Document:

ex10-1.htm

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

Exhibit 10.1

 

LICENSE AGREEMENT

 

BETWEEN

 

CHROMADEX CORPORATION

 

AND

 

CORNELL UNIVERSITY

 

FOR

 

DOCKET NO. D-3787

 

  

  

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

TABLE OF CONTENTS

 

	
RECITALS

	  	1
	
ARTICLE 1.

	
DEFINITIONS

	1
	
ARTICLE 2.

	
GRANTS

	3
	
ARTICLE 3.

	
CONSIDERATION

	4
	
ARTICLE 4.

	
REPORTS, RECORDS AND PAYMENTS

	7
	
ARTICLE 5.

	
PATENT MATTERS

	9
	
ARTICLE 6.

	
GOVERNMENTAL MATTERS

	11
	
ARTICLE 7.

	
TERMINATION OF THE AGREEMENT

	11
	
ARTICLE 8.

	
LIMITED WARRANTY AND INDEMNIFICATION

	12
	
ARTICLE 9.

	
USE OF NAMES AND TRADEMARKS

	13
	
ARTICLE 10.

	
MISCELLANEOUS PROVISIONS

	14
	
APPENDIX A - DEVELOPMENT REPORT

	18
	
APPENDIX B – COMMERCIALIZATION REPORT

	21
	
APPENDIX C – PATENTS AND APPLICATIONS

	24

 

  

-i-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

LICENSE AGREEMENT

 

This agreement (“Agreement”) is made by and between ChromaDex Inc, a California corporation having an address at 10005 Muirlands Blvd, Suite G, First Floor, Irvine, CA  92618 (“LICENSEE”) and Cornell University (“Cornell”) as represented by its Cornell Center for Technology Enterprise and Commercialization (“CCTEC”) at 395 Pine Tree Road, Ithaca, NY 14850.

 

This Agreement is effective on July 5th 2011 (“Effective Date”).

 

RECITALS

 

WHEREAS, the inventions disclosed in Disclosure Docket No. D-3787 and titled “Analogs of a B Vitamin (Nicotinamide Riboside, NR), and Efficient, Stereoselective Methods to Synthesize such Analogs”  (“Invention”), were made in the course of research at Cornell by Dr. Anthony Sauve and his associates (hereinafter and collectively, the “Inventors”) and are covered by Patent Rights as defined below;

 

WHEREAS, the Inventors are employees of Cornell, and they are obligated to assign all of their right, title and interest in the Invention to the Cornell Research Foundation, Inc. (“CRF”) or to Cornell and have done so;

 

WHEREAS, CRF has engaged CCTEC to manage the Invention, in whole or in part, assigned to it and has fully authorized CCTEC to manage all rights subsisting therein and to enter into any agreement granting such rights to advance the missions of Cornell;

 

WHEREAS, CCTEC is the officially authorized unit at Cornell to manage Invention and to grant rights subsisting therein for Cornell and CRF;

 

WHEREAS, Cornell desires that the Invention be developed and utilized to the fullest possible extent so that its benefits can be enjoyed by the general public;

 

WHEREAS, LICENSEE desires to obtain certain rights from Cornell for commercial development, use, and sale of the Invention, and Cornell is willing to grant such rights; and

 

WHEREAS, LICENSEE understands that Cornell may publish or otherwise disseminate information concerning the Invention at any time and that LICENSEE is paying consideration hereunder for its early access to the Invention, the associated intellectual property rights, not continued secrecy therein.

 

NOW, THEREFORE, the parties agree:

 

ARTICLE 1.                                  DEFINITIONS

 

The terms, as defined herein, shall have the same meanings in both their singular and plural forms.

 

1.1 “Affiliate” means any corporation or other business entity which is bound in writing by LICENSEE to the terms set forth in this Agreement and in which LICENSEE owns or controls, directly or indirectly, at least [*] percent ([*]%) of the outstanding stock or other voting rights entitled to elect directors, or in which LICENSEE is owned or controlled directly or indirectly by at least [*] percent ([*]%) of the outstanding stock or other voting rights entitled to elect directors; but in any country where the local law does not permit foreign equity participation of at least [*] percent ([*]%), then an “Affiliate” includes any company in which LICENSEE owns or controls or is owned or controlled by, directly or indirectly, the maximum percentage of outstanding stock or voting rights permitted by local law.

 

  

-1-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

1.2 “Sublicense” means an agreement into which LICENSEE enters with a third party that is not an Affiliate for the purpose of (i) granting certain rights; (ii) granting an option to certain rights; or (iii) forbearing the exercise of any rights, granted to LICENSEE under this Agreement after Effective Date.  “Sublicensee” means a third party with whom LICENSEE enters into a Sublicense.

 

1.3 “Field” means use of Nicotinamide Riboside in Dietary Supplement, Food, Food Additive, Cosmetic, and Drug (as each of these terms is defined in the United States Food, Drug, and Cosmetic Act (“FD&C Act”) or its successors) products and in the Research Market as defined herein.  “Research Market” means use by consumers in laboratories of academic, government, industrial, clinical, or other institutions who determine for themselves that they are entitled to purchase and/or use Licensed Products labeled “For Research Use Only - Not for any clinical or therapeutic use in Humans or Animals” or a reasonable equivalent thereto.  The Research Market expressly excludes, everywhere in the world, use of Licensed Products for the diagnosis of, or predisposition to, or therapy of a disease state in humans or animals.  Field also includes beverages and beverage additives.

 

1.4 “Territory” means worldwide.

 

1.5 “Term” means the period of time beginning on Effective Date and ending on the expiration date of the longest-lived patent in Patent Rights.

 

1.6 “Patent Rights” means CRF’s or Cornell’s right in patent applications listed in Appendix C disclosing and claiming the Invention, filed by Inventors and assigned to CRF or Cornell; and continuing applications thereof including divisions, substitutions, and continuations-in-part (but only to extent the claims thereof are enabled by disclosure of the parent application); any patents issuing on said applications including reissues, reexaminations and extensions; and any corresponding foreign applications or patents.

 

1.7 This paragraph left intentionally blank.

 

1.8 “Licensed Method” means any method that is claimed in Patent Rights the use of which would constitute, but for the license granted to LICENSEE under this Agreement, an infringement, an inducement to infringe or contributory infringement, of any pending or issued claim within Patent Rights.  For the purpose of this Agreement, LICENSEE agrees that the above definition shall be interpreted as if Cornell or CRF is the sole owner and assignee of Patent Rights.

 

1.9 “Licensed Product” means any service, composition or product that is claimed in Patent Rights, or that is produced or enabled by Licensed Method, or the manufacture, use, sale, offer for sale, or importation of which would constitute, but for the license granted to LICENSEE under this Agreement, an infringement, an inducement to infringe or contributory infringement, of any pending or issued claim within the Patent Rights.  For the purpose of this Agreement, LICENSEE agrees that the above definition shall be interpreted as if Cornell or CRF is the sole owner and assignee of Patent Rights.

 

1.10 “Net Sales” means the total of the gross invoice prices of Licensed Products sold or leased by LICENSEE, Sublicensee, Affiliate, or any combination thereof, less the sum of the following actual and customary deductions where applicable and separately listed:  cash, trade, or quantity discounts; sales, use, tariff, import/export duties or other excise taxes imposed on particular sales (except for value-added and income taxes imposed on the sales of Licensed Product in foreign countries); transportation charges; or credits to customers because of rejections or returns.  For purposes of calculating Net Sales, transfers to a Sublicensee or an Affiliate of Licensed Product under this Agreement for (i) end use (but not resale) by the Sublicensee or Affiliate shall be treated as sales by LICENSEE at the list price of LICENSEE in an arm-length transaction, or (ii) resale by a Sublicensee or an Affiliate shall be treated as sales at the list price of the Sublicensee or Affiliate.

 

  

-2-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

1.11 “Patent Costs” means a pro rata share of all expenses for the preparation, filing, prosecution, and maintenance of all United States and foreign patents included in Patent Rights.  Patent Costs shall also include reasonable out-of-pocket expenses for patentability opinions, inventorship review and determination, preparation and prosecution of patent application, re-examination, re-issue, interference, opposition activities related to patents or applications in Patent Rights plus a [*]% patent service fee for services to be provided by Cornell to LICENSEE relating to patent prosecution.

 

1.12 “Nicotinamide Riboside” shall mean the compound:

ARTICLE 2.                                  GRANTS

 

2.1 License.  Subject to Article 5.1 (“patent costs reimbursement obligations”) and to the limitations set forth in this Agreement Cornell hereby grants to LICENSEE, and LICENSEE hereby accepts, a license under Patent Rights to make and have made, to use and have used, to sell and have sold, to offer for sale, and to import and have imported Licensed Products and to practice Licensed Methods in the Field within the Territory and during the Term.

 

The license granted herein is exclusive for Patent Rights in the Field as defined in 1.3.

 

The license granted herein is nonexclusive for Patent Rights in the field of the Research Market.

 

2.2 Sublicense.

 

(a) The license granted in Paragraph 2.1 includes the right of LICENSEE to grant Sublicense to third parties during the Term but only for as long as the license for Patent Rights is exclusive.

 

(b) With respect to Sublicense granted pursuant to Paragraph 2.2(a), LICENSEE shall:

 

(i) not receive, or agree to receive, anything of value in lieu of cash as consideration from a third party under a Sublicense granted pursuant to Paragraph 2.2(a) without the express written consent of  Cornell;

 

  

-3-

  

 

(ii) to the extent applicable, include all of the rights of and obligations due to Cornell (and, if applicable, the Sponsor’s Rights) and contained in this Agreement;

 

(iii) promptly provide Cornell with a copy of each Sublicense issued and any amendment made to any Sublicense; and

 

(iv) collect and guarantee payment of all payments due, directly or indirectly, to Cornell from Sublicensees and summarize and deliver all reports due, directly or indirectly, to Cornell from Sublicensees.

 

(c) Unless a Sublicense receives written consent from Cornell prior to its issuance by LICENSEE to the Sublicensee and becomes effective, upon termination of this Agreement for any reason, Cornell, at its sole discretion, shall determine whether LICENSEE shall cancel or assign to Cornell said Sublicense.

 

2.3 Reservation of Rights.  Cornell reserves the right to:

 

(a) use the Invention and Patent Rights for educational and research purposes;

 

(b) publish or otherwise disseminate any information about the Invention at any time; and

 

(c) allow other nonprofit institutions to use Invention, and Patent Rights for educational and research purposes.

 

ARTICLE 3.                                  CONSIDERATION

 

3.1 Fees and Royalties.  The parties hereto understand that the fees and royalties payable by LICENSEE to Cornell and the provision of Nicotinamide Riboside to Dr. Anthony Sauve under this Agreement are partial consideration for the license granted herein to LICENSEE under Patent Rights.  LICENSEE shall

 

(a)(i)  pay Cornell a license issue fee of  [*] dollars (US$[*]), within [*] ([*]) days after the Effective Date;

 

(a)(ii)                      upon LICENSEE’s commencement of manufacturing, Dr. Anthony Sauve  upon his written request will be provided with up to [*]grams of Nicotinamide Riboside per year and purified to [*]% purity as determined by nuclear magnetic resonance spectroscopy;

 

(b) pay Cornell license maintenance fees of initially [*] dollars (US$[*]) per year and payable on the Effective Date and annually thereafter on each anniversary according to the following schedule;  provided however, that LICENSEE’s obligation to pay this fee shall end on the date when LICENSEE is commercially selling a Licensed Product;

 

	
Fee payable to Cornell:

	
Date:

	
$ [*]

	
2011 to 2012

	
$ [*]

	
2013 to 2015

	
$ [*]

	
2016 to 2018

	
$ [*]

	
each year thereafter

(c) pay Cornell milestone payments in the amounts payable according to the following schedule or events by Licensee or its customers:

 

	
Amount

	
Date or Event

	
$[*]

	
First sale of Licensed Product as a Cosmetic ingredient

	
$[*]

	
Submission of Notification for New Dietary Ingredient for Licensed Product or GRAS self affirmation

	
$[*]

	
Submission of IND for Licensed Product

	
$[*]

	
Initiation of Phase II Trial of Licensed Product

	
$[*]

	
Initiation of Phase III Trial of Licensed Product

	
$[*]

	
FDA approval of Licensed Product

  

-4-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

(d) pay Cornell an earned royalty of [*] percent ([*]%) on Net Sales of Licensed Products by LICENSEE  and/or its Affiliate(s) for any Licensed Product sold direct to consumers or to consumers through distributors, whether or not it is relabelled;

 

pay Cornell an earned royalty of [*] percent ([*]%) on Net Sales of Licensed Products by LICENSEE  and/or its Affiliate(s) for any Licensed Product sold to other businesses for incorporation into their products;

 

PROVIDED, HOWEVER, that if, during the term hereof, LICENSEE is required to pay royalties to one or more third parties for patent rights necessary to make, use, sell, offer for sale, or import Licensed Products, then LICENSEE may deduct $[*] from the earned royalties payable to Cornell for every $[*] LICENSEE actually pays to said third parties provided however that, in no event will the royalties paid to Cornell under this Section 3.1(d) be less than [*]percent ([*]%) of the amount due under this Section 3.1(d).

 

(e) pay Cornell a percentage of all Sublicense fees received by LICENSEE from its Sublicensees that are not earned royalties according to the following schedule;

 

	
Percentage of Sublicensee fee payable to Cornell

	
Events achieved by LICENSEE prior to issuance of Sublicense by LICENSEE

	
[*]%

	
Prior to submission of Notification for New Dietary

(f) pay Cornell on each and every Sublicense royalty payment received by LICENSEE from its Sublicensees on sales of Licensed Product by Sublicensee, the higher of (i) [*]percent ([*]%) of the royalties received by LICENSEE; or the (ii) royalties based on the royalty rate in Paragraph  3.1(d) as applied to Net Sales of Sublicensee;

 

(g) pay Cornell beginning the calendar year of commercial sales of the first Licensed Product by LICENSEE, its Sublicensee, or an Affiliate and if the total earned royalties paid by LICENSEE under Paragraphs 3.1(d) and (f) to Cornell in any such year cumulatively are less than the amount (“minimum annual royalty”) illustrated below:

 

	
Year of

Commercial Sale

	
Minimum Annual Royalty

	
First

	
$[*]

	
Second

	
$[*]

	
Third and following

	
$[*]

LICENSEE shall pay to Cornell on or before February 28 following the last quarter of such year the difference between amount noted above and the total earned royalty paid by LICENSEE for such year under Paragraphs 3.1(d) and (f); provided, however, that for the year of commercial sales of the first Licensed Product, the amount of minimum annual royalty payable shall be pro-rated for the number of months remaining in that calendar year.

 

All fees and royalty payments specified in Paragraphs 3.1(a) through 3.1(g) above shall be paid by LICENSEE pursuant to Paragraph 4.3 and shall be delivered by LICENSEE to Cornell as noted in Paragraph 10.1.

 

3.2 Patent Costs.  LICENSEE shall reimburse Cornell all past (prior to the Effective Date) and future (on or after the Effective Date) Patent Costs within [*] ([*]) days following the date an itemized invoice is sent from Cornell to LICENSEE.

 

  

-5-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

3.3 Due Diligence.

 

(a) LICENSEE shall:

 

(i) diligently proceed with the development, manufacture and sale of Licensed Products;

 

(ii) Transfer the method of production to a toll manufacturer within twelve months of Effective Date

 

(iii) market Licensed Products in Research Market the United States within [*] of the Effective Date;

 

(iv) submit a  Notification for New Dietary Ingredient covering Licensed Products to the United States FDA or establish GRAS self affirmation within [*] from the Effective Date of this Agreement;

 

(v) Formal launch of a branded ingredient for food and cosmetics that is a Licensed Product within [*] of Effective Date

 

(vi) Commence clinical study of Licensed Product as a dietary supplement within [*] of Effective Date

 

(vii) use its reasonable efforts to fill the market demand for Licensed Products following commencement of marketing on a per-field basis at any time during the term of this Agreement; and

 

(viii) obtain and maintain all necessary governmental approvals for the manufacture, use and sale of Licensed Products.

