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Exhibit 10.9
LICENSE AGREEMENT
This agreement, made and entered into as of the 31st day of May, 1996, by and
between RESEARCH DEVELOPMENT CORPORATION OF JAPAN, a corporation organized and
existing under the Act of Japanese Parliament entitled Research Development
Corporation Xxx 0000 (established in 1961, amended in 1981, 1989 and 1993)
having its principal place of business at 1-8, Honcho 4-chome, Kawaguchi City,
Saitama Pref., 000, Xxxxx (hereinafter referred to as LICENSOR) and NANOPHASE
TECHNOLOGIES CORPORATION, a corporation organized and existing under the laws
of State of Illinois, the United States of America, having its principal place
of business at 0000 Xxxxx Xxxx Xxxxxx - Xxxxx 000, Xxxxxx, Xxxxxxxx 00000, The
United States of America (hereinafter referred to as LICENSEE);
WITNESSETH:
WHEREAS National Research Institute for Metals, Science and Technology Agency
of the Government of Japan (hereinafter referred to as NRIM) is the inventor
of Process for Producing Ultrafine Powders of Metal and Ceramics and the owner
of the patents thereof stated in Article 1; and
WHEREAS LICENSOR has been duly granted by NRIM an exclusive right to license
the said patents to any third party non-exclusively; and
WHEREAS LICENSEE is desirous of acquiring from LICENSOR a license to produce
and sell the ultrafine powders of metal and ceramics by processes and methods
which may be subject to such NRIM's patents; and
WHEREAS LICENSOR is willing to grant such a license to LICENSEE upon the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties hereby agree as follows:
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1. DEFINITION
1.1 As used in this AGREEMENT and its recital, the following terms shall
have the following meaning:
(a) "Patent" shall mean the patents to be licensed by this AGREEMENT,
and the number, the date of grant and the title (inclusive of all
extensions, renewals, continuations, reissues and continuations in
part) of which are as follows;
1. U.S.A. Patent No. 4,376,740
granted on March 15, 1983
titled "Process for Production Fine Metal Particles"
2. U.S.A. Patent No. 4,482,134 granted on November 13, 1984 titled
"Apparatus for Producing Fine Metal Particles"
3. U.S.A. Patent No. 4,642,207
granted on February 10, 1987
titled "Process for Producing Ultrafine Particles of Ceramics"
4. U.S.A. Patent No. 4,889,665
granted on December 26, 1989
titled "Process for Producing Ultrafine Particles of Ceramics"
(b) "Product" shall mean ultrafine powders of metal and ceramics produced
using processes or methods within the scope of any valid claim
included within any Patent which is to be licensed by this AGREEMENT.
(c) "Effective Date of this AGREEMENT" shall mean the date stipulated in
Article 9.
(d) "Term of this AGREEMENT" shall mean the period during which this
AGREEMENT remains in force as defined in Article 9.
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2. LICENSE
2.1 Upon the terms and conditions hereinafter more specifically set forth,
LICENSOR hereby grants to LICENSEE and LICENSEE hereby accepts:
A license for Term of this AGREEMENT to employ Patent to non-exclusively
manufacture and use for internal research, Product in the facilities of
LICENSEE in the United States of America and to non-exclusively use for
internal research and sell Product in the United States of America.
3. SUB-LICENSE
3.1 LICENSEE shall have no right to grant any sub-license to a third party
under this AGREEMENT.
4. LICENSE FEE
4.1 In consideration of the right and the license granted herein, LICENSEE
shall pay the following license fees to LICENSOR:
(1) Initial payment: one million and five hundred thousand Japanese
Yen (Yen 1,500,000) to be paid within thirty (30) days from
Effective Date of this AGREEMENT.
(2) Royalty: three (3) percent of the proceeds of sales of Product to
be paid within forty-five (45) days from the last day of
LICENSEE's each fiscal year through Term of this AGREEMENT.
Proceeds of sales shall mean the total of gross proceeds less
cost of raw materials of Product, packing cost, transportation
cost, handling charge of a dealer, insurance, commodity tax and
other trade taxes for Product sold.
4.2 Both parties shall make commercially reasonable efforts to lead this
AGREEMENT to a commercial success which should reflect in royalty
payments.
5. PAYMENT
5.1 Any and all payments under this agreement shall be made in Japanese
Yen by telegraphic transfer to the account of LICENSOR at Head Office
of The Fuji
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Bank LTD. (Ordinary Account No. 0000000), and shall be net without any
deduction. Any tax, dues and charges whatsoever imposed in the United
States of America from whatever the reason shall be borne by LICENSEE so
that LICENSOR shall receive the agreed amount.
The day the above mentioned bank receives the money shall be regarded
as the day of fulfillment of the respective payment. In case of delay in
payment, LICENSOR shall have the right to charge interest at the rate of
eight point two five (8.25) percent per annum.
5.2 LICENSEE shall keep true and accurate records, files and books of
account in accordance with generally accepted accounting principles
consistently applied and containing all the data reasonably required for
the full computation and verification of the payments of royalty to be
made hereunder. LICENSEE shall permit LICENSOR or its duly authorized
representatives, at LICENSOR's expense, adequate access to such records,
files and books of account at any time during usual business hours for
inspection purposes.
