Document:

Exhibit
10.60

 

CONTRACT AMENDMENT

 

	
  BUSINESS:
  

  	
  NewLink
  Genetics Corporation 

  
	
  MASTER
  CONTRACT #: 

  	
  06-54
  

  
	
  FUNDING
  AGREEMENT# 

  	
  06-HQJC-017
  

  
	
  AMENDMENT
  #: 

  	
  Two 

  
	
  EFFECTIVE
  DATE: 

  	
  August 19,
  2010 

  

 

THIS
CONTRACT AMENDMENT is made by and between the IOWA DEPARTMENT OF ECONOMIC
DEVELOPMENT, (hereafter “Department” or “IDED”), 200 East Grand Avenue, Des
Moines, Iowa 50309, an agency of the State of Iowa and NewLink Genetics Corporation (hereafter “Business”), a Delaware corporation, 2901 South Loop Drive, Suite 3900, Ames, Iowa
50010.

 

WHEREAS,
Business requested an extension of the Project Completion Date, and

 

WHEREAS,
the IDED Board approved a one (1) year
extension, effective as of the Effective Date stated above, and

 

NOW,
THEREFORE, the Contract referenced above is amended as follows:

 

6.              REVISION
OF ARTICLE 3.1, “PROJECT COMPLETION DATE.”  The definition of “Project Completion Date”
in Article 3.1 is amended as follows:

 

“Project
Completion Date” means March 18, 2010 2011 as
stated in Exhibit C, Description of the Project and Award Budget. The
Project Completion Date is the date by which all Project activities shall be
satisfactorily completed.

 

7.              REVISION
OF HQJC FUNDING AGREEMENT ARTICLE 4.1 “JOB OBLIGATIONS.” 

Article 4.1 is amended as follows:

 

The Business’s Job
Obligations are as detailed in Master Contract Exhibit D, “Job
Obligations.”

The Business shall create the Project Jobs by March 18, 2010.  The Business shall maintain the Project Jobs
for a period of at least two (2) years beyond the Project Creation Period,
for a total contract duration of 57 years.

 

8.              REVISION
OF HQJC FUNDING AGREEMENT ARTICLE 4.2 “QUALIFYING INVESTMENT.”  Article 4.2 is amended
as follows:

 

By March 18, 2010
2011, the Business shall make a qualifying investment of $2,000,000. A
“qualifying investment” means an investment in real property including the
purchase price of land and existing buildings and structures; site preparation;
improvements to real property; building construction; long-term lease costs;
and/or depreciable assets.

 

 

9.              REVISION
OF HQJC FUNDING AGREEMENT ARTICLE 4.5 “ADDITIONAL CONDITIONS.”  Article 4.5 is amended as follows:

 

Even though the
25,000-28,000 build-to-suit facility is not being included in the project,
Newlink Genetics will be required to finalize the lease terms and occupy the
facility by March 18, 2010 2011.  Failure to do so will result in an event of
non-compliance and NewLink Genetics will be required to re-pay all or a part of
the benefits received through the High Quality Job Creation Program award.

 

10.       REVISION OF EXHIBIT C,
“DESCRIPTION OF THE PROJECT AND AWARD BUDGET.” Exhibit C
is amended to revise the Project Completion Date. Details of this change are
reflected in the attached Revised Exhibit C which is hereby incorporated
by this reference and made a part of this Contract Amendment.

 

Except
as otherwise revised above, the terms, provisions, and conditions of Contract
Number 06-54 remain unchanged and are in full force and effect:

 

 

	
  FOR
  BUSINESS:

  	
   

  	
  FOR
  IDED:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNATURE

  	
   

  	
  Bret
  Mills, Director

  	
  DATE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PRINT/TYPE
  NAME, TITLE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  FOR
  COMMUNITY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNATURE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PRINT/TYPE
  NAME, TITLE

  	
   

  	
   

  

 

 

DESCRIPTION OF THE PROJECT AND AWARD BUDGET

(Exhibit C)

 

	
  Name of
  Business:

  	
  NewLink
  Genetics Corporation

  
	
   

  	
   

  
	
  Contract
  Number:

  	
  06-54

  

 

PROJECT DESCRIPTION

 

NewLink
Genetics Corporation will develop a campus for its operations at the ISU
Research park in Ames, Iowa. The project involves purchases of
manufaturing machinery and equipment and research and development. NewLink
Genetics Corp. will create 45 full-time equivelant (FTE) jobs as a result of
this project.

 

	
  Project
  Completion Date:

  	
  March 18,
  2010March 18, 2011

  
	
  Job
  Maintenance Period:

  	
  March 18,
  2012March 18, 2013

  

 

AWARD BUDGET

 

	
  SOURCE OF FUNDS

  	
   

  	
  Amount

  	
   

  	
   

  	
  USE OF FUNDS

  	
   

  	
  Cost

  
	
  IDED
  Programs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HQJC Program Benefits

  	
   

  	
  *see below

  	
   

  	
   

  	
  *Mfg
  Machinery and Equipment

  	
   

  	
  $2,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Research
  and Development

  	
   

  	
  $20,000,000

  
	
  City
  of Ames

  	
   

  	
  $200,000

  	
   

  	
  Forgivable
  loan

  	
   

  	
   

  	
   

  
	
  AEDC

  	
   

  	
  $200,000

  	
   

  	
  Forgivable
  loan

  	
   

  	
   

  	
   

  
	
  NewLink
  Genetics Corp.