 

(b) If LICENSEE fails to perform any of its obligations specified in Paragraphs 3.3(a)(i)-(viii), then Cornell shall have the right and option to either terminate this Agreement or change LICENSEE’s exclusive license to a nonexclusive license.  This right, if exercised by Cornell, supersedes the rights granted in Article 2.

 

(c) If at any time during the Term, LICENSEE has not begun a genuine product or business development program for at least one Licensed Product for any specific use within the licensed Field or Territory that does not directly compete with the Licensed Product LICENSEE is actively developing and LICENSEE refuses to initiate any program to address the specific use at the request of Cornell, Cornell may then exclude said specific use from the licensed Field of LICENSEE and license such rights to one or more third parties.

 

(d) If at any time during the Term, LICENSEE has not begun a genuine product or business development program for at least one Licensed Product for any specific use within the licensed Field or Territory and Cornell receives one ore more earnest offers to license Patent Rights for said specific use, Cornell shall refer such offers to LICENSE.  If LICENSEE fails to grant Sublicenses to satisfy the market demand for said specific use, Cornell may then exclude said specific use from the licensed Field and license such rights to one or more third parties.

 

  

-6-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

ARTICLE 4.                                  REPORTS, RECORDS AND PAYMENTS

 

4.1 Reports.

 

(a) Development Reports.  Beginning [*] after Effective Date and ending on the date of first commercial sale of a Licensed Product in the United States, LICENSEE shall report to Cornell progress covering LICENSEE’s (and Affiliate’s and Sublicensee’s) activities and efforts in the development of rights granted to LICENSEE under this Agreement for the preceding [*].  The report shall include, but not be limited to, activities and efforts to develop and test all Licensed Products and obtain governmental approvals necessary for marketing the same.  Such [*] reports shall be due within [*] days of the reporting period and shall use the form as provided herein as Appendix A.

 

(b) Commercialization Reports.  After the first commercial sale of a Licensed Product anywhere in the world, LICENSEE shall submit to Cornell [*] reports on or before each [*] of each year.  Each report shall cover LICENSEE’s (and each Affiliate’s and Sublicensee’s) most recently completed calendar quarter and shall show:

 

(i) the gross sales and Net Sales (as defined in Paragraph 1.11) during the most recently completed calendar quarter and the royalties, in US dollars, payable with respect thereto;

 

(ii) the number of each type of Licensed Product sold;

 

(iii) Sublicense fees and royalties received during the most recently completed calendar quarter in US dollars, payable with respect thereto;

 

(iv) the method used to calculate the royalties;

 

(v) the exchange rates used;

 

(vi) relevant business and corporate development efforts relating to the rights granted in this Agreement.

 

LICENSEE shall provide the above information using the form as shown in Appendix B and include information on the date of the first commercial sale of each additional Licensed Product or in each additional country.

 

If no sales of Licensed Products have been made and no Sublicense revenue has been received by LICENSEE during any reporting period, LICENSEE shall so report.

 

4.2 Records & Audits.

 

(a) LICENSEE shall keep, and shall require its Affiliates and Sublicensees to keep, accurate and correct records of all Licensed Products manufactured, used, and sold, and Sublicense fees received under this Agreement.  Such records shall be retained by LICENSEE for at least [*] ([*]) years following a given reporting period.

 

  

-7-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

(b) All records shall be available during normal business hours for inspection at the expense of Cornell by Cornell’s Internal Audit Department or by a Certified Public Accountant selected by Cornell and in compliance with the other terms of this Agreement for the sole purpose of verifying reports and payments or other compliance issues.  Such inspector shall not disclose to Cornell any information other than information relating to the accuracy of reports and payments made under this Agreement or other compliance issues.  In the event that any such inspection shows an under reporting and underpayment in excess of [*]percent ([*]%) for any twelve-month (12-month) period, then LICENSEE shall pay the cost of the audit as well as any additional sum that would have been payable to Cornell had the LICENSEE reported correctly, plus an interest charge at a rate of [*] percent ([*]%) per year.  Such interest shall be calculated from the date the correct payment was due to Cornell up to the date when such payment is actually made by LICENSEE.  For underpayment not in excess of [*] percent ([*]%) for any twelve-month (12-month) period, LICENSEE shall pay the difference within [*] ([*]) days without interest charge or inspection cost.

 

4.3 Payments.

 

(a) All fees, reimbursements and royalties due Cornell shall be paid in United States dollars and all checks shall be made payable to “Cornell University”, referencing Cornell’s taxpayer identification number, [*], and sent to Cornell according to Paragraph 10.1 (Correspondence).  When Licensed Products are sold in currencies other than United States dollars, LICENSEE shall first determine the earned royalty in the currency of the country in which Licensed Products were sold and then convert the amount into equivalent United States funds, using the exchange rate quoted in the Wall Street Journal on the last business day of the applicable reporting period.

 

(b) Royalty Payments.

 

(i) Royalties shall accrue when Licensed Products are invoiced, or if not invoiced, when delivered to a third party or Affiliate.

 

(ii) LICENSEE shall pay earned royalties [*] each calendar year.  Each such payment shall be for earned royalties accrued within LICENSEE’s most recently completed [*].

 

(iii) Royalties earned on sales occurring or under Sublicense granted pursuant to this Agreement in any country outside the United States shall not be reduced by LICENSEE for any taxes, fees, or other charges imposed by the government of such country on the payment of royalty income, except that all payments made by LICENSEE in fulfillment of Cornell’s tax liability in any particular country may be credited against earned royalties or fees due Cornell for that country.  LICENSEE shall pay all bank charges resulting from the transfer of such royalty payments.

 

(iv) If at any time legal restrictions prevent the prompt remittance of part or all royalties by LICENSEE with respect to any country where a Licensed Product is sold or a Sublicense is granted pursuant to this Agreement, LICENSEE shall convert the amount owed to Cornell into US currency and shall pay Cornell directly from its US sources of fund for as long as the legal restrictions apply.

 

(v) In the event that any patent or patent claim within Patent Rights is held invalid in a final decision by a patent office from which no appeal or additional patent prosecution has been or can be taken, or by a court of competent jurisdiction and last resort and from which no appeal has or can be taken, all obligation to pay royalties based solely on that patent or claim or any claim patentably indistinct therefrom shall cease as of the date of such final decision.  LICENSEE shall not, however, be relieved from paying any royalties that accrued before the date of such final decision, that are based on another patent or claim not involved in such final decision.

 

  

-8-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

(c) Late Payments.  In the event royalty, reimbursement and/or fee payments are not received by Cornell when due, LICENSEE shall pay to Cornell interest charges at a rate of [*]percent ([*]%) per year.  Such interest shall be calculated from the date payment was due until actually received by Cornell.

 

ARTICLE 5.                                  PATENT MATTERS

 

5.1 Patent Prosecution and Maintenance.

 

(a) Provided that LICENSEE has reimbursed Cornell for Patent Costs pursuant to Paragraph 3.2, Cornell shall diligently prosecute and maintain the United States and, if available, foreign patents, and applications in Patent Rights using counsel of its choice.  Cornell shall provide LICENSEE with copies of all relevant documentation relating to such prosecution and LICENSEE shall keep this documentation confidential.  The counsel shall take instructions only from Cornell, and all patents and patent applications in Patent Rights shall be assigned solely to CRF or Cornell.

 

(b) Cornell shall consider amending any patent application in Patent Rights to include claims reasonably requested by LICENSEE to protect the products contemplated to be sold as Licensed Products by LICENSEE under this Agreement.

 

(c) LICENSEE may elect to terminate its reimbursement obligations with respect to any patent application or patent in Patent Rights upon [*] months’ written notice to Cornell.  Cornell shall use reasonable efforts to curtail further Patent Costs for such application or patent when such notice of termination is received from LICENSEE.  Cornell, in its sole discretion and at its sole expense, may continue prosecution and maintenance of said application or patent, and LICENSEE shall have no further license with respect thereto.  Non-payment of any portion of Patent Costs with respect to any application or patent may be deemed by Cornell as an election by LICENSEE to terminate its reimbursement obligations with respect to such application or patent.  Cornell is not obligated to file, prosecute, or maintain Patent Rights outside of the territory at any time or to file, prosecute, or maintain Patent Rights to which Licensee has terminated its License hereunder.

 

5.2 Patent Infringement.

 

(a) In the event that Cornell (to the extent of the actual knowledge of the licensing professional responsible for the administration of this Agreement) or LICENSEE learns of infringement of potential commercial significance of any patent licensed under this Agreement, the knowledgeable party will provide the other (i) with written notice of such infringement and (ii) with any evidence of such infringement available to it (the “Infringement Notice”).  During the period in which, and in the jurisdiction where, LICENSEE has exclusive rights under this Agreement, neither Cornell nor LICENSEE will notify a third party (including the infringer) of infringement or put such third party on notice of the existence of any Patent Rights without first obtaining consent of the other which consent shall not be un-reasonably withheld.  Cornell shall have the right to terminate this Agreement immediately without the obligation to provide [*] days’ notice as set forth in Paragraph 7.1 if LICENSEE notifies a third party of infringement or puts such third party on notice of the existence of any Patent Rights with respect to such infringement without first obtaining the written consent of Cornell.  Both Cornell and LICENSEE will use their diligent efforts to cooperate with each other to terminate such infringement without litigation.

 

  

-9-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

(b) If infringing activity of potential commercial significance by the infringer has not been abated within [*] days following the date the Infringement Notice takes effect, LICENSEE may institute suit for patent infringement against the infringer.  CRF and/or Cornell may voluntarily join such suit at its own expense, but may not thereafter commence suit against the infringer for the acts of infringement that are the subject of LICENSEE’s suit or any judgment rendered in that suit.  LICENSEE may not join CRF or Cornell in a suit initiated by LICENSEE without Cornell’s prior written consent.  If, in a suit initiated by LICENSEE, CRF or Cornell is involuntarily joined other than by LICENSEE, LICENSEE will pay any costs incurred by CRF or Cornell arising out of such suit, including but not limited to, any legal fees of counsel that CRF or Cornell selects and retains to represent it in the suit.

 

(c) If, within [*] ([*]) days following the date the Infringement Notice takes effect, infringing activity of potential commercial significance by the infringer has not been abated and if LICENSEE has not brought suit against the infringer, CRF or Cornell may institute suit for patent infringement against the infringer.  If CRF or Cornell institutes such suit, LICENSEE may not join such suit without CRF’s  or Cornell’s consent and may not thereafter commence suit against the infringer for the acts of infringement that are the subject of CRF’s or Cornell’s suit or any judgment rendered in that suit.

 

(d) Any recovery or settlement received in connection with any suit will first be shared by Cornell or CRF and LICENSEE equally to cover the litigation costs each incurred, and next shall be paid to CRF, Cornell or LICENSEE to cover any litigation costs it incurred in excess of the litigation costs of the other, provided that any amounts reimbursed to Cornell or CRF by LICENSEE pursuant to Section 5.2(b) above shall be deducted from amounts shared hereunder.  In any suit initiated by LICENSEE, any recovery in excess of litigation costs will be shared between LICENSEE and Cornell as follows:  (i) Cornell will receive [*] percent ([*]%) of the recovery if CRF or Cornell was not a party in the litigation and did not incur any litigation costs; (ii) Cornell will receive [*] percent ([*]%) of the recovery if CRF or Cornell was a party in the litigation, but did not incur any litigation costs, including the provisions of Paragraph 5.2(b) above, or (iii) Cornell will receive [*] percent ([*]%) of the recovery if CRF  or Cornell incurred any litigation costs in connection with the litigation.  In any suit initiated by CRF or Cornell, any recovery in excess of litigation costs will be shared between LICENSEE and Cornell or CRF as follows:  (i) LICENSEE will receive [*]percent ([*]%) of the recovery if LICENSEE was not a party in the litigation and did not incur any litigation costs; (ii) LICENSEE will receive [*] percent ([*]%) of the recovery if LICENSEE was a party in the litigation, but did not incur any litigation costs, or (iii) LICENSEE will receive [*] percent ([*]%) of the recovery if LICENSEE incurred any litigation costs in connection with the litigation.  CRF, Cornell and LICENSEE agree to be bound by all determinations of patent infringement, validity, and enforceability (but no other issue) resolved by any adjudicated judgment in a suit brought in compliance with this Section 5.2.

 

(e) Any agreement made by LICENSEE for purposes of settling litigation or other dispute shall comply with the requirements of Section 2.2 (Sublicenses) of this Agreement.

 

(f) Each party will cooperate with the other in litigation proceedings instituted hereunder but at the expense of the party who initiated the suit (unless such suit is being jointly prosecuted by the parties).

 

(g) Any litigation proceedings will be controlled by the party bringing the suit, except that CRF and Cornell may be represented by counsel of its choice in any suit brought by LICENSEE.

 

5.3 Patent Marking.  LICENSEE shall mark all Licensed Products made, used or sold under the terms of this Agreement, or their containers, in accordance with the applicable patent marking laws.

 

  

-10-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

ARTICLE 6.                                  GOVERNMENTAL MATTERS

 

6.1 Governmental Approval or Registration.  If this Agreement or any associated transaction is required by the law of any nation to be either approved or registered with any governmental agency, LICENSEE shall assume all legal obligations to do so.  LICENSEE shall notify Cornell if it becomes aware that this Agreement is subject to a United States or foreign government reporting or approval requirement.  LICENSEE shall make all necessary filings and pay all costs including fees, penalties, and all other out-of-pocket costs associated with such reporting or approval process.

 

6.2 Export Control Laws.  LICENSEE shall observe all applicable United States and foreign laws with respect to the transfer of Licensed Products and related technical data to foreign countries, including, without limitation, the International Traffic in Arms Regulations and the Export Administration Regulations.

 

ARTICLE 7.                                  TERMINATION OF THE AGREEMENT

 

7.1 Termination by Cornell.

 

(a) If LICENSEE fails to perform or violates any term of this Agreement, then Cornell may give written notice of default (“Notice of Default”) to LICENSEE.  If LICENSEE fails to cure the default within [*] ([*]) days of the Notice of Default, Cornell may terminate this Agreement and the license granted herein by a second written notice (“Notice of Termination”) to LICENSEE.  If a Notice of Termination is sent to LICENSEE, this Agreement shall automatically terminate on the effective date of that notice.  Termination shall not relieve LICENSEE of its obligation to pay any fees owed at the time of termination and shall not impair any accrued right of Cornell.

 

(b) This Agreement will terminate immediately, without the obligation to provide written notices as set forth in Paragraph 7.1(a), if LICENSEE files a claim including in any way the assertion that any portion of CRF’s or Cornell’s Patent Rights is invalid or unenforceable where the filing is by the LICENSEE, a third party on behalf of the LICENSEE, or a third party at the written urging of the LICENSEE.

 

7.2 Termination by LICENSEE.

 

(a) LICENSEE shall have the right at any time and for any reason to terminate this Agreement upon a [*] ([*])-day written notice to Cornell.  Said notice shall state LICENSEE’s reason for terminating this Agreement.

 

(b) Any termination under Paragraph 7.2(a) shall not relieve LICENSEE of any obligation or liability accrued under this Agreement prior to termination or rescind any payment made to Cornell or action by LICENSEE prior to the time termination becomes effective.  Termination shall not affect in any manner any rights of Cornell or CRF arising under this Agreement prior to termination.

