AMENDED AND RESTATED L
ICENSE AGREEMENT
AMENDED
AND RESTATED LICENSE AGREEMENT dated as of December 31, 2005
(the "Effective Date") and amended and restated as of October
1, 2006 (the “Amendment Date”), by and between
Ambit Corporation, a Delaware corporation ("Licensor"), and
NaturalNano, Inc., a Nevada corporation
("Licensee").
WITNESSETH:
WHEREAS,
Licensor owns and wants to provide for the commercialization
of an invention entitled "Personal Communication Device
Connectivity Arrangement", which is the subject of U.S. Patent
Number 6,885,845 (hereinafter "Invention"); and
WHEREAS,
Licensee is in the business of selling materials to coat
Shielded Structures and wishes to utilize the Invention for
use in connection with Shielded Structures, by the acquisition
or the development, manufacture, and sale of
Products;
WHEREAS,
the parties entered into this Agreement as of December 31,
2005, and now wish to amend and restate the Agreement in its
entirety.
NOW,
THEREFORE, Licensor and Licensee, in consideration of the
foregoing and the mutual promises contained herein and
intending to be legally bound hereby agree as
follows:
1.
DEFINITIONS
As
used herein:
1.1
"Affiliate"
means any corporation, company, partnership, joint venture or
other entity which controls, is controlled by or is under
common control with the Licensee, as well as its successors,
assigns and designees.
1.2
"Enforcement
Expenses" means all costs, fees and/or expenses incurred in
connection with enforcement of Licensed Patents, including
without limitation legal fees, contingent or
otherwise.
1.3
"Improvement"
means any invention, discovery or improvement, whether
patentable or not, which, if practiced, would infringe any
Licensed Patents.
1.4
"Joint
Invention" means any patentable Improvement that includes
co-inventors from Licensor and Licensee.
1.5
"Licensed
Field" means any use of Products in which both of the
following are true: (i) the use of the Product includes
metallized halloysite and/or metallized lipid tubules as
substantial operative components in RF shielding and (ii) the
Product is attached to or functions
in a permanent or temporary structure,
i.e. which is not intended as a form of transportation (such
as trailer homes which are not self-powered or powered by a
four wheel vehicle or attached by trailer hitch to a personal
or recreational vehicle). "Licensed Field" includes
without
limitation use
in buildings, rooms, churches, stores, houses, apartment
buildings, trailer/manufactured homes, casinos, shopping
malls, circus tents, cubicles, booths, arcades, bunkers, and
silos. Use attached to real estate is presumptively in the
"Licensed Field". "Licensed Field" excludes use on
automobiles, recreational vehicles, trains, trucks, and ships
(including cruise ships) and includes aircraft. Products
attached to movable personal property other than aircraft are
presumptively not in the "Licensed Field".
1.6
"Licensed
Patents" means the Patents and all patent applications and
patents disclosing and claiming a Licensor Improvement,
including all reissues, continuations, divisionals and
continuations-in-part thereof, and all corresponding foreign
patent applications and patents.
1.7
"Licensee
Improvements" means all Improvements owned or licensable by
Licensee.
1.8
"Licensee
Patents" means all patent applications and patents disclosing
and claiming a Licensee Improvement, including all reissues,
continuations, divisionals and continuations-in-part thereof,
and all corresponding foreign patent applications and
patents.
1.9
"Licensor
Improvements" means all Improvements owned or licensable by
Licensor.
1.10
"Net
Sales" means gross revenues of a party and Affiliates from
sales of Products, less only usual trade discounts, sales tax
which the seller has to pay or absorb, customs duties and
transportation and insurance charges, if not included in the
gross price, and any and all Federal, foreign, State or local
taxes (except income tax) incurred by the seller on such
sales; provided, however, that Net Sales shall not include
revenues from Sales by such party or Affiliates of Products
that were purchased from a Sublicensee.
1.11
"Patents"
means U.S. Patent No. 6,885,845 and all reissues,
continuations, divisionals and continuations-in-part
thereof.
1.12
"Products"
means any products the sale or use of which would, in the
absence of this Agreement, infringe a Licensed Patent (whether
by direct or contributory infringement or inducement to
infringe).
1.13
"Proprietary
Information" means information and trade secrets owned or
controlled by a party at any time during the term of this
Agreement, which relates to Products, including but not
limited to, invention records, research records and reports,
engineering and technical data, designs, production
specifications, processes, methods, procedures, facilities and
know-how; provided, however, that Proprietary Information does
not include third party information which the possessor is
contractually precluded from disclosing.
1.14
"Revenues"
of a party means any consideration given to a party for the
grant by such party of a Sublicense, including without
limitation one-time lump sums, minimums, running royalties and
other payments, but excludes payments for (i) research and
development or "non-recurring engineering" services, based on
reasonable daily or hourly rates; (ii) reimbursement of
out-of-pocket expenses incurred by the party granting the
Sublicense; and (ii i
)
the purchase of securities of the party granting the
Sublicense at the fair market value of such
securities.
1.15
"Sales",
"Sell, or "Sold" means any sale, transfer, lease, license,
permission to use or other transfer of the right of possession
or other conveyance by Licensee or an Affiliate.
1.16
"Shielded
Structures" means permanent
or
temporary
structures and
components thereof, such as rooms,
theatres and auditoriums,
which have
been treated to shield
radio-frequency energy and thereby prevent or impede the
reception of wireless radio signals.
1.17
"Sublicense"
means a license of all or any of the Licensed Patents by
Licensor or Licensee.
1.18
"Sublicensee"
means a sublicensee of a Sublicense.
