Exhibit 10.5
LICENSE AGREEMENT
between
PURDUE RESEARCH FOUNDATION
and
NANO DYNAMICS, INC.
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS ................................................. 2
ARTICLE 2. GRANT OF LICENSE ............................................ 4
ARTICLE 3. DILIGENCE AND COMMERCIALIZATION ............................. 5
ARTICLE 4. CONSIDERATION FOR LICENSE ................................... 6
ARTICLE 5. REPORTS AND PAYMENTS ........................................ 7
ARTICLE 6. RECORDS ..................................................... 8
ARTICLE 7. PATENT PROSECUTION .......................................... 8
ARTICLE 8. ABATEMENT OF INFRINGEMENT ................................... 8
ARTICLE 9. CONFIDENTIALITY ............................................. 9
ARTICLE 10. LIMITED WARRANTY, MERCHANTABILITY AND EXCLUSION OF
WARRANTIES .................................................. 9
ARTICLE 11. DAMAGES, INDEMNIFICATION, AND INSURANCE ..................... 10
ARTICLE 12. TERM AND TERMINATION ........................................ 10
ARTICLE 13. ASSIGNMENT .................................................. 12
ARTICLE 14. MISCELLANEOUS ............................................... 12
ARTICLE 15. NOTICES ..................................................... 13
EXHIBIT A - Licensed Patents and Licensed Technology .................... [__]
EXHIBIT B - Licensee's Development Plan ................................. [__]
THIS LICENSE AGREEMENT is made and entered into as of this 20th day of December,
2002, by and between the PURDUE RESEARCH FOUNDATION, a statutory body corporate
formed and existing under the Indiana Foundation or Holding Companies Act of
1921, with offices located at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx X, Xxxx Xxxxxxxxx,
Xxxxxxx (hereinafter referred to as "PRF") and NANO DYNAMICS, a New York,
corporation with corporate headquarters located at 000 Xxxxxxxx Xxxxxxxxx,
Xxxxxxx, XX 00000 (hereinafter referred to as "LICENSEE"),
WHEREAS, the Purdue University Board of Trustees has, by general resolution
and/or assignment, designated PRY to administer all matters pertaining to
protection, utilization and commercialization of the intellectual property
developed at Purdue University; and
WHEREAS, PRF owns certain rights, title, and interest in and to the Licensed
Patents and Licensed Technology (as defined herein), including patent-protected
materials as follows:
"Formation of Nano-Crystalline and Sub-Micron Structures in Steels and Other
Metals by Machining and Their Use in the Engineering of New Materials" (PRF
Reference No. P-00002);
"Direct Method for Creating Nanostructured Bulk Forms by Machining" (PRF
Reference No. P-02129); and
"Method of Creating Submicron Particles by Abrasive Machining" (PRF Reference
No. P-02130).
WHEREAS, PRF wishes to have the Licensed Patents and Licensed Technology
further developed and marketed at the earliest possible time in order that
products resulting therefrom may be available for public use and benefit; and
WHEREAS, LICENSEE desires to hereby enter into this Agreement whereby LICENSEE
obtains to use the Licensed Patents and Licensed Technology and for commercial
purposes; and
WHEREAS, LICENSEE represents that it possesses the expertise to do so; and
WHEREAS, PRF is willing to enter into this Agreement with LICENSEE, under the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and premises contained
herein, the receipt and sufficiency of which is hereby acknowledged, the Parties
hereto agree as follows:
ARTICLE 1. DEFINITIONS
The following terms as used herein shall have the following meaning:
1.1 "Affiliate" shall mean a corporation, company, partnership, or other
business entity that controls or is controlled by, or is under common control,
with the LICENSEE. In the
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case of a corporation or company, "control" means
ownership either directly or indirectly of at least fifty percent (50%) of the
shares of stock entitled to vote for the election of directors.
1.2 "Agreement" or "License Agreement" shall mean this Agreement, including
all Exhibits attached to this Agreement.
1.3 "Field of Use" shall mean all fields of use.
1.4 "Indemnitees" shall mean PRF, PRF's officers and directors, PU, PU's
employees, and the Inventors, and their heirs, executors, administrators, and
legal representatives.
1.5 "Inventors" shall mean Drs. Xxxx Xxxxxxx, Xxxxxxxxxx Xxxxxxxxxxxx,
Xxxxxx Xxxxxx, and Xxxxx Xxxxxxx.
1.6 "Licensed Patents" shall mean the patent applications and patents
identified in EXHIBIT A hereto, together with all divisionals, continuations,
reissues, reexaminations and foreign counterparts of such applications or
patents.
1.7 "Licensed Product(s)" shall mean products or services, the development,
manufacture, use or sale of which would infringe a Valid Claim and/or require
the use of Licensed Technology.
