Exhibit 10.3
LICENSE AND ROYALTY AGREEMENT
This agreement entered into the 1st day of February, 2007 by and between ND
Fusion, Inc., a New York corporation with offices at 000 Xxxxxxxx Xxxx, Xxxxxxx,
N.Y., hereinafter referred to as LICENSEE, and CLARKSON UNIVERSITY, a
corporation with principal offices in Potsdam, New York, hereinafter called
CLARKSON.
Whereas, CLARKSON UNIVERSITY and LICENSEE or its Affiliates have previously
undertaken research and development in (i) the field of design of thin film
rotating tube reactors and similar systems useful for process intensification
(ii) the process of operating and using such reactors and systems to synthesize
complex organic and inorganic molecules, and (iii) unique compositions of matter
resulting from such process; and
Whereas, CLARKSON UNIVERSITY and LICENSEE seek to commercialize processes,
techniques and products resulting from said field.
Witnesseth:
1. EFFECTIVE DATE
This Agreement is effective February 1, 2007 ("Effective Date").
2. DEFINITIONS
As used in this Agreement, the following terms have the meanings
indicated:
A. "AFFILIATE" means any business entity more than 50% owned by
LICENSEE, any business entity which owns more than 50% of
LICENSEE, or any business entity that is more than 50% owned by a
business entity that owns more than 50% of LICENSEE.
B. "LICENSED FIELD" means chemical processes, instrumentation of
equipment developed by Xx. Xxxxxx Xxxxxxx for the design of thin
film rotating tube reactors and similar systems useful for
process intensification (ii) the process of operating and using
such reactors and systems to synthesize complex organic and
inorganic molecules, and (iii) unique compositions of matter
resulting from such process.
C. "LICENSED PRODUCT" means any product sold by LICENSEE comprising
Licensed Subject Matter pursuant to this Agreement.
D. "LICENSED SUBJECT MATTER" means inventions and discoveries
covered by Patent Rights or Technology Rights within the Licensed
Field.
E. "NET SALES" means the gross revenues received by LICENSEE from
the Sale of Licensed Products, less sales and/or use taxes
actually paid, import and/or export duties actually paid,
outbound transportation prepaid or
allowed and amounts allowed or credited due to returns (not to
exceed the original billing or invoice amount).
F. "PATENT RIGHTS" means CLARKSON's rights in information or
discoveries covered by patents and/or patent applications,
whether domestic or foreign, and all divisions continuations,
continuations-in-part, reissues, reexaminations or extensions
thereof, and any letters patent that issue thereon, which name
Xxxxxx Xxxxxxx as either sole or joint inventor ("Inventor") and
which relate to the manufacture, use or sale of licensed Field.
G. "SALE OR SOLD" means the transfer or disposition of a Licensed
Product for value to a party other than LICENSEE.
H. "TECHNOLOGY RIGHTS" means CLARKSON's rights in technical
information, know-how, processes, procedures, compositions,
devices, methods, formulas, protocols, techniques, software,
designs, drawings or data created by Xxxxxx Xxxxxxx (Inventor) at
CLARKSON before the Effective Date or after that date with
respect to any research or development efforts funded by LICENSEE
or its Affiliates all as relates to the Licensed Subject Matter.
3. WARRANTY; SUPERIOR RIGHTS
A. Except for the rights, if any of the Government of the United
States or the State of New York, as set forth below, Clarkson
represents and warrants its belief that (i) it is the owner of
the entire right, title, and interest in and to Licensed Subject
Matter, (ii) it has the sole right to grant licenses thereunder,
and it has not knowingly granted licenses thereunder to any other
entity that would restrict rights granted to LICENSEE except as
stated herein.
B. LICENSEE understands that the licensed Subject Matter may have
been developed under a funding agreement with the Government of
the United States and/or the State of New York, and if so, that
the Government may have certain rights relative thereto. This
Agreement is explicitly made subject to the Government's rights
under any agreement and any applicable law or regulation. If
there is a conflict between an agreement, applicable law or
regulation and this Agreement, the terms of the Government
agreement, applicable law, or regulation shall prevail.