1.19
"Territory"
means world-wide.
2.
GRANT OF LICENSE
2.1
Licensor
hereby grants to Licensee a non-exclusive, nontransferable
(except as provided in Section 15.10), world-wide,
royalty-bearing license under the Licensed Patents and
Licensor’s Proprietary Information to make, have made,
sell, offer for sale, use, and import Products, limited to the
Licensed Field, with the right to grant Sublicenses
,
and including the right to sue and collect damages for past
infringements in the Licensed Field .
2.2
Licensee
hereby grants to Licensor a non-exclusive, nontransferable
(except as provided in Section 15.10), world-wide,
royalty-bearing
(except under the circumstances set forth in Section 13.5)
license under Licensee Patents and Licensee Proprietary
Information to make, have made, sell, offer for sale, use, and
import Products, other than in the Licensed Field, with a
right to grant Sublicenses.
2.3
Each
party may grant Sublicenses (within the scope of its license
in this Section 2) to persons or entities, without
notification to the other, provided that each Sublicense
contains a provision that the rights therein granted are
personal to the Sublicensee and cannot be assigned or
sublicensed, except in the case of a merger or acquisition or
sale of all or substantially all of the assets to which the
sublicense relates. Any
Sublicense shall incorporate the substance of Sections 1.5,
1.10, 1.13, 7.1 to 7.3, 8.1, 8.2, 8.4, 11.1, 12.2 and
12.3,
mutatis mutandis.
2.4
Any
provision of this Agreement to the contrary notwithstanding,
Licensor retains all rights under the Licensed Patents outside
the Licensed Field.
3.
Improvements
Should
a consultant or employee of a party make or discover any
Improvement, the party shall forthwith disclose or cause the
same to be disclosed to the other party, and, if requested by
the other party, make available or supply to the other party
such information or data as is necessary or convenient for the
proper understanding or use of such Improvement.
4.
Ownership
Notwithstanding
the provisions of Section 3 or otherwise:
(a)
Licensor
shall own all right, title and interest in the Licensed
Patents; and
(b)
Licensee
shall own all right, title and interest in any Licensee
Patents.
5.
CONSIDERATION
5.1
In
consideration of the rights granted in Section 2.1, Licensee
shall:
(a)
(a)
pay
Licensor One Hundred Thousand Dollars ($100,000) upon
execution of this Agreement, which amount was paid prior to
the Amendment Date; and
(b)
pay
Licensor the Royalties set forth in Sections 6
.1
and,
if applicable, 6 .3
;
and
(c)
Within
two (2) days after the Amendment Date, Ambit shall endorse in
blank and return to NaturalNano the One Hundred Thousand
(100,000) shares of NaturalNano common stock, par value
$0.001, previously issued pursuant to this
Agreement.
5.2
In
consideration of the rights granted in Section
2.1
,
Licensor shall pay Licensee the Royalties set forth in
Sections 6 .2
and,
if applicable, 6 .3
.
6.
ROYALTIES
and Royalty Sharing
6.1
Licensee
shall pay to Licensor Twenty Percent (20%) of any Revenues
received with respect to Licensor Patents from Sublicenses
granted by Licensee to third parties.
6.2
Licensor
shall pay to Licensee Twenty Percent (20%) of any Revenues
received with respect to the Licensee Patents from Sublicenses
granted by Licensor to third parties.
6.3
If
a party makes Products, the parties shall negotiate in good
faith the terms of payment therefor. In the absence of any
other agreement, the party otherwise liable under this Section
shall pay royalties at the rate of Twenty Percent (20%) of Net
Sales of Products sold by it.
6.4
In
the event of a Sale of Products between or among Licensee
and/or Affiliates where there is a resale by an Affiliate to a
non-Affiliate, any royalty shall be paid to Licensor based on
the greater of (i) amounts paid by the Affiliate to Licensee
or (ii) by the non-Affiliate to the Affiliate.
6.5
All
payments shall be made in U.S. dollars at the recipient's
address for notice. Such payments shall be paid on a calendar
quarter basis, within thirty (30) days after each quarter.
Each payment shall be accompanied by a detailed report,
showing the basis on which the payment was computed, including
without limitation the total Net
Sales and
Revenues
during
such period, and the royalties payable thereon
,
calculated
in the manner required in this Section 6.
7.
REPORTING
7.1
Licensee
shall report to Licensor the date of first sale of any
Products, within thirty (30) days of occurrence. Licensee
shall report to Licensor when Licensee enters into any
Sublicense
for
the Patent within thirty (30) days of execution of the
Sublicense
,
and (upon request by Licensor) provide Licensor with a copy of
such Sublicense
.
7.2
Each
party shall keep, at its usual place of business, true and
particular accounts of all matters connected with its
sublicensing of Licensed Patents and its manufacture and sale
of Products and shall keep books of account relating to
royalties payable hereunder containing true entries complete
in every particular as may be necessary or proper for enabling
the amount of such royalties to be conveniently
ascertained.
7.3
If
requested in writing by a party, the other party shall, upon
ten (10) business days notice and no more often than once per
calendar year, make its books and records available for
inspection during regular business hours by an independent
certified public accountant engaged and paid for by the
requesting party; provided, if any such audit reveals
underpayment of licensee fees hereunder, audits (and
re-audits) may be performed periodically until a two-year
period elapses with no underpayment. Such party
shall give the accountant all reasonably necessary
facilities and
information
to
enable the amount of the royalties to be
verified.
8.
CONFIDENTIALITY
8.1
Neither
party shall disclose any Proprietary Information received
from
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