1.8 "Licensed Technology" shall mean all technical information known to one
or more Inventors that is, as of the date of this Agreement, legally vested in
PRF, as assignee of Purdue University, and within the scope of the disclosure of
Licensed Technology set forth in Exhibit A. The term "Licensed Technology" does
not include either (a) any invention covered by Valid Claim(s) or any other
patent or (b) any right or interest in or to or arising from any future research
at Purdue University.
1.9 "Licensed Territory" shall mean worldwide.
1.10 "Valid Claim" shall mean a claim included among the Licensed Patents,
which claim shall not have been irrevocably abandoned or held invalid in an
unappealable decision of a court or other authority of competent jurisdiction.
1.11 "Commercial Sublicense" shall mean any sublicensing agreement or
arrangement between LICENSEE and a third party by which the third-party is
licensing Licensed Patents or Licensed Technology primarily to incorporate
Licensed Products for commercial purposes. The holder of a Commercial Sublicense
is a "Commercial Sublicensee."
1.12 "Authorized Uses" shall mean uses of the Licensed Patents and Licensed
Technology to develop and make and have made Licensed Product(s) for use,
license and sale.
1.13 "Gross Receipts" means the gross payments and other consideration
(whether cash or non-cash) accrued or received by LICENSEE (net of product
returns) in consideration for provision by LICENSEE of Licensed Product(s),
including but not limited to: fees, gains, or other consideration for sale,
license, or lease of Licensed Product(s), or other service or product
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fees otherwise related in any way to Licensed Product(s). This definition
includes all amounts for installation, products, maintenance, and/or other
services provided in conjunction with Licensed Product(s). Where a sale, gift,
use, or other disposition of a Licensed Product is transacted for value other
than cash, the term "Gross Receipts" shall mean, per unit of said Licensed
Product, the fair market value of said Licensed Product as evidenced by the
retail price realized for sales of comparable Licensed Product during the
immediately preceding three (3) month period. Gross Receipts excludes the
following items as separately charged and enumerated on an invoice to customers,
packing, transportation and insurance charges; and import, export, excise,
sales, use and value added taxes, and customs duties. Any royalty income or
other consideration for a Commercial Sublicense that is subject to paragraph 4.2
hereof shall not be deemed to be "Gross Receipts" hereunder.
1.14 "Effective Date" shall mean the date this Agreement is duly executed
by both Parties hereto.
ARTICLE 2. GRANT OF LICENSE
2.1 Subject to compliance with this Agreement, and subject to the
reservation of rights stated below, PRF grants, and LICENSEE accepts, a license
to the Licensed Patents and Licensed Technology on a royalty-bearing basis for
Authorized Uses in the Field of Use in the Licensed Territory and for issuance
of corresponding Commercial Sublicenses, for seven (7) years from the date of
issuance of the first patent, directly between LICENSEE and Commercial
Sublicensee on terms and conditions consistent with this Agreement. The license
granted to LICENSEE under this paragraph is exclusive for Licensed Patents for a
period of seven (7) years from the issuance of the first patent. The license
granted to LICENSEE under this paragraph is non-exclusive for a period of seven
(7) years from the issuance of the first patent for the Licensed Technology.
After the seven (7) year period, PRF and LICENSEE shall negotiate in good faith
the license to the Licensed Patents and Licensed Technology.
2.2 Except as expressly granted by PRF to LICENSEE herein, all rights and
entitlements, whether now existing or that may hereafter come into existence,
are reserved to PRF.
2.3 This Agreement shall not be construed to confer any rights upon
LICENSEE by implication or estoppel.
2.4 LICENSEE acknowledges and consents that, notwithstanding any provision
of this Agreement, Purdue University retains a permanent, irrevocable,
royalty-free reversionary license from PRF to utilize the Licensed Patents and
Licensed Technology.
2.5 LICENSEE shall notify PRF of any proposed grant of a Commercial
Sublicense, and the terms thereof. LICENSEE shall ensure that all uses of
Licensed Patents and Licensed Technology and all development and distribution of
Licensed Products by Commercial Sublicensees 1) are consistent with the terms
and conditions of this Agreement, and 2) return value to LICENSEE commensurate
with the benefits conferred on the Commercial Sublicensee by the Commercial
Sublicense. LICENSEE may not authorize a Commercial Sublicensee to further
sublicense a Licensed Patent. Prior to execution of a Commercial Sublicense,
LICENSEE
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shall submit the proposed Commercial Sublicense to PRF for PRF's review
and determination whether the proposed Commercial Sublicense conforms to this
Agreement. PRF shall be deemed to have approved the proposed Commercial
Sublicense unless, within thirty days of LICENSEE's tender of the proposed
Commercial Sublicense to PRF, PRF provides to LICENSEE either a) written notice
of nonapproval and the reasons for nonapproval, or b) written notice of approval
that is conditioned on specified actions by LICENSEE and/or the proposed
Commercial Sublicensee. Nonapproval by PRF shall be binding on LICENSEE and
render the proposed Commercial Sublicense invalid, subject only to judicial
review in a court of competent jurisdiction. LICENSEE shall remain responsible
for the operations of Commercial Sublicensees as if such operations were carried
out by LICENSEE, including but not limited to the payment of all fees and
royalties due to PRF under this Agreement, whether or not such payments are made
to LICENSEE by its Commercial Sublicensees.
