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Exhibit 10.7
LICENSE AGREEMENT
License Agreement dated June 1, 1990, between ARCH DEVELOPMENT
CORPORATION, an Illinois not-for-profit corporation ("ARCH"), and NANOPHASE
TECHNOLOGIES CORPORATION, an Illinois corporation ("NTC").
PRELIMINARY STATEMENT
ARCH holds certain rights, title and interest in and to the technology
described below.
NTC desires to obtain the right to exploit the technology in commercial
settings, on the terms and conditions set forth below.
Therefore, in consideration of the mutual obligations set forth
herein, ARCH and NTC agree as follows.
AGREEMENT
I. DEFINITIONS. The following capitalized terms are used in this
Agreement with the following meanings:
"Affiliate" of any entity means any person or entity which directly or
indirectly controls, is controlled by, or is under common control with such
entity.
"Combination Product" means any product sold as a single unit but which
incorporates both (a) one or more Licensed Products and (b) one or more
products, not themselves Licensed Products, which the seller of the
Combination Product also offers for sale separately from the Combination
Product.
"Field of Use" means all uses of nanophase processes or materials
for structural, electrical, chemical or optical applications.
"Improvements" means all modifications, revisions or improvements to the
Inventions (i) to which ARCH shall acquire rights during the term of this
Agreement, and (ii) which improve the performance of the Inventions or any
Licensed Product, reduce the production costs of any Licensed Product, broaden
the applicability of any Licensed Product, increase the marketability of any
Licensed Product, or replace any Licensed Product in the marketplace.
"Invention" means each product, composition, process and use within the
scope of any claim contained in any patent application listed on Schedule I
attached hereto, and each product or
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composition made or manufactured by any art, method or process within the
scope of any claim of any such patent application, and all Improvements
thereof.
"Know-How" means the information, technical abilities, know-how, data and
designs in the possession or control of ARCH related to the Inventions that is
necessary or useful to reduce the Inventions to practice or to manufacture
Licensed Products.
"Later Developments" means all discoveries, inventions, or other
proprietary matters now or hereafter owned or controlled by ARCH within the
Field of Use and not constituting Improvements.
"Licensed Product" means any product or composition within the scope of
any claim of any patent application filed with respect to any of the
Inventions or any issued patent within the Patent Rights, or any product or
composition made or manufactured by any art, method, or process within the
scope of any claim of any patent application filed with respect to any of the
Inventions or any issued patent within the Patent Rights, including any
Combination Product.
"Net Sales" means:
(a) with respect to Licensed Products sold for cash other than
Licensed Products sold as an element of a Combination Product, the
price actually charged by NTC or any sublicensee of NTC in the sale of the
Licensed Product, less:
(i) customary trade, quantity or cash discounts, rebates, and
non-affiliated brokers' or agents' commissions actually
allowed and taken;
(ii) amounts repaid or credited to customers on account
of rejections or returns of specified products subject to
royalty hereunder or on account of retroactive price
reductions affecting such products; and
(iii) freight and other transportation costs, including
insurance charges, and duties, tariffs, sales and excise taxes
and other governmental charges based directly on sales, turnover
or delivery of the specified products and paid or allowed by NTC
or a sublicensee; and
(b) with respect to Licensed Products sold or otherwise transferred
other than for cash, and with respect to Licensed Products sold for
cash as an element of a Combination Product, and with respect to Licensed
Products used or consumed by NTC or any sublicensee of NTC in the manufacture
of another product,
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either (i) an amount per unit of Licensed Product equal to the average sale
price of the Licensed Product determined in accordance with clause (a) above
for sale to third parties in the same and the preceding quarterly accounting
period, or (ii) if no sales of the Licensed Product have occurred in the same
and the preceding quarterly accounting period, other than as an element of a
Combination Product, an amount equal to (y) the price actually charged in the
sale of the Combination Product, less:
(i) customary trade, quantity or cash discounts, rebates, and
non-affiliated brokers' or agents commissions actually allowed and
taken;
(ii) amounts repaid or credited to customers on account of
rejections or returns of specified products subject to royalty
hereunder or on account of retroactive price reductions affecting
such products; and
(iii) freight and other transportation costs, including insurance
charges, and duties, tariffs, sales and excise taxes and other
governmental charges based directly on sales, turnover or delivery of
the specified products and paid or allowed by NTC or a sublicensee;
times (z) a fraction, the numerator of which is the direct manufacturing cost
of the Licensed Product, including materials, purchased parts and labor and
calculated in the customary manner used in the seller's internal cost
accounting, and the denominator of which is the total direct manufacturing
cost of the Combination Product, including materials, purchased parts and
labor and calculated in the same manner.