C. LICENSEE understands and acknowledges that CLARKSON, by this
Agreement, makes no representation as to the operability or
fitness of any use, safety, efficacy, ability to obtain
regulatory approval, patentability, and/or breadth of the
Licensed Subject Matter. CLARKSON, by this Agreement, also makes
no representation as to whether there are any patents now held,
or which will be held, by others or by CLARKSON in
2
the Licensed Field, nor does CLARKSON make any representation
that the inventors contained in Patent Rights do not infringe any
other patents now held or that will be held by others or by
CLARKSON.
D. LICENSEE, by execution hereof, acknowledges, covenants and agrees
that it has not been induced in any way by CLARKSON or its
employees to enter into this Agreement, and further warrants and
represents that (i) it has conducted sufficient due diligence
with respect to all items and issues pertaining to this Article 3
and all other matters pertaining to this Agreement; and (ii)
LICENSEE has adequate knowledge and expertise, or has utilized
knowledgeable and expert consultants, to adequately conduct the
due diligence, and agrees to accept all risks inherent herein.
4. LICENSE
X. XXXXXXXX hereby grants to LICENSEE a royalty-bearing, exclusive
worldwide license under Licensed Subject Matter to manufacture,
have manufactured, use, offer, sublicense and/or sell Licensed
Products or Licensed Subject Matter for use within Licensed
Field. This grant is subject to the payment by LICENSEE to
CLARKSON of all consideration as provided herein, and is further
subject to rights retained by CLARKSON to:
a. Publish the general scientific findings from research
related to Licensed Subject Matter subject to the terms of
Section 12, Confidential Information; and
b. Use Licensed Subject Matter for research, teaching and other
educationally-related purposes.
B. LICENSEE may extend the license granted herein to any Affiliate
if the Affiliate consents to be bound by this Agreement to the
same extent as LICENSEE.
5. PAYMENT AND REPORTS
A. In consideration of the rights granted by CLARKSON to LICENSEE
under this Agreement, LICENSEE will pay CLARKSON the following:
A running royalty equal to:
(i) on all sublicensing fees, payments and royalties ("Fees") received
by LICENSEE or its Affiliates with respect to any sublicense of Licensed
Subject Matter to independent third parties equal to five percent (5%) of
cumulative Fees;
(ii) a royalty, on Sales by LICENSEE or its Affiliates of any and all
materials whether powder, liquid or solid, consisting of a composition of
matter or utilizing in its
3
method of production one or more claims covered by the Licensed Subject
Matter equal to two percent (2%) of Net Sales of such materials; and
(iii) a royalty, on Sales by LICENSEE or its Affiliates of any and all
devices or components covered by the Licensed Subject Matter equal to three
percent (3%) of such devices and components.
In any sale of an end product by FUSION incorporates Affected Materials or
Affected Products, Net Sales of Affected Materials or Affected Products shall be
the amount that FUSION would charge to a Third Party for the Affected Materials
or Affected Products incorporated into the end product if sold on a stand-alone
basis.
In any sale of an end product by LICENSEE or its Affiliates incorporates a
Licensed Product, the Net Sales shall be the amount that LICENSEE or its
Affiliates would charge to a Third Party for the Licensed Product incorporated
into the end product if sold on a stand-alone basis.
B. In the event that CLARKSON and LICENSEE, upon mutual agreement,
amend the license from exclusive to non-exclusive, the royalty
rates set herein shall be reduced by 50%.
C. During the Term of this Agreement and for one year thereafter,
LICENSEE agrees to keep complete and accurate records of its
Sales and Net Sales of Licensed Products under the license
granted in this Agreement in sufficient detail to enable the
royalties payable hereunder to be determined. Licensee agrees to
permit CLARKSON or its representatives, at CLARKSON's expense, to
periodically examine its books, ledgers, and records during
regular business hours for the purpose of and to the extent
necessary to verify any report required under this Agreement. If
the amounts due to CLARKSON are determined to have been
underpaid, LICENSEE will pay the cost of the examination and
accrued interest at the highest allowable rate.
D. Bi-annually, beginning immediately after the Effective Date,
LICENSEE must deliver to CLARKSON a true and accurate written
report, even if no payments are due CLARKSON, giving the
particulars of the business conducted by LICENSEE during the
preceding 6 calendar months under this Agreement as are pertinent
to calculating payments hereunder. This report will include at
least:
a. The quantities of Licensed Subject Matter that it has
produced;
b. The total Sales;
c. The calculation of royalties thereon; and
d. The total royalties computed and due CLARKSON.
Simultaneously with the delivery of each report, Licensee must pay to
CLARKSON the amount, if any, due for the period of each report.
