exv10w6





[***]
Indicates text has been omitted from this Exhibit pursuant to a
confidential treatment request and has been filed separately with the
Securities and Exchange Commission.


Exhibit 10.6




4060.LICI.006 Harvard



Co-Exclusive License Agreement



Between



President and Fellows of Harvard College



And



Mycometrix Corporation



Effective as of October 15, 2000



Re:
Harvard Case [***]




In consideration of the mutual promises and covenants set forth below, the parties hereto
agree as follows:


Article I

Definitions




	 	 	As used in this Agreement, the following terms shall have the following meanings:
	 
	1.1	 	ACADEMIC RESEARCH PURPOSES: use of PATENT RIGHTS for academic research or other
not-for-profit scholarly purposes which are undertaken at a non-profit or governmental
institution that does not use the PATENT RIGHTS in the production or manufacture of products
for sale or the performance of services for a fee.
	 
	1.2	 	AFFILIATE: any entity which controls, is controlled by, or is under common control with a
party by ownership or control of at least fifty percent (50%) of the voting stock or other
ownership. Unless otherwise specified, the term LICENSEE includes AFFILIATES.
	 
	1.3	 	FIELD: use of PATENT RIGHTS to develop, manufacture, use, offer for sale, sell, or import
components and products in FIELD I and/or FIELD II:
	 
	 	 	FIELD I:
[***]
	 
	 	 	FIELD II:
[***]




1








 






	1.4	 	HARVARD: President and Fellows of Harvard College, a nonprofit Massachusetts educational
corporation having offices at the Office for Technology and Trademark Licensing, Holyoke
Center, Suite 727, 1350 Massachusetts Avenue, Cambridge, Massachusetts 02138.
	 
	1.5	 	LICENSED PROCESSES: the processes covered by at least one VALID CLAIM included within the
PATENT RIGHTS.
	 
	1.6	 	LICENSED PRODUCTS: products covered by at least one VALID CLAIM included within the PATENT
RIGHTS or products made or services provided in accordance with or by means of LICENSED
PROCESSES.
	 
	1.7	 	LICENSEE: Mycometrix Corporation, a corporation organized under the laws of Califonia having
its principal offices at 213 East Grand Avenue, South San Francisco, CA 94080.
	 
	1.8	 	NET SERVICE INCOME: SERVICE INCOME less LICENSEE’s actual direct and indirect cost for
research, development and/or services provided.
	 
	1.9	 	NET SALES: the amount actually received for sales, leases, or other transfers of LICENSED
PRODUCTS, less:






	 	(i)	 	customary trade, quantity or cash discounts and
non-affiliated brokers’ or agents’ commissions actually allowed and taken;
	 
	 	(ii)	 	amounts repaid or credited by reason of rejection or return;
	 
	 	(iii)	 	to the extent separately stated on purchase orders, invoices, or other
documents of sale, taxes levied on and/or other governmental charges made as to
production, sale, transportation, delivery or use and paid by or on behalf of
LICENSEE; and
	 
	 	(iv)	 	reasonable charges for delivery or transportation provided by third parties
and cost of insurance in transit, if separately stated.






	 	 	NET SALES also includes the fair market value of any non-cash consideration received by
LICENSEE for the sale, lease, or transfer of LICENSED PRODUCTS.
	 
	 	 	If a LICENSED PRODUCT is sold as a combination product containing the LICENSED PRODUCT and
one or more other components, NET SALES shall be calculated by multiplying the gross amount
invoiced for the sale of the combination product by the fraction A/A+B where A is the average
gross selling price of the LICENSED PRODUCT sold separately by LICENSEE and B is the average
gross selling price of such other components of the combination products sold separately by
LICENSEE during the relevant royalty payment period.




2









 




	 	 	In the event that LICENSEE grants a sublicensee hereunder, and receives payments based upon
SUBLICENSEE’s sales of LICENSED PRODUCTS, LICENSEE may upon approval from HARVARD (which
shall not be unreasonably withheld) modify the definition of NET SALES for the purposes of
calculating royalties payable to HARVARD on such SUBLICENSEE’s sales to be the same as the
definition of NET SALES on which such royalties to LICENSEE are calculated.
	 
	1.10	 	SERVICE INCOME: the total financial consideration received by LICENSEE for commercial
services performed on a fee-for-service basis using the LICENSED PRODUCTS or LICENSED
PROCESSES by LICENSEE under a contract with a third party, where such services are based
primarily on the use of fully functional LICENSED PRODUCTS or LICENSED PROCESSES (as
applicable) for their intended commercial use (such as, for example, where LICENSEE performs
commercial-scale genotyping services for a pharmaceutical company on a fee-for-service basis
using fully developed microfluidics chips comprising LICENSED PRODUCTS). SERVICE INCOME shall
not include amounts received in connection with research and/or development of LICENSED
PRODUCTS or LICENSED PROCESSES themselves.
	 
	1.11	 	PATENT RIGHTS: The applications and patents as listed in Appendix A of this Agreement, the
allowed claims of such applications, the inventions described and claimed therein, and any
divisions or continuations of the applications and patents as listed in Appendix A, and
specific claims of any continuations-in-part of such applications to the extent the specific
claims are directed to subject matter described in the applications and patents listed in
Appendix A in a manner sufficient to support such specific claims under 35 U.S.C., patents
issuing thereon or reissues thereof, and any and all foreign patents and patent applications
corresponding thereto, all to the extent owned or controlled by HARVARD.
	 
	1.12	 	SUBLICENSE INCOME: the amount paid to LICENSEE by a third party (other than an AFFILIATE of
LICENSEE) (a) for the sublicening of PATENT RIGHTS to a third party as well as (b) for the
related licensing of LICENSEE’s own patent rights or know-how or
LICENSEE’s in-licensed
non-HARVARD technologies, including but not limited to (i) license fees, (ii) milestone
payments, (iii) royalties, (iv) the fair market value in cash of any non-cash consideration
for such sublicense, and (v) in the event that LICENSEE receives any payment for equity in
consideration for the grant of sublicense rights that included a premium over the fair market
value of such equity, the amount of such premium. LICENSEE shall be responsible for
determining such fair market value with reasonable business judgment.
	 
