actions or
failures of DYNAMOTIVE EUROPE LTD form part of the reasons of the Secretary
of State in seeking repayment.
Signed..... /Sinature/...............Director for and behalf of DYNAMOTIVE
EUROPE LTD.
Date March 8th 2001
DECLARATION BY PARTICIPATING COMPANY
..............., on behalf of ORENDA AEROSPACE CORPORATION, one of the
companies participating in the Project which is the subject of the Secretary
of State's offer letter of 22 January 2001 hereby confirm that, in
consideration of the Secretary of State's becoming bound to fulfill the
obligations undertaken by him in the above offer letter upon acceptance
thereof by BORDER BIOFUELS LTD, ORENDA AEROSPACE CORPORATION accepts all the
terms and conditions set out in the offer letter and requiring the compliance
of, or imposing any obligation on ORENDA AEROSPACE Corporation as a
Participant in the Project. I undertake to the Secretary of State that ORENDA
AEROSPACE CORPORATION will do all such things and provide all such
information, documentation and assistance as is required of it or necessary
to be produced by it under the terms of the offer letter.
I further undertake to the Secretary of State that ORENDA AEROSPACE
CORPORATION will indemnify Border Biofuels Ltd in regard to any repayment to
be made to the Secretary of State under paragraphs 5, 13,18,19 and 27 of the
offer letter to the extent of monies received by ORENDA AEROSPACE CORPORATION
FROM BORDER BIOFUELS LTD under the Project. The obligation of ORENDA
AEROSPACE CORPORATIOn to indemnify BORDER BIOFUELS LTD shall only arise in
the case that actions or failures of ORENDA AEROSPACE CORPORATION form part
of the reasons of the Secretary of State in seeking repayment.
Signed..... /Sinature/........... .Director for and behalf of ORENDA
AEROSPACE CORPORATION
Date March 8th 2001
SCHEDULE 1
PROJECT COSTS
1. The provisions of this Schedule are subject to the terms and conditions of
the offer letter.
2. The grant will be 25% of the net eligible costs (as defined in paragraph 5
below) in respect of which monies have been expended (as defined in paragraph
4 below) by the Participants on the Project between 9 January 2001 and 8 July
2003, the estimated costs of which are set out below:-
Project Cost and Breakdown of the Total Resources for the Project
Totals (pound sterling)
STAFF AND OVERHEADS:
Border Biofuels Ltd 406,528
Dynamotive Europe Ltd 159,916
Orenda Aerospace Corporation 159,916
Consumables 250,000
Capital Equipment 3,415,000
Sub-contracts 236,000
Site Rental 5,000
UK Travel Br Subsistence 7,680
Overseas Travel R Subsistence 5,000
TOTAL (Overall Project Cost) 4,645,040
Award Approved 1,161,300
Breakdown of Participation, in pound sterling (including collaborators where
applicable)
Organization type Financial award
contribution sought
Lead Organization Border Biofuel Ltd (R) 1,223,780 25%
Collaborator 1 Dynamotive Europe Ltd (I) 1,080,000 25%
Collaborator 2 Orenda Aerospace Corporation (I) 1,180,000 25%
Note: Organization Type - industry(I); education (E); and research (R),
Intermediary (such as Trade Association) (Int.)
3. The grant to be paid will be reduced by the amount of any Selective
Assistance received or receivable on an goods or buildings, the costs of
which are properly included in the net eligible costs.
4. For monies to have been expended liabilities must have been incurred and
delayed. No claim can be accepted for liabilities which have been incurred
but have not yet been defrayed. The labour cost, at an agreed rate, of the
Lead Company who is a sole trader or partnership, will be treated as cost
defrayed for the purpose of the claims relating to time spent in connection
with the project.