 

7.3 Survival on Termination.  The following Paragraphs and Articles shall survive the termination of this Agreement:

 

(a) Article 4 (REPORTS, RECORDS AND PAYMENTS);

 

(b) Paragraph 7.4 (Disposition of Licensed Products on Hand);

 

(c) Paragraph 8.2 (Indemnification);

 

(d) Article 9 (USE OF NAMES AND TRADEMARKS);

 

(e) Paragraph 10.2 hereof (Secrecy); and

 

  

-11-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

(f) Paragraph 10.5 (Failure to Perform).

 

7.4 Disposition of Licensed Products on Hand.  Upon termination of this Agreement, LICENSEE may dispose of all previously made or partially made Licensed Product within a period of [*] days of the effective date of such termination provided that the sale of such Licensed Product by LICENSEE, its Sublicensees, or Affiliates shall be subject to the terms of this Agreement, including but not limited to the rendering of reports and payment of royalties required under this Agreement.

 

7.5 Grant Back to Cornell.  To the extent that LICENSEE owns or controls (now or in the future) any patent rights that blocks, interferes with or otherwise prevents Cornell from making or having made, using or having used, selling and having sold, offering for sale or importing or having imported Licensed Products or licensing to others such rights (“Blocking Rights”), then LICENSEE hereby grants or will cause to be granted a nonexclusive, worldwide, perpetual, royalty-free license to make and have made, use and have used, sell and offer for sale, import and have imported products that are claimed in the Blocking Rights, with the right to grant sublicenses to third parties, provided that such products are also Licensed Products and are licensed or exercised by Cornell together with the Patent Rights.

 

ARTICLE 8.                                  LIMITED WARRANTY AND INDEMNIFICATION

 

8.1 Limited Warranty.

 

(a) Cornell warrants that it has the lawful right to grant this license.

 

(b) The license granted herein is provided “AS IS” and without WARRANTY OF MERCHANTABILITY or WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE or any other warranty, express or implied.  Cornell makes no representation or warranty that the Licensed Product, Licensed Method or the use of Patent Rights will not infringe any other patent or other proprietary rights.

 

(c) In no event shall Cornell or CRF be liable for any incidental, special or consequential damages resulting from exercise of the license granted herein or the use of the Invention, Licensed Product, Licensed Method.

 

(d) Nothing in this Agreement shall be construed as:

 

(i) a warranty or representation by Cornell or CRF as to the validity or scope of any Patent Rights;

 

(ii) a warranty or representation that anything made, used, sold or otherwise disposed of under any license granted in this Agreement is or shall be free from infringement of patents of third parties;

 

(iii) an obligation to bring or prosecute actions or suits against third parties for patent infringement except as provided in Paragraph 5.2 hereof;

 

(iv) conferring by implication, estoppel or otherwise any license or rights under any patents of CRF or Cornell other than Patent Rights as defined in this Agreement, regardless of whether those patents are dominant or subordinate to Patent Rights; or

 

(v) an obligation to furnish any know-how not provided in Patent Rights.

 

  

-12-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

8.2 Indemnification.

 

(a) LICENSEE shall indemnify, hold harmless and defend CRF, Cornell, its officers, employees, and agents; the sponsors of the research that led to the Invention; and the Inventors of the patents and patent applications in Patent Rights and their employers against any and all claims, suits, losses, damage, costs, fees, and expenses resulting from or arising out of exercise of this license or any Sublicense.  This indemnification shall include, but not be limited to, any product liability.

 

(b) LICENSEE, at its sole cost and expense, shall insure its activities in connection with the work under this Agreement and obtain, keep in force and maintain insurance or an equivalent program of self insurance as follows:

 

(i) comprehensive or commercial general liability insurance (contractual liability included) with limits of at least:  (A) each occurrence, [*] dollars (US$[*]); (B) products/completed operations aggregate, [*] dollars (US$[*]); (C) personal injury, [*] dollars (US$[*]); and (D) general aggregate (commercial form only), [*] dollars (US$[*]); and

 

(ii) the coverage and limits referred to above shall not in any way limit the liability of LICENSEE.

 

(c) LICENSEE shall, within [*] ([*]) days of Effective Date, furnish Cornell with certificates of insurance showing compliance with all requirements.  Such certificates shall:  (i) provide for [*] ([*]) day advance written notice to Cornell of any modification; (ii) indicate that Cornell has been endorsed as an additionally insured party under the coverage referred to above; and (iii) include a provision that the coverage shall be primary and shall not participate with nor shall be excess over any valid and collectable insurance or program of self-insurance carried or maintained by Cornell.

 

(d) Cornell shall notify LICENSEE in writing of any claim or suit brought against CRF or Cornell in respect of which Cornell intends to invoke the provisions of this Article.  LICENSEE shall keep Cornell informed on a current basis of its defense of any claims under this Article.

 

ARTICLE 9.                                  USE OF NAMES AND TRADEMARKS

 

9.1 Nothing contained in this Agreement confers any right to use in advertising, publicity, or other promotional activities any name, trade name, trademark, or other designation of either party hereto (including contraction, abbreviation or simulation of any of the foregoing).  Unless required by law, the use by LICENSEE of the name, “Cornell University”, the names of Cornell’s various units, centers, schools, and faculty, and the name, “Cornell Research Foundation”, is prohibited, without the express written consent of Cornell.

 

9.2 Cornell may disclose to the Inventors the terms and conditions of this Agreement upon their request.  If such disclosure is made, Cornell shall request the Inventors not disclose such terms and conditions to others.

 

9.3 Cornell may acknowledge the existence of this Agreement and the extent of the grant in Article 2 to third parties, but Cornell shall not disclose the financial terms of this Agreement to third parties, except where CRF or Cornell is required by law or the order of a court of competent jurisdiction to do so.

 

9.4 LICENSEE may acknowledge or make press releases regarding the existence of this Agreement and the extent of the grant in Article 2 but LICENSEE shall not disclose the financial terms of this Agreement except where LICENSEE is required by law or the order of a court of competent jurisdiction to do so.  To the extent LICENSEE makes any forward-looking statement in its press releases, LICENSEE shall receive prior consent of Cornell which shall not be unreasonably withheld.

 

  

-13-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

ARTICLE 10.                                  MISCELLANEOUS PROVISIONS

 

10.1 Correspondence.  Any notice, invoice or payment required to be given to either party under this Agreement shall be deemed to have been properly given and effective:

 

(a) on the date of delivery if delivered in person;

 

(b) on the date of successful transmission if sent by facsimile,

 

(c) one (1) day after the successful transmission in pdf file format if sent by electronic mail using the Internet; or

 

(d) five (5) days after mailing if mailed by first-class or certified mail, postage paid, to the respective addresses given below, or to such other address as is designated by written notice given to the other party.

 

If sent to LICENSEE:

 

Reports and Notices Contact:

ChromaDex Corporation

10005 Muirlands Blvd

Suite G, First Floor

Irvine, CA  92618

Ph:  949-419-0288

Fax:  949-419-0294

Attention:  Tom Varvaro

EMAIL:tom.varvaro@Chromadex.com

 

Accounts Payable Contact:

 

ChromaDex Corporation

10005 Muirlands Blvd

Suite G, First Floor

Irvine, CA  92618

Ph:  949-419-0288

Fax:  949-419-0294

Attention:  Accounts Payable

 

Intellectual Property Contact

 

ChromaDex Corporation

10005 Muirlands Blvd

Suite G, First Floor

Irvine, CA  92618

Ph:  949-419-0288

Fax:  949-419-0294

Attention:  Tom Varvaro

EMAIL: tom.varvaro@Chromadex.com

 

  

-14-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

If sent to Cornell:

 

For all correspondence except payments –

 

Cornell Center for Technology Enterprise and Commercialization

Attention:  Executive Director

395 Pine Tree Road, Suite 310

Ithaca, NY 14850

FAX:   607-254-5454

TEL:   607-254-5236

EMAIL:  cctec-contracts@cornell.edu

 

For all payments –

 

If sent by mail:

 

Cornell Center for Technology Enterprise and Commercialization

PO Box 6899

Ithaca, NY 14850-6899

 

If remitted by electronic payments via ACH or Fed Wire:

 

Receiving bank name:     [*]

Bank account no.:            [*]

Bank routing (ABA) no.: [*]

SWIFT code:                    [*]

Bank account name:        [*]

ACH format code:           Not required

Bank address:                   [*]

Additional information:[*]

                                          Agreement No.:  <to be filled in>

                                          Department contact:  [*]

 

A FAX copy of the transaction receipt shall be sent to Associate Director for Finance and Operations at: [*].  LICENSEE is responsible for all bank charges of wire transfer of funds for payments.  The bank charges shall not be deducted from total amount due to Cornell.

 

10.2 Secrecy.

 

(a) “Confidential Information” shall mean information relating to the Invention and disclosed by Cornell to LICENSEE during the term of this Agreement, which if disclosed in writing shall be marked “Confidential”, or if first disclosed otherwise, shall within [*] ([*]) days of such disclosure be reduced to writing by Cornell and sent to LICENSEE:

 

(b) Licensee shall:

 

(i) use the Confidential Information for the sole purpose of performing under the terms of this Agreement;

 

(ii) safeguard Confidential Information against disclosure to others with the same degree of care as it exercises with its own data of a similar nature;

 

  

-15-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

(iii) not disclose Confidential Information to others (except to its employees, agents or consultants who are bound to LICENSEE by a like obligation of confidentiality) without the express written permission of Cornell, except that LICENSEE shall not be prevented from using or disclosing any of the Confidential Information that:

 

	
(A)  

	
LICENSEE can demonstrate by written records was previously known to it;

 

	
(B)  

	
is now, or becomes in the future, public knowledge other than through acts or omissions of LICENSEE;

 

	
(C)  

	
is lawfully obtained by LICENSEE from sources independent of Cornell; or

 

	
(D)  

	
is required to be disclosed by law or a court of competent jurisdiction; and

 

(c) The secrecy obligations of LICENSEE with respect to Confidential Information shall continue for a period ending [*] ([*]) years from the termination date of this Agreement.

 

10.3 Assignability.  This Agreement may be assigned by Cornell, but is personal to LICENSEE and assignable by LICENSEE only with the written consent of Cornell.

 

10.4 No Waiver.  No waiver by either party of any breach or default of any covenant or agreement set forth in this Agreement shall be deemed a waiver as to any subsequent and/or similar breach or default.

 

10.5 Failure to Perform.  In the event of a failure of performance due under this Agreement and if it becomes necessary for either party to undertake legal action against the other on account thereof, then the prevailing party shall be entitled to reasonable attorney’s fees in addition to costs and necessary disbursements.

 

10.6 Governing Laws.  THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, but the scope and validity of any patent or patent application shall be governed by the applicable laws of the country of the patent or patent application.

 

10.7 Force Majeure.  A party to this Agreement may be excused from any performance required herein if such performance is rendered impossible or unfeasible due to any catastrophe or other major event beyond its reasonable control, including, without limitation, war, riot, and insurrection; laws, proclamations, edicts, ordinances, or regulations; strikes, lockouts, or other serious labor disputes; and floods, fires, explosions, or other natural disasters.  When such events have abated, the non-performing party’s obligations herein shall resume.

 

10.8 Headings.  The headings of the several sections are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

 

10.9 Entire Agreement.  This Agreement embodies the entire understanding of the parties and supersedes all previous communications, representations or understandings, either oral or written, between the parties relating to the subject matter hereof.

 

10.10 Amendments.  No amendment or modification of this Agreement shall be valid or binding on the parties unless made in writing and signed on behalf of each party.

 

10.11 Severability.  In the event that any of the provisions contained in this Agreement is held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if the invalid, illegal, or unenforceable provisions had never been contained in it.

 

  

-16-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

IN WITNESS WHEREOF, both Cornell and LICENSEE have executed this Agreement, in duplicate originals, by their respective and duly authorized officers on the day and year written.

 

	  	  	  
	
CHROMADEX CORPORATION:

 

	  	
CORNELL UNIVERSITY:

 

	
By: /s/ William Spengler

	  	
By: /s/ Brian Kelly

	
      (Signature of an authorized officer)

 

	  	
      (Signature of an authorized officer)

 

	
Name: William Spengler

 

	  	
Name: Brian Kelly

 

	
Title: President

 

	  	

Title: Director Technology Commercialization and Liason

	 	  	  
	
Date: 7/12/2011

 

 

 

	  	
Date: July 12, 2011

 

	
ATTEST:

	  	
ATTEST:

 

	
By: /s/ Frank Jaksch

	  	
By: /s/ Carol J. Dempster

	
      (Signature of a witness)

 

	  	
      (Signature of a witness)

 

	
Name: Frank Jaksch

 

	  	
Name: Carol J. Dempster

 

	
Date: 7/12/2011

 

	  	
Date: July 12, 2011

 

 

 

 

  

-17-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

Appendix A - DEVELOPMENT REPORT

 

	
Company Name

 

	
CCTEC Agreement No

	
Your Reference No

	
Reporting Period  ( mm / dd / yyyy )

 

From  ___/ ___/___    Through  ___/ ___/___  

	
EXPECTED or ACTUAL ( mm / dd / yyyy )

Date of first sale of

Licensed Product(s)  ___/ ___/___  

 

	
Please Check One

 

Your Company Has:  [  ]  less than 500 employees worldwide      [  ] 500 or more employees worldwide

For the reporting period prescribed in the agreement, please provide detailed answers to the questions listed below.  Please attach a separate report to this sheet if necessary.

	
1. Summary of work completed during the reporting period

	
  

 

 

 

	
2. Summary of work in progress

	
  

 

 

 

  

-18-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

	
3. Current schedule of anticipated events or milestones, e.g. First round of financing, Phase 1 Clinical trials, etc.

	
  

 

 

 

	
4. Market plans for Introduction of Licensed Product(s)

	
  

 

 

 

	
5. Summary of resources (dollar value) spent in the reporting period.

	
  

 

 

 

 

	
6.  Pipeline for  Licensed Products

	
Product Name

	  	
Developmental Stage

	  
	
Product Name

	  	
Developmental Stage

	  
	
Product Name

	  	
Developmental Stage

	  
	
Product Name

	  	
Developmental Stage

	  

  

-19-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

	
Report Prepared & Approved By

	
Name  ( Please Print )

 

 

	
Title

	
Email

 

 

 

 

	
Signature

 

 

	
Date ( mm / dd / yyyy )

             

            ___/ ___/___  

 

 

  

-20-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

Appendix B – Commercialization Report

 

	
Company Name

	
CCTEC Agreement No

	
Your Reference No

	
 

Reporting Period  ( mm / dd / yyyy )

From  ___/ ___/___    Through  ___/ ___/___  

	
EXPECTED or ACTUAL ( mm / dd / yyyy )

Date of first sale of

Licensed Product(s)  ___/ ___/___  

 

 

	
Please list all trade names for product(s) incorporating licensed rights whether or not you had sales during this reporting period.