  	
   

  	
  $21,600,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SUB TOTAL

  	
   

  	
  $22,000,000

  	
   

  	
   

  	
  SUBTOTAL

  	
   

  	
  $22,000,000

  
	
   

  	
   

  	
  * included as capital investment if aw arded tax credit program 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SUB TOTAL

  	
   

  	
  $0

  	
   

  	
   

  	
  SUB
  TOTAL

  	
   

  	
  $0

  
	
  TOTAL
  ALL FUNDS

  	
   

  	
  $22,000,000

  	
   

  	
   

  	
   

  	
   

  	
  $22,000,000

  

 

	
  *HQJC Program Benefits

  	
   

  	
  $414,200
  (estimated value)

  

 

Jan. 06Apr. 09Exhibit 10.61

 

EXCLUSIVE LICENSE AGREEMENT

 

between

 

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

 

and

 

BIOPROTECTION SYSTEMS CORPORATION

 

for

 

[*]

 

 

Table of Contents

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1

  	
  DEFINITIONS

  	
  2

  
	
   

  	
   

  	
   

  
	
  2

  	
  GRANT

  	
  7

  
	
   

  	
   

  	
   

  
	
  3

  	
  SUBLICENSES

  	
  9

  
	
   

  	
   

  	
   

  
	
  4

  	
  MANDATORY
  SUBLICENSING

  	
  10

  
	
   

  	
   

  	
   

  
	
  5

  	
  PAYMENT
  TERMS

  	
  11

  
	
   

  	
   

  	
   

  
	
  6

  	
  LICENSE
  ISSUE FEE

  	
  13

  
	
   

  	
   

  	
   

  
	
  7

  	
  LICENSE
  MAINTENANCE FEE

  	
  13

  
	
   

  	
   

  	
   

  
	
  8

  	
  PAYMENTS
  ON SUBLICENSES

  	
  13

  
	
   

  	
   

  	
   

  
	
  9

  	
  EARNED
  ROYALTIES AND MINIMUM ANNUAL ROYALTIES

  	
  14

  
	
   

  	
   

  	
   

  
	
  10

  	
  MILESTONE
  PAYMENTS

  	
  15

  
	
   

  	
   

  	
   

  
	
  11

  	
  DUE
  DILIGENCE

  	
  15

  
	
   

  	
   

  	
   

  
	
  12

  	
  PROGRESS
  AND ROYALTY REPORTS

  	
  17

  
	
   

  	
   

  	
   

  
	
  13

  	
  BOOKS
  AND RECORDS

  	
  19

  
	
   

  	
   

  	
   

  
	
  14

  	
  LIFE
  OF THE AGREEMENT

  	
  19

  
	
   

  	
   

  	
   

  
	
  15

  	
  TERMINATION
  BY THE REGENTS

  	
  20

  
	
   

  	
   

  	
   

  
	
  16

  	
  TERMINATION
  BY LICENSEE

  	
  20

  
	
   

  	
   

  	
   

  
	
  17

  	
  DISPOSITION
  OF LICENSED PRODUCTS UPON TERMINATION OR EXPIRATION

  	
  21

  
	
   

  	
   

  	
   

  
	
  18

  	
  USE
  OF NAMES AND TRADEMARKS

  	
  21

  
	
   

  	
   

  	
   

  
	
  19

  	
  LIMITED
  WARRANTY

  	
  21

  
	
   

  	
   

  	
   

  
	
  20

  	
  LIMITATION
  OF LIABILITY

  	
  22

  
	
   

  	
   

  	
   

  
	
  21

  	
  PATENT
  PROSECUTION AND MAINTENANCE

  	
  22

  
	
   

  	
   

  	
   

  
	
  22

  	
  PATENT
  MARKING

  	
  24

  
	
   

  	
   

  	
   

  
	
  23

  	
  PATENT
  INFRINGEMENT

  	
  24

  
	
   

  	
   

  	
   

  
	
  24

  	
  INDEMNIFICATION

  	
  25

  
	
   

  	
   

  	
   

  
	
  25

  	
  NOTICES

  	
  27

  
	
   

  	
   

  	
   

  
	
  26

  	
  ASSIGNABILITY

  	
  28

  
	
   

  	
   

  	
   

  
	
  27

  	
  WAIVER

  	
  28

  
	
   

  	
   

  	
   

  
	
  28

  	
  FORCE
  MAJEURE

  	
  28

  
	
   

  	
   

  	
   

  
	
  29

  	
  GOVERNING
  LAWS; VENUE; ATTORNEYS’ FEES

  	
  28

  

 

i

 

Table of Contents

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  30

  	
  GOVERNMENT
  APPROVAL OR REGISTRATION

  	
  29

  
	
   

  	
   

  	
   

  
	
  31

  	
  COMPLIANCE
  WITH LAWS

  	
  29

  
	
   

  	
   

  	
   

  
	
  32

  	
  CONFIDENTIALITY

  	
  29

  
	
   

  	
   

  	
   

  
	
  33

  	
  MISCELLANEOUS

  	
  31

  

 

ii

 

EXCLUSIVE LICENSE AGREEMENT

 

for

 

[*]

 

This
license agreement (“Agreement”) is made effective this 29th day of July, 2008 (“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 acting through its Office of Technology Management, University of
California San Francisco (“UCSF”), 185 Berry Street, Suite 4603, San
Francisco, California 94107, and BioProtection Systems Corporation, a Delaware
corporation, having a principal place of business at 2901 South Loop Drive, Suite 3360,
Ames, Iowa 50010-8646 (“Licensee”).

 

BACKGROUND

 

A.                                   Certain
inventions, generally characterized as [*]
(collectively “Inventions”), were made in the course of research at the
University of California, San Francisco, by Drs. Raul Andino and Andres McAllister
Moreno  and are claimed in Patent Rights as
defined below.

 

B.                                     The development
of the Inventions was sponsored by the Department of Health and Human Services
and, 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 Inventions for or on behalf of the
United States Government throughout the world.

 

C.                                     Licensee wishes
to obtain certain rights from The Regents for the commercial development of the
Inventions, in accordance with the terms and conditions set forth herein and
The Regents is willing to grant those rights so that the Inventions 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 the Valid Claims of such Patent
Rights.

 

E.                                      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 specific products, services and methods covered by this Agreement
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.

