Exhibit 10.1
LICENSE AND ROYALTY AGREEMENT
This agreement entered into the 15th day of June, 2003 by and between
NanoDynamics, Inc., a corporation with principal offices in Buffalo, NY,
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 have previously undertaken research
and development in the field of micron and submicron powder milling for the
synthesis of fine and/or ultra fine simple and composite metallic powders and
flakes; and
Whereas, CLARKSON UNIVERSITY and LICENSEE seek to commercialize processes,
techniques and products resulting from said field;
Witnesseth:
It is mutually agreed that CLARKSON will exert its best efforts in performing a
research program in accordance with the following:
1. EFFECTIVE DATE
This Agreement is effective June 15, 2003 ("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 60% of LICENSEE.
B. "Licensed Field" means chemical and physical processes developed
by ▇▇. ▇▇▇ ▇. ▇▇▇▇ including synthesis techniques and milling of
micron and submicron powders for the synthesis of fine/ultrafine
simple and composite metallic powders and flakes.
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 ▇▇▇
▇. ▇▇▇▇ 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 ▇▇▇ ▇. ▇▇▇▇ (Inventor) at
CLARKSON before the Effective Date relating to chemical and
physical processes developed by ▇▇. ▇▇▇ ▇. ▇▇▇▇ including
synthesis techniques and milling of micron and submicron powders
for the synthesis of fine/ultrafine simple and composite metallic
powders and flakes.
3. WARRANTY; SUPERIOR RIGHTS
A. Except for the rights, if any, of the Government of the United
States, 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 (iii) 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 of America, 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 the Licensed
Field, nor does CLARKSON make any representation that the
inventors contained in Patent Rights do
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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
▇. ▇▇▇▇▇▇▇▇ hereby grants to SPONSOR a royalty-bearing, exclusive
worldwide license under Licensed Subject Matter to manufacture,
have manufactured, and/or sell Licensed Products 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. A running royalty equal to
5% of net revenue for Licensed Products sales of first $500,000
4% of net revenue for Licensed Products sales of next $500,000
3% of net revenue for Licensed Products sales of next $1,000,000
2% of net revenue for Licensed Products sales of next $3,000,000
1% of net revenue for all Licensed Products sales in excess of
$5,000,000.
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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 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.
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:
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Division of Research
Clarkson University
Attn: ▇▇. ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Grant & Contracts Administrator
▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
G. LICENSEE is responsible for costs associated with patenting,
enforcing and defending any resulting patents in the Licensed
Field so long 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 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 Article 2; and
c. LICENSEE will be bound by the provisions of Articles 10, 11,
and 12 of this Agreement.
7. INFRINGEMENT BY THIRD PARTIES
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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 unreasonably withheld.
9. PATENT MARKING
LICENSEE must permanently and legibly ▇▇▇▇ all products and
documentation manufactured or sold by it under this Agreement with a
patent notice as may be permitted or required under ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇ Code.
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
officers, 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
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confidence, (ii) be used only for the purposes 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.
▇. ▇▇▇▇▇▇▇▇ 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 confidential information. Upon LICENSEE'S
request, publication will be delayed up to 60 additional days to
enable LICENSEE to secure adequate intellectual property
protection of LICENSEE'S property that would be affected by the
publication.
13. PATENTS & INVENTIONS
If after consultation with LICENSEE, both parties agree that a patent
application should be filed for Licensed Subject Matter, CLARKSON will
prepare and file the appropriate patent applications, and LICENSEE
will pay the costs of searching, preparing, filing, prosecuting and
maintaining same. If LICENSEE notifies CLARKSON that it does not
intend to pay the cost of an application, or if LICENSEE does not
respond or make an effort to agree with CLARKSON on the disposition of
rights in the Subject Invention, then CLARKSON may file an application
at its own expense and LICENSEE will have no rights to the invention.
CLARKSON will provide LICENSEE a copy of any patent application for
which LICENSEE has paid the cost of filing, as well as copies of any
documents received or filed with the respective patent office during
the prosecution thereof.