 

 

 

	
CCTEC Docket #

	
Country

	
Number of Units Sold

	
Gross Sales by Country

	
Net Sales by Country*

( A )

	
Royalty Rate*

( B )

	
Total Royalties by Country

( A * B )

	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	
 

* Please refer to the license agreement for:

· applicable royalty rate, please provide as decimal;

· how Net Sales should be calculated;

· applicable share of sublicense fees;

· application of minimum royalty rate

· If sales were in a currency other than United States Dollars, please specify exchange rate used

 

	
Royalty Subtotal

	  
	
Minimum Royalty Payment*

	  
	
Total Royalty Owed

	  
	
Total Sublicense Fees*

(if applicable)

	  
	
Total Payment

 

	  

 

 

  

-21-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

	
Sublicense Activity (if applicable)

	
Number of sublicenses granted during the reporting period

	  	  	
Number of sublicenses terminated or expired during the reporting period

	  
	
Granted Sub-Licensee Company Name(s) (please list below)

	  	
Terminated Sub-Licensee Company Name(s) (please list below)

	
  

 

	  	  
	
  

 

	  	  
	
  

 

	  	  
	
  

 

	  	  
	
  

 

	  	  
	
Total Number of active sublicenses during reporting period

	  	  

	
Other Licensed Products in the pipeline

	
Product Name

	
  

 

	
Developmental Stage

	  
	
Product Name

	
  

 

	
Developmental Stage

	  
	
Product Name

	
  

 

	
Developmental Stage

	  
	
Product Name

	
  

 

	
Developmental Stage

	  

	
Are Licensed Product(s) Manufactured in the US?   Yes    No

	
If No, please list countries where Licensed Product(s) is manufactured

	
Product Name

	
  

 

	
Countries

	  
	
Product Name

	
  

 

	
Countries

	  
	
Product Name

	
  

 

	
Countries

	  
	
Product Name

	
  

 

	
Countries

	  

  

-22-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

	
Report Prepared & Approved By

	
Name  ( Please Print )

	
Title

	
Email

 

	
Signature

	
Date ( mm / dd / yyyy )

 

             ___/ ___/___  

 

  

-23-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

Appendix C – Patents and Applications

 

	
Cornell Reference

	
Country of Filing

	
Application No

	
3787-02-US

	
United States

	
11/601,714

	
3787-04-CN

	
China

	
200680051368.4

	
3787-05-EP

	
Europe

	
6837837

	
3787-06-IN

	
India

	
4525/DELNP/2008

300991687.2

-23-ex10-2.htm

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

Exhibit 10.2

EXCLUSIVE LICENSE AGREEMENT

 

between

 

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

 

and

 

CHROMADEX INC.,

 

for

 

Method for Inducing UDP-Glucuronosyltransferase Activity Using Pterostilbene

 

UC Case No. 2011-432

 

  

  

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

TABLE OF CONTENTS

 

	
1.

	
DEFINITIONS

	
2

	
2.

	
GRANT

	
6

	
3.

	
SUBLICENSES

	
8

	
4.

	
PAYMENT TERMS

	
8

	
5.

	
LICENSE ISSUE FEE

	
10

	
6.

	
LICENSE MAINTENANCE FEE

	
10

	
7.

	
PAYMENTS ON SUBLICENSES

	
10

	
8.

	
ROYALTIES AND MINIMUM ANNUAL ROYALTIES

	
10

	
9.

	
MILESTONE PAYMENTS

	
11

	
10.

	
DUE DILIGENCE

	
11

	
11.

	
PROGRESS AND ROYALTY REPORTS

	
12

	
12.

	
BOOKS AND RECORDS

	
14

	
13.

	
LIFE OF THE AGREEMENT

	
14

	
14.

	
TERMINATION BY THE REGENTS

	
15

	
15.

	
TERMINATION BY LICENSEE

	
15

	
16.

	
USE OF NAMES AND TRADEMARKS

	
16

	
17.

	
LIMITED WARRANTY

	
16

	
18.

	
LIMITATION OF LIABILITY

	
17

	
19.

	
PATENT PROSECUTION AND MAINTENANCE

	
17

	
20.

	
PATENT MARKING

	
18

	
21.

	
PATENT INFRINGEMENT

	
19

	
22.

	
INDEMNIFICATION

	
20

	
23.

	
NOTICES

	
21

	
24.

	
ASSIGNABILITY

	
22

	
25.

	
WAIVER

	
22

	
26.

	
FORCE MAJEURE

	
22

	
27.

	
GOVERNING LAWS; VENUE; ATTORNEYS’ FEES

	
23

	
28.

	
GOVERNMENT APPROVAL OR REGISTRATION

	
23

	
29.

	
COMPLIANCE WITH LAWS

	
23

	
30.

	
CONFIDENTIALITY

	
23

	
31.

	
MISCELLANEOUS

	
25

 

  

-i-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

UC Case No. 2011-432

 

EXCLUSIVE LICENSE AGREEMENT

for

Method for Inducing UDP-Glucuronosyltransferase Activity Using Pterostilbene

 

This license agreement (“Agreement”) is made effective this 8th day of September, 2011 (“Effective Date”), by and between The Regents of the University of California, a California corporation, having its statewide administrative offices at 1111 Franklin Street, 12th Floor, Oakland, California 94607-5200 (-The Regents”) and ChromaDex Inc., a California corporation, having a principal place of business at 10005 Muirlands, Blvd, Suite G, Irvine, CA 92618, USA (“Licensee”).

 

BACKGROUND

 

A.           Certain inventions, generally characterized as Method for Inducing UDP¬Glucuronosyltransferase Activity Using Pterostilbene (collectively “Invention”), were made jointly by Dr.  Jeremy Bartos, ChromaDex and in the course of research at the University of California, Irvine, by Drs.  Frank Meyskens and Ryan Dellinger and are claimed in Patent Rights as defined below.

 

B.           The development of the Invention may have been sponsored by the Department of Health and Human Services and, if so, as a consequence, this license is subject to overriding obligations to the United States Federal Government under 35 U.S.C. §§ 200-212 and applicable regulations including a non-exclusive, non-transferable, irrevocable, paid-up license to practice or have practiced the Invention for or on behalf of the United States Government throughout the world.  Upon request by the Licensee, The Regents shall conduct reasonable investigations to determine whether the development of the Invention was sponsored by the Department of Health and Human Services.

 

C.           The Licensee wishes to obtain certain rights from The Regents for the commercial development of the Invention, in accordance with the terms and conditions set forth herein and The Regents is willing to grant those rights so that the Invention may be developed and the benefits enjoyed by the general public.

 

D.           The scope of such rights granted by The Regents is intended to extend to the scope of the patents and patent applications in Patent Rights, but only to the extent that The Regents has proprietary rights in and to such Patent Rights.

 

E.           The Licensee is a “small business firm” as defined in 15 U.S.C. §632.

 

F.           Both parties recognize and agree that Earned Royalties are due under this Agreement with respect to products and methods and that such royalties will be paid with respect to both pending patent applications and issued patents, in accordance with the terms and conditions set forth herein.

 

  

-1-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

The parties agree as follows:

 

 

	
1.  

	
DEFINITIONS

 

As used in this Agreement, the following terms, whether used in the singular or plural, shall have the following meanings:

 

1.1 “Affiliate” of the Licensee means any entity which, directly or indirectly, Controls the Licensee, is Controlled by the Licensee or is under common Control with the Licensee.  “Control” means (i) having the actual, present capacity to elect a majority of the directors of such affiliate; (ii) having the power to direct at least fifty percent (50%) of the voting rights entitled to elect directors; or (iii) in any country where the local law will not permit foreign equity participation of a majority, ownership or control, directly or indirectly, of the maximum percentage of such outstanding stock or voting rights permitted by local law.

 

1.2 “Attributed Income” means the total gross proceeds, excluding Sublicensee Royalties, but including, without limitation, any license fees, maintenance fees, or milestone payments (other than milestone payments paid for the achievement of the milestones in Article 9 hereof), whether consisting of cash or any other forms of consideration and whether any rights other than Patent Rights are granted, which gross proceeds are received by or payable to the Licensee or an Affiliate of the Licensee from any Sublicensee in consideration of the grant of a sublicense under the Patent Rights; provided, however, that if rights other than Patent Rights are granted by Licensee or an Affiliate to a Sublicensee, then Attributed Income shall not include proceeds received by Licensee or an Affiliate that are reasonably attributed to such other rights.  Notwithstanding the foregoing, Attributed Income shall not include proceeds attributed in such sublicense to bona fide (i) debt financing; (ii) equity (and conditional equity, such as warrants, convertible debt and the like) investments in the Licensee at market value; (iii) reimbursements of Patent Prosecution Costs actually incurred by the Licensee; (iv) payments or reimbursements specifically committed to research and/or development services to be provided on a going forward basis by Licensee for the applicable Sublicensee under such sublicense at or below commercially reasonable and standard rates and (v) payments from a Sublicensee that represent the Licensee’s share in net profits derived from the Sale of Licensed Products by or on behalf of the Licensee or a Sublicensee (including through a Joint Venture), provided that such net profits already take into account payments that are due to The Regents hereunder.  For the avoidance of doubt, any gross proceeds meeting the definition set forth above in this Article 1.2 shall be “Attributed Income” irrespective of whether such gross proceeds are received under one or more separate agreements and irrespective of how such gross proceeds are referred to or characterized by the Licensee or the Sublicensee.

 

1.3 “Combination Product” means a combined Product that contains or uses a Licensed Product and at least one other active component, Product or process (a “Combination Product Component”), where (i) such Combination Product Component is not a Licensed Product, (ii) if such Combination Product Component were removed from such combined Product, the manufacture, use, Sale or import of the resulting Product in or into a particular country would infringe, but for a license, the same Valid Claim of Patent Right(s) in the country where such manufacture, use, Sale or import occurs as such combined Product, (iii) such Combination Product Component provides a function that is in addition to or supplementary to the function for which such Licensed Product is Sold on its own and (iv) the market price of such combined Product is higher than the market price for such Licensed Product as a result of such combined Product containing or using such Combination Product Component.

 

1.4 “Compound” means Pterostilbene.

 

1.5 “Earned Royalty” or “Earned Royalties” means the Sublicensee Royalties (as defined in Paragraph 7.2) and Royalties (as defined in Paragraph 8.1).

 

1.6 “Field of Use” means the use of Pterostilbene to induce UDP - Glucuronosyltransferase (UGT) Activity.

 

  

-2-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

1.7 “Joint Venture” means any separate entity established pursuant to an agreement between a third party and the Licensee and/or Sublicensee to constitute a vehicle for a joint venture, in which the separate entity manufactures, uses, purchases, Sells or acquires Licensed Products from the Licensee or Sublicensee.

 

1.8 “Licensed Method” means any process, art or method the use or practice of which, but for the license granted in this Agreement, would infringe, or contribute to, or induce the infringement of, any Patent Rights in any country were they issued at the time of the infringing activity in that country.

 

1.9 “Licensed Product” means any Product, including, without limitation, a Product explicitly directed for use or used in practicing a Licensed Method and any Product made by practicing a Licensed Method, the manufacture, use, Sale, offer for Sale or import of which, but for the license granted in this Agreement, would infringe, or contribute to, or induce the infringement of, a Valid Claim of any Patent Rights in any country were they issued at the time of the infringing activity in that country.

 

1.10 “Modifications” means substances created by the Licensee which contain or incorporate the Original Materials, Progeny and/or Unmodified Derivatives.

 

1.11 “Net Invoice Price” means the gross invoice price of a (a) Licensed Product and (b) a Product that combines a Licensed Product in any manner with any other Product (but subject to the adjustments for Net Sales of Combination Products set forth below), charged by the Licensee, any Affiliate of the Licensee or any Sublicensee, to a Third Party, including to distributors and end-users, less the following items, but only to the extent that they actually pertain to the disposition of such Licensed Product, are actually incurred, and are identified separately on a bill, invoice or other appropriate documentation:

 

	
1.11.1  

	
Credits or allowances actually granted to customers for rejections, returns, prompt payment, volume and other trade discounts, retroactive price reductions or billing corrections;

 

	
1.11.2  

	
Freight, transport, packing and insurance charges associated with transportation;

 

	
1.11.3  

	
Taxes (including without limitation sales, value-added or excise taxes, but excluding income taxes), surcharges, tariffs, import/export duties and other governmental charges based on Sales, transportation, delivery, use, production, exportation or importation of Licensed Products when included in the gross invoice price;

 

	
1.11.4  

	
Normal and customary discounts (including wholesaler’s discounts), rebates and charge backs that are paid, allowed or credited to customers, third-party payers, managed care organizations, healthcare systems, or administrators, as permitted by applicable law; and

 

	
1.11.5  

	
Rebates and discounts paid, credited or allowed pursuant to applicable law, including Government mandated rebates and discounts.

 

If a Licensed Product or Combination Product is sold, or otherwise commercially disposed of for value (including, without limitation, disposition in connection with the delivery of other products or services), in a transaction that is not a sale for cash to an independent Third Party, then the gross invoiced price in such transaction shall be deemed to be the gross amount that would have been paid had there been such a sale at the average sale price of such Licensed Product or Combination Product during the applicable royalty reporting period.

  

-3-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

1.12 “Net Sale” means:

 

	
1.12.1  

	
except in the instances described in Paragraphs 1.12.2 and 1.12.3 of this Paragraph, the Net Invoice Price;

 

	
1.12.2  

	
for any Relationship-Influenced Sale of a Licensed Product, Net Sales shall be based only on the Net Invoice Price at which the Relationship-Influenced Sale Purchaser re-Sells such Licensed Product to a Third Party (and the Relationship-Influenced Sale itself shall not be deemed a Sale); and

 

	
1.12.3  

	
in those instances where Licensed Product is not Sold, but is otherwise commercially exploited by the Licensee, an Affiliate of the Licensee, or a Sublicensee, the Net Sales for such Licensed Product shall be the Net Invoice Price of such Licensed Product Sold to Third Parties in similar quantities by the Licensee, an Affiliate of the Licensee or a Sublicensee, as applicable.

 

For a Combination Product, Net Sales shall be calculated, on a country-by-country basis, as:

 

A/(A+B) x Net Sales, calculated without regard to this formula, of the Licensed Product that is the Combination Product,

 

Where:

 

	
  

	
(i)

	
“A” is the total of Net Sales of each Licensed Product contained within or used in the Combination Product when Sold separately; and

 

	
  

	
(ii)

	
“B” is the total of Net Sales of all Combination Product Components contained within or used in the Combination Product when Sold separately,

 

Provided, however, that if the Licensed Product is sold separately in finished form in such country but the Combination Product Components in the Combination Product are not sold separately in finished form in such country, Net Sales shall be calculated as

 

	
  

	
C/(C+D) x Net Sales, calculated without regard to this formula, of the Licensed Product that is the Cornbination Product,

 

	
  

	
Where:

 

	
  

	
(i)

	
“C” is the total of Net Sales of each Licensed Product contained within or used in the Combination Product when Sold separately; and

 

	
  

	
(ii)

	
“D” is the difference between the Nets Sales of the Combination Product and the Net Sales of the Licensed Product when sold separately,

 

Provided, further, that if the Combination Product Components in the Combination Product are sold separately in finished form in such country but the Licensed Product is not sold separately in finished forrn in such country, Net Sales shall be calculated as

 

	
  

	
1 - C/(C+D) x Net Sales, calculated without regard to this formula, of the Licensed Product that is the Combination Product.

 

  

-4-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

	
  

	
Where:

 

	
  

	
(i)

	
“C” is the total of Net Sales of the Combination Product Components contained within or used in the Combination Product when Sold separately; and

 

	
  

	
(ii)

	
“D” is the difference between the Nets Sales of the Combination Product and the Net Sales of the Combination Product Components when sold separately.

 

Provided, further, that if neither the Licensed Product nor the Combination Product Components are sold separately in finished form in such country, Net Sales of the Combination Product shall be determined by the Parties in good faith based on the relative fully allocated costs of goods for the Licensed Product and each Combination Product Component, as applicable.

 

Notwithstanding the foregoing, Net Sales shall not include distribution without consideration of reasonable quantities of Licensed Products to a Third Party for use in any research, testing, clinical trials, or promotional offers, or for humanitarian purposes, including without limitation, expanded access programs or charitable donations.