"Patent Costs" means out-of-pocket expenses incurred in connection with
the preparation, filing, prosecution and maintenance of the Patent Rights,
including, among other items, the fees and expenses of attorneys and patent
agents, filing fees and maintenance fees, but excluding costs involved in any
patent infringement claims.
"Patent Rights" means all rights arising from any patents issued on (i)
patent applications listed on Schedule I attached hereto and made a part
hereof, (ii) any other patent applications that may be filed in connection
with any of the Inventions, and (iii) all patent applications which are
divisions, continuations, continuations-in-part, reissues, renewals, foreign
counterparts, substitutions, or extensions of or to such patent applications.
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II. GRANT OF LICENSE.
2.1. Grant. ARCH hereby grants, and agrees to grant, to NTC:
(a) the exclusive (except as otherwise specified in Section 2.2)
worldwide license to make, have made, use and sell Licensed Products within
the Field of Use; and
(b) a non-exclusive worldwide license to use Know-How in
connection with the manufacture, use and sale of Licensed
Products within the Field of Use; and
(c) the exclusive (except as otherwise specified in Section
2.2) right and authority to grant sublicenses of the rights granted
in clause (a) above, and the non-exclusive right and authority to
grant sublicenses of the rights granted in clause (b) above, subject
to the provisions of this Agreement.
2.2. Reservations.
(a) ARCH reserves for itself and for The University of Chicago
(the "University") the irrevocable right to make and use Licensed
Products and to use the Patent Rights and Inventions for its own internal
educational and research purposes. Neither ARCH nor the University shall have
any obligation to pay NTC a royalty or any other fee for the rights reserved
in the preceding sentence, which shall not be transferable (except to any
Affiliate of or successor to ARCH or the University, in which event such
Affiliate shall be bound by the restrictions on transfer set forth herein) or
licensable, and shall not include the right to sell Licensed Products or to
license the Patent Rights or Inventions.
(b) NTC acknowledges that the Inventions were developed at
Argonne National Laboratory, which is operated by the University
pursuant to its agreement with the United States Department of Energy
("DOE") (such agreement, as it may be amended from time to time,
being referred to herein as the "Prime Contract"), and that pursuant
to such Prime Contract DOE has reserved certain rights to the
Inventions. Such rights include, but are not necessarily limited to,
(i) a non-exclusive, nontransferable, irrevocable, paid-up license to
practice or have practiced for or on behalf of the United States
throughout the world and (ii) march-in rights pursuant to 37 C.F.R.
401.6. In the event DOE attempts to acquire additional rights to any
Invention by exercising such march-in rights, ARCH will, upon
receiving notice of such attempt promptly notify NTC and will allow
NTC, at NTC's expense, to oppose such DOE effort in the name of and
on behalf of ARCH.
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2.3. Sublicenses. NTC shall promptly notify ARCH in writing following the
execution by NTC of any sublicense under this Agreement, and shall include a
summary of all material terms. The terms of any such sublicense shall be in
NTC's sole discretion. Upon the termination of this Agreement for any reason
prior to the expiration of the last-to-expire of the Patent Rights, each such
sublicense shall be deemed converted to a temporary direct license from ARCH
to such sublicensee on the terms of such sublicense agreement, which temporary
direct license shall terminate upon the earlier of (i) sixty (60) days after
the termination of this Agreement or (ii) the expiration of the last-to-expire
of the Patent Rights; provided, however, that ARCH agrees that upon request it
will negotiate in good faith with any of the sublicensees under such
sublicense agreements to grant such sublicensee a permanent direct license,
within such sublicensee's existing field of use, on substantially the same
terms as set forth in such sublicense and this Agreement. NTC shall be
entitled to collect any amounts due to it under each sublicense agreement for
the period prior to the termination of this Agreement, subject to NTC's
obligation to pay Royalties to ARCH with respect to such amounts.