5.3 LICENSEE shall deliver to LICENSOR every twelve (12) months license
fee reports that shall show computation of royalty due including
reasonably sufficient information on production of Product made hereunder
by LICENSEE. Each of such reports shall be delivered to LICENSOR within
thirty (30) days after the last day of LICENSEE's each fiscal year. In
case no license fee is payable for the period in question, the report
shall so state.
5.4 Any money received by LICENSOR as provided in this AGREEMENT shall not
be refunded to LICENSEE whatever the reason may be.
6. FORCE MAJEURE
6.1 Neither party shall be liable for failure to perform its part of this
AGREEMENT when the failure is due to event beyond its reasonable control.
Occurrence of such force majeure shall be notified to the other party in
writing within ten (10) days from the day such occurrence started and
shall be verified by the respective chamber of commerce or any other
respective authority within twenty (20) days at the latest. Should such
verification be not possible the party claiming the occurrence of force
majeure shall have to present to the other party sufficient proof
thereof. Each party undertakes to use commercially
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reasonable efforts in order to re-establish conditions favorable for the
performance of this AGREEMENT, and shall inform the other party of the
steps it has taken. If the contractual performance is, as the result of
force majeure, delayed by more than six (6) months, the other party
will be at liberty to terminate this AGREEMENT.
7. ARBITRATION
7.1 Any disputes between the parties in connection with this AGREEMENT, also
those relating to its validity, shall be settled amicably. In
default of such settlement, all disputes that may arise under or in
relation to this AGREEMENT shall be subject to a final decision of the
Japan Commercial Arbitration Association in Tokyo, Japan whose
proceedings shall take place in Tokyo, Japan.
8. GOVERNING LAW
8.1 This AGREEMENT shall be governed as to all matters including its
validity, construction and performance by the laws of Japan.
9. EFFECTIVE DATE AND TERM
9.1 This AGREEMENT shall become effective on the date on which the AGREEMENT
is approved by NRIM and it shall remain in force thereafter for
ten (10) years from such date. However, upon expiration of License
term, the term of this AGREEMENT shall be extended upon agreement
between LICENSEE and LICENSOR.
10. TERMINATION
10.1 In the event of failure or negligence of either party to fulfill
any provisions hereof to be performed by it, and if the other
party gives written notice of such default, then if such default is
not cured within sixty (60) days after giving such notice, the party
having given such notice shall reserve the right to terminate this
AGREEMENT any time thereafter, by giving written notice of such
termination to the receiving party. Such notice of termination shall
be effective on the date of the notice unless otherwise designated in
the said notice.
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10.2 Upon expiration or earlier termination of this AGREEMENT as provided in
this AGREEMENT, all rights and obligations provided in this
AGREEMENT shall forthwith terminate except the obligation concerning
any amount payable to LICENSOR by LICENSEE which would have accrued
under this AGREEMENT on or prior to such termination.
11. NOTICES
11.1 To be legally effective, any notices which the parties are
required or permitted to give to each other pursuant to any of the
provisions of this AGREEMENT shall be sent by registered airmail or
telex confirmed by registered airmail at the addresses as first set
forth above.
12. ENTIRE AGREEMENT
12.1 This AGREEMENT constitutes the entire agreement between the parties
relating to the subject matter hereof. No change of, addition
to, or waiver of the terms and conditions hereof shall be binding upon
either party unless agreed by it in writing.
13. NON-ASSIGNMENT
13.1 Assignment of this AGREEMENT or any part thereof by either
party shall not be effective unless agreed by the other party in
writing.
IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT in
duplicate original to be executed by their duly authorized representatives on
the day and year first above written and each party shall keep one copy of
original.
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Date LICENSOR:
May 31, 1996 RESEARCH DEVELOPMENT CORPORATION
------------ OF JAPAN
by Xxxxxxxxx Xxxxxxxxxx
-------------------------------
Xxxxxxxxx Xxxxxxxxxx
President
Date LICENSEE:
May 31, 1996 NANOPHASE TECHNOLOGIES
------------ CORPORATION
by Xxxxxx X. Xxxxx
----------------------------------
Xxxxxx X. Xxxxx
President
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APPENDIX
Date:
--------------------
President
Research Development Corporation of Japan
1-8, Honcho 4-chome, Kawaguchi City
Saitama Pref. 332, Japan
Dear Sir,
Re: Report for Fine Metal Powders
We are pleased to report to you on our production of Fine Metal Powders and
the royalty thereof for our 1st fiscal year basing on the book of account in
accordance with the Article 5.3 of License Agreement of the 31st day of May,
1996 as follows:
1. Period:
From to
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2. Production:
Carryover from Previous Term:
Production Quantity:
Quantity Adjusted:
Carryover to Next Term:
Remarks:
3. Sales:
Sales Quantity in pounds:
Sales Amount in U.S. Dollar:
Amount Adjusted:
Amount Deducted:
Amount Subject to Royalty:
Remarks:
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4. Royalty:
U.S.$ Amount x % = U.S.$ Amount
5. Breakdown of Amount Deducted:
Subject:
Amount:
6. Estimate for Coming One Year:
Sales Quantity:
Sales Amount:
Royalty:
Remarks:
7. Name and Address of Factory:
8. Person in Charge:
Department:
Name of person:
Telephone & Facsimile:
9. Others:
The breakdown for monthly production and sales is as per attached.
The above amount will be paid to your ordinary account No. 0000000 at the head
office of Fuji Bank Ltd. by (date).
Yours faithfully,
Nanophase Technologies Corporation
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