 

1.13 “New Developments” means inventions, or claims to inventions, which constitute advancements, developments or improvements, whether or not patentable and whether or not the subject of any patent application, which are not sufficiently supported by the specification of a previously-filed patent or patent application within the Patent Rights to be entitled to the priority date of the previously-filed patent or patent application.

 

1.14 “Patent Prosecution Costs” is defined in Paragraph 20.4.

 

1.15 “Patent Rights” means, to the extent assigned to or otherwise owned by The Regents, all United States and foreign patents and patent applications covering or claiming (i) a Compound or its manufacture or use or any method of identifying or screening for Compounds, including, without limitation, those patents and patent applications that are listed on Exhibit A hereto, which shall be amended from time to time by the parties to include Patent Rights that arc filed or issued in the future.  Patent Rights shall further include any reissues, extensions, substitutions, continuations, divisions, provisionals, registrations, renewals, reexaminations, additional patents and any continuation-in-part applications (but only the Valid Claims of the continuation-in-part application that are entirely supported in the specification and entitled to the priority date of the parent application) of any of the foregoing United States or foreign patents and patent applications.

 

1.16 “Product” means any kit, article of manufacture, composition of matter, material, compound, component or product.

 

1.17 “Related Party” means a corporation, firm or other entity with which, or individual with whom, the Licensee or any Sublicensee (or any of its respective stockholders, subsidiaries or Affiliates) have any agreement, understanding or arrangement (for example, but not by way of limitation, an option to purchase stock or other equity interest, or an arrangement involving a division of revenue, profits, discounts, rebates or allowances) unrelated to the Sale or exploitation of the Licensed Products without which such other agreement, understanding or arrangement, the amounts, if any, charged by the Licensee or any Sublicensee to such entity or individual for the Licensed Product, would be higher than the Net Invoice Price actually received, or if such agreement, understanding or arrangement results in the Licensee or any Sublicensee extending to such entity or individual lower prices for such Licensed Product than those charged to others without such agreement, understanding or arrangement buying similar products in similar quantities.

 

1.18 “Relationship-Influenced Sale” means a Sale of a Licensed Product (i) from the Licensee to either an Affiliate of the Licensee, to a Sublicensee or to a Related Party, (ii) from an Affiliate of the Licensee to a Sublicensee or to a Related Party or (iii) from a Sublicensee to an Affiliate or Related Party of the Sublicensee, in each case for resale to a Third Party.

  

-5-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

1.19 “Relationship-Influenced Sale Purchaser” means the purchaser of Licensed Product in a Relationship-Influenced Sale.

 

1.20 “Sale” means the act of selling, leasing or otherwise transferring, providing, or furnishing for use for any consideration.  Correspondingly, “Sell” means to make or cause to be made a Sale and “Sold” means to have made or caused to be made a Sale.

 

1.21 “Sublicensee” means any Third Party (including, if applicable, a Joint Venture) to which any of the license rights granted to the Licensee hereunder are sublicensed.

 

1.22 “Sublicense Fee” is defined in Paragraph 7.1.

 

1.23 “Technical Information” means, to the extent controlled by The Regents, any and all information, know-how, data, research results, writings, inventions, discoveries, whether or not patentable or copyrightable (other than Patent Rights) that relate to any Compounds, including the manufacture, use, development or methods of identifying or screening any Compounds, or to any New Developments.

 

1.24 “Third Party” means any individual, entity or legal person other than the Regents, the Licensee, and their respective Affiliates.

 

1.25 “Valid Claim” means a claim of a patent or patent application in any country that (i) has not expired; (ii) has not been disclaimed; (iii) has not been cancelled or superseded, or if cancelled or superseded, has been reinstated; and (iv) has not been revoked, held invalid, or otherwise declared unenforceable or not allowable by a tribunal or patent authority of competent jurisdiction over such claim in such country from which no further appeal has or may be taken.

 

	
2.  

	
GRANT

 

2.1 Subject to the limitations and other terms and conditions set forth in this Agreement including the license granted to the United States Government described in the Background and in Paragraph 2.3, The Regents grants to the Licensee and its Affiliates a worldwide license under its rights in and to Patent Rights and Technical Information to research, develop, make, have made, use, Sell, offer for Sale and import Licensed Products and to practice Licensed Methods, only in the Field of Use.

 

2.2 Except as otherwise expressly provided for in this Agreement, the license granted under Patent Rights in Paragraph 2.1 is exclusive and the license granted under the Technical Information in Paragraph 2.1 is non-exclusive.

 

2.3 The license granted in Paragraphs 2.1 and 2.2 is subject to the obligations to the United States Government under 35 U.S.C. §§ 200-212 and all applicable governmental implementing regulations, as amended from time to time.

 

2.4 The license granted in Paragraphs 2.1 and 2.2 is limited to methods and products that are used or useful within the Field of Use.  For methods and products that have no use within the Field of Use, the Licensee has no license under this Agreement.

 

2.5 Subject to the rights granted to Licensee under this Agreement, the Regents reserves and retains the right (and the rights granted to the Licensee in this Agreement shall be subject to such right) to make and use, and to allow other educational and nonprofit institutions the right to make and use, the subject matter described and claimed in the Patent Rights for educational and research purposes, including publication and other communication of any research results related to such use, subject to Section 31.6 hereof.

  

-6-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

2.6 Because one or more of the inventions set forth in the Patent Rights may have been made under funding provided by the United States Government, any Licensed Products that embody any such invention and are sold in the United States will be substantially manufactured in the United States unless a waiver of such manufacturing requirement is obtained from the funding agency for the Patent Rights, which waiver The Regents may apply for in cooperation with the Licensee or a Sublicensee if the Licensee or Sublicensee, as applicable, so requests and meets the statutory criteria therefor.

 

2.7 This Agreement will terminate immediately if a claim which includes, in any way, the assertion that any portion of Patent Rights is invalid or unenforceable is filed by the Licensee or an Affiliate of the Licensee, or by any Third Party, including a Sublicensee, at the express written request of the Licensee.

 

2.8 If at any time after the Effective Date the Regents, through the Licensing Officer of the Office of Technology Alliances responsible for the administration of this matter, learn that the Regents have come to own or control any developments, inventions or discoveries that are New Developments or otherwise pertain or relate to Compounds, but are not otherwise included within the Patent Rights and are not covered by any obligations to Third Parties (in each case, a “Covered Invention”), then The Regents will promptly notify the Licensee in writing of the existence and nature of such Covered Inventions in reasonable detail (an -Option Notice”) and, to the extent permitted by law, the Licensee shall thereafter have an exclusive option to negotiate an exclusive license under the Regents’ rights to the Covered Invention(s) within the Field of Use, which option the Licensee may exercise by providing written notice to the Regents (the “Exercise Notice”) within [*] ([*]) days after its receipt of the Option Notice.  If the Licensee provides The Regents with an Exercise Notice within such [*] ([*]) day period, then the Licensee and The Regents shall thereafter exercise commercially reasonable efforts to negotiate and enter into a definitive agreement governing the terms of the exclusive license to the Covered Inventions within [*] ([*]) days following The Regents’ receipt of the Exercise Notice.  The economic terms of any license with respect to any patent rights claiming the Covered Inventions shall he materially similar to the terms of this Agreement (i.e., there shall be no kind of payment obligation under such license in addition to the kinds of payment obligations that are included under this Agreement and the percentages or amounts of payment obligations under such license shall not exceed any corresponding payment obligations under this Agreement).  If Licensee fails to contact the Regents within [*] days after receipt of the Election Notice, or if the parties do not enter into an agreement within [*] days following the Regents’ receipt of the Election Notice, Licensee shall have no rights in New Developments and the Regents may dispose of those rights in its sole discretion.

 

2.9 Licensee may fully reference, rely on, submit and/or have transferred to it any investigational drug applications (IND) prepared by The Regents and covering Licensed Products and any and all know-how and data relating to the Licensed Product.  The Regents agrees to cooperate with any effort by the Licensee to file any regulatory documents including but not limited to a Licensee-sponsored IND covering the Licensed Products and to cooperate in any effort by or on behalf of the Licensee to obtain marketing exclusivity for the Licensed Products.

  

-7-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

	
3.  

	
SUBLICENSES

 

3.1 The Regents also grants to the Licensee the right to sublicense to Third Parties (including to Joint Ventures) the rights granted to the Licensee hereunder, with the right to further sublicense, as long as the Licensee has current rights thereto under this Agreement and provided that the Licensee shall remain responsible for its obligations hereunder notwithstanding the granting of a sublicense.  Each Sublicensee must be subject to a written sublicense agreement, which must be consistent with and subject to the terms of this Agreement with respect to the obligations of Sublicensees and the rights of The Regents (and, if applicable, the United States Government and other sponsors).  Also, for the avoidance of doubt, the Licensee may extend its rights and obligations hereunder to Affiliates without a sublicense arrangement as set forth in section 2.1, provided that the Licensee shall guarantee the performance and compliance with the terms of this Agreement of any of its Affiliates.  The Licensee will notify The Regents of each sublicense granted hereunder and will provide The Regents with a complete copy of each sublicense (along with a summary of the material terms of each such sublicense) and each amendment to such sublicense within [*] ([*]) days of issuance of such sublicense or such amendment (all of which shall constitute the Proprietary Information of the Licensee).  Notwithstanding the granting of a sublicense, the Licensee will continue to be obligated to pay to The Regents all fees, payments, royalties and the cash equivalent of any consideration due The Regents hereunder.  For clarity, if the Licensee grants a sublicense that contains a provision for payment of royalties by any Sublicensee in an amount that is less than the Sublicensee Royalty required to be paid under Paragraph 7.2 below, then the Licensee will pay to The Regents a total amount equal to the Sublicensee Royalty based on the Sublicensees’ Net Sales as provided for in Paragraph 7.1.2.  The Licensee will require Sublicensees to provide it with copies of all progress reports and royalty reports in accordance with the provisions herein and the Licensee will collect and deliver all such reports due The Regents from Sublicensees (all of which shall constitute the Proprietary Information of the Licensee).  Licensee will also provide to The Regents a yearly reporting of any further sublicensing of Patent Rights by its Sublicensees, Affiliates and Joint Ventures.

 

3.2 If Licensee licenses patent rights assigned to or otherwise acquired by it (“Licensee’s Patent Rights”), and it believes, in good faith, that the recipient of such license will infringe Patent Rights in practicing the Licensee’s Patent Rights, then the Licensee will not separately grant a license to such recipient under Licensee’s Patent Rights without concurrently granting a sublicense under Patent Rights on the terms required under this Agreement.

 

3.3 Upon any expiration or termination of this Agreement for any reason, all sublicenses shall survive, provided that (a) such Sublicensee is not in breach of the relevant sublicense, (b) such Sublicensee will continue to make all reports and payments due and owing under its sublicense to The Regents, and (c) The Regents will not be bound by any grant of rights broader than or will not be required to perform any obligation other than those rights and obligations contained in this Agreement.  Moreover, The Regents will have the sole right to modify each such assigned sublicense to include all of the rights of The Regents (and, if applicable, the United States Government and other sponsors) that are contained in this Agreement, including the payment of Earned Royalties directly to The Regents by the Sublicensee as if it were the Licensee at a rate that is no lower than the rate set forth in Article 8 (Earned Royalties and Minimum Annual Royalties) in accordance with Article 4 (Payment Terms).

 

	
4.  

	
PAYMENT TERMS

 

4.1 Earned Royalties will accrue, on a country-by-country, and Licensed Product-by - Licensed Product basis, for the duration of the last Valid Claim of Patent Rights (whether or not an issued Valid Claim) in such country that claims such Licensed Product.

 

4.2 The Licensee will pay to The Regents all Earned Royalties, Sublicense Fees and other consideration payable to The Regents quarterly on or before [*] (for the calendar quarter ending December 31), [*] (for the calendar quarter ending March 31), [*] (for the calendar quarter ending June 30) and [*] (for the calendar quarter ending September 30) of each calendar year.  Each payment will be for Earned Royalties, Sublicense Fees and other consideration which has accrued within the Licensee’s most recently completed calendar quarter.

  

-8-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

4.3 All consideration due The Regents will be payable and will be made in United States dollars by check payable to “The Regents of the University of California” or by wire transfer to an account designated by The Regents.  The Licensee is responsible for all bank or other transfer charges.  When Licensed Products are Sold for monies other than United States dollars, the Earned Royalties and other consideration will first be determined in the foreign currency of the country in which such Licensed Products were Sold and then converted into equivalent United States dollars.  The exchange rate will be the average exchange rate quoted in The Wall Street Journal during the last thirty (30) days of the reporting period.  Sublicensee Fees and Earned Royalties on Net Sales of Licensed Products and other consideration accrued in any country outside the United States may not be reduced by any taxes, fees or other charges imposed by the government of such country, except those taxes, fees and charges allowed under the provisions of Paragraph 1.12 (Net Sales) or Section 4.4 below.

 

4.4 In the event that (1) a Sublicensee is required to withhold any tax to the tax or revenue authorities in any country other than the United States from payments to Licensee that constitute royalties on Net Sales of Licensed Product due to the laws of such country and (2) the applicable Sublicense Agreement permits the Sublicensee to deduct such withheld amount from royalties otherwise payable to Licensee (the “Deducted Amount”), then Licensee may deduct a portion of such Deducted Amount from the Sublicensee Royalties to be paid by the Licensee to The Regents hereunder, such Deducted Amount not to exceed [*]% of Net Sales.  The portion of the Deducted Amount that may be deductible by Licensee hereunder shall equal the Deducted Amount times a fraction, the numerator of which is the Deducted Amount and the denominator of which is the amount that would be payable by the Sublicensee to Licensee if the Deducted Amount were not withheld.  For purposes of illustration, if the Net Sales of Licensed Products by a Sublicensee equaled $1,000,000 in a calendar quarter pursuant to a Sublicense Agreement with a [*]% royalty that permitted withholding as set forth above, and the Sublicensee deducted $[*]from the $[*] otherwise payable to Licensee as royalties (i.e., because the applicable law required 20% withholding), then Licensee would be entitled to deduct $[*] from the $[*] otherwise payable to The Regents hereunder as Sublicensee Royalties (i.e., [*]% of the Deducted Amount).

 

4.5 Notwithstanding the provisions of Article 27 (Force Majeure) if at any time legal restrictions prevent the prompt remittance of Earned Royalties or other consideration owed to the Licensee by a Sublicensee, or to The Regents by the Licensee, with respect to any country where a sublicense is issued or a Licensed Product is Sold or otherwise exploited, then the Licensee shall convert the amount owed to The Regents into United States dollars and will pay The Regents directly from another source of funds in order to remit the entire amount owed to The Regents.

 

4.6 In the event that any patent or claim thereof included within the Patent Rights is held invalid in a final decision by a court of competent jurisdiction and last resort and from which no appeal has or can be taken, then all obligation to pay royalties based on that patent or claim or any claim patentably indistinct therefrom will cease as of the date of final decision.  The Licensee will not, however, be relieved from paying any royalties that accrued before such final decision and the Licensee shall be obligated to pay the full amount of royalties due hereunder to the extent that The Regents licenses one or more Valid Claims within the Patent Rights to the Licensee with respect to Licensed Products or to the extent that Licensed Products are based on Technology Rights.

 

4.7 No Earned Royalties will be collected or paid hereunder to The Regents on Licensed Products Sold to, or otherwise exploited for, the account of the United States Government as provided for in the license to the United States Government.  The Licensee and its Sublicensees will reduce the amount charged for Licensed Products Sold to, or otherwise exploited by, the United States Government by an amount equal to the Earned Royalty for such Licensed Products otherwise due The Regents.  Such reduction in Earned Royalties will be in addition to any other reductions in price required by the United States Government.

