Exhibit 10.2
LICENSE AND ROYALTY AGREEMENT
This agreement entered into the 26th day of March, 2004 by and between
NanoDynamics, 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 ultrafine 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 March 26, 2004 ("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 process developed by Xx. Xxx X.
Xxxx to synthesize highly dispersed uniform, crystalline
nanosized silver powders.
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. "NET REVENUES" means net sales less the value directly
attributable to the silver content contained in the Licensed
Product, calculated on the basis of the quoted spot price for
Silver on the London Metal Exchange on the date of invoicing for
each shipment of Licensed Product.
G. "PATENT RIGHTS" means CLARKSON'S rights in information or
discoveries covered by patents anchor 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 Xxx
X. Xxxx as either sole or joint inventor ("Inventor") and which
relate to the manufacture, use or sale of Licensed held.
H. "SALE OR SOLD" means the transfer or disposition of a Licensed
Product for value to a party other than LICENSEE.
I. "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 Xxx X. Xxxx (Inventor) at
CLARKSON before the Effective Date relating to chemical processes
developed by Xx. Xxx X. Xxxx to synthesize highly dispersed
uniform, crystalline nanosized silver powders.
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 (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 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
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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
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
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 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 running royalty equal to
5% of net revenue for Licensed Products sales of first $1,000,000
4% of net revenue for Licensed Products sales of next $1,000,000
3% of net revenue for Licensed Products sales of next $2,000,000
2% of net revenue for Licensed Products sales of next $4,000,000
1% of net revenue for all Licensed Products sales in excess of
$6,000,000.
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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. In the event
LICENSEE fails to demonstrate that LICENSEE has taken effective
steps within three years after a patent is issued 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:
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Division of Research
Clarkson University
Attn: Xx. Xxxxxxxxx X. Xxxxxxxx
Grants & Contracts Administrator
0 Xxxxxxxx Xxx., XX Xxx 0000
Xxxxxxx, XX 00000-0000
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 in 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 Articles 4 and 5; and
c. LICENSEE will be bound by the provisions of Articles 10, 11
and 12 of this Agreement.
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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 then
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.
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.
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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 confidential information, Upon LICENSEE's
request, publication will be delayed up to 54 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
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
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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.
14. SOLE AGREEMENT
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 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,
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. Xxxxxxxxx
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The parties have caused their duly authorized representatives to execute
this Agreement.
CLARKSON UNIVERSITY LICENSEE
By: /s/ Xxxxxxx X. Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
--------------------------------- ------------------------------------
Signature Signature
Xxxxxxx X. Xxxxxxxxx Xxxxx X. Xxxxxxx
Director of Research CEO
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Title
3/26/04
------------------------------------- 3/26/04
Date ----------------------------------------
Date
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