III. PAYMENTS.
3.1. Royalties and Sublicense Fees. (a) Beginning with the first sale of
a Licensed Product sold by NTC or any sublicensee of NTC, NTC shall pay ARCH
royalties ("Royalties") equal to five percent (5%) of Net Sales of Licensed
Products sold by NTC or any of its sublicensees. In addition, NTC shall pay
ARCH 50% of all amounts received from any sublicensees that are not based upon
sales for use of Licensed Products, whether such payments are designated as
sublicense fees, or otherwise.
(b) In the event that NTC is obligated to pay a royalty to a third party
to make, have made, use or sell a Licensed Product, NTC may reduce the
Royalties payable to ARCH by an amount equal to the royalty paid to such third
party, provided, however, that in no event will the Royalties otherwise
payable hereunder be reduced by more than 50% for any period.
(c) In the event of a substantial infringement of the Patent Rights by a
third party, the Royalties payable to ARCH shall be reduced by a percentage
equal to the percentage of sales of Licensed Products lost by NTC as a result
of such infringer's action (to be determined in good faith by NTC and ARCH,
taking into account both historical and projected sales, at the time of such
infringement), but in no event by more than 50%, beginning upon the date NTC
shall substantiate to ARCH that a substantial infringement of the Patent
Rights is occurring, and ending upon
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the date such infringement shall cease. For purposes of this Section 3.1(c),
a "substantial infringement" shall be deemed to occur when a third party
shall have sales of products that, if sold by NTC, would constitute Licensed
Products, of more than $10,000 per year.
(d) The requirement for NTC to pay Royalties to ARCH arising from the
manufacture, use or sale of Licensed Products by NTC or any sublicensee of NTC
in a particular jurisdiction shall extend only so long as such manufacture,
use or sale:
(i) is within the scope of any then pending claim of an application
in such jurisdiction; and
(ii) is covered by any claim (other than a claim which has been
determined by a court of competent jurisdiction from which no appeal can
be taken to be invalid or unenforceable) of an issued, unexpired and
in-force patent within the Patent Rights in such jurisdiction.
Only one Royalty shall be due or payable with respect to any single Licensed
Product regardless of how many patents or patent applications within the
Patent Rights cover the manufacture, use or sale of such Licensed Product.
3.2. Payment of Royalties Accounting. (a) Royalties shall
be calculated on a calendar quarter basis for sales occurring in
such quarter. Payment of Royalties with respect to each calendar
quarter shall be due at the same time that NTC's accounting of
sales and receipts with respect to the quarter is due (as
provided in Section 3.2(b) hereof), beginning with the calendar
quarter in which the first sale of a Licensed Product occurs.
(b) Within sixty (60) days after the end of each calendar quarter
during the term of this Agreement (and regardless of whether any sales
of Licensed Products occurred during such period), NTC shall deliver
to ARCH a true and complete accounting of sales of Licensed Products
and receipts from those sales by NTC and its sublicensees during such
period, with a separate accounting of sales and receipts by country.
If no sales of Licensed Products occurred during such period, NTC's
accounting shall consist of a statement to that effect.
3.3. Records. NTC shall keep accurate records in sufficient
detail to permit the Royalties under this Agreement to be determined,
and shall require any sublicensees to do the same. NTC shall permit
its books and records regarding Licensed Products to be examined and
copied from time to time during the term of this Agreement and for a
reasonable period of not less
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than three years after the date to which such records relate, at the request
and sole expense of ARCH, during normal business hours by ARCH or any
representative of ARCH reasonably acceptable to NTC or such sublicensee, and
shall require each of its sublicensees to do the same.
3.4. Foreign Payments. In the event of Net Sales for which NTC or any
sublicensee receives payment in a currency other than currency which is legal
tender in the United States of America, all Royalties with respect to such Net
Sales shall be computed by converting such payment into United States dollars
at the applicable rate of exchange of Citibank, N.A., in New York, New York,
on the last day of the quarter in which the Net Sales occurred. All Royalties
shall be paid to ARCH in United States dollars.
3.5. Interest on Overdue Payments. Payments provided for in this
Agreement shall, when overdue more than thirty (30) days, bear interest at a
fluctuating rate equal from time to time to one percent (1%) per annum plus
the rate then most recently announced by Citibank, N.A., as its Base Rate,
beginning on the thirty-first day after the due date and continuing until
payment is received by ARCH. Any interest accruing under this Section shall be
due to ARCH without demand to NTC.