ARTICLE 3. DILIGENCE AND COMMERCIALIZATION
3.1 Diligence and Commercialization. LICENSEE shall use its reasonable
efforts throughout the term of this Agreement to bring Licensed Products, in
each licensed Field of Use, to market through a, diligent program for
exploitation of the right and license granted in this Agreement to LICENSEE and
to create, supply, and service in the Licensed Territory as extensive a market
as possible, consistent with LICENSEE's Development Plan attached hereto as
Exhibit B. In no instance shall LICENSEE's reasonable efforts be less than
efforts customary in LICENSEE's industry.
3.2 Lack of Diligence. If PRF concludes that LICENSEE is not in material
compliance with Article 3.1, then, any time after one year from the Effective
Date, PRF shall have the right to terminate LICENSEE's rights under this License
Agreement, to all or some of the Fields of Use, pursuant to Article 12. Prior to
exercising said right, PRF shall give notice to LICENSEE stating the basis for
its conclusion. Within five (5) days of such notice, LICENSEE may request that
both parties and negotiate, in good faith, a resolution to the LICENSEE's
non-compliance. Such negotiation shall be concluded within forty-five (45) days
of said notice from PRF. Failure of LICENSEE to comply with the resolution
reached shall automatically (not subject to any requirement for further cause,
legal process, or other action of PRF or LICENSEE) cause this License Agreement
to be deemed to be conclusively terminated upon notice of non-compliance to the
resolution from PRF. Failure to reach a resolution within the said forty-five
(45) day period shall cause this License Agreement to be deemed to be
conclusively terminated upon notice from PRF.
3.3 Lack of Commercial Sublicensing Diligence. IF LICENSEE is not in
compliance with Commercial Sublicensing due diligence, as called for in
LICENSEE's Development Plan, PRF shall have the right to issue appropriate
license(s) to other entities, at which time this Agreement will be amended
accordingly to reflect rights conferred to the new licensee(s).
3.4 Financial Capability. At all times during the term of this license,
LICENSEE shall maintain the financial capability to comply with Article 3.1.
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ARTICLE 4. CONSIDERATION FOR LICENSE
4.1 License Fee. LICENSEE shall pay PRF a license fee of sixty thousand
dollars ($60,000) payable according to the following schedule:
Effective Date $30,000
Six months from Effective Date $15,000
Twelve months from Effective Date $15,000
Said License Fee shall not be credited toward any other obligation of LICENSEE
under this Agreement.
4.2 Commercial Sublicensing Income. LICENSEE shall, on an annual basis, pay
to PRF thirty five percent (35%) of all Commercial Sublicensing Income other
than royalties, And LICENSEE shall, on an annual basis pay thirty five percent
(35%) of all royalties received from Commercial Sublicensees.
This paragraph 4.2 shall also apply to any recovery by LICENSEE of royalty
damages on a claim for infringement of Licensed Patent(s), said recovery to be
discounted by the documented amount of any attorneys fees and costs reasonably
incurred by LICENSEE in the direct prosecution of said infringement claim.
4.3 Royalty On Gross Receipts. As further consideration for the grant of
rights hereunder, LICENSEE will pay PRF an earned cumulative annual royalty on
Gross Receipts of three percent (3%).
Said annual period shall end on December 31 of each annual period during
the Term of the Agreement (the "Annual Period"). For the purpose of calculation
of royalties under this paragraph 4.3, Gross Receipts will include sales of all
Licensed Products for all Fields of Use.
4.4 Minimum Annual Royalties. LICENSEE shall pay PRF the following minimum
annual payments:
(a) December 31, 2003 $ 30,000
(b) December 31, 2004 $ 30,000
(b) December 31, 2005 $ 60,000
(c) December 31, 2006 $ 80,000
(d) December 31, 2007 and for the remaining years $100,000
The amounts due from LICENSEE to PRF as earned royalties on Gross Receipts
in each Annual Period shall be creditable against the minimum annual royalties
for that Annual Period. In the event that such amounts do not achieve the
required minimum, LICENSEE's payment shall include payment of the balance needed
to achieve the minimum annual royalties for that Annual Period, pursuant to
Article 5.
4.5 Reimbursement for Legal and Patent Expenses. LICENSEE shall reimburse
PRF for all out-of-pocket legal and other fees, costs, and expenses heretofore
and hereafter during the term of this Agreement paid or incurred by PRF in the
preparation of this Agreement and filing,
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prosecuting, and maintaining the Licensed Patents in the United States only.