	1.13	 	SUBLICENSEE: any non-AFFILIATE granted a sublicense of any of the rights HARVARD has granted
to LICENSEE under Section 3.1.
	 
	1.14	 	TERRITORY: Worldwide.




3









 





	1.15	 	VALID CLAIM: either (i) a claim of an issued patent that has not been held
unenforceable or invalid by an agency or a court of competent jurisdiction in any
unappealable or unappealed decision or (ii) a claim of a published, pending patent
application, which claim is substantially identical to a corresponding claim in a subsequently
issued patent having priority to the patent application.
	 
	1.16	 	The terms “Public Law 96-517” and “Public Law 98-620” include all amendments to those statutes.
	 
	1.17	 	The terms “sold” and “sell” include, without limitation, leases and other transfers and similar transactions.





Article II

Representations





	2.1	 	HARVARD is owner by assignment from [***], in the US and foreign patent applications
corresponding thereto, and in the inventions described and claimed therein. Inventorship
will be finalized in the near future.
	 
	2.2	 	HARVARD has authority to issue licenses under PATENT RIGHTS.
	 
	2.3	 	HARVARD is committed to the policy that ideas or creative works produced at HARVARD should
be used for the greatest possible public benefit, and believes that every reasonable
incentive should be provided for the prompt introduction of such ideas into public use, all
in a manner consistent with the public interest.
	 
	2.4	 	LICENSEE is prepared and intends to diligently develop the invention and to bring products
to market which are subject to this Agreement, specifically including one or more products in
the FIELD selected from a [***].
	 
	2.5	 	LICENSEE is desirous of obtaining a co-exclusive license in the FIELD and in the TERRITORY
in order to practice the PATENT RIGHTS in the United States and in certain foreign countries,
and to manufacture, use and sell in the commercial market the products made in accordance
therewith, and HARVARD is desirous of granting such a license to LICENSEE in accordance with
the terms of this Agreement.





Article III

Grant of Rights





	3.1	 	HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the terms and conditions
hereof, in the TERRITORY a co-exclusive commercial license under PATENT




4









 






	 	 	RIGHTS in FIELD I and in FIELD II to make and have made, to use and have used, to sell and
have sold, and to offer for sale and have offered for sale the LICENSED PRODUCTS, and to
practice the LICENSED PROCESSES, for the life of the PATENT RIGHTS. HARVARD will grant no
more than two commercial licenses in FIELD I at any time and will grant no more than two
commercial licenses in FIELD II at any time and HARVARD will not grant other licenses in the
FIELD except as required by HARVARD’s obligations in Section 3.2(a) or as permitted Section
3.2(b). Such co-exclusive license shall include the right to grant sublicenses under the
following circumstances: (i) LICENSEE can demonstrate that it has added significant value to
the PATENT RIGHTS to be sublicensed, and that such a sublicense also contains a substantial
and essentially simultaneous license of LICENSEE owned intellectual property, or (ii)
LICENSEE grants a sublicense under other HARVARD patent rights licensed exclusively to
LICENSEE which are dominated by PATENT RIGHTS, and such sublicense under PATENT RIGHTS is
necessary to practice such other HARVARD patent rights.
	 
	3.2	 	The granting and exercise of this license is subject to the following conditions:






	 	(a)	 	HARVARD’s “Statement of Policy in Regard to Inventions, Patents and Copyrights,”
dated August 10, 1998, Public Law 96-517, Public Law 98-620. In addition, this Agreement
is subject to HARVARD’s obligations under agreements with other sponsors of research,
provided that such obligations are not in conflict with the rights granted hereunder.
Any right granted in this Agreement greater than that permitted under Public Law 96-517,
or Public Law 98-620, shall be subject to modification as may be required to conform to
the provisions of those statutes.
	 
	 	(b)	 	HARVARD reserves the right to make and use, and grant to others non-exclusive
licenses to make and use solely for ACADEMIC RESEARCH PURPOSES the subject matter
described and claimed in PATENT RIGHTS.
	 
	 	(c)	 	LICENSEE shall use commercially reasonable efforts to effect introduction of the
LICENSED PRODUCTS into the commercial market as soon as practicable, consistent with
sound and reasonable business practice and judgment; thereafter, until the expiration
of this Agreement, LICENSEE shall endeavor to keep LICENSED PRODUCTS reasonably
available to the public.
	 
	 	(d)	 	At any time after three years from the effective date of this Agreement and as
HARVARD’s sole remedy for such non-performance, HARVARD may increase the license
maintenance royalty under Section 4.4 to [***] ($[***]) dollars each in
FIELD I and in FIELD II in year 2004 and [***] ($[***]) dollars each in FIELD
I and FIELD II per year each year beginning in 2005, if in
HARVARD’s reasonable
judgment, the Progress Reports furnished by LICENSEE do not demonstrate that LICENSEE
has satisfied at least one of the following conditions, which non-performance is not
cured within ninety (90) days following the written notification of such by HARVARD to
LICENSEE:




5









 





	 	(i)	 	has put the licensed subject matter into commercial use in at least one of
the countries hereby licensed, directly or through a sublicense, and is keeping
the licensed subject matter reasonably available to the public; or
	 
	 	(ii)	 	is engaged in research, development, manufacturing, marketing or
sublicensing activity appropriate to achieving 3.2(d)(i).






	 	(e)	 	In all sublicenses granted by LICENSEE hereunder, LICENSEE shall include a
requirement that the SUBLICENSEE use commercially reasonable efforts to bring the
subject matter of the sublicense into commercial use. LICENSEE shall further provide in
such sublicenses that such sublicenses are subject and subordinate to the terms and
conditions of this Agreement, except: (i) the SUBLICENSEE may not further sublicense;
and (ii) the rate of royalty on NET SALES paid by the SUBLICENSEE to the LICENSEE.
Copies of the relevant provisions of all sublicense agreements shall be provided
promptly to HARVARD. HARVARD agrees to maintain any information contained in such
provisions in confidence, except as otherwise required by law, however, HARVARD may
include in its usual reports annual amounts of royalties paid.
	 