 

G.                                           Both parties
recognize and agree that Earned Royalties due under this Agreement will be
based on Licensee’s or a Sublicensee’s last act covered by the Patent Rights
within the control of Licensee or a Sublicensee, regardless of whether Licensee
or a Sublicensee 

 

1

 

had
control over prior acts; the parties intend that Earned Royalties due under
this Agreement will be calculated based on the Net Sales of the product or
service resulting from the last such act by Licensee and its Sublicensees.

 

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                               “API” or “Active Pharmaceutical
Ingredient” means a therapeutically active biological or chemical
compound that (i) requires regulatory approval by the United States Food
and Drug Administration (“FDA”) before use in humans; (ii) does not
function together with the Licensed Product to achieve the same prophylactic or
therapeutic purpose through the same mechanism of action, by targeting the same
antigen or the same gene or expressed product of a gene; (iii) is claimed
or covered by patent rights that do not claim or cover Licensed Product; and (iv) when
Sold as a component of a Combination Product, the market price of such
Combination Product is higher than the market price for the Licensed Product
portion included within such Combination Product, when such Licensed Product is
Sold alone.  For clarity, the term “Active
Pharmaceutical Ingredient” shall not include excipients, buffers or other
similar substances that are typically formulated with the therapeutically
active ingredient contained in a drug product to form the final drug product
for sale and/or pharmaceutical administration.

 

1.2                               “Affiliate” of Licensee means any entity which, directly or
indirectly, Controls Licensee, is Controlled by Licensee or is under common
Control with Licensee.  “Control” means: (i) having
the actual, present capacity to elect a majority of the directors of such
entity; (ii) having the power to direct at least forty percent (40%) 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.

 

1.3                               “Attributed Income” means the total gross proceeds (exclusive
of Earned Royalties of Sublicensees, but including, without limitation, any
license fees, maintenance fees, or milestone payments), 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
Licensee or any Affiliate from any Sublicensee in consideration of the grant of
a sublicense under the Patent Rights. 
Notwithstanding the foregoing, Attributed Income shall not include
proceeds attributed in such sublicense or such agreement, arrangement or other
relationship to bona fide: [*] for the
applicable Sublicensee under such sublicense or such agreement, arrangement or
other relationship on the basis of full-time equivalent (“FTE”) efforts of
personnel at or below commercially reasonable and standard FTE rates and/or
reimbursement of other research costs (such as capital equipment purchase) on
any actual cost basis.

 

2

 

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
relating to sublicensing of the Patent Rights and irrespective of how such
gross proceeds are referred to or characterized by Licensee, or the
Sublicensee.

 

1.4                               “Combination Product” means a therapeutic Product that when
Sold contains as active ingredients both a Licensed Product and one or more
Active Pharmaceutical Ingredients (which are not themselves Licensed
Products).  For clarity, the entire
Combination Product is deemed a Licensed Product.

 

1.5                               “Commercially Reasonable Efforts” shall mean, with respect to
the efforts and resources to be expended by Licensee (or its Affiliates or any
Sublicensees) with respect to any objective under this Agreement, reasonable,
diligent, good faith efforts to accomplish such objective as such party would
normally use to accomplish a similar objective under similar circumstances, it
being understood and agreed that with respect to the discovery, development or
commercialization of any Product, such efforts shall be substantially
equivalent to those efforts and resources commonly used by such party for a
product owned by it or to which it has exclusive rights, which product is at a
similar stage in its development or product life and is of similar market
potential taking into account efficacy, safety, approved labeling, the
competitiveness of alternative products in the marketplace, the patent and
other proprietary position of the product, the likelihood of regulatory
approval, the profitability and commercial potential of the product to the
applicable party, alternative products and other relevant factors.

 

1.6                               “Earned Royalty” means a royalty as defined in Paragraph 9.1.

 

1.7                               “Field of Use” means all uses, applications and indications
relating to human health, such as diagnostic, prophylactic and therapeutic
applications, including without limitation Licensee’s and any Sublicensee’s
internal research and development use as required to develop such applications
and all commercial uses relating to human healthcare.  All other uses are excluded.

 

1.8                               “FTE” is defined in Paragraph 1.2 (Attributed Income).

 

1.9                               “Joint Venture” means any separate entity established
pursuant to an agreement between a third party and 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
Licensee or Sublicensee.

 

1.10                        “Know-How” means the Biological Materials, protocols and
other unpatented know-how listed or generally described in Appendix A.

 

1.11                        “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.

 

3

 

1.12                        “Licensed Product(s)” means any Product, (which may include, without
limitation, a Product 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, any
Patent Rights in any country were they issued at the time of the infringing
activity in that country.  For the
avoidance of doubt, if such Product is a component of a larger unit such as a
kit, composition of matter or combination, then such kit, composition of matter
or combination is deemed to be the Licensed Product for purposes of this
definition.

 

1.13                        “Net Invoice Price” means the gross invoice price charged by,
and the value of any other consideration (if any) owed to, Licensee and/or any
Sublicensee for a Licensed Product Sold to a third party, less (i) an
allowance only for those accounts deemed uncollectible by Licensee (or the
Sublicensee, as applicable) after diligent efforts to collect the amount owed,
and (ii) the following items, but only to the extent that they actually
pertain to the disposition of such Licensed Product, and are included in the
gross invoice price charged or other consideration owed:

 

1.13.1                        Allowances or
credits or refunds actually granted to customers for rejections, returns and
prompt payment and volume or trade discounts off of the gross invoice price;

 

1.13.2                        Freight,
transport packing and insurance charges associated with transportation, to the
extent identified separately on a bill or invoice;

 

1.13.3                        Taxes,
including Deductible Value Added Tax, tariffs or import/export duties based on
Sales when included in the gross invoice price, but excluding value-added taxes
other than Deductible Value Added Tax or taxes assessed on income derived from
Sales.  “Deductible Value Added Tax”
means only the portion of the value added tax that is actually incurred and is
not reimbursable, refundable or creditable under the tax authority of any
country;

 

1.13.4                        normal and
customary discounts and rebates given off of the gross invoice price as a part
of a formulary or similar program that are allowed, paid or credited to
customers, third-party payers, healthcare systems, or administrators for a
Licensed Product that is included in such program, as permitted by applicable
law;

 

1.13.5                        normal and
customary chargebacks and retroactive price reductions that are paid or
credited to customers, third-party payers, health care systems, or
administrators for a Licensed Product, as permitted by applicable law;

 

1.13.6                        Rebates and
discounts off of the gross invoice price paid or credited pursuant to
applicable law; and

 

1.13.7                        The invoiced,
out-of-pocket cost (or cost of manufacture, if manufactured by Licensee, its
Affiliate(s) or any Sublicensees) for drug delivery devices or 

 

4

 

vaccine delivery devices
specifically for use with and included in the Licensed Product.