LICENSEE shall deliver such reimbursement to PU within thirty (30) days after
PRF notifies LICENSEE from time to time of the amount of such fees, costs, and
expenses that have been paid or incurred by PRF.
4.6 License Grant-back. As further consideration for the grant of rights
herein, LICENSEE agrees to grant to PRF and Purdue University an irrevocable,
royalty-free, nonexclusive right, to use Licensed Product(s), for educational or
research purposes of Purdue University, including such components as are
independently developed by LICENSEE. This grant of nonexclusive rights includes
the right to make or have made for use at Purdue University, products or devices
(or the rights to practice the process, if a process invention) that are based
on Licensed Product(s); provided however, that (i) PRF and/or Purdue University
may not sell, assign, transfer, license, or otherwise commercially exploit the
rights, products or services referred to herein, and (ii) further provided, that
PRF will take all necessary and reasonable steps to prevent misuse of any such
proprietary information.
ARTICLE 5. REPORTS AND PAYMENTS
5.1 LICENSEE agrees to make written reports and payments of earned
royalties to PRF within thirty (30) days of the end of each calendar quarter for
each Annual Period of this Agreement. For the quartet being reported, LICENSEE
will provide:
(a) For each Licensed Product, the number of units sold and the Gross
Receipts during the reporting period.
(b) For each Commercial Sublicense, descriptions of Licensed Patent(s),
Licensed Technology and/or Licensed Product(s), name and address of
the Commercial Sublicensee, primary terms of the Commercial
Sublicense, and consideration received by LICENSEE from the Commercial
Sublicensee during the reporting period.
(c) Total payments due to PRF, with supporting calculations.
Concurrent with the issuance of each report, LICINSEE shall pay PRF the amounts
due for the quarter covered by such report. Minimum annual royalties are due on
the thirtieth day after the conclusion of the Annual Period and shall be payable
concurrent with the quarterly report for the final quarter of each Annual
Period. Reports are required even if no earned royalties are due.
5.2 All royalties to be paid by LICENSEE hereunder shall be paid in U.S.
Dollars. To the extent that Gross Receipts received by LICENSEE in any calendar
quarter are received in currencies other than U.S. Dollars, for purposes of
calculating the royalties due hereunder, such Gross Receipts shall be converted
to U.S. Dollars at the exchange rate existing between the U.S. Dollar and the
relevant currency on the last day of such calendar quarter, as such rate is
determined by the Chase Manhattan Bank of New York.
5.3 Payments required under this Agreement shall, if overdue, bear interest
until payment at a per annum rate of two percent (2%) above the prime rate in
effect as published in
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the Wall Street Journal on the due date. The payment of such interest shall not
foreclose PRF from exercising any other rights it may have because any payment
is late.
ARTICLE 6. RECORDS
6.1 Records of Sales. During the term of this Agreement and for a period of
seven years thereafter, LICENSEE shall keep at its principal place of business
true and accurate records of all Sales in such form and manner so that all
royalties owed to PU may be readily and accurately determined. LICENSEE shall
furnish PRF copies of such records upon PRF's request.
6.2 Audit of Records. Upon the request and at the expense of PRF, the
accounting records maintained by LICENSEE for the purpose of establishing the
amount of the payments due to PRF under this Agreement (including earned
royalties and sublicensing fees) shall be subject, at all reasonable times, and
upon at least thirty (30) days written notice to LICENSEE, to audit by a PRF
auditor for the purposes of determining and verifying the royalty payments made
under this Agreement. if the audit reveals a material underpayment by LICENSEE
to PRF, then LICENSEE shall reimburse PRF for its expenses incurred in the
conduct of the audit.
ARTICLE 7. PATENT PROSECUTION
7.1 Prosecution and Maintenance of Licensed Patents. The prosecution and
maintenance of the Licensed Patents shall be the primary responsibility of PRF.
PRF shall keep LICENSEE informed as to all developments with respect to Licensed
Patents. LICENSEE shall be afforded reasonable opportunities to advise PRF and
cooperate with PRF in such prosecution and maintenance. If LICENSEE should fail
to timely make reimbursement for patent expenses incurred under this paragraph
as required in Article 4.5 of this Agreement, PRF shall have no further
obligation to prosecute or maintain the, Licensed Patents. LICENSEE, upon ninety
(90) days advance written notice to PRF, may advise PRF that it no longer wishes
to pay expenses for filing, prosecuting or maintaining one or more Licensed
Patents. PRF may, at its option, elect to pay such expenses or permit such
Licensed Patents to become abandoned or lapsed. If PRF elects to pay such
expenses, such patents shall not be subject to any license granted to LICENSEE
hereunder.
