<PAGE>
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 901 Fuhrmann
Blvd, Buffalo,
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 Dr. Roshan Jachuck 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
<PAGE>
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
Roshan Jachuck 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 Roshan Jachuck (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
<PAGE>
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
A. CLARKSON
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
<PAGE>
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 Prod