	 	(f)	 	A license in any other field of use in addition to the FIELD shall be the
subject of a separate agreement and shall require LICENSEE’s submission of evidence,
satisfactory to HARVARD, demonstrating LICENSEE’s willingness and ability to develop
and commercialize in such other field of use the kinds of products or processes likely
to be encompassed in such other fields.
	 
	 	(g)	 	To the extent that federal funds are used to support research leading to a
patent or patent application in the PATENT RIGHTS, LICENSEE shall cause any LICENSED
PRODUCT produced for sale by LICENSEE or SUBLICENSEES in the United States to be
manufactured substantially in the United States during the period of exclusivity of
this license in the United States.






	3.4	 	All rights reserved to the United States Government and others under Public Law 96-517, and
Public Law 98-620, shall remain and shall in no way be affected by this Agreement.





Article IV

Royalties





	4.1	 	LICENSEE shall pay to HARVARD a non-refundable license
royalty fee in the sum of [***] dollars ($[***]) payable within thirty (30) days of the execution date of this
Agreement.
	 
	4.2	 	(a) In consideration of the right and license granted herein, LICENSEE shall pay to HARVARD
during the term of this Agreement a royalty of [***] percent ([***]) on NET SALES of LICENSED
PRODUCTS sold by LICENSEE.




6









 





	 	 	(b) In the event that a single LICENSED PRODUCT or LICENSED PROCESS is covered by HARVARD
intellectual property in addition to PATENT RIGHTS, which is licensed to LICENSEE under other
agreements as of the date of this Agreement, then the total royalty payment due HARVARD under all
such agreements including this Agreement shall be [***] percent ([***]) of NET SALES. LICENSEE shall
notify HARVARD of the identity of each license agreement that includes patent rights covering the
product or process, and HARVARD shall distribute the royalties evenly among such agreements.
	 
	 	 	(c) As consideration for the rights granted hereunder, LICENSEE shall pay to
HARVARD during the term of this Agreement a royalty in the form of stock of LICENSEE as follows:






	 	(i)	 	LICENSEE shall issue to HARVARD [***] shares of the Common Stock of LICENSEE (“Shares”) pursuant to the terms of a
mutually acceptable Stock Subscription Agreement, provided, however, that HARVARD shall
be subject to and enter into appropriate agreements and related documents as required of
other stockholders of LICENSEE.






(ii) HARVARD represents and warrants to LICENSEE that:




(1) HARVARD is acquiring the Shares for its own account for investment and not
with a view to, or for sale in connection with any distribution thereof, nor with
any present intention of distributing or selling the same; and HARVARD has no
present or contemplated agreement, undertaking, arrangement, obligation,
indebtedness or commitment providing for the disposition thereof.




(2) HARVARD has full power and authority to enter into and to perform this
Agreement in accordance with its terms.




(3) HARVARD has sufficient knowledge and experience in investing in companies
similar to LICENSEE so as to be able to evaluate the risks and merits of its
investment in LICENSEE and is able financially to bear the risks thereof.




(iii) Each certificate representing the Shares shall bear a legend
substantially in the following form:



7









 




“The shares represented by this certificate have not been registered under the Securities
Act of 1933 or any state securities law and they may not be sold or otherwise transferred
by any person, including a pledgee, unless (1) either (a) a registration statement with
respect to such shares shall be effective under the Securities Act of 1933, as amended,
or (b) the Corporation shall have received an opinion of counsel satisfactory to the
Corporation that an exemption from registration under such Act is then available, and (2)
there shall have been compliance with all applicable securities laws.”


“The shares represented by this certificate are subject to a mutually agree-upon Stock
Purchase and Right of First Refusal Agreement with this Corporation, a copy of which
Stock Purchase and Right of First Refusal Agreement is available for inspection at the
offices of the Corporation or may be made available upon request.”


The foregoing legend shall be removed from the certificates representing any Shares, at
the request of the holder thereof, at such time as they become eligible for resale
pursuant to the Securities Act of 1933, as amended.


If at any time prior to the time the Shares are eligible for resale pursuant to an
exemption from registration under the Securities Act of 1933, as amended, LICENSEE
proposes to register any of its Common Stock, under the Securities Act of 1933, except at
LICENSEE’s initial public offering or any offering pursuant to Forms S-4 or S-8, LICENSEE
shall offer HARVARD the opportunity to have its Shares registered under the registration
statement to be filed at such time. HARVARD will be offered the right to register its
Shares under the same terms, conditions and restrictions as other shareholders with
piggyback registration rights and the inclusion of any Shares in such registration
statement shall be subject to the approval of the underwriters of such offering


(iv) HARVARD’s ownership rights to Shares shall not be affected should the license
pursuant to this Agreement be converted to a non-exclusive one.


(d) In the case of sublicenses, LICENSEE shall also pay to HARVARD a royalty of [***] of
SUBLICENSE INCOME. If compensation for such a sublicense of PATENT RIGHTS is bundled with
compensation received for the sublicensing of the other HARVARD patent rights licensed to LICENSEE
under other agreements as of the date of this Agreement, LICENSEE
shall pay HARVARD only [***] of the total compensation received no matter how many license agreements from HARVARD
are involved. In such a case, LICENSEE shall notify HARVARD of the identity of each license
agreement involved and HARVARD shall distribute its [***] of


8








 




compensation equally among those license agreements, including this Agreement.


(e) LICENSEE shall pay HARVARD [***] of NET SERVICE INCOME. If SERVICE INCOME
is bundled with service income under another license to LICENSEE as of the date of this
Agreement, LICENSEE shall pay a royalty of [***] of NET SERVICE INCOME
received from each and every third party (“Third Party”) to which services are provided.
LICENSEE shall notify HARVARD of the identity of each license agreement involved in the
services and HARVARD shall distribute its [***] of compensation equally among
those license agreements, including this Agreement.


(f) If other co-exclusive licenses in the same FIELD and TERRITORY are granted after the
date this Agreement is executed, the above financial compensation shall not exceed the
financial compensation to be paid by other licensees in the same FIELD and TERRITORY during
the term of the co-exclusive license provided LICENSEE accepts any less favorable terms
included in such other license.



If stock is part of the financial compensation to be paid by other licensees in the same
FIELD and TERITORY, the fair market value of the stock shall be the same as the price per
share which other investors paid in the last round of financing unless the stock is publicly
traded.