7.2 Extension of Licensed Patents. LICENSEE may request that PRF have the
normal term of any Licensed Patent extended or restored under a country's
procedure of extending life for time lost in government regulatory approval
processes, and the expense of same shall be borne in accordance with the terms
of Article 4.5. LICENSEE shall assist PRF to take whatever action is necessary
to obtain such extension. In the case of such extension, royalties pursuant to
Article 4 hereof shall be payable until the end of the extended life of the
patent. In the event that LICENSEE does not elect to extend Licensed Patent(s),
PRF may, at its own expense, effect the extension of such Licensed Patent(s). If
PRF elects to pay such expenses, such extended Licensed Patents shall not be
subject to any license granted to LICENSEE hereunder.
ARTICLE 8. ABATEMENT OF INFRINGEMENT
8.1 LICENSEE acknowledges that the Licensed Patents and Licensed Technology
are of great value to PRF, and therefore, LICENSEE promises to take all
appropriate measures to
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protect PRF's interests therein. LICENSEE shall not permit any entity,
individual or firm to have access to the Licensed Patents and Licensed
Technology, except as authorized in this Agreement.
8.2 LICENSEE shall promptly inform PRF of any suspected infringement of any
Licensed Patents.
8.3 LICENSEE shall have the first right (but not the obligation) to notify
the infringer and/or initiate legal proceedings to xxxxx the infringement. Upon
failure by LICENSEE to begin or continue to do so timely, PRF shall have the
right (but not the obligation) to take those steps on behalf of itself and
LICENSEE.
8.4 If LICENSEE leads proceedings to xxxxx and remedy infringement, any
monetary recovery (net of litigation costs) from the infringement of Licensed
Patents shall be treated as Commercial Sublicensing Income. If PRF leads
proceedings to xxxxx and remedy infringement, any monetary recovery from the
infringement of Licensed Patents shall belong exclusively to PRF. If LICENSEE
and PRF jointly lead proceedings to xxxxx and remedy infringement, any monetary
recovery (net of the parties' respective litigation costs) from the infringement
of Licensed Patents shall be divided equally between LICENSEE and PRF.
8.5 LICENSEE and PRF shall each bear their own attorney fees and costs
incurred in the prosecution of any infringement proceedings under this Article,
subject to the provisions of Section 11.1 of this Agreement.
ARTICLE 9. CONFIDENTIALITY
LICENSEE and PRF shall not, without the express written consent of the other
party, for any reason or at any time either during or subsequent to the term of
this Agreement disclose to third parties the financial terms set forth in this
Agreement, except upon a subpoena or other court order made with appropriate
provision for protection of confidential information.
ARTICLE 10. LIMITED WARRANTY, MERCHANTABILITY AND EXCLUSION OF WARRANTIES
Each Party warrants to the other that it is fully empowered to enter into this
Agreement. PRF represents, in good faith and to the best of its knowledge, that
there are not, as of the date of this Agreement, any claims, demands, suits, or
judgments against it that in any manner would or might impair or interfere with
PRF's performance of the license granted by PRF to LICENSEE under this
Agreement. Notwithstanding the foregoing, PRF does not warrant the validity of
any Licensed Patents or Licensed Technology. PRF does not warrant the content
contained in the Licensed Patents or Licensed Technology or that they will be
error free or that any defects will be corrected. PRF makes no representation
whatsoever with regard to the scope or commercial potential or profitability or
income of or from the Licensed Patents or Licensed Technology or that such
Licensed Patents or Licensed Technology may be exploited by LICENSEE or its
Affiliates without infringing any rights of any other party. PRF makes no
covenant either to defend any infringement charge by a third party or to
institute action against infringers of Licensed Patents or Licensed Technology.
PRF does not warrant that the Licensed Patents or Licensed Technology will meet
LICENSEE'S or any of LICENSEE'S customer's specific requirements. LICENSEE
warrants that it possesses the necessary expertise and skill to make,
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and has made, its own evaluation of the capabilities, safety, utility, and
commercial application of the Licensed Patents and Licensed Technology.
ACCORDINGLY, THE LICENSED PATENTS AND LICENSED TECHNOLOGY ARE PROVIDED "AS IS."
PRF MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO THE
LICENSED PATENTS AND LICENSED TECHNOLOGY AND EXPRESSLY DISCLAIMS ANY WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY OTHER IMPLIED
WARRANTIES WITH RESPECT TO THE CAPABILITIES, SAFETY, UTILITY, OR COMMERCIAL
APPLICATION OF LICENSED PATENTS AND LICENSED TECHNOLOGY.
ARTICLE 11. DAMAGES, INDEMNIFICATION, AND INSURANCE
11.1 LICENSEE shall defend, indemnify and hold PRF and/or Purdue
University, their trustees, officers, agents, employees or assigns, and the
Inventors harmless from any and all claims, demands, actions and causes of
action against PRF, whether groundless or not, in connection with any and all
injuries, losses, damages or liability of any kind whatsoever arising, directly
or indirectly, out of use, exploitation, distribution, or sale of Licensed
Patents Licensed Technology, or Licensed Product(s) by or through the LICENSEE
or its Affiliate(s) or sublicensees, whether or not the claims, demands, actions
or causes of action are alleged to have resulted in whole or in part from the
negligent acts or omissions of PRF and/or Purdue University, their agents,
employees or assigns, or from acts or omissions of such persons for which PRF
would otherwise be strictly liable. This indemnification obligation shall
include, without limiting the generality of the foregoing, reasonable attorney
fees and other costs or expenses incurred in connection with the defense of any
and all such claims, demands, actions, or causes of action.