5. The net eligible costs shall be the costs which are properly attributable
exclusively to the Project excluding and deducting (as may be appropriate)
from the amount of such costs:-
(i) input Value Added Tax;
(ii) any other grant from any public authority (as defined in paragraph
18 of the Offer Letter) received or receivable in respect of the Project;
(iii) interest, service charges and interest arising from hire purchase,
leasing and credit arrangements;
(iv) any addition for profit by any Participant and profit earned by any
company in any Participant's group as a result of work relevant to the
Project undertaken by a Participant or sub-contracted to such company by
a Participant. For the purposes of this sub-paragraph "group" means any
holding company of any Participant and any subsidiary of such holding
company or of, and "holding company" and "subsidiary" have the respective
meanings assigned to them in Section 736 of the Companies Act 1985.
SCHEDULE 2
REPORTING REQUIREMENTS
1. The Company shall provide to the Mr Nick Hall-Stride the following:
(a) at monthly intervals one copy of a progress report summarizing the
progress of the Work to date;
(b) progress meetings, if and when required, will be held with and
arranged by the ETSU Project Supervisor;
(c) Not later than 9 June 2003 one copy of a drat final report
describing all of the Work carried out. ETSU's Project Supervisor
shall forward his detailed comments on the draft report to the
Company by 23 June 2003;
(d) Upon receipt of written confirmation that the draft report is
satisfactory, the Company shall provide by 8 July 2003:-
(i) Two bound copies of the agreed final report, and
(ii) One unbound master copy of the agreed final report on single
sided A4 plain paper;
(iii) an electronic copy of the report in a format compatible with Word
for Windows.
2. The reports detailed above shall be in a form agreed with the Secretary of
State and in accordance with the 'Guidelines for the Preparation of
Department of Trade and Industry's New and Renewable Energy Programme
Contractors Reports', a copy of which will be provided to the Company on
request.
SCHEDULE 3
THE ACCOUNTANT'S REPORT
I/We have examined the enclosed claim and previous claims submitted by Border
Biofuel Ltd (the Company), on behalf of the Participants.
I/We have also examined the records of the Participants as necessary and have
obtained such explanations and carried out such tests as I/we consider
necessary.
I/We report that in my/our opinion subject to any reservations set out in
my/our accompanying letter dated
(i) the claim and previously submitted claims for payment are in
accordance with the Department of Trade and Industry offer letter dated
22 January 2001 under INTEGRATED BIOFUELS, PYROLYSIS and ENERGY
CONVERSION DEMONSTRATION PLANT including the Schedules thereto;
(ii) the Participants have expended (as defined in Schedule 1 to the offer
letter) monies to cover those eligible costs incurred and defrayed during
the period from 9 January 2001 to 8 July 2003 related to the Project
described in the offer letter amounting to:-
Staff and overheads
Consumables
Capital items
Sub-contracts
Site Rental
UK Travel R Subsistence
Overseas Travel R Subsistence
TOTAL (Overall Project Cost)
(iii) none of the costs were incurred before 9 January 2001;
(iv) overheads included in the expenditure are:-
(a) in respect of the Participant's own labour;
(b) not calculated to include any profit;
(c) appropriate to the Project;
(d) not in excess of overhead rates applicable to similar work
carried out by the Participants;
(v) the totals at (ii) above exclude any other grant from any public
authority received or receivable by the Company or any Participant in
respect of the Project;
(vi) the totals at (ii) above exclude input Value Added Tax and interest
and service charges arising from hire purchase, leasing and credit
arrangements;
(vii) the totals at (ii) above exclude any addition for profit by any
Participant and profit earned by any company in any Participant's group
(as defined in Schedule 1) as a result of work relevant to the Project
undertaken by a Participant or sub-contracted to such company by a
Participant.
(viii) the Participants have maintained adequate records to enable me/us
to report on this claim for payment of grant.
I/We certify that except for the grants mentioned above or specified in
my/our accompanying letter dated no grants from any other public authority
have been received or are receivable by any Participant in respect of the
Project.
Name for enquiries
FRAMEWORK FOR COLLABORATION
1. DEFINITIONS
(i) THE PROGRAMME:
All work carried out under the New and Renewable Energy Programme and
supported by the Department and other funding organisations (if any) and
extending to the exploitation of that work.