	4.3	 	On sales between LICENSEE and its AFFILIATES for resale or incorporation into
products, the royalty shall be paid on the NET SALES of the AFFILIATE. On sales
between LICENSEE and sublicensees for resale, the royalty shall be paid on the
SUBLICENSE INCOME.
	 
	4.4	 	No later than January 1 of each calendar year indicated below, LICENSEE shall pay to
HARVARD the following non-refundable license maintenance royalty and/or advance on
royalties. Such payments shall be credited against running royalties due for that calendar
year and Royalty Reports shall reflect such a credit. Such payments shall not be credited
against milestone payments (if any) nor against royalties due for any subsequent calendar
year nor against such payments due under any other agreements with HARVARD.




	 	 	 	 	 	 	 	 	 
	 	 	FIELD I	 	FIELD II
	January 1, 2002
	 	 	[***]	 	 	 	[***]	 
	January 1, 2003
	 	 	[***]	 	 	 	[***]	 
	January 1, 2004
	 	 	[***]	 	 	 	[***]	 
	each year thereafter
	 	 	[***]	 	 	 	[***]	 





Article V

Reporting




	5.1	 	Prior to signing this Agreement, LICENSEE has provided to HARVARD a written business plan
under which LICENSEE intends to bring the subject matter of the licenses



9








 




	 	 	 	 	 
	 	 	granted hereunder into commercial use upon execution of this Agreement. Such plan includes
proposed marketing efforts.
	 
	5.2   	 	No later than sixty (60) days after June 30 of each calendar year, LICENSEE shall provide to
HARVARD a written annual Progress Report describing progress on research and development,
regulatory approvals, manufacturing, sublicensing, marketing and sales during the most recent
twelve (12) month period ending June 30 and plans for the forthcoming year. If multiple
technologies are covered by the license granted hereunder, the Progress Report shall provide
the information set forth above for each technology. If progress differs from that anticipated
in the plan required under Section 5.1, LICENSEE shall explain the reasons for the difference
and propose a modified plan for HARVARD’s review. LICENSEE shall also provide any reasonable
additional data HARVARD requires to evaluate LICENSEE’s performance.
	 
	5.3	 	LICENSEE shall report to HARVARD the date of first sale of LICENSED PRODUCTS (or results of
LICENSED PROCESSES) in each country within thirty (30) days of occurrence.
	 
	5.4	 	(a)	LICENSEE shall submit to HARVARD within sixty (60) days after each calendar
half year ending June 30 and December 31, a Royalty Report setting forth for such half
year at least the following information:
	 

	 	 	 	(i)	the number of LICENSED PRODUCTS sold by LICENSEE in each country;
	 
	 	 	 	(ii)	total billings and amounts actually received for such LICENSED PRODUCTS;
	 
	 	 	 	(iii)	an accounting for all LICENSED PROCESSES used or sold;
	 
	 	 	 	(iv)	deductions applicable to determine the NET SALES thereof;
	 
	 	 	 	(v)	the amount of SERVICE INCOME received by LICENSEE and an accounting
of all deductions to yield NET SERVICE INCOME;
	 
	 	 	 	(vi)	the amount of SUBLICENSE INCOME received by LICENSEE; and
	 
	 	 	 	(vii) 	the amount of royalty due thereon, or, if no royalties are due to
HARVARD for any reporting period, the statement that no royalties are due.
	 

	 	 	 	Such report shall be certified as correct by an officer of LICENSEE and shall include a
detailed listing of all deductions from royalties.
	 

	 	 	(b)	LICENSEE shall pay to HARVARD with each such Royalty Report the amount of
royalty due with respect to such half year. If multiple technologies are covered by the
license granted hereunder, LICENSEE shall specify which PATENT RIGHTS are utilized for
each LICENSED PRODUCT and LICENSED PROCESS included in the Royalty Report.



10








 




	 	(c)	 	All payments due hereunder shall be deemed received when funds are credited to
HARVARD’s bank account and shall be payable by check or wire transfer in United States
dollars. Conversion of foreign currency to U.S. dollars shall be made at the conversion
rate existing in the United States (as reported in the New York Times or the Wall
Street Journal) on the last working day of each royalty period. No transfer, exchange,
collection or other charges shall be deducted from such payments.
	 
	 	(d)	 	All such reports shall be maintained in confidence by HARVARD except as required
by law; however, HARVARD may include in its usual reports annual amounts of royalties
paid.
	 
	 	(e)	 	Late payments shall be subject to a charge of one and one-half percent (1.5%)
per month, or $250, whichever is greater.





	5.5	 	In the event of acquisition, merger, change of corporate name or change in make-up,
organization, or identity, LICENSEE shall notify HARVARD in writing within thirty
(30) days of such event.
	 
	5.6	 	If by law, regulation or fiscal policy of a particular country, conversion into United
States
dollars or transfer of funds of a convertible currency to the United States is restricted or
forbidden, LICENSEE shall give HARVARD prompt notice in writing and shall pay the
royalty and other amounts due through such means or methods as are lawful in such
country as HARVARD may reasonably designate. Failing the designation by HARVARD
of such lawful means or methods within thirty (30) days after such notice is given to
HARVARD, LICENSEE shall deposit such royalty or other payment in local currency to
the credit of HARVARD in a recognized banking institution designated by HARVARD,
or if none is designated by HARVARD within the thirty (30) day period described above,
in a recognized banking institution selected by LICENSEE and identified in a written
notice to HARVARD by LICENSEE, and such deposit shall fulfill all obligations of
LICENSEE to HARVARD with respect to such royalties. When in any country in which
the law or regulations prohibit both the transmittal and deposit of royalties on sales in
such
country, royalty payments shall be suspended for as long as such prohibition is in effect,
and as soon as such prohibition ceases to be in effect, all royalties which LICENSEE
would have been under obligation to transmit or deposit, but for the prohibition, shall be
deposited or transmitted promptly to the extent allowable.