 

1.14                        “Net Sale”
means:

 

1.14.1                        except in the
instances described in Paragraphs 1.14.2, 1.14.3 and 1.14.4 of this Paragraph,
the Net Invoice Price;

 

1.14.2                        for any
Relationship-Influenced Sale of a Licensed Product, Net Sales shall be based on
the Net Invoice Price at which the Relationship-Influenced Sale Purchaser
re-Sells such Licensed Product;

 

1.14.3                        in those
instances where Licensed Product is not Sold, but is otherwise commercially
exploited, the Net Sales for such Licensed Product shall be the Net Invoice
Price of products of the same or similar kind and quality, Sold in similar quantities,
currently being offered for Sale by Licensee, and/or any Sublicensee.  Where such products are not currently being
offered for Sale by Licensee, and/or any any Sublicensee, the Net Sales for
Licensed Product otherwise exploited, for the purpose of computing royalties,
shall be the average Net Invoice Price at which products of the same or similar
kind and quality, Sold in similar quantities, are then currently being offered
for Sale by other manufacturers.  Where
such products are not currently Sold or offered for Sale by Licensee, and/or
any Sublicensee, or others, then the Net Sales shall be Licensee’s, and/ or any
Sublicensee’s cost of manufacture of Licensed Product, determined according to
Generally Accepted Accounting Principles (“GAAP”), [*];
and

 

1.14.4                        for a
Reacquisition Sale or Exploitation, Net Sales shall mean the Net Invoice Price
upon the Reacquisition Sale or Exploitation of a Licensed Product.

 

1.14.5                        For a
Combination Product, Net Sales for royalty purposes shall be calculated as:

 

A/(A+B)
x [Net Sales, calculated as in 1.14.1-1.14.4 above, without regard to this
formula], 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 each API
contained within or used in the Combination Product when Sold separately; 

provided,
however, that in no event shall Net Sales for royalty purposes of a Combination
Product be less than [*] of the Net
Sales calculated as above without regard to this formula.

In
the event that either the Licensed Product or any of the APIs included in the
Combination Product are not Sold separately, the Net Sales shall be calculated
as: (C/D) x [Net Sales, calculated as in 1.14.1-1.14.4 above, without regard to
this formula], where:

 

5

 

(i)        “C” is the relative contribution, to the
overall market value of such Combination Product, of the Licensed Product
portion included in the Combination Product; and

(ii)       “D” is relative contribution, to the
overall market value of such Combination Product, of the API portion(s) included
in the Combination Product; with C and D to be established by the mutual
agreement of the Parties acting reasonably and in good faith based upon the
then-current market conditions; and

provided,
however, that in no event shall Net Sales for a Combination Product be less
than [*] of the Net Sales calculated without
regard to this formula.

 

1.15                        “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.

 

1.16                        “Patent Prosecution Costs” is defined in Paragraph 12.4.

 

1.17                        “Patent Rights” means to the extent assigned to or otherwise
obtained by The Regents, the following United States patents and patent
applications and all rights thereunder:

 

	
  UC Case Number

  	
   

  	
  United States Application Number or

  United States Patent Number

  	
   

  	
  Filing or Issue Date

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
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  [*]

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  

 

The
term “Patent Rights” shall also mean, to the extent assigned to or otherwise
obtained by The Regents, any reissues, extensions, substitutions,
continuations, divisions, and continuation-in-part applications (but excluding
those Valid Claims in the continuation-in-part applications that are not
supported in the specification of and not entitled to the priority date of the
parent application).  This definition of
Patent Rights excludes any rights in and to New Developments.

 

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

 

1.19                        “Reacquisition Sale or Exploitation” means those instances
where Licensee, or a Sublicensee, acquires a Licensed Product and then
subsequently Sells or otherwise commercially exploits such Licensed Product.

 

1.20                        “Related Party” means a corporation, firm or other entity
with which, or individual with whom, Licensee, and/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 

 

6

 

interest, or an arrangement
involving a division of revenue, profits, discounts, rebates or allowances)
unrelated to the Sale or exploitation of the Licensed Products and due to such
other agreement, understanding or arrangement, the amounts, if any, charged by
Licensee, or any Sublicensee to such entity or individual for the Licensed
Product, is less than Licensee or Sublicensee (as applicable) otherwise would
have charged for such Licensed Product.

 

1.21                        “Relationship-Influenced Sale” means a Sale of a Licensed
Product, or any other commercial exploitation of the Licensed Product or
Licensed Method, between Licensee and/or any Sublicensee and (i) an
Affiliate; (ii) a Joint Venture; (iii) a Related Party or (iv) Licensee
or a Sublicensee.

 

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

 

1.23                        “Sale” means the act of selling, leasing or otherwise
commercially 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.

 

1.24                        “Sublicensee” means any person or entity (including any
Affiliate or Joint Venture) to which any of the license rights granted to
Licensee hereunder are sublicensed.

 

1.25                        “Sublicense Fee” is defined in Paragraph 8.1.