 

4.8 In the event that royalties, fees, reimbursements for Patent Prosecution Costs or other monies owed to The Regents are not received by The Regents when due, the Licensee will pay to The Regents simple interest on an annual basis at the Prime Rate as reported by Bank of America (or its successor entity) plus [*] percent (PA).  Such interest will be calculated from the date payment was due until actually received by The Regents.  Such accrual of interest will be in addition to and not in lieu of, enforcement of any other rights of The Regents due to such late payment.

  

-9-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

	
5.  

	
LICENSE ISSUE FEE

 

The Licensee will pay to The Regents a License Issue Fee of [*] ($[*]) dollars within [*] ([*]) days of the Effective Date.  This fee is non-refundable, non-cancelable and is not an advance or otherwise creditable against any royalties or other payments required to be paid under the terms of this Agreement.

 

	
6.  

	
LICENSE MAINTENANCE FEE

 

The Licensee will also pay to The Regents a License Maintenance Fee of [*] dollars ($[*]) beginning on the [*]anniversary of the Effective Date and continuing annually on each subsequent anniversary of the Effective Date.  The License Maintenance Fee is not due on any anniversary of the Effective Date if on that date, the Licensee is Selling or otherwise exploiting Licensed Products and is paying an Earned Royalty to The Regents on the Net Sales of such Licensed Product.  The License Maintenance Fee is non-refundable and is not an advance or otherwise creditable against any royalties or other payments required to be paid under the terms of this Agreement.

 

	
7.  

	
PAYMENTS ON SUBLICENSES

 

7.1 The Licensee will pay to The Regents the following non-refundable and non-creditable sublicense fees (“Sublicense Fees”):

 

	
7.1.1  

	
[*] percent ([*]%) of Attributed Income from Sublicense Agreements executed prior to dosing of 1st patient in Phase I clinical study of a Licensed Product and [*]% of Attributed Income from Sublicense Agreements executed after dosing of 1st patient in Phase I clinical trial of a Licensed Product; and

 

	
7.1.2  

	
[*] percent ([*] %) of Net Sales of each Licensed Product Sold by a Sublicensee or its Affiliates (“Sublicensee Royalties”).

 

	
8.  

	
ROYALTIES AND MINIMUM ANNUAL ROYALTIES

 

8.1 The Licensee will also pay to The Regents [*] percent ([*]%) of Net Sales of Licensed Product Sold by the Licensee or any of its Affiliates (“Royalties”).

 

8.2 In the event it becomes necessary for the Licensee or a Sublicensee to license patent rights owned by a Third Party to make, use or Sell Licensed Products, then the Licensee or Sublicensee shall have the right to obtain a license from such Third Party and the Licensee shall have the right to credit [*] percent ([*]%) of any payment made to such Third Party under such license against up to [*]percent ([*]%) of the amounts payable to The Regents under Paragraphs 7.1.2 or 8.1 above on a going-forward basis.  Any credit pursuant to this Paragraph shall be available to the Licensee with respect to the full royalty payable pursuant to Paragraphs 7.1.2 and 8.1, but no such credit shall be available with respect to any Combination Product if the Third Party license is necessary solely because of a Combination Product Component that is not a Licensed Product.  In addition, any credit that the Licensee is unable to use in full within the particular royalty reporting period in which such credit is earned may be rolled forward from one royalty reporting period to the next.

 

8.3 The Licensee will also pay to The Regents a minimum annual royalty of [*] dollars ($[*]) until the expiration or abandonment of the last Valid Claim within the Patent Rights, beginning with the year of the first Sale of Licensed Product.  The minimum annual royalty will be paid to The Regents by [*] of each year and will be credited against the Earned Royalty due for the calendar year in which the minimum payment was made.

  

-10-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

	
9.  

	
MILESTONE PAYMENTS

 

9.1 With respect to the first Licensed Product to achieve the following milestones, the Licensee will pay to The Regents the following non-refundable, non-creditable amounts

 

	
9.1.1  

	
[*] dollars ($[*]) upon dosing of the 1st patient in the first Licensee sponsored Phase II clinical trial in the United States, or a foreign equivalent;

 

	
9.1.2  

	
[*]dollars ($[*]) upon dosing of the 1st patient in the first Licensee sponsored Phase III clinical trial in the United States, or a foreign equivalent; and

 

	
9.1.3  

	
[*] dollars ($[*]) upon Regulatory Approval in the United States, or a foreign equivalent.

 

9.2 For the avoidance of doubt, each of the milestone payments set forth in Paragraphs 9.1.1 through 9.1.3 will be payable only with respect to the first Licensed Product that achieves the applicable milestone.  Furthermore, each such milestone payment will be payable by the Licensee regardless of whether the applicable milestone event has been achieved by the Licensee or any Affiliate or Sublicensee; provided that any payments that Licensee receives from a Sublicensee in connection with the achievement of any such milestone shall not be considered Attributed Income.

 

9.3 All milestone payments are due to The Regents within [*] ([*]) days of the occurrence of the applicable milestone event.

 

	
10.  

	
DUE DILIGENCE

 

10.1 The Licensee will (either itself or through its Affiliates or Sublicensees) use diligent and commercially reasonable efforts to develop, manufacture and Sell at least one Licensed Product and to market the same after obtaining necessary regulatory approvals in quantities sufficient to meet the market demands therefor.

 

10.2 The Licensee or its Affiliates will, or will require that its Sublicensees will, obtain all necessary governmental approvals in each country prior to the manufacture, use, Sale, offer for Sale or importation of a Licensed Product in such country.

 

10.3 The Licensee, its Affiliates or Sublicensees will, or will cause a Third Party to:

 

	
10.3.1  

	
complete a Phase I clinical trial for a Licensed Product in the United States or foreign equivalent within [*] ([*]) years of the Effective Date;

 

	
10.3.2  

	
submit an application for regulatory approval covering a Licensed Product in the United States or foreign equivalent within [*] ([*]) year(s) from the Effective Date;

 

	
10.3.3  

	
market a Licensed Product in the United States within [*] ([*]) months of receiving approval of such Licensed Product in the United States,

 

  

-11-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

10.4 The Regents shall consider in good faith any requested revisions to the milestones listed above, or the extension of the designated time periods above whenever requested in writing by the Licensee and supported by a reasonable basis for granting such revisions, including but not limited to, delay in obtaining financing, technical difficulties or delays in clinical studies or regulatory processes that the parties could not have reasonably avoided or expected.  If the Licensee is unable to perform any of the above provisions, as they may be revised or extended, then, subject to Section 10.5 below, The Regents has the right and option to either terminate this Agreement or reduce the exclusive license granted to the Licensee to a nonexclusive license in accordance with Paragraph 10.6 below.  This right, if exercised by The Regents, supersedes the rights granted in Article 2 (Grant).

 

10.5 The Licensee may pay The Regents, within [*] ([*]) days of the time periods designated in Section 10.3 above, [*] Dollars ($[*]) in lieu of satisfying the applicable milestone within the designated time period.  Upon such payment, the time period for Licensee’s performance of such milestone shall be extended for one year, and The Regents shall not have the right, during said one year period, to terminate or convert the license under this Agreement to non-exclusive as provided in Section 10.5.  If, however, the Licensee, its Affiliates or Sublicensees shall have failed to meet such milestone by the end of said one year period, The Regents shall have the rights set forth in Section 10.4 and 10.6.

 

10.6 To exercise either the right to terminate this Agreement or to reduce the exclusive license granted to the Licensee to a non-exclusive license for lack of diligence required in this Article 10 (Due Diligence), The Regents will give the Licensee written notice of the deficiency.  The Licensee thereafter has [*] ([*]) days to cure the deficiency.  If The Regents has not received written tangible evidence satisfactory to The Regents that the deficiency has been cured by the end of the [*] ([*])-day period, then The Regents may, at its option, terminate this Agreement immediately without the obligation to provide [*] ([*]) days’ notice as set forth in Article 14 (Termination by The Regents) or reduce the exclusive license granted to the Licensee to a non-exclusive license by giving written notice to the Licensee.

 

	
11.  

	
PROGRESS AND ROYALTY REPORTS

 

11.1 Beginning on the [*]anniversary of the Effective Date, and annually thereafter, the Licensee will submit to The Regents a written progress report as described in Paragraph 11.2 below covering the Licensee’s (and any Affiliates’ or Sublicensee’) activities related to the development and testing of all Licensed Products and related to the obtaining of the governmental approvals necessary for marketing and the activities required and undertaken in order to meet the diligence requirements set forth in Article 10 (Due Diligence).  Progress reports are required for each Licensed Product until the first Sale or other exploitation of that Licensed Product occurs in the United States and shall be again required if Sales of such Licensed Product are suspended or discontinued.

 

11.2 Progress reports submitted under Paragraph 11.1 shall include, but are not limited to, a reasonably detailed summary of the following topics so that The Regents will be able to determine the progress of the development of Licensed Products and will also be able to determine whether or not the Licensee has met its diligence obligations set forth in Article 10 (Due Diligence) above:

 

	
11.2.1  

	
summary of work completed as of the submission date of the progress report;

 

	
11.2.2  

	
summary of work in progress as of the submission date of the progress report;

 

	
11.2.3  

	
current schedule of anticipated events and milestones, including those event and milestones specified in Article 10 (Due Diligence);

 

	
11.2.4  

	
market plans for introduction of Licensed Products including the anticipated and actual market introduction dates of each Licensed Product; and

 

	
11.2.5  

	
Sublicensees’ activities relating to the above items, if there are any Sublicensees.

 

  

-12-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

11.3 If the Licensee fails to submit a timely progress report to The Regents, then The Regents will be entitled to terminate this Agreement in accordance with Paragraph 14.  If either party terminates this Agreement before any Licensed Products are Sold or before this Agreement’s expiration, then a final progress report covering the period prior to termination must be submitted within [*] ([*]) days of termination or expiration.

 

11.4 The Licensee has a continuing responsibility to keep The Regents informed of the business entity status (small business entity status or large business entity status as defined by the United States Patent and Trademark Office) of itself, any Affiliates, or, to its knowledge, Sublicensees.  The Licensee will notify The Regents of any change of its status or that of any Affiliate, or, to its knowledge, of any Sublicensee, within [*] ([*]) days of the change in status.

 

11.5 The Licensee will report to The Regents the date of first Sale or other exploitation of a Licensed Product in each country in its first progress and royalty reports following such first Sale of a Licensed Product.

 

11.6 Beginning with the earlier of (i) the first Sale or other exploitation of a Licensed Product or (ii) the first transaction that results in Sublicense Fees accruing to The Regents, the Licensee will make quarterly royalty and Sublicensee Fee reports to The Regents on or before each [*] (for the quarter ending December 31), [*] (for the quarter ending March 31), [*] (for the quarter ending June 30) and [*] (for the quarter ending September 30) of each year.  Each royalty and Sublicensee Fee report will cover Licensee’s most recently completed calendar quarter and will, at a minimum, show:

 

	
11.6.1  

	
the gross invoice prices and Net Sales of Licensed Products Sold or otherwise exploited (itemizing the applicable gross proceeds and any deductions therefrom), and any Attributed Income (itemizing the applicable gross proceeds and any deductions therefrom) due to the Licensee;

 

	
11.6.2  

	
the quantity of each type of Licensed Product Sold or otherwise exploited;

 

	
11.6.3  

	
the country in which each Licensed Product was made, used or Sold or otherwise exploited;

 

	
11.6.4  

	
the Earned Royalties, in United States dollars, payable with respect to Net Sales;

 

	
11.6.5  

	
the Sublicense Fees, in United States dollars, payable with respect to Attributed Income;

 

	
11.6.6  

	
the method used to calculate the Eamed Royalty, specifying all deductions taken and the dollar amount °leach such deduction;

 

	
11.6.7  

	
the exchange rates used, if any;

 

	
11.6.8  

	
the amount of the cash and the amount of the cash equivalent of any non-cash consideration including the method used to calculate the non-cash consideration;

 

	
11.6.9  

	
for each Licensed Product, the specific Patent Rights identified by UC Case Number and Technology Rights exercised by the Licensee or any Affiliate, Joint Venture or Sublicensee in the course of making, using, selling, offering for Sale or importing such Licensed Product; and

 

	
11.6.10  

	
any other information reasonably necessary to confirm Licensee’s calculation of its financial obligations hereunder.

 

  

-13-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

11.7 If no Sales of Licensed Products have been made and no Licensed Products have been otherwise exploited and no Attributed Income is due to the Licensee during any reporting period, then a statement to this effect must be provided by the Licensee in the immediately subsequent royalty and Sublicense Fee report.

 

	
12.  

	
BOOKS AND RECORDS

 

12.1 The Licensee will keep accurate books and records regarding all Licensed Products that are being Sold, offered for Sale, imported, or otherwise exploited; all Net Sales, all Attributed Income, and other amounts payable hereunder; and all sublicenses granted under the terms of this Agreement.  Such books and records will be preserved for at least [*] ([*]) years after the date of the payment to which they pertain and, upon the written request of The Regents, the Licensee shall permit a recognized national independent public accounting firm selected by The Regents and acceptable to the Licensee, to have access to such books and records during normal business hours to determine the accuracy of the royalty reports and payments set forth in Section 11.6 in respect of any fiscal year not more than [*] ([*]) years prior to such examination; provided, however, that any such examination may not occur more than once during each fiscal year of the Licensee and may not be for a fiscal year that has already been examined.

 

12.2 The Regents shall pay the fees and expenses of any such examination, provided, however, that if a deficiency in aggregate payments of more than [*]percent ([*]%) of the total royalties due for any year is discovered in any examination, then the Licensee shall bear the fees and expenses of such examination.  Additionally, if such examination reveals any underpayment in the aggregate amounts due for such year, then Licensee shall remit such underpayment to The Regents within [*] ([*]) days of the examination results and if such examination reveals any overpayment in the aggregate amounts due for such year, then The Regents shall remit such overpayment to the Licensee within [*] ([*]) days of the examination results.  As a condition to such examination, the independent public accounting firm selected shall execute a written agreement, reasonably satisfactory in form and substance to the Licensee, to maintain in confidence all information obtained during the course of any such examination except for disclosure to The Regents as necessary for the above purpose.

 

	
13.  

	
LIFE OF THE AGREEMENT

 

13.1 Unless otherwise terminated as provided for in this Agreement, this Agreement will remain in effect on a country-by-country basis from the Effective Date until the expiration or abandonment of the last Valid Claim of the Patent Rights licensed hereunder, after which the Licensee shall have a fully paid up, royalty free, world wide right and license to make, have made, use, sell, offer for sale and import Licensed Products for any use or purpose.

 

13.2 This Agreement will automatically terminate without the obligation to provide [*] days’ notice as set forth in Article 14 (Termination By The Regents) upon the filing of a petition for relief under the United States Bankruptcy Code by or against the Licensee as a debtor or alleged debtor,

  

-14-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

13.3 The rights and obligations set forth in the following Articles and Paragraphs shall survive any termination, but not the expiration, of this Agreement:

 

	 	
Article 1

	
Definitions

	 	
Paragraph 3.3

	
Survival of Sublicenses

	 	
Paragraph 4.8

	
Late Payments

	 	
Article 5

	
License Issue Fee

	 	
Article 12

	
Books and Records

	 	
Article 13

	
Life of the Agreement

	 	
Article 16

	
Disposition of Licensed Products on Hand Upon Termination or Expiration

	 	
Article 17

	
Use of Names and Trademarks

	 	
Article 18

	
Limited Warranty

	 	
Article 19

	
Limitation of Liability

	 	
Article 23

	
Indemnification

	 	
Article 24

	
Notices

	 	
Article 28

	
Governing Laws; Venue; Attorneys Fees

	 	
Article 31

	
Confidentiality

 

13.4 The termination or expiration of this Agreement will not relieve the Licensee of its obligation to pay any fees, royalties or other payments owed to The Regents at the time of such termination or expiration and will not impair any right of The Regents to receive any such payments then owed, including the right to receive Earned Royalties in accordance with Articles 7 (Payments on Sublicenses), 8 (Earned Royalties and Minimum Annual Royalties) and 16 (Disposition of Licensed Products Upon Termination or Expiration).