Article VI

Record Keeping




	6.1	 	LICENSEE shall keep, and shall require its SUBLICENSEES to keep, accurate records (together
with supporting documentation) of LICENSED PRODUCTS made, used or sold under this Agreement,
and SERVICE INCOME and SUBLICENSE INCOME received by LICENSEE under this Agreement,
appropriate to determine the amount of royalties due to HARVARD hereunder. Such records shall
be retained for three (3) years following the end of the reporting period to which they
relate. For such three year period, they shall be



11








 




	 	 	available during normal business hours upon reasonable advance notice for examination by a
certified public accountant selected by HARVARD, and reasonably acceptable to LICENSEE, for
the sole purpose of verifying reports and payments hereunder. In conducting examinations
pursuant to this Section 6.1, HARVARD’s accountant shall have access to all records which
HARVARD reasonably believes to be relevant to the calculation of royalties under Article IV.
HARVARD agrees to maintain any information contained in such records in confidence, except
as otherwise required by law and except information in regarding the amount of royalties
due.
	 
	6.2	 	HARVARD’s accountant shall not disclose to HARVARD any information other than information
relating to the accuracy of reports and payments made hereunder.
	 
	6.3	 	Such examination by HARVARD’s accountant shall be at
HARVARD’s expense, except that if such
examination shows an underreporting or underpayment in excess of five percent (5%) for any
twelve (12) month period, then LICENSEE shall pay the cost of such examination as well as any
additional sum that would have been payable to HARVARD had the LICENSEE reported correctly,
plus interest on said sum at the rate of one and one-half percent (1.5%) per month.




Article VII

Domestic and Foreign Patent Filing and Maintenance




	



	7.1	 	Upon execution of this Agreement, LICENSEE shall reimburse HARVARD for fifty percent (50%)
of all reasonable expenses HARVARD has incurred for the preparation, filing, prosecution,
maintenance and counseling with respect to PATENT RIGHTS. Such
expenses total [ *  *  * ] as
of October 1, 2000. Thereafter, LICENSEE shall reimburse HARVARD
for fifty percent (50%)  of
all such future reasonable expenses prior to termination of this Agreement upon receipt of
invoices from HARVARD.
	



	 
	7.2	 	HARVARD shall be responsible for the preparation, filing, prosecution and maintenance of any
and all patent applications and patents included in PATENT RIGHTS. HARVARD will instruct
counsel to directly notify HARVARD and LICENSEE and provide them copies of any official
communications from the United States and foreign patent offices relating to said prosecution,
and to provide LICENSEE with advance draft copies of all relevant communications to the
various patent offices, so that LICENSEE may be informed and apprised of the continuing
prosecution of patent applications in PATENT RIGHTS. LICENSEE shall have reasonable
opportunities to participate in decision making on all key decisions affecting filing,
prosecution and maintenance of patents and patent applications in PATENT RIGHTS. HARVARD will
use reasonable efforts to incorporate LICENSEE’s reasonable suggestions regarding said
prosecution. HARVARD shall use all reasonable efforts to amend any patent application to
include claims reasonably requested by LICENSEE to protect LICENSED PRODUCTS.
	 
	7.3	 	HARVARD and LICENSEE shall cooperate fully in the preparation, filing, prosecution and
maintenance of PATENT RIGHTS and of all patents and patent applications licensed to LICENSEE
hereunder, executing all papers and instruments or requiring members of



12








 




	 	 	HARVARD to execute such papers and instruments so as to enable HARVARD to apply for, to
prosecute and to maintain patent applications and patents in
HARVARD’s name in any country.
Each party shall provide to the other prompt notice as to all matters which come to its
attention and which may affect the preparation, filing, prosecution or maintenance of any
such patent applications or patents.
	 
	7.4	 	LICENSEE may elect to surrender its PATENT RIGHTS in any country upon sixty (60) days
written notice to HARVARD. Such notice shall not relieve LICENSEE from responsibility to
reimburse HARVARD for patent-related expenses incurred prior to the expiration of the (60)
day notice period.
	 
	



	7.5	 	If HARVARD elects not to prosecute or maintain any of the patents or patent applications
relating to PATENT RIGHTS or any portion thereof in any country, LICENSEE shall be given
sufficient notice of HARVARD’s decision so that LICENSEE may request that HARVARD continue
prosecuting or maintaining such patents or patent applications, at
LICENSEE’s expense. If
HARVARD elects not to prosecute or maintain such patents or patent applications after such
request by LICENSEE, then LICENSEE shall have the right, but not the obligation, at its own
expense to prosecute and maintain such patents and patent applications or portion thereof in
such country and in HARVARD’s name. If LICENSEE assumes 100% of the costs to file, prosecute,
and maintain certain patents and patent applications relating to the PATENT RIGHTS pursuant to
this Section 7.5, and, if HARVARD licenses the PATENT RIGHTS to one or more co-exclusive
licensees designated in Section 3.1 after such time, then HARVARD will credit LICENSEE with
the costs LICENSEE has paid in excess of 50% if one other licensee, due for the preparation,
filing, prosecution and maintenance of patents and patent applications relating to PATENT
RIGHTS pursuant to Section 7.1 above.
	



	 
	7.6	 	If LICENSEE can demonstrate that it is not being adequately informed or apprised of the
continuing prosecution of patents or patent applications in PATENT RIGHTS, or that it is not
being provided with reasonable opportunities to participate in decision making or that its
interests are not being adequately protected, LICENSEE shall be entitled to engage, at
LICENSEE’s expense, independent patent counsel to review and evaluate patent prosecution and
filing of patents and patent applications included in PATENT RIGHTS.





Article VIII

Infringement





	8.1	 	With respect to any PATENT RIGHTS that are licensed to LICENSEE pursuant to this Agreement,
LICENSEE shall have the right to prosecute in its own name and at its own expense any
infringement of such patent. HARVARD agrees to notify LICENSEE promptly of each infringement
of such patents of which HARVARD, as applicable, is or becomes aware. Before LICENSEE
commences an action with respect to any infringement of such patents, LICENSEE shall give
careful consideration to the views of HARVARD and to potential effects on the public interest
in making its decision whether or not to sue.