11.2 Without limiting LICENSEE's indemnity obligations, within ninety (90)
days of the commercial distribution of any LICENSED PRODUCT or on the date of
initiation of any human trials whichever occurs sooner, LICENSEE shall acquire a
liability insurance policy and shall further maintain said policy throughout the
term of this Agreement and for five (5) years thereafter, said policy to cover
PRF and Purdue University as named insureds (with right to prior notice of
cancellation) for all liabilities, claims, damages, and actions arising from or
relating to LICENSEE's exercise of its license under this Agreement, including
but not limited to product liability and other matters within the scope of
LICENSEE's indemnity obligations under this Agreement, said coverage to be in an
amount no less than [Two Million Dollars ($2,000,000)] per occurrence for bodily
injury and [Five Million Dollars ($5,000,000)] per occurrence for property
damage, subject to a reasonable aggregate amount.
11.3 LICENSEE shall promptly notify PRF of each claim relating in any way
to a Licensed Product and provide PRF with LICENSEE'S good-faith evaluation of
the claim.
ARTICLE 12. TERM AND TERMINATION
12.1 Term. Unless otherwise extended in writing by mutual agreement of the
Parties, this Agreement will remain valid and in force for seven (7) years from
the Effective Date. Any extensions may include additional provisions or
modifications to terms herein as applicable, and
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such changes shall be negotiated between the Parties and a written amendment to
this Agreement will be made as appropriate.
12.2 LICENSEE shall have the right to terminate this Agreement at any time,
upon ninety (90) days prior written notice, without cause and for any reason. If
LICENSEE terminates this Agreement under this provision, PRF, will not be under
any obligation to return any portion of the consideration paid by LICENSEE to
PRF. In the event of such termination, LICENSEE agrees, upon the request of PRF,
to provide PRF with all existing data in support of governmental registration of
Licensed Products. PRF shall have the unrestricted right to provide such data to
third parties.
12.3 If LICENSEE should at any time default or commit any material breach
of any covenant or any obligation of the license, and should fail to remedy any
default or breach within thirty (30) days of LICENSEE's receipt of written
notice, PRF may, at its sole option, terminate this license by notice in writing
to the LICENSEE. Upon termination, LICENSEE shall remain responsible for all
obligations contained in this Agreement, including without limiting the
generality of the foregoing, reasonable attorney fees and other costs or
expenses incurred by PRF as a result of LICENSEE's breach and/or default.
12.4 If LICENSEE: (a) liquidates and ceases to carry on its business, (b)
becomes "insolvent" (as such term is defined in the United States Bankruptcy
Code, as amended from time to time), or (c) voluntarily seeks, consents to or
acquiesces in the benefits of any bankruptcy or similar debtor-relief laws, then
PEF may terminate this Agreement without prejudice to any other remedy to which
PRF may be entitled at law or in equity or elsewhere under this Agreement, by
giving written notice of termination to LICENSEE.
12.5 Upon termination of the Agreement, LICENSEE and any Commercial
Sublicensees shall cease all uses of the Licensed Patents and Licensed
Technology.
12.6 If this Agreement is terminated for any reason whatsoever, LICENSEE
shall return, or at PRF's direction destroy, all plans, drawings, papers, notes,
writings and other documents, samples, organisms, biological materials and
models pertaining to the Licensed Patents and Licensed Technology, retaining no
copies, and shall refrain from using or publishing any portion thereof. Upon
termination of this Agreement, LICENSEE shall cease manufacturing, processing,
producing, using, or selling Licensed Products; provided, however, that LICENSEE
may continue to sell in the ordinary course of business for a period of three
(3) months reasonable quantities of Licensed Products that are fully
manufactured and in LICENSEE's normal inventory at the date of termination if
(a) all monetary obligations of LICENSEE to PRF have been satisfied, and (b)
royalties on such sales are paid to PRF in the amounts and in the manner
provided in this Agreement. However, nothing herein shall be construed to
release either party of any obligation that matured prior to the effective date
of such termination.
12.7 The provisions of Articles 9, 10, and 11 of this Agreement shall
remain in full force and effect notwithstanding the termination of this
Agreement.
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ARTICLE 13. ASSIGNMENT
This Agreement shall be binding upon and shall inure to the benefit of the legal
representatives and assigns of PRF and LICENSEE, provided, however, that any
assignment of this Agreement by LICENSEE to a third party may be made only upon
prior written consent of PRF, which consent may be reasonably withheld or
conditioned by PRF as necessary to prevent prejudice to the Licensed Patents and
Licensed Technology and to preserve the value of the consideration promised by
LICENSEE to PRF under this Agreement.