E. On or before each anniversary of the Effective Date, irrespective
of having a first Sale or offer for Sale, LICENSEE must deliver
to CLARKSON a
4
written progress report as to LICENSEE's efforts and
accomplishments during the preceding year in diligently
commercializing Licensed Subject Matter and the LICENSEE's
commercialization plans for the upcoming year. In the event
LICENSEE fails to demonstrate that LICENSEE has taken effective
steps within three years after a patent application is filed to
bring the Licensed Subject Matter to the point of practical
application, then CLARKSON shall have the right to grant a
non-exclusive or exclusive license to responsible applicants
under terms that are reasonable under the circumstances, or
require LICENSEE to do so.
F. All amounts payable here by LICENSEE must be paid in United
States funds without deductions for taxes, assessments, fees, or
charges of any kind. Checks must be payable to CLARKSON
UNIVERSITY and addressed to:
Division of Research
Attn: Xx. Xxxxxxxxx X. Xxxxxxxx
Grants & Contracts Administrator
0 Xxxxxxxx Xxx., XX Xxx 0000
Xxxxxxx, XX 00000-0000
LICENSEE is responsible for costs associated with preparing, filing
and prosecuting any patent applications relevant to this agreement and
enforcing, defending, and paying, any Maintenance fees of any
resulting patents in the Licensed Field so long as and in all
countries in which its license remains.
6. TERM AND TERMINATION
A. The term of this Agreement is from the Effective Date to the full
end of the terms or term of any patent licensed under this
agreement, or for 15 years, whichever is longer and so long as
LICENSEE fulfills the financial obligations set forth this
Agreement;
B. This Agreement will earlier terminate automatically if LICENSEE
becomes bankrupt, insolvent and/or if the business of the
LICENSEE is placed in the hands of a receiver, assignee, or
trustee, whether by voluntary act of LICENSEE or otherwise, or
upon 30 days' written notice from CLARKSON if LICENSEE breaches
or defaults on its obligation to make payments (if any are due)
or reports, in accordance with the terms of Article 2, unless,
before the end of the 30 day period, LICENSEE has cured the
default or breach and so notifies CLARKSON in writing, stating
the manner of the cure, or upon 90 days' written notice if
LICENSEE breaches or defaults on any other obligation under this
Agreement, unless, before the end of the 90 day period, LICENSEE
has cured the default or breach and so notifies CLARKSON in
writing, stating the manner of the cure, or at any time by mutual
written consent between LICENSEE and
5
CLARKSON, upon 180 days' written notice to all parties and
subject to any terms herein which survive termination.
C. If this Agreement is terminated for any cause;
a. nothing herein shall be construed to release either party of
any obligation matured prior to the effective date of the
termination;
b. after the effective date of the termination, LICENSEE may
sell all Licensed Products and parts therefore it has on
hand at the date of termination, if it pays earned royalties
thereon according to the terms of Articles 4 and 5; and
c. LICENSEE will be bound by the provisions of Articles 10, 11
and 12 of this Agreement.
7. INFRINGEMENT BY THIRD PARTIES
A. LICENSEE, at its own expense, must enforce any patent exclusively
licensed hereunder against infringement by third parties and it
is entitled to retain recovery from such enforcement. LICENSEE
must pay CLARKSON a royalty on any monetary recovery if the
monetary recovery is for damages or a reasonable royalty in lieu
thereof. If LICENSEE does not file suit against a substantial
infringer of a patent within 6 months of knowledge thereof, then
CLARKSON may enforce any patent licensed hereunder on behalf of
itself and LICENSEE, CLARKSON retaining all recoveries from such
enforcement and/or reducing the license granted hereunder to
non-exclusive.
B. In any infringement suit or dispute, the parties agree to
cooperate fully with each other. At the request and expense of
the party bringing suit, the other party will permit access to
all relevant personnel, records, papers, information, samples,
specimens, etc., during regular business hours.
8. ASSIGNMENT
Except in connection with the sale of substantially all of
LICENSEE's assets to a third party, this Agreement may not be
assigned by LICENSEE without the prior written consent of
CLARKSON, which will not be unreasonable withheld.
9. PATENT MARKING
LICENSEE must permanently and legibly xxxx all products and
documentation manufactured or sold by it under this Agreement
with a patent notice as may be permitted or required under Xxxxx
00, Xxxxxx Xxxxxx Code.