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	8.2	 	LICENSEE acknowledges that other co-exclusive licensees of PATENT RIGHTS designated
in Section 3.1 shall have rights identical to LICENSEE to prosecute infringers and that co-
exclusive licensees will be bound by the identical terms of this Section 8.2. In any
prosecution instigated by LICENSEE and in which HARVARD, as necessary, is also named
plaintiff as owner of the PATENT RIGHTS, LICENSEE must notify other co-exclusive
licensees of the existence of such legal action and allow other co-exclusive licensees to join
as a plaintiff upon co-exclusive licensees’ request. In addition, in the event other co-
exclusive licensees instigate an infringement prosecution, LICENSEE hereby consents to
being joined as a plaintiff in such suit solely for the purpose of procuring standing to bring
the action and at the sole expense of the instigating co-exclusive licensee. To the extent that
LICENSEE desires to participate in any strategic decisions affecting the prosecution of the
action brought by other co-exclusive licensees, LICENSEE acknowledges that it and co-
exclusive licensees will necessarily have to reach a mutual agreement concerning litigation
expenses and strategy. In no event shall HARVARD incur any liability or expense in
connection with any action of co-exclusive licensees, joint or otherwise.
	 
	 	 	During any such litigation, HARVARD will agree to not license any defendant or accused
infringer of the PATENT RIGHTS in the litigation, without LICENSEE’s prior written consent.





	 	 	 	 	 
	8.3

	 	(a)
	 	If LICENSEE elects to commence an action as described above, HARVARD may, to
the extent permitted by law, elect to join as parties in that action. Regardless of
whether HARVARD elects to join as parties, HARVARD shall cooperate fully with LICENSEE
in connection with any such action.
	 
	 	 	 	 
	 

	 	(b)
	 	HARVARD agrees to join as a party in any action if required by law to do so in
order to bring an action under the PATENT RIGHTS.
	 
	 	 	 	 
	 

	 	(c)
	 	LICENSEE shall reimburse HARVARD for any costs incurs with LICENSEE’s approval,
including reasonable attorneys’ fees, as part of an action brought by LICENSEE,
irrespective of whether HARVARD becomes a co-plaintiff.







	



	8.4	 	If LICENSEE elects to commence an action as described above, LICENSEE may deduct
from its royalty payments to HARVARD with respect to the patent(s) subject to suit an
amount not exceeding fifty percent (50%) of LICENSEE’s expenses and costs of such
action, including reasonable attorneys’ fees; provided, however, that such reduction shall
not exceed fifty percent (50%) of the total royalty due to HARVARD with respect to the
patent(s) subject to suit for each calendar year. If such fifty percent (50%) of
LICENSEE’s expenses and costs exceeds the amount of royalties deducted by LICENSEE
for any calendar year, LICENSEE may to that extent reduce the royalties due to
HARVARD from LICENSEE in succeeding calendar years, but never by more than fifty percent (50%) of
the total royalty due in any one year with respect to the patent(s) subject
to suit.
	







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	8.5	 	No settlement, consent judgment or other voluntary final disposition of the suit may be
entered into without the prior written consent of HARVARD which consent shall not be
unreasonably withheld.
	



	 
	8.6	 	Recoveries or reimbursements from actions commenced by LICENSEE pursuant to this Article
shall first be applied to reimburse LICENSEE, HARVARD for litigation costs not paid from
royalties and then to reimburse HARVARD for royalties deducted by LICENSEE pursuant to Section
8.4. Any remaining recoveries or reimbursements shall be shared as follows:






	 	(a)	 	If the amount is lost profits or lost royalties, LICENSEE shall receive an
amount equal to the damages the court determines LICENSEE has suffered as a result of
the infringement less the amount of any royalties that would have been due HARVARD on
sales of LICENSED PRODUCTS lost by LICENSEE as a result of the infringement had
LICENSEE made such sales, and HARVARD shall receive an amount equal to the royalties it
would have received if such sales had been made by LICENSEE, and
	 
	 	(b)	 	As to awards other than lost profits or lost royalties, fifty
percent (50%)
to LICENSEE and fifty percent (50%) to HARVARD.
	 
	 	(c)	 	If two or more co-exclusive licensees undertake the suit, the provision of this
Section 8.6 will be modified to take into account each co-exclusive licensee’s expenses
and lost profits.
	









	8.7	 	If LICENSEE elects not to exercise its right to prosecute an infringement of the PATENT
RIGHTS pursuant to this Article, HARVARD may do so at its own expense, controlling
such action and retaining all recoveries therefrom. LICENSEE shall cooperate fully with
HARVARD in connection with any such action.
	 
	8.8	 	If a declaratory judgment action is brought naming LICENSEE as a defendant and
alleging invalidity of any of the PATENT RIGHTS, HARVARD may elect to take over
the sole defense of the action at its own expense. LICENSEE shall cooperate fully with
HARVARD in connection with any such action. HARVARD shall consult with
LICENSEE regarding such defense.





Article IX

Termination of Agreement





	9.1	 	This Agreement, unless terminated as provided herein, shall remain in effect until the last
patent or patent application in PATENT RIGHTS has expired or been abandoned.
	 
	9.2	 	HARVARD may terminate this Agreement as follows:






	 	(a)	 	If LICENSEE does not make a payment due hereunder and fails to cure such
non-payment (including the payment of interest in accordance with Section 5.4(e)) within




15









 





	 	 	 	thirty (30) days after the date of notice in writing of such non-payment by HARVARD.
	 
	 	(b)	 	If LICENSEE defaults in its obligations under Sections 10.3(c) and 10.3(d) to
procure and maintain insurance.
	 
	 	(c)	 	If LICENSEE shall become insolvent, shall make an assignment for the benefit of
creditors, or shall have a petition in bankruptcy filed for or against it. Such
termination shall be effective immediately upon HARVARD giving written notice to
LICENSEE.
	 
	 	(d)	 	If an examination by HARVARD’s accountant pursuant to Article V shows an
underreporting or underpayment by LICENSEE in excess of twenty percent (20%) for any
twelve (12) month period, provided that such underreporting or underpayment is not
determined to be inadvertent or the result of an honest mistake.
	 
	 	(e)	 	If LICENSEE is convicted of a felony relating to the manufacture, use, or sale
of LICENSED PRODUCTS.
	 