IV. NO WARRANTIES; INDEMNIFICATION;
4.1. Disclaimer of Warranties. ARCH hereby disclaims all warranties
relating to the Inventions, Patent Rights or Know-How, express or implied.
Without limiting the generality of the foregoing, ARCH expressly does not
warrant (i) the accuracy of the information contained in the Applications,
(ii) the patentability of any of the Inventions, or (iii) the accuracy,
safety, or usefulness for any purpose, of the Patent Rights, Inventions, or
any Know-How made available by ARCH hereunder. Nothing contained in this
Agreement shall be construed as either a warranty or representation by ARCH
that any Patent Rights will issue or as to the validity or scope of any Patent
Rights that may issue. ARCH assumes no liability in respect of any
infringement of any patent or other right of third parties due to the
activities of NTC or any sublicensee under this Agreement.
4.2. Indemnification and Insurance. (a) Neither ARCH, the University,
any Affiliate of either of them, nor any officer, director, trustee,
employee, agent or representative of any of them (each an "Indemnified
Party") shall have any liability whatsoever to NTC or any other person for or
on account of (and NTC and each sublicensee agrees and covenants not to xxx
any Indemnified Party in connection with) any injury, loss, or
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damage, of any kind or nature, sustained by, or any damage assessed
or asserted against, or any other liability incurred by or imposed
upon NTC or any other person, arising out of or in connection with
or resulting from (i) the production, use or sale of the Licensed
Products by NTC or its sublicensees,(ii) the use of any Invention or
Know-How by NTC or its sublicensees, or (iii) any advertising or
other promotional activities with respect to either of the
foregoing. NTC shall indemnify and hold each Indemnified Party
harmless against all claims, demands, losses, damages or penalties
(including but not limited to attorney's fees) made against any
Indemnified Party with respect to such matters, whether or not such
claims are groundless and without merit or basis.
(b) Each Indemnified Party agrees to notify NTC in writing as
soon as possible and in any event within thirty (30) days after
receiving written notice of any claim for which indemnity will be
sought by such Indemnified Party hereunder. In such event, NTC shall
be entitled to select counsel of its choosing and direct the defense
thereof. NTC shall have the right to settle any such claim;
provided, however, no such settlement shall involve the surrender by
NTC, on behalf of itself or ARCH, of rights under any Patent Rights
without the prior written consent of ARCH. ARCH agrees to cooperate
with NTC in connection with any such claim, and shall not
unreasonably withhold its consent to any settlement to which it has the
right to consent.
(c) NTC agrees to use its best efforts to list ARCH, at NTC's
expense, as an additional insured under any liability insurance
policy that NTC shall have or obtain that includes any coverage of
claims relating to any of the Inventions, Patent Rights or
Licensed Products. At ARCH's request, NTC will supply ARCH from
time to time with copies of each such policy, and will notify ARCH
in writing at least thirty (30) days prior to any termination of
or change in coverage under any such policies.
4.3. Government Indemnification. This license is entered into by ARCH,
independent from the Prime Contract with the Department of Energy. ARCH is
acting independently from the Government and in its own private capacity and
is not acting on behalf of the U.S. Government, nor as its contractor nor its
agent. Correspondingly, it is understood and agreed that the U.S. Government
is not a party to this Agreement and in no manner shall be liable for nor
assume any responsibility or obligation for any claim, cost or damages arising
out of or resulting from this Agreement, the subject matter licensed, or any
action or lack thereof by ARCH, the University, or NTC with respect thereto.
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V. PROSECUTION AND MAINTENANCE OF LICENSED PATENTS
5.1. ARCH Prosecution. During the term of this Agreement, and
subject to the provisions of Section 5.3 of this Agreement, ARCH
shall be responsible for prosecuting and maintaining the Patent
Rights in the United States and such other jurisdictions that NTC
may elect in writing to ARCH (subject to Section 5.3). Except as
otherwise specified in this Agreement, NTC shall pay when due, or in
ARCH's option reimburse ARCH for, all Patent Costs accruing after
November 30,1989. At NTC's request, ARCH shall provide NTC with
copies of all office actions and other communications received by
ARCH or its patent counsel with respect to the Patent Rights and,
prior to submission to the recipients, copies of all draft filings
with governmental agencies from ARCH or its patent counsel with
respect to the Patent Rights.