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14. SOLE AGREEMENT/CHANGE
This Agreement, including all exhibits referenced heroin, shall be the
complete Agreement of the parties hereto and shall supersede all prior
agreements and understandings between the parties respecting 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 be determined, in accordance with the law of the
State of New York.
16. NOTICES
Any notice and correspondence required by this Agreement if to the
LICENSEE must be given in writing to:
NanoDynamics,
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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
▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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The parties have caused their duly authorized representatives to execute this
Agreement.
CLARKSON LICENSEE
By: /s/ S.V. Babu By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- ------------------------------------
Signature Signature
S. V. Babu ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice ▇▇▇▇▇▇▇ for Research CEO
6/30/03 6/30/03
--------------------------------- ------------------------------------
Date Date
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FIRST AMENDMENT
DATED AUGUST 12, 2004
TO LICENSE AND ROYALTY AGREEMENT
DATED JUNE 15, 2003
This first amendment ("Amendment") dated as of the 12th day of August, 2004 to
the License and Royalty Agreement dated June 15th, 2003 by and between
NanoDynamics, Inc., a corporation with principal offices in Buffalo, New York,
hereinafter referred to as LICENSEE and CLARKSON UNIVERSITY, a corporation with
principal offices in Potsdam, New York, hereinafter referred to as CLARKSON
("License").
Whereas, the parties previously entered into the License with respect to
chemical and physical processes developed by ▇▇. ▇▇▇ ▇. ▇▇▇▇ including synthesis
techniques and milling of micron and submicron powders for the synthesis of
fine/ultrafine simple and composite metallic powders and flakes ("Licensed
Field");
Whereas, CLARKSON and LICENSEE have done, and are continuing to do, research and
development in the Licensed Field; and
Whereas, CLARKSON and LICENSEE seek to amend the License to cover the additional
research, clarify certain rights of LICENSEE under the License, and amend the
process for seeking patent protection.
Witnesseth:
The parties agree to amend the License as follows:
1. All capitalized terms used but not defined in this Amendment shall have the
meaning ascribed to them in the License.
2. The defined term "TECHNOLOGY RIGHTS" as used in this Amendment and the
License is hereby amended and restated in its entirety as follows:
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 ▇▇▇ ▇.
▇▇▇▇ (Inventor) at CLARKSON either before August 12th, 2004 or after such date
with respect to any research or development efforts funded by LICENSEE all as
relates to chemical and physical processes developed by ▇▇. ▇▇▇ ▇. ▇▇▇▇
including synthesis techniques and milling of micron and submicron powders for
the synthesis of fine/ultrafine simple and composite metallic powders. The
foregoing shall cover all metals except silver which is covered by separate
license agreement dated March 26, 2004.
3. The first sentence of Section 4. A. of the License is hereby amended and
restated in its entirety as follows:
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▇. ▇▇▇▇▇▇▇▇ hereby grants to LICENSEE a royalty-bearing, exclusive worldwide
license of the Licensed Subject Matter to manufacture, have manufactured, use,
sell, offer or sublicense the Licensed Products or Licensed Subject Matter for
use within the Licensed Field.
4. The royalty payable to CLARKSON under Section 5. A. shall apply to both
Licensed Products sales as well as all sublicensing fees, royalties or payments.
5. Section 13 is hereby amended and restated in its entirety as follows:
13. PATENTS & 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 U.S.A.),
LICENSEE shall notify CLARKSON in sufficient time for CLARKSON to file or
continue to prosecute such applications, and LICENSEES' rights with respect to
that foreign patent or patents shall terminate.
4. Except as amended by this Amendment, the License shall continue in full force
and effect.
The parties have caused their duly authorized representatives to execute this
Amendment as of the date above first written.
CLARKSON UNIVERSITY NANODYNAMICS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- ------------------------------------
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, CEO
Director of Research
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