	 	(f)	 	Except as provided in Subsections (a), (b), and (c) above, if LICENSEE defaults
in the performance of any material obligations under this Agreement and the default has
not been remedied within forty-five (45) days after the date of notice in writing of
such default by HARVARD.






	9.3	 	LICENSEE shall provide, in all sublicenses granted by it under this Agreement, that
LICENSEE’s interest in such sublicenses shall at HARVARD’s option terminate or be assigned to
HARVARD upon termination of this Agreement; however, LICENSEE shall have the option to
nominate one of its sublicensees as a substitute for LICENSEE. The proposed substitute must
(i) have a net worth of at least equivalent to the net worth LICENSEE had as of the date of
this Agreement and (ii) have available resources and sufficient scientific, business and other
expertise comparable to LICENSEE in order to satisfy its obligations under this Agreement. At
least sixty (60) days prior to termination of this Agreement, LICENSEE shall provide HARVARD
with written notice of LICENSEE’s nominee together with documentation sufficient to
demonstrate the requirements set forth in subparagraphs (i) and (ii) above for HARVARD’s
approval, which shall not be unreasonably withheld. HARVARD shall notify LICENSEE in writing
of its decision prior to termination of this Agreement. If HARVARD approves LICENSEE’s
nominee, LICENSEE shall assign this Agreement to its nominee and its nominee shall accept the
assignment no later than thirty (30) days after the termination date of this Agreement.
	 
	 	 	In the event that HARVARD disapproved LICENSEE’s first nominee, prior to the termination date
of this Agreement, LICENSEE shall have the option to nominate one of its other sublicensees
for HARVARD’s approval which shall not be unreasonably withheld.





16









 






	9.4	 	LICENSEE may terminate this Agreement by giving ninety (90) days advance written notice
of termination to HARVARD. Upon termination, LICENSEE shall submit a final Royalty Report to
HARVARD and any royalty payments and unreimbursed patent expenses invoiced by HARVARD shall
become immediately payable.
	 
	9.5	 	Sections 6.1, 6.2, 6.3, 7.1, 9.4, 9.5, 10.2, 10.3, 10.4, and 10.7 of this Agreement shall
survive termination.





Article X

General





	10.1	 	HARVARD does not warrant the validity of the PATENT RIGHTS licensed hereunder and make no
representations whatsoever with regard to the scope of the licensed PATENT RIGHTS or that such
PATENT RIGHTS may be exploited by LICENSEE, an AFFILIATE, or SUBLICENSEE without infringing
other patents, provided, however, HARVARD represents that it has no knowledge of any facts or
circumstances as of the execution date of this Agreement that would render any of the PATENT
RIGHTS invalid or unenforceable. HARVARD represents and warrants, to the best of its
knowledge, that HARVARD owns all right, title and interest in and to the PATENT RIGHTS.
	 
	10.2	 	HARVARD EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES AND MAKES NO EXPRESS OR IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE PATENT RIGHTS OR
INFORMATION SUPPLIED BY HARVARD, LICENSED PROCESSES OR LICENSED PRODUCTS CONTEMPLATED BY THIS
AGREEMENT.







	 
	10.3	 	(a)	LICENSEE shall indemnify, defend and hold harmless HARVARD and its current or
former directors, governing board members, trustees, officers, faculty, medical and
professional staff, employees, students, and agents and their respective successors, heirs
and assigns (collectively, the “INDEMNITEES”), from and against any claim, liability, cost,
expense, damage, deficiency, loss or obligation of any kind or nature (including, without
limitation, reasonable attorney’s fees and other costs and expenses of litigation)
(collectively, “Claims”), based upon, arising out of, or otherwise relating to this
Agreement, including without limitation any cause of action relating to product liability
concerning any product, process, or service made, used or sold pursuant to any right or
license granted under this Agreement, provided, however, that such indemnification shall not
apply to any liability, damage, loss, or expense to the extent directly attributable to the
negligent activities, reckless misconduct or intentional misconduct of Indemnitees.
	 	 	(b)	Each Indemnitee that intends to claim indemnification under Section 10.3(a)
shall promptly notify LICENSEE of any claim or action in respect of which the
Indemnitee intends to claim such indemnification, and LICENSEE shall assume the defense
thereof with counsel mutually satisfactory to LICENSEE and HARVARD. The failure to
deliver notice to LICENSEE within a reasonable time after the




17









 




	 	 	 	commencement of any such claim or action, if materially prejudicial to its ability to defend
such action, shall relieve LICENSEE of any liability to the Indemnitee under Section 10.3(a)
with respect to such action, but the omission so to deliver notice to LICENSEE will not
relieve it of any liability that it may have to any Indemnitee otherwise than under Section
10.3(a). HARVARD and any other Indemnitee, and their respective employees and agents, shall
cooperate fully with LICENSEE and its legal representatives in the investigation of any claim
or action covered by the indemnification under Section 10.3(a).
	



	 
	 	(c)	 	Beginning at the time any such product, process or service is being commercially distributed
or sold (other than for the purpose of obtaining regulatory approvals) by LICENSEE or by a
SUBLICENSEE, AFFILIATE or agent of LICENSEE, LICENSEE shall, at its sole cost and expense,
procure and maintain commercial general liability insurance in amounts not less than
$2,000,000 per incident and $2,000,000 annual aggregate and naming the Indemnitees as
additional insureds. During clinical trials of any such product, process or service, LICENSEE
shall, at its sole cost and expense, procure and maintain commercial general liability
insurance in such equal or lesser amount as HARVARD shall require, naming the Indemnitees as
additional insureds. Such commercial general liability insurance shall provide: (i) product
liability coverage; and (ii) broad form contractual liability coverage for LICENSEE’s
indemnification under this Agreement. If LICENSEE elects to self-insure all or part of the
limits described above (including deductibles or retentions which are
in excess of $250,000
annual aggregate) such self-insurance program must be acceptable to HARVARD and the Risk
Management Foundation of the Harvard Medical Institutions, Inc. in their sole discretion. The
minimum amounts of insurance coverage required shall not be construed to create a limit of
LICENSEE’s liability with respect to its indemnification under this Agreement.
	