5.2. NTC Cooperation. NTC agrees to cooperate with ARCH in
ARCH's preparation, filing, prosecution and maintenance of Patent
Rights, by disclosing such information as may be necessary and by
promptly executing such documents as ARCH may reasonably request to
effect such efforts. NTC shall bear its own costs in connection with
its cooperation with ARCH under this Section. All Patent Rights shall
be filed, prosecuted and maintained in ARCH's name or as ARCH shall
designate.
5.3. NTC Prosecution. (a) In the event that NTC wishes to file
a patent application for any of the Inventions in any jurisdiction
other than the United States in which a patent application for such Invention
has not already been filed, NTC shall identify the jurisdiction and Invention
in writing to ARCH, and ARCH shall have ninety (90) days (or such shorter
period as provided in the following sentence) after it receives such written
notice in which to file such an application. Notwithstanding the foregoing, if
NTC reasonably determines that a filing or other action is required in such
jurisdiction in order to preserve or protect any Patent Rights in such
jurisdiction, it shall so notify ARCH, and ARCH shall have until seven days
prior to such date in which to file such an application. If ARCH declines or
fails to file such an application within ninety (90) days (or such shorter
period) after receiving the written notice, NTC may, in NTC's discretion and at
NTC's sole expense but in ARCH's name, file and prosecute such an application.
(b) In the event that ARCH determines to abandon any patent
application covering the Inventions previously filed by it, ARCH
will give NTC at least ninety (90) days prior written notice of its
intention to abandon such application. NTC may, by written
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notice to ARCH, elect to continue the prosecution of such application
at NTC's sole expense but in ARCH's name.
(c) In the event that NTC determines to abandon any patent
application covering the Inventions previously filed by it under
Section 5.3(a) hereof, NTC will give ARCH at least ninety (90) days
prior written notice of its intention to abandon such application.
ARCH may, by written notice to NTC, elect to continue the
prosecution of such application at ARCH's sole expense.
5.4. Confidentiality. (a) Both NTC and ARCH agree to treat (and,
in the case of NTC, to cause its sublicensees to treat) as
confidential all proprietary information made available by ARCH to NTC
or by NTC to ARCH, provided that the party disclosing such information
marks or otherwise identifies such information as "confidential" or
"proprietary" (if such information is disclosed orally, it shall be
summarized in writing within 30 days and such summary shall be
identified as "confidential" or "proprietary"). ARCH acknowledges that
NTC may find it beneficial to disclose such information provided by
ARCH during the conduct of NTC's business. Under such circumstances,
NTC may make such information available to third parties, provided
that NTC shall first obtain from the recipients a fully-executed
confidentiality agreement which is at least as restrictive as the
confidentiality agreement NTC employs to protect its own secrets of
comparable commercial value of the information being disclosed, and
shall send a copy of such agreements to ARCH at the time of NTC's next
accounting as required by Section 3.2(b) hereof.
(b) Neither NTC nor ARCH shall be bound by the provisions of
Section 5.4 with respect to information which (i) is known to the
recipient at the time of disclosure; or (ii) is in the public
domain at the time of disclosure; or (iii) becomes a part of the
public domain after the time of disclosure, other than through
disclosure by the recipient; or (iv) is required to be disclosed
by law or contract.
(c) Notwithstanding the provisions of Section 5.4(a), each of
ARCH and the University shall, upon thirty (30) days prior written
notice to NTC, be entitled to make disclosures of information
regarding the Inventions in scholarly journals where in its
reasonable judgment such disclosure will not materially compromise
any proprietary rights.
(d) NTC and ARCH shall each take such actions as the other
party may reasonably request from time to time to safeguard the
confidentiality of any information subject to the terms of this
Section 5.4.
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(e) To the extent that United States Export Control Regulations are
applicable, neither NTC nor ARCH shall, without having first fully complied
with such regulations, (i) knowingly transfer, directly or indirectly, any
unpublished technical data obtained or to be obtained from the other party
hereto to a destination outside the United States, or (ii) knowingly ship,
directly or indirectly, any product produced using such unpublished technical
data to any destination outside the United States.
(f) The obligations of NTC and ARCH under this Section 5.4 shall survive
the expiration or earlier termination of all or any other part of this
Agreement.