ARTICLE 14. MISCELLANEOUS
14.1 Export Controls. LICENSEE acknowledges that PRF is subject to United
States laws and regulations controlling the export of technical data, computer
software, laboratory prototypes, and other commodities and that PRF's
obligations under this Agreement are contingent upon compliance with applicable
United States export laws and regulations. The transfer of technical data and
commodities may require a license from the cognizant agency of the United States
government or written assurances by LICENSEE that LICENSEE shall not export data
or commodities to certain foreign countries without the prior approval of
certain United States agencies. PRF neither represents that an export license
shall not be required nor that, if required, such export license shall issue.
14.2 Jurisdiction, Venue, Choice of Law, and Attorney's Fees. Any
justifiable dispute between LICENSEE and PRF shall be determined solely and
exclusively under Indiana law by a court of competent jurisdiction in Tippecanoe
County in Indiana. The prevailing party in any litigated dispute shall be
entitled to reimbursement of its attorney's fees and costs.
14.3 Legal Compliance. LICENSEE shall comply with all laws and regulations
relating to its manufacture, processing, producing, use, Selling, or
distributing of Licensed Products. LICENSEE shall not take any action that would
cause PRF or LICENSEE to violate any laws and regulations.
14.4 Independent Contractor. LICENSEE's relationship to PRF shall be that
of a licensee only. LICENSEE shall not be the agent of PRF and shall have no
authority to act for or on behalf of PRF in any matter. Persons retained by
LICENSEE as employees or agents shall not by reason thereof be deemed to be
employees or agents of PRF.
14.5 Patent Marking. LICENSEE shall xxxx Licensed Products sold in the
United States with United States patent numbers. Licensed Products manufactured
or sold in other countries shall be marked in compliance with the intellectual
property laws in force in such foreign countries.
14.6 Use of Names. LICENSEE shall obtain the prior written approval of PRF,
PU, or the Inventors prior to making use of their names for any commercial
purpose, except as required by law. As an exception to the foregoing, both
LICENSEE and PRF shall have the right to publicize the existence of this
Agreement; however, neither LICENSEE nor PRF shall disclose the terms and
conditions of this Agreement without the other party's consent, except as
required by law.
12
14.7 Place of Execution. This Agreement and any subsequent modifications or
amendments hereto shall be deemed to have been executed in the State of Indiana,
U.S.A.
14.8 Governing Law. This Agreement and all amendments, modifications,
alterations, or supplements hereto, and the rights of the parties hereunder,
shall be construed under and governed by the laws of the State of Indiana and
the United States of America.
14.9 Entire Agreement. This Agreement constitutes the entire agreement
between PRF and LICENSEE with respect to the subject matter hereof and shall not
be modified, amended or terminated except as herein provided or except by
another agreement in writing executed by the parties hereto.
14.10 Severability. All rights and restrictions contained herein may be
exercised and shall be applicable and binding only to the extent that they do
not violate any applicable laws and are intended to be limited to the extent
necessary so that they will not render this Agreement illegal, invalid or
unenforceable. If any provision or portion of any provision of this Agreement
not essential to the commercial purpose of this Agreement shall be held to be
illegal, invalid or unenforceable by a court of competent jurisdiction, it is
the intention of the parties that the remaining provisions or portions thereof
shall constitute their agreement with respect to the subject matter hereof, and
all such remaining provisions or portions thereof shall remain in full force and
effect. To the extent legally permissible, any illegal, invalid or unenforceable
provision of this Agreement shall be replaced by a valid provision that will
implement the commercial purpose of the illegal, invalid or unenforceable
provision. In the event that any provision essential to the commercial purpose
of this Agreement is held to be illegal, invalid or unenforceable and cannot be
replaced by a valid provision that will implement the commercial purpose of this
Agreement, this Agreement and the rights granted herein shall terminate.
14.11 Force Majeure. Any delays in, or failure of, performance of any party
to this Agreement shall not constitute default hereunder, or give rise to any
claim for damages, if and to the extent caused by occurrences beyond the control
of the party affected, including, but not limited to, acts of God, strikes or
other work stoppages, civil disturbances, fires, floods, explosions, riots, war,
rebellion, sabotage, acts of governmental authority or failure of governmental
authority to issue licenses or approvals that may be required.
ARTICLE 15. NOTICES
15.1 All notices and other communications shall be hand delivered, sent by
private overnight mail service, or sent by registered or certified U.S. mail,
postage prepaid, return receipt requested, and addressed to the party to receive
such notice or other communication at the address given below, or such other
address as may hereafter be designated by notice in writing:
If to PRF: Assistant Vice President and Director
Purdue Research Foundation
Office of Technology Commercialization
0000 Xxxxxxxxxx Xxx.
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
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If to LICENSEE: President
NanoDynamics, Inc.