(ii) THE PROJECT:
Specific work undertaken in collaboration as part of the Programme with
financial support from the Department and other funding organisations (if
any).
(iii) CONSORTIUM:
The participants in the Project working within the terms of a formal
collaboration agreement.
(iv) PARTICIPANT:
Any commercial, academic or other science-base research organisation
undertaking research within the terms of a collaboration agreement as part of
the Project supported by the Department and other funding organisations (if
any) under a Programme.
(v) LEAD COMPANY:
Where specified by the collaboration agreement, the Participant that
coordinates the applications and is the sole recipient of the Consortium
grant from the Department.
(vi) INTELLECTUAL PROPERTY:
Any inventions (whether patentable or not) and applications thereof, patents,
registered designs, copyright material including computer software, and
technical know how and other information.
(vii) BACKGROUND:
Any Intellectual Property made available by a Participant for use in the
Project or necessary to exploit the results but not generated under the
Project and belonging to the Participant or to which the Participant has the
necessary rights for the purpose of the Programme. References to Background
in this Framework include only such material as above which is made available
before or during the Project or identified before the end of the Project or
is necessary for the exploitation of the results of the Project.
(viii) RESULTS:
Any Intellectual Property generated under the Project by one or more
participants or under any subcontract made between a Participant and a
subcontractor in connection with the Project.
(ix) IPR:
Intellectual Property rights including Background and Results.
(x) Dissemination:
The passing of a report prepared by a Participant to any other Participant(s)
which contains:
(a) a statement on the Results and/or progress of work done under the
Project;
(b) a statement of the performance, form, fit or function of items
resulting from work on the Project.
(xi) DISCLOSURE:
The passing to any party by a Participant of information which contains:
(a) data relating to capability, technology, techniques, process know-how
and the like;
(b) any data which is deemed by the disclosing party to be of a
commercially sensitive nature.
2. STRUCTURE OF COLLABORATION
Each Participant will be entitled to choose its partners in any Consortium.
The members of a Consortium will submit a joint proposal to the Department. A
formal collaboration agreement shall be entered into, setting out inter alia:
(a) the terms of the collaboration between the intending Participants and
the mechanisms for managing the Project;
(b) ownership and licensing of IP;
(c) provisions for confidentiality including any mechanisms for
dissemination and disclosure.
MANAGEMENT/ORGANISATION OF A CONSORTIUM
The collaboration agreement relating to a Project should cover the management
and organisation of the Consortium. It should set out the details of how the
work by the deferent Participants will be coordinated; the responsibilities
and liabilities of the Participants; how information relating to the Project
will be collected and assessed; and the mechanisms for reviewing progress and
reporting the results of these reviews to the Department and to other funding
organisations (if any) at agreed intervals. The following conditions shall
apply:-
(1) the Consortium should appoint an employee of one of its Participants
as Project Manager responsible for the documentation of IPR and the
implementation of a project management system. The Project Manager will
also act as a formal contact point with the Department and other funding
organisations (if any) for the collection, coordination and communication
of management information and submission of regular progress reports;
(2) the Consortium will appoint a Lead Company to act on behalf of the
Consortium vis-a-vis the Department. The collaboration agreement should
set out the rights and responsibilities of the Lead Company vis-a-vis the
other Participants.
(3) the Department and other funding organisations (if any) will normally
appoint a Project Monitor to undertake the technical monitoring required
under the Programme. The participants will cooperate with the Project
Monitor and make available such information (both financial and
technical) as he/she considers necessary for the effective monitoring of
the Project.
4 INTELLECTUAL PROPERTY
(1) Participants should make all reasonable enquiries concerning the
availability of, and rights to use, IP needed for the Project and ensure
that to the best of their respective beliefs there are no such rights
which are required in connection with the carrying out of the Project or
the exploitation of the Results that are not owned by or available to
the Participants at start of the Project.