VI. INFRINGEMENT
6.1. Disclosure. In the event that either ARCH or NTC becomes aware
of the infringement of any Patent Rights, each shall inform the other in
writing of all details available.
6.2. Rights to Prosecute. ARCH shall have the right, but not the
obligation, to enforce the Patent Rights against any infringement. In the
event of infringement by a third party of any Patent Rights within the Field
of Use which NTC wishes to prosecute, NTC shall first make a written request
to ARCH to prosecute such action. If within 90 days of receipt of such request
ARCH shall have been unsuccessful in persuading such alleged infringer to
desist such infringement, and shall not have brought an infringement action
against such alleged infringer, NTC may enforce the Patent Rights by
appropriate legal proceedings.
6.3. NTC Prosecution. In the event that NTC shall be prosecuting an
alleged infringer pursuant to Section 6.2, it shall employ counsel reasonably
satisfactory to ARCH and shall keep ARCH fully informed of all material
developments of such proceedings. NTC shall be responsible for all costs and
expenses of any enforcement activities, including legal proceedings, against
infringers which NTC initiates. ARCH agrees to join in and cooperate with any
enforcement proceedings at NTC's request, and at NTC's expense, provided that
ARCH may be represented by ARCH's counsel in any such legal proceedings, at
ARCH's own expense (subject to reimbursement under Section 6.5(a)), acting in
an advisory but not controlling capacity. In addition, NTC may name ARCH as
party plaintiff as required by law. No settlement, consent judgment, or other
final, voluntary disposition of any suit brought by NTC which waives any
rights within the Patent Rights may be entered into without the prior written
consent of ARCH. In the event that a declaratory
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judgment action alleging the invalidity or non-infringement of the
Patent Rights shall be brought or raised against NTC, ARCH shall
have the right, but not the obligation, to intervene and take over
the sole defense of such action. Any recoveries in any action
brought by NTC under this Section 6.3 shall be allocated as provided
in Section 6.5(a) hereof.
6.4. ARCH Prosecution.
(a) Any actions brought by ARCH at the request of NTC pursuant
to Section 6.2 shall be at the sole cost and expense of NTC,
provided that ARCH agrees to consult with NTC and to keep NTC
reasonably informed regarding such costs and expenses, and any
recoveries shall be allocated as provided in Section 6.5(a) hereof.
(b) Any other actions brought by ARCH shall be at the sole
cost and expense of ARCH, and any recoveries shall be allocated as
provided in Section 6.5(b) hereof, provided that ARCH shall notify
NTC of any such action and NTC may, by written notice to ARCH,
agree to pay all such costs and expenses, in which event the costs
and expenses of such action, and any recoveries, shall be allocated
as provided in Section 6.5(a) hereof.
(c) NTC agrees to join in and cooperate with any
enforcement proceedings at ARCH's request, and at ARCH's
expense, provided, however, that NTC may be represented by NTC's
counsel in any such legal proceedings, at NTC's own expense
(subject to reimbursement under Section 6.5(b)), acting in an
advisory but not controlling capacity. ARCH may name NTC as a
party plaintiff as required by law.
.
6.5. Recoveries.
(a) All recoveries by way of royalties, damages, and claims with
respect to infringement actions instituted, and claims made
(including penalties and interest) (i) prosecuted by NTC pursuant to
Section 6.2 hereof, (ii) prosecuted by ARCH pursuant to the request
of NTC, or (iii) prosecuted by ARCH and paid for by NTC pursuant to
Section 6.4(b) hereof shall belong to NTC. To the extent that NTC's
recoveries with respect to an infringement action or claim exceed
NTC's expenses with respect to such action or claim, NTC shall
reimburse ARCH for ARCH's expenses for separate counsel with respect
thereto, as provided in Section 6.3 hereof. After deduction of such
costs and expenses, any recoveries shall be considered Net Sales
under this Agreement as of the date any such recoveries are paid to
NTC, giving rise to royalty obligations under Article III hereof.
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(b) All recoveries by way of royalties, damages and claims
with respect to any infringement action prosecuted by ARCH other
than those described in Section 6.5(a) shall belong to ARCH. To the
extent that ARCH's recoveries with respect to any such infringement
action or claim exceed ARCH's expenses with respect to such action
or claim, ARCH shall reimburse NTC FOR NTC'S expenses for separate
counsel with respect thereto, as provided in Section 6.4(c) hereof.