 

1.26                        “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 set forth in the
Background and in Paragraph 2.4.1, The Regents grants to Licensee a license
under its rights in and to Patent Rights to make, use, Sell, offer for Sale and
import Licensed Products and to use and practice the Patent Rights and Licensed
Methods, in the United States and in other countries where The Regents may lawfully
grant such licenses, only in the Field of Use.

 

2.2                               Except as
otherwise provided for in this Agreement, the license granted under Patent
Rights in Paragraph 2.1 is exclusive,

 

2.3                               Subject to the
limitations and other terms and conditions set forth in this Agreement
including the license granted to the United States Government set forth in the
Background and in Paragraph 2.4.1, The Regents grants to Licensee a
non-exclusive

 

7

 

 

license under its rights in
and to Know-How to use solely for the research, development and
commercialization of Licensed Products only in the Field of Use.

 

2.4                               The license
granted in Paragraphs 2.1 and 2.2 is subject to the following:

 

2.4.1                               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, including
the obligation to report on the utilization of the Inventions as set forth in
37 CFR. § 401.14(h), and all applicable provisions of any license to the United
States Government executed by The Regents; and

 

2.4.2                               the National
Institutes of Health “Principles and Guidelines for Recipients of NIH Research
Grants and Contracts on Obtaining and Disseminating Biomedical Research
Resources,” 64 F.R. 72090 (Dec.  23, 1999), as amended from time to time.

 

2.5                               The license
granted in Paragraphs 2.1, 2.2 and 2.3 is limited to activities, methods and
products that are within the Field of Use. 
For other activities, methods and products outside the Field of Use,
Licensee has no license under this Agreement.

 

2.6                               The Regents
reserves and retains the right (and the rights granted to Licensee in this
Agreement shall be limited accordingly) to make, use and practice the
Inventions, and any technology relating to the Inventions and to make and use
any Products and to practice any process that is the subject of the Patent
Rights (and to grant any of the foregoing rights to other educational and
non-profit institutions) for educational and research purposes, including
without limitation, any sponsored research performed for or on behalf of
commercial entities and including publication and other communication of any
research results.  For the avoidance of
doubt, to the extent the Inventions and any technology relating to it are not
the subject of the exclusive license under the Patent Rights granted to the
Licensee hereunder, The Regents shall be free to make, use, Sell, offer to
Sell, import, practice and otherwise commercialize and exploit (including to
transfer, license to, or have exercised by, third parties) for any purpose
whatsoever and in its sole discretion, such Inventions, and any Products or
processes that are the subject of any of the foregoing.

 

2.7                               Because the Inventions
were made under funding provided by the United States Government, Licensed
Products, the Inventions, and any products embodying the Inventions sold in the
United States will be substantially manufactured in the United States to the
extent required by law or regulation. 
The Regents agree to use reasonable efforts to seek an exemption from
the foregoing requirement, if requested by Licensee, based upon reasonable
reasons justifying such exemption.

 

2.8                               Promptly after
the Effective Date, The Regents will disclose or provide, as appropriate, to
Licensee the Know-How in Appendix.  A (to
the extent not otherwise disclosed within the Patent Rights disclosed to
Licensee).

 

8

 

3                                         SUBLICENSES

 

3.1                               The Regents
also grants to Licensee the right to sublicense to third parties (including to
Affiliates and Joint Ventures) the rights granted to Licensee hereunder, with
no right to further sublicense except as provided below, as long as Licensee
has current exclusive rights under this Agreement.  Each Sublicensee must be subject to a written
sublicense agreement.  All sublicenses
will be subject to all terms and conditions of this Agreement, will include all
of the rights of, and will require the performance of all the obligations due
to, The Regents (and, if applicable, the United States Government and other
sponsors) to the extent that such obligations are not performed by Licensee,
other than those rights and obligations specified in Article 6 (License
Issue Fee), Article 7 (License Maintenance Fee) and Paragraph 9.3 (Minimum
Annual Royalty) and Paragraphs 21.4 and 21.5 (reimbursement for Patent
Prosecution Costs).  For the avoidance of
doubt, Licensee shall have no right to permit any Sublicensee and no Sublicensee
shall have any right to further sublicense any of the rights granted to
Licensee hereunder without the prior written consent of The Regents, such
consent not to be unreasonably withheld or delayed, except that each
Sublicensee (except Affiliates and Joint Ventures) may sublicense to its
Affiliates (as affiliate is defined in Paragraph 1.1 with Sublicensee
substituted for Licensee in the definition), to the extent needed for the
development and commercialization of Licensed Products in accordance with this
Agreement.  Also, for the avoidance of
doubt, Affiliates and Joint Ventures shall have no licenses under this
Agreement unless such Affiliates and Joint Ventures are granted a sublicense.  For the purposes of this Agreement, any act
or omission by a Sublicensee that would be a breach of this Agreement if
imputed to Licensee will be deemed to be a breach by Licensee of this
Agreement.

 

3.2                               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 thirty (30) days of issuance of such sublicense or such amendment.  Licensee will use reasonable efforts to
collect from Sublicensees all fees, payments, royalties and the cash equivalent
of any consideration due under the applicable sublicense agreements and will
pay to The Regents all amounts due The Regents under this Agreement based on
all Sublicensee’s activities.  For clarity,
even if Licensee grants a sublicense that contains a provision for payment to
Licensee (or its Affiliate) of royalties by any Sublicensee in an amount that
is less than the Earned Royalty required to be paid under Paragraph 9.1 below
based on the sales of Licensed Product by such Sublicensee, Licensee will pay
to The Regents a total amount equal to the Earned Royalty based on the
Sublicensees’ Net Sales as provided for in Paragraph 9.1.  Licensee will require Sublicensees to provide
it with copies of all progress reports and royalty reports in accordance with
the provisions herein and Licensee will collect and deliver all such reports
due The Regents from Sublicensees.