	 
	 	(d)	 	LICENSEE shall provide HARVARD with written evidence of such insurance upon request of
HARVARD. LICENSEE shall provide HARVARD with written notice at least fifteen (15) days prior
to the cancellation, non-renewal or material change in such insurance; if LICENSEE does not
obtain replacement insurance providing comparable coverage within such fifteen (15) day
period, HARVARD shall have the right to terminate this Agreement effective at the end of such
fifteen (15) day period without notice or any additional waiting periods.
	 
	 	(e)	 	LICENSEE shall maintain such commercial general liability insurance beyond the expiration or
termination of this Agreement during: (i) the period that any product, process, or service,
relating to, or developed pursuant to, this Agreement is being commercially distributed or
sold by LICENSEE or by a SUBLICENSEE, AFFILIATE or agent of LICENSEE; and (ii) a reasonable
period after the period referred to in Subsection (e)(i) above which in no event shall be
less than fifteen (15) years.





18









 





	10.4	 	LICENSEE shall not use HARVARD’s name or insignia, or any adaptation of them, or the
name of any of HARVARD’s inventors in any advertising, promotional or sales literature
without the prior written approval of HARVARD.
	 
	10.5	 	Without the prior written approval of HARVARD in each instance, neither this Agreement nor
the rights granted hereunder shall be transferred or assigned in whole or in part by LICENSEE
to any person whether voluntarily or involuntarily, by operation of law or otherwise, except
that each of LICENSEE and its AFFILIATES may assign this Agreement in connection with a
merger, consolidation or sale or transfer of all or substantially all of its assets. This
Agreement shall be binding upon the respective successors, legal representatives and assignees
of HARVARD and LICENSEE.
	 
	10.6	 	The interpretation and application of the provisions of this Agreement shall be governed by
the laws of the Commonwealth of Massachusetts.
	 
	10.7	 	LICENSEE shall comply with all applicable laws and regulations. In particular, it is
understood and acknowledged that the transfer of certain commodities and technical data is
subject to United States laws and regulations controlling the export of such commodities and
technical data, including all Export Administration Regulations of the United States
Department of Commerce. These laws and regulations among other things, prohibit or require a
license for the export of certain types of technical data to certain specified countries.
LICENSEE hereby agrees and gives written assurance that it will comply with all United States
laws and regulations controlling the export of commodities and technical data, that it will
be solely responsible for any violation of such by LICENSEE or its AFFILIATES or
SUBLICENSEES, and that it will defend and hold HARVARD, CHILDREN, and MIT harmless in the
event of any legal action of any nature occasioned by such violation.
	 
	10.8	 	LICENSEE agrees: (i) to obtain all regulatory approvals required for the manufacture and
sale of LICENSED PRODUCTS and LICENSED PROCESSES; and (ii) to utilize appropriate patent
marking on such LICENSED PRODUCTS. LICENSEE also agrees to register or record this Agreement
as is required by law or regulation in any country where the license is in effect.
	 
	10.9	 	Any notices to be given hereunder shall be sufficient if signed by the party (or party’s
attorney) giving same and either: (i) delivered in person; (ii) mailed certified mail return
receipt requested; or (iii) faxed to other party if the sender has evidence of successful
transmission and if the sender promptly sends the original by ordinary mail, in any event to
the following addresses:
	 
	 	 	If to LICENSEE:




Mycometrix Corporation

213 E. Grand Ave.

South San Francisco, CA 94080

Attention:

Fax: (650)-




19









 





	 	 	 	 
	 	 	If to HARVARD:
	 	 	 	Office for Technology and Trademark Licensing

Harvard University

Holyoke Center, Suite 727

1350 Massachusetts Avenue

Cambridge, MA 02138

Fax: (617) 495-9568
	 

	 	 	By such notice either party may change their address for future notices.
	 
	 	 	Notices delivered in person shall be deemed given on the date delivered. Notices sent by fax
shall be deemed given on the date faxed. Notices mailed shall be deemed given on the date
postmarked on the envelope.
	 		 
	10.10	 	Should a court of competent jurisdiction later hold any provision of this Agreement to be
invalid, illegal, or unenforceable, and such holding is not reversed on appeal, it shall be
considered severed from this Agreement. All other provisions, rights and obligations shall
continue without regard to the severed provision, provided that the remaining provisions of
this Agreement are in accordance with the intention of the parties.
	 
	10.11	 	In the event of any controversy or claim arising out of or relating to any provision of this
Agreement or the breach thereof, the parties shall try to settle such conflict amicably
between themselves. Subject to the limitation stated in the final sentence of this Section
10.11, any such conflict which the parties are unable to resolve promptly shall be settled
through arbitration conducted in accordance with the rules of the American Arbitration
Association. The demand for arbitration shall be filed within a reasonable time after the
controversy or claim has arisen, and in no event after the date upon which institution of
legal proceedings based on such controversy or claim would be barred by the applicable statute
of limitation. Such arbitration shall be held in Boston, Massachusetts. The award through
arbitration shall be final and binding. Either party may enter any such award in a court
having jurisdiction or may make application to such court for judicial acceptance of the award
and an order of enforcement, as the case may be. Notwithstanding the foregoing, either party
may, without recourse to arbitration, assert against the other party a third-party claim or
cross-claim in any action brought by a third party, to which the subject matter of this
Agreement may be relevant.
	 		 
	10.12	 	This Agreement constitutes the entire understanding between the parties and neither party
shall be obligated by any condition or representation other than those expressly stated
herein or as may be subsequently agreed to by the parties hereto in writing.




[The remainder of this page is intentionally blank.]



20








 




IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized representatives.



	 	 	 	 	 
	President And Fellows	 	 	 	Mycometrix Corporation
	of Harvard College	 	 	 	 
	 	 	 	 	 
	/s/ Joyce Brinton	 	 	 	/s/ Gajus Worthington
	 	 	 	 	 
	Joyce Brinton, Director	 	 	 	 
	Office for Technology and	 	 	 	President
	Trademark Licensing	 	 	 	 
	 	 	 	 	 
	12/7/00	 	 	 	12/10/00
	 	 	 	 	 
	Date	 	 	 	Date





21








 




Appendix A

The following comprise PATENT RIGHTS:



[ *  *  * ]


[ *  *  * ]




22