VII. TERMINATION.
7.1. Breach of Obligations. ARCH shall have the right (without
prejudice to any of its other rights conferred on it by this
Agreement), upon written notice to NTC, to terminate this Agreement
upon the material breach by NTC of the obligations or conditions
contained in this Agreement, provided that if such breach is
susceptible of cure, NTC shall have five (5) business days, with
respect to any breach of an obligation to pay money, and sixty (60)
days, with respect to a breach not involving a payment of money,
after the receipt of such notice to correct such breach. ARCH's
right to terminate this Agreement, as hereinabove provided, shall
not be affected in any way by its waiver of, or failure to take
action with respect to, any previous breach.
7.2. NTC Right to Terminate. NTC may terminate this Agreement
at any time by written notice to ARCH, giving at least ninety (90)
days prior to the termination date specified in the notice.
7.3. Expiration of Patent Rights. The license granted
under this Agreement shall terminate upon the expiration of the
last to expire Patent Rights, except that NTC's and ARCH's
obligations under Sections 3.3, 4.2, and 5.4 shall continue in
effect as provided in such Sections.
7.4. Effect of Termination. Upon the termination of this
license for any reason prior to the expiration of the last-to expire
of the Patent Rights, all rights granted hereunder shall revert to
ARCH for the sole benefit of ARCH, and NTC agrees to return all
technical data, related documents and improvements supplied by ARCH
specific to the Licensed Products and Inventions to ARCH. If this
Agreement shall terminate pursuant to the provisions of Section 7.3
hereof, or shall be terminated by the agreement of the parties prior
to the expiration of the last-to expire of the Patent Rights, NTC
shall retain the right to possess and use such confidential
information, including Know-How, subject to the restrictions in
disclosure set forth in section 5.4.
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VIII. ADVERTISING. Each party agrees not to use the name of
the other party in any commercial activity, advertising or sales
brochures except with the prior written consent of the other
party. NTC agrees not to use the name of any of the inventors of
the Inventions in any commercial activity, advertising or sales
brochures unless it has obtained the prior written consent of the
inventor.
IX. PERFORMANCE. NTC agrees to use its reasonable best
efforts promptly to commence and thereafter maintain commercial
sales of Licensed Products.
X. LATER DEVELOPMENTS. Subject to any obligations of ARCH in
favor of other persons (including the DOE), ARCH hereby grants NTC
an option to obtain a license on any Later Developments, which
license shall be on the terms set forth in this Agreement except as
ARCH and NTC may by mutual agreement otherwise provide. ARCH shall
use its best efforts to obtain title, pursuant to the
ARCH/University Agreement (as hereinafter defined) or any successor
agreement, to all discoveries, inventions, or other proprietary
matters within the Field of Use made at ANL or the University, and
shall notify NTC of any Later Developments by a writing referring to
this provision within ninety (90) days of acquiring rights to such
Later Developments, all in sufficient detail to allow NTC to
evaluate the commercial potential of such Later Development. NTC shall have
thirty (30) days after such disclosure to exercise such option which shall be
exercised by written notice to ARCH received within such period. If NTC shall
fail to exercise its option within such period, its option for such Later
Development shall be void, and NTC shall have no interest in such Later
Development.
XI. MISCELLANEOUS.
11.1. Assignment. (a) This Agreement may, at any time and
without NTC's consent, be assigned by ARCH without such assignment
operating to terminate, impair or in any way change the obligations
or rights which ARCH would have had, or any of the obligations or
rights which NTC would have had (including rights of NTC to
Improvements and Later Developments), if such assignment had not
occurred. From and after the making of such assignment, the assignee
shall be substituted for ARCH as a party hereto, and ARCH shall no
longer be bound hereby.
(b) This Agreement shall not be assigned by NTC without the
prior written consent of ARCH except to a wholly-owned subsidiary of
NTC or to the successor or assignee of substantially all of its
business related to Licensed Products.
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11.2. Entire Agreement, Amendment and Waiver. This Agreement (including
any schedules and exhibits attached) contains the entire understanding of the
parties with respect to the subject matter hereof. This Agreement may be
amended, modified or altered only by an instrument in writing duly executed by
the parties hereto. The waiver of a provision hereunder may be effected only
by a writing signed by the waiving party and shall not constitute a waiver of
any other provision.