(2) Background necessary for the purposes of the Project shall be made
feely available within each Consortium for such purposes for the duration
of the project. Participation in the Programme shall not of itself affect
the ownership of Background.
(3) Results will be made freely available within each Consortium for the
purpose and duration of the Project.
(4) The results of the Project will usually be vested in the industrial
Participant(s). The collaboration agreement shall inter alia set out the
terms and conditions which may be agreed to safeguard the interests of
non-industrial Participants.
(5) When a Participant subcontracts work under a Project, he shall take
such steps as are necessary to ensure that his obligations under the
Programme can be met.
5. DISSEMINATION AND DISCLOSURE
(1) Each Consortium should furnish regular reports describing progress
and Results for dissemination to Participants in other projects within
the Programme. It is intended that these should be informative but may
exclude commercially sensitive information.
(2) Participants should not withhold unreasonably information relating to
a Project requested by Participants of other projects in the Programme
who are not also Participants in that Project. The owner of the
information may require the recipients to enter into an appropriate
confidentiality agreement which may be subject to the prior approval of
the other members of the Consortium.
(3) Participants are free to take into account their commercial interests
when deciding whether and how material stemming from a Project should be
made public. Within the constraints that this may impose, Participants
should be able to publish material as they think appropriate and other
Participants should not seek to impose unreasonable restrictions on
their doing so.
(4) Where the Consortium includes one or more Government Establishments,
the Crown have the right, free of payment, to use the Results for
information and research purposes only, within Government departments and
establishments, provided that any information not in the public domain
relating to such Results shall not be communicated outside such
Government departments and establishments without the prior written
permission of the Participants to whom the Results are proprietary.
(5) Where disclosure of information about a Project is necessary for the
purpose and implementation of another Project, and the conditions set out
in this section and elsewhere do not provide a means of ensuring this,
the Department and other funding organisations (if any) may call a
meeting of the interested parties with a view to determining what
information should be made available for the purposes of that Project
and on what terms.
6. FURTHER RESEARCH
In general science-base Participants shall be entitled to use their Results
for further research. Where this involves the use of information supplied or
generated by other Participants, consent should not be unreasonably withheld.
7. EXPLOITATION
Industrial Participants to a Project should ensure as far as possible the
exploitation of Results owned by them and shall in consequence be entitled
to:
(a) a licence to use the Background of other Participants to the Project
to the extent necessary to exploit their own Results. Such licence will
be on terms specified in the collaboration agreement.
(b) a licence to use the Results of other Participants to the Project to
the extent necessary to exploit the Participant's own Results. Such
licence will be on terms specified in the collaboration agreement.
All licences should be on a non-exclusive basis and may be transferable.
8 FAILURE TO EXPLOIT
(1) Where a Participant fails to exploit its Results and in consequence
licenses those Results and any necessary Background to another
organisation, the licence shall be on fair and reasonable terms in
respect of Results and on commercial terms in respect of Background.
(2) The collaboration agreement shall specify the circumstances under
which, and the terms on which, the IPR should revert, where IPR that had
been invested by one Participant in another Participant is not exploited
by the latter.
9. TERMINATION
A Participant may withdraw from a Project only with the unanimous consent of
the other Participants. Otherwise withdrawal shall be treated as default and
the conditions set out below should apply.
If a Participant to a Project defaults on its obligations so as to jeopardize
the objectives of the Project, the defaulting Participant's right to continue
participating in the Project may be terminated, where upon:-
(a) rights granted to other Participants in respect of the defaulting
Participant's Background shall continue for the duration of the Project; to
the extent that exploitation of the Results of other Participants is
dependent on the defaulting Participant's Background this shall be licensed
on terms to be specified in the collaboration agreement.
(b) the defaulting Participant shall provide other Participants with a free
licence to use any of its Results necessary for the implementation of the
Project and furthermore to the extent necessary for them to exploit their own
rights.
all rights acquired by the defaulting Participants to the Background and
R.esults of other Participants shall cease immediately.