000 Xxxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Such notices or other communications shall be effective upon receipt by an
employee, agent or representative of the receiving party authorized to receive
notices or other communications sent or delivered in the manner set forth above.
IN WITNESS WHEREOF, PRF and LICENSEE have caused this Agreement to be
signed by their duly authorized representatives, under seal, as of the day and
year indicated above.
PRF: LICENSEE:
PURDUE RESEARCH FOUNDATION NANODYNAMICS, INC.
By: /s/ Xxxxxx X. Hornet By: /s/ Xxxxx X. Xxxxxxx
--------------------------------- ------------------------------------
Name: Xxxxxx X. Hornet Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President and Title: CEO
Treasurer
14
AMENDMENT TO
EXCLUSIVE LICENSE AGREEMENT
THIS AMENDMENT, made and entered into this 18th day of September, 2006 amends
the Agreement executed on December 20, 2002, (hereinafter AGREEMENT) between
Purdue Research Foundation (hereinafter known as PRF) and NanoDynamics, Inc.
(hereinafter known as LICENSEE).
NOW THEREFORE, the parties hereto do hereby agree as follows:
1. ARTICLE 2.1 SHALL BE DELETED IN ITS ENTIRETY AND REPLACED WITH THE
FOLLOWING:
License. Subject to compliance with this Agreement, and subject to the
reservation of rights stated below, PRF grants, and LICENSEE accepts,
an exclusive license to the Licensed Patent(s) to develop, make, have
made, use, and sell Licensed Products on a royalty-bearing basis in
the Field of Use in the Licensed Technology and for issuance of
corresponding Commercial Sublicenses directly between LICENSEE and a
Sublicensee on terms and conditions consistent with this Agreement.
Exclusivity of the License is subject to the terms mentioned in
Article 4.5
2. ARTICLE 12.1, TERM IS DELETED IN ITS ENTIRETY AND REPLACED WITH THE
FOLLOWING:
Term. Unless otherwise extended in writing by mutual agreement of the
Parties, this Agreement will remain valid and in force for ten (10)
yews from the date of the first sale of a Licensed Product in any
country, or until the expiration date of the last of the valid claims
of the last to expire of the Licensed Patents, whichever is greater.
3. ARTICLE 4.5, B, C, D ARE REPLACED IN ITS ENTIRETY WITH THE FOLLOWING:
September 25, 2006 $30,000
December 31, 2006 and for the remaining years $30,000
For a period of ten (10) years from the effective date of this
amendment, if Licensee shall fail to pay minimum royalties within the
due date of each year, License will be considered in default and shall
be the grounds for termination,
After 10 years, if anytime the Licensee discontinues minimum royalty
payments, the license shall be automatically converted into a
Non-Exclusive license.
4. THE FOLLOWING TECHNOLOGIES ARE LICENSED TO NANODYNAMICS, INC. THEREBY
AMENDING EXHIBIT A OF THE AGREEMENT TO INCLUDE:
1
"Large Strain Machining: A Method for Making Bulk Nanostructured
Materials" PRF Reference No. 64588
Purdue Ref No. Serial/Patent No. Country File/Date Comments
-------------- ----------------- ------- --------- --------
64588.00.WO In the process of filing PCT
"Micro- and Meso- Scale Components with Ultrafine Grained (UFG)
Microstructure and Enhanced Performance" PRF Reference No. 64341
Xxxxxx Ref No. Serial/Patent No. Country File/Date Comments
-------------- ----------------- ------- --------- --------
64341.00.WO PCT/US06/16974 5/3/2006 Filed
00000.00.XX 11/381,387 US 5/3/2006 Filed
5. ARTICLE 13 (ASSIGNMENT) SHALL BE REPLACED ENTIRELY WITH THE FOLLOWING:
This Agreement shall be binding upon and shall inure to the benefit of
the legal representatives and assigns of PRF and LICENSEE, provided,
however, that any assignment of this Agreement by License to a third
party may be made only upon prior written consent of PRF, such consent
not to be unreasonably withheld. Notwithstanding the foregoing, either
panty may, without consent of the other party, assign this Agreement
and its rights and obligations hereunder to an Affiliate or in
connection with the transfer or sale of all or substantially all of
its business to which this Agreement relates, or in the event of its
merger, consolidation, change in control or similar transaction. PRF
shall have the right to assign this Agreement to a non-profit
corporation that promotes the research purposes of PU. Any permitted
assignee shall assume all obligations of its assignor under this
Agreement. Any purported assignment or transfer in violation of this
section shall be void.
All other terms and conditions of the original agreement remain unchanged and in
effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first above written.
Purdue Research Foundation Nanodynamics, Inc.
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------- ----------------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President Title: President
Date: 10/2/2006 Date: September 27, 2006
2