11.3. Notices. Any notice or report required or permitted to be given
or made under this Agreement by one of the parties hereto to the other shall
be in writing and shall be given by personal delivery or by United States
registered or certified mail, return receipt requested, addressed as
follows:
If to ARCH: ARCH Development Corporation
0000-00 Xxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: President
If to NTC: Nanophase Technologies Corporation
0000 Xxxxx Xxx.
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
or to such other address of which the intended recipient shall have notified
the sender by a written notice given in accordance with the terms of this
Section. Any notice under this Agreement shall be effective when received.
11.4. Severability. In the event that any one or more of the provisions
of this Agreement should for any reason be held by any court or authority
having jurisdiction over this Agreement, or either of the parties hereto, to
be invalid, illegal or unenforceable, such provision or provisions shall be
reformed to approximate as nearly as possible the intent of the parties, and
the validity of the remaining provisions shall not be affected.
11.5. Governing Law. The interpretation and performance of this
Agreement shall be governed by the laws of the State of Illinois applicable
to contracts made and to be performed in that state.
11.6. Marking. NTC shall place in a conspicuous location on any Licensed
Product (or its packaging where appropriate) made or sold under this
Agreement, a patent notice in accordance with the laws concerning the marking
of patented articles.
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11.7. Implementation. Each party shall, at the request of the other
party, execute any document reasonably necessary to implement the provision
of this Agreement.
11.8. United States Manufacture. Unless DOE shall agree otherwise, NTC
agrees that Licensed Products will be manufactured substantially in the United
States, and further agrees that it will not grant any exclusive sublicenses
under this Agreement to sell Licensed Products in the United States unless the
sublicensee agrees that any License Products will be manufactured
substantially in the United States.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first above written.
ARCH: ARCH DEVELOPMENT CORPORATION, an
Illinois not-for-profit corporation
By:
--------------------------------
Its: President
-------------------------------
NTC: NANOPHASE TECHNOLOGIES CORPORATION,
an Illinois corporation
By:
---------------------------------
Its: Vice-President
--------------------------------
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SCHEDULE I
1. Invention Title: Nanophase Ceramics for Improved Industrial
Products
Inventors: X.X. Xxxxxx, X. Xxxx, X.X. Xxxxxxx
ANL Case No. ANL-IN-89-80.
2. Invention Title: Industrial Devices from Nanophase Metals
Inventors: X.X. Xxxxxx, X. Xxxx, X.X. Xxxxxxx
ANL Case No. ANL-IN-89-81.
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AMENDMENT TO LICENSE AGREEMENT
THIS AMENDMENT TO LICENSE AGREEMENT ("Amendment") is made as of the 21st
day of November, 1991, by and between ARCH Development Corporation, an Illinois
not-for-profit corporation ("ARCH"), and Nanophase Technologies Corporation, an
Illinois corporation ("NTC").
WHEREAS, ARCH and NTC have previously entered into that certain License
Agreement dated as of June 1, 1990 (the "License");
WHEREAS, as of the execution of this Amendment, ARCH is the controlling
shareholder of NTC;
WHEREAS, contemporaneously with the execution of this Amendment, ARCH and
certain other purchasers (the "Other Purchasers") are purchasing shares of NTC's
Series B Preferred Stock (the "Preferred"); and
WHEREAS, in order to induce the Other Purchasers to purchase the Preferred
for the benefit of NTC and ARCH, ARCH and NTC desire to amend the License as
provided below.
NOW, THEREFORE, in consideration of the covenants set forth below, ARCH and
NTC agree as follows:
1. Section 3.1(a) of the License is hereby amended by deleting the phrase
"five percent (5%)" and replacing it with the phrase "two and one-half percent
(2 & 1/2%)".
2. Except as otherwise specifically provided above, the License Agreement
shall remain in full force and effect in accordance with its terms.
IN WITNESS WHEREOF, the parties have cause their respective authorized
officers to execute this Agreement as of the day and year first written above.
ARCH DEVELOPMENT CORPORATION, an
Illinois not-for-profit corporation
By:_____________________________
Title________________________
NANOPHASE TECHNOLOGIES CORPORATION,
an Illinois corporation
By:_____________________________
Title________________________