 

3.3                               If Licensee
licenses to a third party patent rights assigned to or otherwise acquired by
Licensee (“Licensee’s Patent Rights”), and it believes, in good faith, that the
recipient of such license will infringe Patent Rights in practicing Licensee’s
Patent Rights, then Licensee will not separately grant a license to such
recipient under Licensee’s Patent Rights without concurrently granting a
sublicense under Patent Rights consistent with Section 3.1 under this
Agreement.

 

9

 

3.4                               Upon any
expiration or termination of this Agreement for any reason, all sublicenses
shall automatically terminate, unless The Regents, at its sole discretion,
agrees in writing to an assignment to The Regents of any sublicense.  In the event of termination of this Agreement
and if The Regents accepts assignment of any sublicense, 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, if The Regents
accepts assignment of a sublicense in such case, 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 Licensee at
a rate that is no lower than the rate set forth in Article 9 (Earned
Royalties and Minimum Annual Royalties) in accordance with Article 5
(Payment Terms).

 

4                                         MANDATORY
SUBLICENSING

 

4.1                               If The Regents
(as represented by the actual knowledge of the licensing professional
responsible for administration of this Agreement) becomes aware of, or if a
third party becomes aware of and notifies such licensing professional of an
application or use for Licensed Products within the licensed Field of Use but
for which Licensed Products have not been developed or are not, at such time,
being developed by Licensee, then The Regents, through the Office of Technology
Management, may give written notice to Licensee thereof.

 

4.2                               Within ninety
(90) days of such notice, Licensee shall give The Regents written notice
stating whether Licensee (or its Affiliate or Sublicensee) agrees to develop
and commercialize Licensed Products for such application (“New Licensed
Products”).  Such notice shall be
accompanied by (i) a reasonably detailed development schedule, including
specific diligence requirements and development milestones, for the development
of New Licensed Products; and (ii) a reasonably detailed business plan for
the development, marketing and commercialization of New Licensed Products
(collectively, the “Development Plan”). 
If Licensee has not notified The Regents, in accordance with the
foregoing, that Licensee (or its Affiliate or Sublicensee) agrees to develop
and commercialize such New Licensed Products within such ninety (90) day
period, or if the Development Plan is not reasonably acceptable to The Regents,
then Licensee shall be deemed to not so agree.

 

4.3                               If Licensee has
notified The Regents, as set forth in Paragraph 4.2, that it (or its Affiliate
or Sublicensee) intends to develop and commercialize such New Licensed
Products, then Licensee (or its Affiliate or Sublicensee) shall (i) diligently
proceed with the development, manufacture and commercialization of such New
Licensed Products in accordance with the Development Plan and (if required
regulatory approvals are obtained) earnestly and diligently endeavor to market
the same in accordance with the Development Plan and in quantities sufficient
to meet market demand; and (ii) Licensee shall submit a written progress
report setting forth in detail the status of such development, manufacture and
commercialization every six (6) months to The Regents.

 

10

 

4.4                               If Licensee
does not agree, as set forth in Paragraph 4.2, to develop and commercialize
such New Licensed Products, or if Licensee (or its Affiliate or Sublicensee, as
applicable) materially fails to diligently pursue the development and
commercialization thereof in accordance with the Development Plan and such
failure is not cured within 90 days of written notice of such failure, then The
Regents shall have the right to seek one or more third parties for the development
and commercialization of such New Licensed Products and refer such third party
to Licensee so that such third party may request a sublicense allowing for
development and commercialization of such New Licensed Products, provided
however that Licensee shall not in any event be required to grant to any such
third party a sublicense with respect to any Licensed Product then in
development or being commercialized by Licensee (or its Affiliate or
Sublicensee) for other uses or indications within the licensed Field of
Use.  If the third party requests a
sublicense, then Licensee shall report such request, together with the terms
and conditions thereof proposed by such third party, to The Regents within
thirty (30) days from the date of such request, and Licensee shall negotiate
with such third party reasonably and in good faith and seek to reach agreement
on the terms of such a sublicense, which shall be commercially reasonable for
Licensee.

 

4.5                               If such a third
party has requested a sublicense with respect to New Licensed Products and has
proposed commercially reasonable terms, and Licensee does not grant a
sublicense to the third party within a reasonable time after such request under
commercially reasonable terms, then Licensee shall promptly, or, in the event
of such refusal, within thirty (30) days after such refusal, submit to The
Regents a written report specifying the license terms proposed by the third
party and a written justification for the Licensee’s refusal or failure to
grant such sublicense.  If The Regents,
acting reasonably and in good faith, determines that the terms of the
sublicense proposed by the third party are commercially reasonable under the
circumstances, then The Regents shall have the right to grant to the third
party (and the rights granted to Licensee in this Agreement shall be limited
accordingly) a license to make, have made, use, sell, offer for sale and import
the requested New Licensed Products and to practice the Licensed Methods
(within the licensed Field of Use and otherwise) with respect to the specific
application covered by the request, at substantially the same terms last
proposed to Licensee by the third party providing that the royalty rates are
not lower than the earned royalties owed by Licensee hereunder and provided
further that The Regents may not in any event grant such third party any
license rights with respect to any Licensed Product then in development or
being commercialized by Licensee (or its Affiliate or Sublicensee) or with
respect to any uses or indications within the licensed Field of Use other than
the specific use requested by such third party that is the New Licensed
Product.

 

5                                         PAYMENT
TERMS

 

5.1                               Paragraphs
1.11, 1.12 and 1.17 define Licensed Method, Licensed Product, and Patent
Rights, so that Earned Royalties are payable on products and methods covered by
Valid Claims in the Patent Rights (which includes both pending patent
applications and issued patents).  Earned
Royalties will accrue for the duration of Patent Rights and will accrue when
Licensed Products are invoiced, or if not invoiced, when delivered or otherwise
exploited by Licensee or Sublicensee in a manner constituting a Net Sale as
defined in 

 

11

 

Paragraph 1.14.  Sublicense Fees with respect to any
Attributed Income shall accrue to The Regents within thirty (30) days of the
date that such Attributed Income is received by Licensee.  Licensee shall use diligent efforts to
collect from its Sublicensees all Attributed Income that is due to Licensee,
and if a Sublicensee materially defaults in an obligation to pay Attributed
Income, and does not cure such default within ninety (90) days of the date such
Attributed Income is due, then Licensee shall terminate the corresponding
sublicense.