6
10. INDEMNIFICATION
LICENSEE agrees to hold harmless and indemnify CLARKSON, its
officers, employees and agents from and against any claims,
demands, or causes of action whatsoever, including without
limitation those arising on account of any injury or death of
persons or damage to property caused by, or arising out of, or
resulting from, the exercise or practice of the license granted
hereunder by LICENSEE, its Affiliates or their offices,
employees, agents or representatives.
11. PUBLICITY
Neither party shall use the name of the other party without that
party's express written consent.
12. CONFIDENTIAL INFORMATION & PUBLICATION
A. Each party agrees that all information contained in documents
marked "confidential" and forwarded to one by the other (i) be
received in strict confidence, (ii) be used only for the purpose
of this agreement, and (iii) not be disclosed by the recipient
party, its agents or employees without the prior written consent
of the other party, except to the extent that the recipient party
can establish competent proof that such information:
a. Was in the public domain at the time of disclosure,
b. Later became part of the public domain through no act or
omission of the recipient party, its employees, agents,
successors or assigns,
c. Was lawfully disclosed to the recipient party by a third
party having the right to disclose it,
d. Was already known by the recipient party at the time of
disclosure,
e. Was independently developed by the recipient, or
f. Is required by law or regulation to be disclosed.
B. Each party's obligation of confidence hereunder shall be
fulfilled by using at least the same degree of care with the
other party's confidential information as it uses to protect its
own confidential information. This obligation shall exist while
this Agreement is in full force and for a period of 3 years
thereafter.
X. XXXXXXXX will submit its manuscript for any proposed publication
of research related to Licensed Subject Matter to LICENSEE at
least 30 days before publication, and LICENSEE shall have the
right to review and comment upon the publication in order to
protect LICENSEE's
7
confidential information. Upon LICENSEE's request, publication
will be delayed up to 60 additional days to enable LICENSEE to
secure adequate intellectual property protection for LICENSEE's
property that would be affected by the publication.
13. PATENTS AND INVENTIONS
LICENSEE shall provide and be responsible for patent filings,
prosecutions and maintenance worldwide, including the selection
of patent counsel and payment of all cost associated with such
counsel as well as all costs and fees associated with filings,
prosecutions and maintenance. LICENSEE shall have the right, in
its sole discretion, to decide what portion of the Technology
Rights to retain as trade secrets or to file for patent
protection beginning in the U.S.A. All patent applications shall
list CLARKSON and LICENSEE as the co-owners. LICENSEE shall
promptly inform CLARKSON or CLARKSON's attorney of all actions
taken by any patent office and all actions taken by LICENSEE with
regard to prosecution of any patent application. CLARKSON agrees
to reasonably cooperate in this effort including execution of all
necessary applications, documents and writings. Once a U.S.
patent application is filed, should LICENSEE elect not to
prosecute such patent application in foreign countries (other
than the U.S.A.), LICENSEE shall notify CLARKSON in sufficient
time for CLARKSON to file or continue to prosecute such
applications, and LICENSEE's rights with respect to that foreign
patent or patents shall terminate.
14. SOLE AGREEMENT/CHANGE
This Agreement, including all exhibits referenced herein, shall
be the complete Agreement of the parties hereto and shall
supersede all prior agreements and understandings between the
parties respective the subject matter hereof. Any changes or
modifications of this Agreement must be in writing and signed by
both parties.
15. NEW YORK LAW
This Agreement shall be construed, and the legal relations
between the parties hereto shall he determined, in accordance
with the law of the State of New York.
8
16. NOTICES
Any notice and correspondence required by this Agreement if to
the LICENSEE must be given in writing to:
NanoDynamics,
000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
ATTN: Xx. Xxxxx X. Xxxxxxx
Any notice and correspondence other than reports and invoices as
provided for herein if to CLARKSON shall be given in writing to:
Division of Research
Clarkson University
0 Xxxxxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Attn: Xx. Xxxxxxx X. Xxxxx
The parties have caused their duly authorized representatives to execute
this Agreement.
CLARKSON UNIVERSITY LICENSEE
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxxx
--------------------------------- ------------------------------------
Signature Signature
Director of Research President
------------------------------------- ----------------------------------------
Title Title
15 Mar 07 21 Mar 07
------------------------------------- ----------------------------------------
Date Date
9