 

	
14.  

	
TERMINATION BY THE REGENTS

 

If the Licensee materially fails to perform or violates any material term of this Agreement, then The Regents may give written notice of such default (“Notice of Default”) to the Licensee.  If the Licensee fails to repair such default within [*] ([*]) days after the effective date of such notice, then The Regents will have the right to immediately terminate this Agreement and its licenses by providing a written notice of termination (“Notice of Termination”) to the Licensee.

 

	
15.  

	
TERMINATION BY LICENSEE

 

The Licensee has the right at any time to terminate this Agreement by providing a Notice of Termination to The Regents.  Moreover, the Licensee will be entitled to terminate the rights under one or more Patent Rights on a country-by-country basis by giving notice in writing to The Regents.  Termination of this Agreement (but not termination of any patents or patent applications under Patent Rights, which termination is subject to Paragraph 20.6) will be effective [*] ([*]) days from the effective date of such notice.

  

-15-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

	
16.  

	
USE OF NAMES AND TRADEMARKS

 

Nothing contained in this Agreement will be construed as conferring any right to either party to use in advertising, publicity or other promotional activities any name, trade name.  trademark or other designation of the other party (including a contraction, abbreviation or simulation of any of the foregoing).  Without the Licensee’s consent case-by-case, The Regents may list Licensee’s name as a licensee of technology from The Regents without further identifying the technology.  Unless required by law or unless consented to in writing by Executive Director, Office of Technology Transfer of The Regents, the use by the Licensee of the name “The Regents of the University of California” or the name of any campus of the University of California in advertising, publicity or other promotional activities is expressly prohibited.  Notwithstanding the foregoing, Licensee may refer to any Licensed Method or Licensed Product as patent pending, with or without an identification of any application or registration numbers assigned to a Patent Right, at any time where Patent Rights exist in the nation where the advertising, publicity or other promotional activities is published.

 

	
17.  

	
LIMITED WARRANTY

 

17.1 The Regents represents and warrants to the Licensee as of the Effective Date that:

 

	
17.1.1  

	
It has the lawful right to grant the rights and licenses under this Agreement.

 

	
18.2              

	
Except as expressly set forth in this Agreement, this license and the associated Invention, Patent Rights, and Licensed Products are provided by The Regents WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY OF ANY KIND, EXPRESS OR IMPLIED.  THE REGENTS MAKES NO EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY THAT THE INVENTION, PATENT RIGHTS, OR LICENSED PRODUCTS WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK OR OTHER RIGHTS.

 

	
18.3              

	
Except as otherwise expressly set forth in this Agreement, this Agreement does not:

 

(a)           express or imply a warranty or representation as to the validity, enforceability, or scope of any Patent Rights or Technology Rights; or

 

(b)           express or imply a warranty or representation that anything made, used, Sold, offered for Sale or imported or otherwise exploited under any license granted in this Agreement is or will be free from infringement of patents, copyrights, or other rights of third parties; or

 

(c)           obligate The Regents to bring or prosecute actions or suits against third parties for patent infringement except as provided in Article 22 (Patent Infringement); or

 

(d)           confer by implication, estoppel or otherwise any license or rights under any patents or other rights of The Regents other than Patent Rights, regardless of whether such patents are dominant or subordinate to Patent Rights; or

 

(e)           obligate The Regents to furnish any New Developments, know-how, technology or information not provided in Patent Rights or Technology Rights; or

 

(f)           obligate The Regents to update the technology in Patent Rights.

 

  

-16-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

	
18.  

	
LIMITATION OF LIABILITY

 

EXCEPT AS SET FORTH IN SECTION 23 (INDEMNIFICATION), NEITHER PARTY WILL BE LIABLE FOR ANY LOST PROFITS, COSTS OF PROCURING SUBSTITUTE GOODS OR SERVICES, LOST BUSINESS, ENHANCED DAMAGES FOR INTELLECTUAL PROPERTY INFRINGEMENT OR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR OTHER SPECIAL DAMAGES SUFFERED BY THE OTHER PARTY, SUBLICENSEES, JOINT VENTURES OR AFFILIATES ARISING OUT OF OR RELATED TO THIS AGREEMENT FOR ALL CAUSES OF ACTION OF ANY KIND (INCLUDING TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY AND BREACH OF WARRANTY) EVEN IF THE REGENTS, OR THE LICENSEE, AS THE CASE MAY BE, HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

	
19.  

	
PATENT PROSECUTION AND MAINTENANCE

 

19.1 As long as the Licensee has paid Patent Prosecution Costs as provided for in this Article 20 (Patent Prosecution and Maintenance), The Regents will diligently prosecute and maintain the United States and foreign patents comprising the Patent Rights using counsel of its choice, provided that The Regents agrees to use initially Licensee’s existing patent counsel at the law firm of Amin, Talati.  The Regents will consult with Licensee before retaining any substitute counsel for the maintenance and prosecution of the Patent Rights and will make reasonable efforts to take Licensee’s input into account with respect to such retention.  Subject to the terms hereof, the Licensee acknowledges that the Regents’ counsel will take instructions only from The Regents.  The Regents will provide the Licensee with copies of all relevant documentation and correspondence, or drafts thereof, pertaining to the filing, prosecution, or maintenance of all Patent Rights, including but not limited to each patent application, office action, response to office action, request for terminal disclaimer, and request for reissue or reexamination of any patent issuing from such application to the Licensee as follows: Documents and correspondence received from any patent office, and counsel’s analysis thereof, shall be provided promptly after receipt.  For a document to be filed in any patent office, or correspondence to be sent to any patent office, the Regents will make best efforts to provide a draft of such document sufficiently prior to its filing, to allow for review and comment by the Licensee.  Without limiting the foregoing, with respect to any patent application included in Patent Rights, The Regents will make best efforts to consult with the Licensee at least [*] ([*]) days in advance of any deadline for foreign filings.  The Licensee agrees to keep this documentation confidential as provided for in Article 31 (Confidentiality), The Regents will make commercially reasonable efforts to consider and accept all reasonable comments and suggestions provided by the Licensee with respect to such documentation as well as the overall patent strategy related to the Patent Rights.  Notwithstanding the foregoing, if Licensee has not commented upon such documentation in a reasonable time for the Regents to sufficiently consider the Licensee’s comments prior to a deadline with the relevant government patent office, or the Regents must act to preserve the Patent Rights, the Regents will be free to respond without consideration of the Licensee’s comments, if any.

 

19.2 The Regents shall use reasonable efforts to amend any patent application to include claims reasonably requested by the Licensee.

 

19.3 The Licensee will apply for an extension of the term of any patent included within the Patent Rights if appropriate under the Drug Price Competition and Patent Term Restoration Act of 1984 and/or European, Japanese and other foreign counterparts of this Law.  The Licensee shall prepare all documents and The Regents agrees to execute the documents and to take additional action as the Licensee reasonably requests in connection therewith.  Licensee shall be liable for all costs relating to such application.

 

  

-17-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

19.4 The Licensee will bear the costs of preparing, filing, prosecuting and maintaining all United States and foreign patent applications contemplated by this Agreement (“Patent Prosecution Costs”), Patent Prosecution Costs billed by The Regents’ counsel will be rebilled to the Licensee and are due within [*] ([*]) days of rebilling by The Regents.  These Patent Prosecution Costs will include, without limitation, patent prosecution costs for the Invention incurred by The Regents prior to the execution of this Agreement and any patent prosecution costs that may be incurred for patentability opinions, re-examination, re-issue, interferences, oppositions or inventorship determinations.

 

19.5 The Licensee may request that The Regents obtain Patent Rights in foreign countries, if available and if it so desires.  The Licensee will notify The Regents of its decision to obtain or maintain foreign patents not less than [*] ([*]) days prior to the deadline for any payment, filing or action to be taken in connection therewith.  This notice concerning foreign filing must be in writing, must identify the countries desired and must reaffirm the Licensee’s obligation to pay the Patent Prosecution Costs thereof.  So long as Licensee complies with its obligations hereunder, The Regents shall make reasonable efforts to comply with any written notice by Licensee under this Section 20.5.  The absence of such a notice from the Licensee to The Regents will be considered an election not to obtain or maintain foreign Patent Rights.

 

19.6 The Licensee will be obligated to pay any Patent Prosecution Costs incurred during the [*] ([*])-month period after receipt by either party of a Notice of Termination, even if the invoices for such Patent Prosecution Costs arc received by the Licensee after the end of the [*] ([*])-month period following receipt of a Notice of Termination.  The Licensee may terminate its obligation to pay Patent Prosecution Costs with respect to any given patent application or patent under Patent Rights in any or all designated countries upon [*] ([*])- months’ written notice to The Regents.  The Regents may continue prosecution and/or maintenance of such application(s) or patent(s) at its sole discretion and expense, provided, however, that the Licensee will have no further right or licenses thereunder.  Non-payment of Patent Prosecution Costs may be deemed by The Regents as an election by the Licensee not to maintain such application(s) or patent(s).

 

19.7 The Regents may tile, prosecute or maintain patent applications or patents that constitute Patent Rights at its own expense in any country in which the Licensee has not requested the Regents to file, prosecute or maintain patent applications or patents in accordance with this Article 20 (Patent Prosecution and Maintenance) and those applications, resultant patents and patents will not be subject to this Agreement.  However, if the Licensee agrees to pay the Patent Prosecution Costs for such Patent Rights at any time, then they shall remain or become subject to this Agreement.

 

19.8 The Regents shall direct its patent counsel, within [*] ([*]) days following the last day of each calendar quarter, to provide to the Licensee at Licensee’s sole expense a status report of all activity relating to the prosecution and maintenance of Patent Rights, including the status of all current patent applications included in Patent Rights.  The Regents shall allow the Licensee, at the Licensee’s reasonable request and at Licensee’s sole expense, to have access to any copies of all patent prosecution documents for all Patent Rights made by or on behalf of The Regents.  Without limiting the foregoing, the Licensee shall be entitled to keep a complete set of such materials.  Further, The Regents agrees that because of the license and rights granted to the Licensee hereunder that The Regents shall direct its counsel responsible for patent and copyright applications and Filings to make their files available to the Licensee upon reasonable request by the Licensee, to the extent consistent with the attorney-client privilege.  The Licensee may at its sole expense provide copies of those filings, documents related to those findings and other relevant information to separate counsel of its choice.

 

19.9 For the avoidance of doubt, and so long as Licensee complies with its obligations hereunder, the Regents may not discontinue the prosecution or maintenance of any of the Patent Rights without the express prior written consent of the Licensee.

 

	
20.  

	
PATENT MARKING

 

The Licensee will mark all Licensed Products made, used or Sold under the terms of this Agreement or their containers in accordance with the applicable patent marking laws.

 

  

-18-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

	
21.  

	
PATENT INFRINGEMENT

 

21.1 In the event that The Regents (to the extent of the actual knowledge of the licensing professional responsible for the administration of this Agreement) or the Licensee learns of infringement of any patent licensed under this Agreement, the knowledgeable party will provide the other (i) with written notice of such infringement and (ii) with any evidence of such infringement available to it (the “Infringement Notice”).  During the period in which, and in the jurisdiction where, the Licensee has exclusive rights under this Agreement, neither The Regents nor the Licensee will, during a period of [*] ([*]) days after an Infringement Notice, notify a possible infringer of infringement or put such infringer on notice of the existence of any Patent Rights without first obtaining consent of the other.  If either Party puts such infringer on notice of the existence of any Patent Rights with respect to such infringement without first obtaining the written consent of the other Party during such [*] ([*]) day period, and if a declaratory judgment action is filed by such infringer against The Regents, then the Party that put such infringer on notice shall lose its right to initiate a suit against such infringer for infringement under Paragraph 22.2 or 22.3 below, as applicable, immediately without the obligation of notice.  Both The Regents and the Licensee will use their diligent efforts to cooperate with each other and to terminate such infringement without litigation if reasonably possible unless otherwise agreed to in writing by the Regents and the Licensee.  In the event that the infringement involves rights under 35 U.S.C. §154 as relating to a Valid Claim which is not an issued Valid Claim, the Regents and Licensee shall cooperate in issuing the proper notice of such rights to the infringer.

 

21.2 If infringing activity by the infringer has not been abated within [*] ([*]) days following the date the Infringement Notice takes effect, then the Licensee may commence and control a suit for patent infringement against the infringer and control a defense against a declaratory judgment action.  To the extent required by law (i.e.  in order for the Licensee to have standing in a court of competent jurisdiction), The Regents agree to be joined as a party to an action under this Section 22.1 if the Licensee so requests and if approved by the UC Board of Regents; provided that the Licensee agrees to reimburse The Regents for any and all expenses of litigation (including attorneys’ fees) incurred by The Regents in connection with such action.  Additionally, the Regents may voluntarily join such suit at its own expense, but may not otherwise confluence suit against the infringer for the acts of infringement that are the subject of the Licensee’s suit or any judgment rendered in that suit.  The Licensee may not join The Regents as a party in a suit initiated by the Licensee without the Regents’ prior written consent, such consent subject to the approval of the UC Board of Regents.  If, in a suit initiated by the Licensee, The Regents is involuntarily joined other than by the Licensee, then the Licensee will pay any costs incurred by The Regents arising out of such suit, including but not limited to, any legal fees of counsel that The Regents selects and retains to represent it in the suit.

 

21.3 If, within [*] ([*]) days following the date the Infringement Notice takes effect, infringing activity by the infringer has not been abated and if the Licensee has not brought suit against the infringer, then The Regents may institute suit for patent infringement against the infringer at its sole cost and expense.  If The Regents institutes such suit, then the Licensee may not join such suit without The Regents’ consent and may not thereafter commence suit against the infringer for the acts of infringement that are the subject of The Regents’ suit or any judgment rendered in that suit.  The Regents may not join the Licensee as a party in a suit initiated by The Regents without the Licensee’s prior written consent.

 

21.4 Notwithstanding anything to the contrary in this Agreement, in the event that the infringement or potential infringement pertains to an issued patent included within the Patent Rights and written notice is given under the Drug Price Competition and Patent Term Restoration Act of 1984 (and/or foreign counterparts of this Law), then the party in receipt of such notice under the Act (in the case of The Regents to the extent of the actual knowledge of the licensing officer responsible for the administration of this Agreement) shall provide the Infringement Notice to the other party promptly.  If the time period is such that the Licensee will lose the right to pursue legal remedy for infringement by not notifying a third party or by not filing suit, the notification period and the time period to file suit will be accelerated to within [*] ([*]) days of the date of such notice under the Act to either party.

  

-19-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

21.5 Any recovery or settlement received in connection with any suit will first be shared by The Regents and the Licensee equally to cover any litigation costs each incurred and next shall be paid to The Regents or the Licensee to cover any litigation costs it incurred in excess of the litigation costs of the other.  In any suit initiated by the Licensee, any recovery in excess of litigation costs will be shared between Licensee and The Regents as follows: (1) for any recovery other than amounts paid for willful infringement, the Regents will receive [*]% of the recovery; (2) for any recovery for willful infringement, the Licensee shall receive [*] ([*]%) of the recovery and the Regents will receive [*]percent ([*]%) of the recovery.  In any suit initiated by The Regents, for recover amount other than amounts paid for willful infringement, Licensee shall receive [*]percent ([*]%) of any recovery in excess of litigation costs; (2) for any recovery for willful infringement, the Licensee shall receive [*] ([*]%) of the recovery and the Regents will receive [*]percent ([*]%) of the recovery will belong to the Regents.  The Regents and the Licensee agree to be bound by all determinations of patent infringement, validity and enforceability (but no other issue) resolved by any adjudicated judgment in a suit brought in compliance with this Article 22 (Patent Infringement).