 

5.2                               Licensee will
pay to The Regents all Earned Royalties, Sublicense Fees and other
consideration payable to The Regents quarterly on or before February 28
(for the calendar quarter ending December 31), May 31 (for the
calendar quarter ending March 31), August 31 (for the calendar
quarter ending June 30) and November 30 (for the calendar quarter
ending September 30) of each calendar year.  Each such payment will be for Earned
Royalties, Sublicense Fees and other consideration which has accrued within
Licensee’s most recently completed calendar quarter.

 

5.3                               All
consideration due The Regents will be payable and 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.  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 The Wall Street Journal during the last thirty (30) days of
the reporting period.

 

5.4                               Sublicense 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 Paragraphs 1.13
(Net Invoice Price) and 1.14 (Net Sale) or for withholding taxes required to be
assessed by any government upon the payments being made to The Regents.

 

5.5                               Notwithstanding
the provisions of Article 28 (Force Majeure) if at any time legal
restrictions prevent the prompt remittance of Earned Royalties or other
consideration owed to The Regents by Licensee with respect to any country where
a sublicense is issued or a Licensed Product is Sold or otherwise exploited,
then 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.

 

5.6                               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 further appeal 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.  Licensee will not, however, be relieved from
paying any royalties that accrued before such final decision and Licensee shall
be obligated to pay the full amount 

 

12

 

of royalties due hereunder
to the extent that The Regents licenses one or more Valid Claims within the
Patent Rights to Licensee that cover such Licensed Products.

 

5.7                               To the extent
required by law, 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.  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.

 

5.8                               In the event
that royalties, fees, reimbursements for Patent Prosecution Costs or other
monies owed to The Regents under this Agreement are not received by The Regents
when due, Licensee will pay to The Regents interest on the amount of the late
payment at a rate of ten percent (10%) simple interest per annum.  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.

 

6                                         LICENSE
ISSUE FEE

 

Licensee
will pay to The Regents a license issue fee of [*] within
seven (7) 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.

 

7                                         LICENSE
MAINTENANCE FEE

 

7.1                               Beginning on the
one-year anniversary of the Effective Date and continuing annually on each
anniversary of the Effective Date (except as otherwise provided in Section 7.2),
Licensee will also pay to The Regents a license maintenance fee as follows:

 

7.1.1                               [*] until and including
the [*];

 

7.1.2                               [*] subsequent to
the [*].

 

7.2                               The license
maintenance fee is not due on any anniversary of the Effective Date if on that
date, Licensee (or its Affiliate or Sublicensee) is Selling or otherwise
exploiting Licensed Products and is paying an Earned Royalty to The Regents on
the Net Sales of such Licensed Products. 
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.

 

8                                         PAYMENTS
ON SUBLICENSES

 

8.1                               Licensee will
pay to The Regents the following percentages of all Attributed Income (“Sublicense
Fees”), according to the stage of development of Licensed Products:

 

13

 

8.1.1                               [*] under
sublicenses executed before [*];

 

8.1.2                               [*] under
sublicenses executed subsequent to [*] but prior
to [*];

 

8.1.3                               [*] under
sublicenses executed subsequent to [*] but prior
to [*];

 

8.1.4                               [*] under
sublicenses executed after [*].

 

Sublicense
Fees are non-refundable and non-creditable.

 

9                                         EARNED
ROYALTIES AND MINIMUM ANNUAL ROYALTIES

 

9.1                               Licensee will
pay to The Regents an “Earned Royalty”
of:

 

9.1.2                     [*] of the Net
Sales of Licensed Product(s) or Licensed Method [*]
by Licensee or any Affiliate or Sublicensee; and

 

9.1.3                     [*] of the Net
Sales of Licensed Product(s) or Licensed Method [*]
by Licensee or any Affiliate or Sublicensee.

 

9.2                               In the event it
becomes necessary for Licensee (or its Affiliate or Sublicensee) to license
patent rights owned by an unaffiliated third party in order to make, use, Sell,
offer to Sell or import Licensed Product or Licensed Method, and Licensee (or
its Affiliate or Sublicensee) is required to pay a royalty to the unaffiliated
third party under a separate license agreement in order to practice Licensed
Methods, and/or to make, use, Sell, offer to Sell or import Licensed Products,
in addition to Licensee paying to The Regents a royalty under this Agreement
for such activity, and the combined earned royalty due all the parties exceeds [*], then the Earned Royalty to be paid to The Regents
under this Agreement by Licensee shall be reduced on a going-forward basis by
an amount equal to [*] of the
royalty rate due to such unaffiliated third party that is in excess of the [*] combined royalty rate due to all parties.  However, in no event shall the amount paid to
The Regents be reduced below [*] of the
original Earned Royalty amount due The Regents under Paragraph 9.1 above.  No reduction pursuant to this Section 9.2
will be available with respect to a Combination Product if no such royalty
would have been payable to such unaffiliated third party if the relevant API
were not included in such Combination Product.

 

9.3                               In the event it
becomes necessary for the Licensee or its Affiliate or a Sublicensee to license
patent rights owned by an unaffiliated third party in order to make, use, Sell,
offer to Sell or import the Licensed Product component of a Combination
Product, and Licensee is required to pay a royalty to both The Regents under
this Agreement and the unaffiliated third party under that separate license
agreement in order to practice Licensed Methods, and to make, use, Sell, offer
to Sell or import Licensed Products, and the combined earned royalty due all
the parties exceeds [*], and the
Net Sales amount has been allocated to the Licensed Product portion of the
Combination Product pursuant to Subparagraph 1.14.5, then the Earned Royalty to
be paid to The Regents under this Agreement by Licensee shall be reduced by an
amount equal to [*] of the combined earned
royalty rate due to The Regents and the unaffiliated third party.  However, in no 

 

14

 

event shall the amount paid
to The Regents be reduced below [*] of the
original Earned Royalty amount due The Regents on Net Sales of the Combination
Product calculated without regard to Subparagraph 1.14.5 and without regard to
this Paragraph 9.3.