 

21.6 Any agreement made by the Licensee for purposes of settling litigation or other dispute shall comply with the requirements of Article 3 (Sublicenses) of this Agreement.

 

21.7 Each party will cooperate with the other in litigation proceedings instituted hereunder but at the expense of the party who initiated the suit (unless such suit is being jointly prosecuted by the parties).

 

21.8 Any litigation proceedings will be controlled by the party bringing the suit, except that The Regents may be represented by counsel of its choice in any suit brought by the Licensee.

 

	
22.  

	
INDEMNIFICATION

 

22.1 The Licensee will indemnify, hold harmless and defend The Regents, the sponsors of the research that led to the Invention, and the inventors of any invention claimed in patents or patent applications under Patent Rights (including the Licensed Products and Licensed Methods contemplated hereunder) and their employers and their trustees, officers, employees and agents (the “Indemnitees”), against any and all claims, suits, losses, damages, costs, fees and expenses incurred by or imposed upon any of them in connection with any claim or suit resulting from, or arising out of, any theory of product liability (including actions in the form of tort, warranty, or strict liability) concerning any product, process or service made, used or sold by or on behalf of the Licensee pursuant to any right or license granted under this Agreement; provided, however, that the foregoing indemnification shall not apply to any losses, damages, costs, fees and expenses to the extent attributable to the gross negligence, reckless misconduct, violation of law or intentional misconduct of the Indemnitees.  The Licensee shall control any such action with legal counsel of its choosing, provided, however, that if The Regents, in its reasonable sole discretion, determines that there will he a conflict of interest or it will not otherwise be adequately represented by counsel chosen by the Licensee to defend The Regents in accordance with this Paragraph 23.1, then The Regents may retain one counsel of its choice to represent it and the Licensee will pay all expenses for such representation.

 

22.2 The Licensee, at its sole cost and expense, will insure its activities in connection with any work performed hereunder upon commencement of clinical trials and continuing through commercialization of any Licensed Product and will obtain, keep in force, and maintain the following insurance:

 

  

-20-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

	
22.2.1  

	
Commercial Form General Liability Insurance (contractual liability included) with limits as follows:

 

	
Each Occurrence

	
$[*]

	
Products/Completed Operations Aggregate

	
$[*]

	
Personal and Advertising Injury

	
$[*]

	
General Aggregate (commercial form only)

 

	
$[*]

	
22.2.2  

	
Worker’s Compensation as legally required in the jurisdiction in which the Licensee is doing business.

 

22.3 The coverage and limits referred to in Paragraph 23.2.1 and 23.2.2 above will not in any way limit the liability of the Licensee under this Article 23 (Indemnification).  Prior to initiation of any clinical trials of a Licensed Product, the Licensee will furnish The Regents with certificates of insurance evidencing compliance with all requirements.  Such certificates will:

 

	
·  

	
Provide for [*] ([*]) days’ ([*] ([*]) days for non-payment of premium) advance written notice to The Regents of any cancellation of insurance coverage; the Licensee will promptly notify The Regents of any material modification of the insurance coverage;

 

	
·  

	
Indicate that The Regents has been endorsed as an additional insured under the coverage described above in Paragraph 24.2.1; and

 

	
·  

	
Include a provision that the coverage will be primary and will not participate with, nor will be excess over, any valid and collectable insurance or program of self-insurance maintained by The Regents.

 

22.4 The Regents will promptly notify the Licensee in writing of any claim or suit brought against The Regents for which The Regents intends to invoke the provisions of this Article 23 (Indemnification).  The Licensee will keep The Regents informed of its defense of any claims pursuant to this Article 23 (Indemnification).

 

	
23.  

	
NOTICES

 

23.1 Any notice or payment required to be given to either party under this Agreement will be in writing and will be deemed to have been properly given and to be effective as of the date specified below if delivered to the respective address given below or to another address as designated by written notice given to the other party:

 

	
23.1.1  

	
on the date of delivery if delivered in person;

 

	
23.1.2  

	
on the date of mailing if mailed by first-class certified mail, postage paid; or

 

	
23.1.3  

	
on the date of mailing if mailed by any global express carrier service that requires the recipient to sign the documents demonstrating the delivery of such notice or payment.

 

  

-21-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

	 	In the case of Licensee:	ChromaDex, Inc., 

10005 Muirlands Blvd, Suite G 

Irvine, CA 102618 

United States of America. 

 

Attention:______________

	 	 	 
	 	
In the case of The Regents:

	The Regents of the University of California 

Innovation Alliances and Services 

1111 Franklin Street, 5th Floor 

Oakland, CA 94607-5200 

Attention: Executive Director 

Research Administration and Technology Transfer

RE:   UC Case No. 2011-432

	 	 	 
	 	With a copy to:	Ronnie Hanecak 

Assistant Vice Chancellor 

Research and Technology Alliances 

Office of Technology Alliances 

5171 California Avenue, Suite 150 

Irvine, CA 92697-7700 

RE: UC Case 2011-432

 

	
24.  

	
ASSIGNABILITY

 

The Licensee may not assign or transfer this Agreement without the Regents’ prior written consent; provided, however, that the Licensee may, without such consent, assign all of its rights and obligations under this Agreement in connection with a merger or consolidation of the Licensee with a Third Party, or the sale of substantially all of the Licensee’s assets to which this Agreement relates to a Third Party.  In the event of any assignment permitted hereunder, such assignee or successor in interest shall assume all of the transferring Party’s rights and obligations under this Agreement; accordingly, all references herein to such Party shall thereafter be deemed references to the assignee to whom the Agreement is so assigned.  Any purported assignment in violation of this Paragraph 25 shall be void..  This Agreement is binding upon and will inure to the benefit of The Regents, its successors and assigns.

 

	
25.  

	
WAIVER

 

No waiver by either party of any breach or default of any of the agreements contained herein will be deemed a waiver as to any subsequent and/or similar breach or default.  No waiver will be valid or binding upon the parties unless made in writing and signed by a duly authorized officer of each party.

 

	
26.  

	
FORCE MAJEURE

 

26.1 Except for the Licensee’s obligation to make any payments to The Regents hereunder, the parties shall not be responsible for any failure to perform due to the occurrence of any events beyond their reasonable control which render their performance impossible or onerous, including, but not limited to: accidents (environmental, toxic spill, etc.); acts of God; biological or nuclear incidents; casualties; earthquakes; fires; floods; governmental acts; orders or restrictions; inability to obtain suitable and sufficient labor, transportation, fuel and materials; local, national or state emergency; power failure and power outages; acts of terrorism; strike; and war.

  

-22-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

26.2 Either party to this Agreement, however, will have the right to terminate this Agreement upon [*] ([*]) days’ prior written notice if either party is unable to fulfill its obligations under this Agreement due to any of the causes specified in Paragraph 27.1 for a period of [*] ([*])[*].

 

	
27.  

	
GOVERNING LAWS; VENUE; ATTORNEYS’ FEES

 

27.1 THIS AGREEMENT WILL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, excluding any choice of law rules that would direct the application of the laws of another jurisdiction and without regard to which party drafted particular provisions of this Agreement, but the scope and validity of any patent or patent application will be governed by the applicable laws of the country of such patent or patent application.

 

27.2 Any legal action brought by the parties hereto relating to this Agreement may be brought and conducted in any court of competent jurisdiction in the state of California.

 

27.3 The prevailing, party in any suit related to this Agreement will be entitled to recover its reasonable attorneys’ fees in addition to its costs and necessary disbursements.

 

	
28.  

	
GOVERNMENT APPROVAL OR REGISTRATION

 

If this Agreement or any associated transaction is required by the law of any nation to be either approved or registered with any governmental agency, the Licensee will assume all legal obligations to do so.  The Licensee will notify The Regents if it becomes aware that this Agreement is subject to a United States or foreign government reporting or approval requirement.  The Licensee will make all necessary filings and pay all costs including fees, penalties and all other out-of-pocket costs associated with such reporting or approval process.

 

	
29.  

	
COMPLIANCE WITH LAWS

 

The Licensee shall comply with all applicable international, national, state, regional and local laws and regulations in performing its obligations hereunder and in its use, manufacture.  Sale or import of the Licensed Products or practice of the Licensed Method.  The Licensee will observe all applicable United States and foreign laws with respect to the transfer of Licensed Products and related technical data to foreign countries, including, without limitation, the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations.  The Licensee shall manufacture Licensed Products and practice the Licensed Method in compliance with applicable government importation laws and regulations of a particular country for Licensed Products made outside the particular country in which such Licensed Products are used, Sold or otherwise exploited.

 

	
30.  

	
CONFIDENTIALITY

 

30.1 The Licensee and The Regents will treat and maintain the other party’s proprietary business, patent prosecution, software, engineering drawings, process and technical information and other proprietary information, including the negotiated terms of this Agreement and any progress reports and royalty reports and any sublicense agreement issued pursuant to this Agreement (“Proprietary Information”) in confidence using at least the same degree of care as the receiving party uses to protect its own proprietary information of a like nature from the date of disclosure until [*] ([*]) years after the termination or expiration of this Agreement.  This confidentiality obligation will apply to the information defined as “Data” under the Secrecy Agreement and such Data will be treated as Proprietary information hereunder.

 

  

-23-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

30.2 The Licensee and The Regents may use the other party’s Proprietary Information only for the purposes contemplated under this Agreement and may disclose such Proprietary Information to their employees, agents, consultants, contractors and, in the case of the Licensee, its Sublicensees, investors or acquirors, provided that such parties are bound by a like duty of confidentiality as that found in this Article 31 (Confidentiality).  Notwithstanding anything to the contrary contained in this Agreement, The Regents may release this Agreement or any sublicense, including any terms thereof, and information regarding royalty payments or other income received in connection with this Agreement to the inventors, senior administrative officials employed by The Regents and individual Regents upon their request.  If such release is made, The Regents will request such individuals to keep such terms in confidence in accordance with the provisions of this Article 31 (Confidentiality), and will make best efforts to ensure compliance.  In addition, notwithstanding anything to the contrary in this Agreement, if a third party inquires whether a license to Patent Rights is available, then The Regents may disclose the existence of this Agreement and the extent of the grant in Articles 2 (Grant) and 3 (Sublicenses) and related definitions to such third party, but will not disclose the name of the Licensee or the economic terms unless Licensee has already made such disclosure publicly.

 

30.3 All written Proprietary Information will be labeled or marked confidential or proprietary.  If the Proprietary Information is orally disclosed, it will be reduced to writing or some other physically tangible form, marked and labeled as confidential or proprietary by the disclosing party and delivered to the receiving party within [*] ([*]) days after the oral disclosure.

 

30.4 Nothing contained herein will restrict or impair, in any way, the right of the Licensee or The Regents to use or disclose any Proprietary Information:

 

	
30.4.1  

	
that recipient can demonstrate by written records was previously known to it prior to its disclosure by the disclosing party;

 

	
30.4.2  

	
that recipient can demonstrate by written records is now, or becomes in the future, public knowledge other than through acts or omissions of recipient;

 

	
30.4.3  

	
that recipient can demonstrate by written records was obtained lawfully and without restrictions on the recipient from sources independent of the disclosing party; and

 

	
30.4.4  

	
that The Regents is required to disclose pursuant to the California Public Records Act or other applicable law.

 

The Licensee or The Regents also may disclose Proprietary Information that is required to be disclosed (i) to a governmental entity or agency in connection with filing a prosecuting patent applications, seeking any governmental or regulatory approval, governmental audit, or other governmental contractual requirement or (ii) by law, provided that the recipient uses reasonable efforts to give the party owning the Proprietary Information sufficient notice of such required disclosure to allow the party owning the Proprietary Information reasonable opportunity to object to, and to take legal action to prevent, such disclosure.

 

30.5 Upon termination of this Agreement, the Licensee and The Regents will destroy or return any of the disclosing party’s Proprietary Information in its possession within [*] ([*]) days following the termination of this Agreement.  The Licensee and The Regents will provide each other, within [*] ([*]) days following termination, with written notice that such Proprietary Information has been returned or destroyed.  Each party may, however, retain one copy of such Proprietary Information for archival purposes in non-working files.

 

  

-24-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

30.6 If the Regents, or its employees, wish to make a publication or presentation (including any oral disclosure made without obligation of confidentiality) in connection with the Regents’ retained rights under Section 2.5, the Regents shall use its best efforts to first transmit to the Licensee a copy’ of the proposed written publication or a written detailed description of the proposed oral disclosure at least [*] ([*]) days prior to submission or disclosure.  The Licensee shall have the right (a) to propose modifications to the publication for accuracy and/or patent reasons, and (b) to request a delay in publication or presentation in order to protect patentable information or maintain trade secrets.  If the Licensee requests such a delay, the Regents shall delay submission or presentation of the publication for a period not to exceed [*] ([*]) days from the date of such request to enable patent applications protecting such information to be filed and/or to allow the Parties to agree to a modification of the publication so as not to disclose the Licensee’s Proprietary Information.  Upon the expiration of [*] ([*]) days from the transmission to the Licensee of a proposed written disclosure or an abstract of a proposed oral disclosure, the Regents shall be free to proceed with the written publication or the oral presentation, unless the Licensee has requested the delay described above.

 

	
31.  

	
MISCELLANEOUS

 

31.1 The headings of the several sections are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

 

31.2 This Agreement is not binding on the parties until it has been signed below on behalf of each party.  It is then effective as of the Effective Date.

 

31.3 No amendment or modification of this Agreement is valid or binding on the parties unless made in writing and signed on behalf of each party.

 

31.4 This Agreement embodies the entire understanding of the parties and supersedes all previous communications, representations or understandings, either oral or written, between the parties relating to the subject matter hereof.

 

31.5 In case any of the provisions contained in this Agreement is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provisions of this Agreement and this Agreement will be construed as if such invalid, illegal or unenforceable provisions had never been contained in it.

 

31.6 No provisions of this Agreement are intended or shall be construed to confer upon or give to any person or entity other than The Regents and the Licensee any rights, remedies or other benefits under, or by reason of, this Agreement.

 

31.7 In performing their respective duties under this Agreement, each of the parties will be operating as an independent contractor.  Nothing contained herein will in any way constitute any association, partnership, or joint venture between the parties hereto, or be construed to evidence the intention of the parties to establish any such relationship.  Neither party will have the power to bind the other party or incur obligations on the other party’s behalf without the other party’s prior written consent.

 

  

-25-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

IN WITNESS WHEREOF, both The Regents and the Licensee have executed this Agreement, in duplicate originals, by their respective and duly authorized officers on the day and year written.

 

	
CHROMADEX INC.,

	
THE REGENTS OF THE UNIVERSITY

OF CALIFORNIA

 

	
By: /s/ Frank Jaksch

	

By: /s/ Ronnie Hanecak

	
Name: Frank Jaksch

	
Name:  Ronnie Hanecak

	
Title:   CEO

	
Title:    Assistant Vice Chancellor

             Office of Technology Alliances

 

	
Date: 9/7/2011

	

Date: September 8, 2011

 

  

-26-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

Exhibit A

 

Patent Rights

 

	
UC Case Number

	
United States Application Number or

United States Patent Number

	
Filing or Issue Date

	
2011-432

	
61484977

	
5/11/2011

 

 

300991214.2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00196-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00196-of-00352.parquet"}]]