 

9.4                               Licensee will
also pay to The Regents a minimum annual royalty of [*]
for the life of Patent Rights, beginning with the year of the first Sale of
Licensed Product, but no later than calendar year 2015.  The minimum annual royalty will be paid to
The Regents by February 28 of each year and will be credited against the
Earned Royalty due for the calendar year in which the minimum payment was
made.  However, if the year of the first
Sale is earlier than calendar year 2015, then Licensee’s obligation to pay the
minimum annual royalty will be pro-rated for the number of months remaining in
that calendar year when Sales commence and will be due the following February 28
(along with the minimum annual royalty payment for that year), to allow for
crediting of the pro-rated year’s Earned Royalties.

 

10                                  MILESTONE
PAYMENTS

 

10.1                        With respect to
each Licensed Product, Licensee will pay to The Regents the following
non-refundable, non-creditable amounts:

 

10.1.1                        [*] upon the first
[*];

 

10.1.2                        [*] upon first [*];

 

10.1.3                        [*] upon first [*];

 

10.1.4                        [*] upon the first
[*];

 

10.1.5                        [*] upon first [*]; provided that
such payment shall be [*] upon [*] for each [*].

 

10.2                        For the
avoidance of doubt, each of the milestone payments set forth in Section 10.1
above will be payable with respect to each different Licensed Product, but
shall be payable only once with respect to such Licensed Product.  Furthermore, each such milestone payment will
be payable regardless of whether the applicable milestone event has been
achieved by Licensee or any Affiliate, Joint Venture, or Sublicensee.

 

10.3                        All milestone
payments are due to The Regents within thirty (30) days of the occurrence of
the applicable milestone event.

 

11                                  DUE
DILIGENCE

 

11.1                        Licensee, upon
execution of this Agreement, will diligently proceed with the development,
manufacture and (if required regulatory approvals are obtained) Sale of
Licensed Products and will earnestly and diligently market the same after
execution of this Agreement and in quantities sufficient to meet the market
demands therefor, all using Commercially Reasonable Efforts.

 

15

 

11.2                        Licensee will
use Commercially Reasonable Efforts to obtain all necessary governmental
approvals in each country where Licensed Products are intended to be
manufactured, used, Sold, offered for Sale or imported; Licensee shall not make
any Sale of a Licensed Product in a country without obtaining all necessary
governmental approvals for the Sale in such country.

 

11.3                        Licensee will:

 

11.3.1                        [*] from the
Effective Date;

 

11.3.2                        [*] within [*] from the Effective Date;

 

11.3.3                        [*] within [*] from the Effective Date;

 

11.3.4                        [*] within [*] of [*]; and

 

11.3.5                        [*] for Licensed
Products [*] at any time during the exclusive
period of this Agreement.

 

11.4                        If Licensee
does not perform any of the above milestone events under Subparagraphs 11.3.1
through 11.3.4 within the specified time, and Licensee can demonstrate with
supporting documentation its Commercially Reasonable efforts to meet such
milestones, then The Regents agrees to extend such milestone for one (1) year
upon payment of an extension fee of [*].  Additional one (1) year extensions are
available for any milestone provided that Licensee can continue to demonstrate
its Commercially Reasonable efforts with supporting documentation and pays an
additional extension fee of [*].

 

11.5                        If Licensee
does not perform any of the above provisions in Section 11.3 within the
specified time, and cannot demonstrate its Commercially Reasonable efforts to
achieve such milestone (based on The Regents’ objective, good faith assessment
of Licensee’s demonstration and supporting documentation), and provided that such failure is not due to matters outside of
Licensee’s control, then The Regents has the right and option to either
terminate this Agreement or reduce the exclusive license granted to Licensee to
a nonexclusive license subject to and in accordance with Paragraph 11.7
below.  This right, if exercised by The
Regents, supersedes the rights granted in Article 2 (Grant).

 

11.6                        In addition to
the obligations set forth above, Licensee shall [*]
Licensed Products during the first two (2) years of this Agreement.

 

11.7                        If Licensee
fails to comply with the spending requirement set forth in Paragraph 11.5, then
The Regents has the right and option to either terminate this Agreement or
reduce the exclusive license granted to Licensee to a nonexclusive
license.  This right, if exercised by The
Regents, supersedes the rights granted in Article 2 (Grant).

 

11.8                        To exercise
either the right to terminate this Agreement or to reduce the exclusive license
granted to Licensee to a non-exclusive license for lack of diligence required
in this Article 11 (Due Diligence), The Regents will give Licensee written
notice of the deficiency.  Licensee
thereafter has sixty (60) days to cure the deficiency.  If The Regents 

 

16

 

has not received written
tangible evidence satisfactory to The Regents that the deficiency has been
cured by the end of the sixty (60)-day period, then The Regents may, at its option,
terminate this Agreement immediately without the obligation to provide sixty
(60) days’ notice as set forth in Article 15 (Termination by The Regents)
or reduce the exclusive license granted to Licensee to a non-exclusive license
by giving written notice to Licensee.

 

12                                  PROGRESS
AND ROYALTY REPORTS

 

12.1                        Beginning on March 31, 2008 and semi-annually thereafter, Licensee
will submit to The Regents a written progress report as described in Paragraph
12.2 below covering Licensee’s (and any Affiliates’, Joint Ventures’, or
Sublicensee’s) 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 11 (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.

 

12.2                        Progress
reports submitted under Paragraph 12.1 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 Licensee has met its diligence
obligations set forth in Article 11 (Due Diligence) above:

 

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

 

12.2.2                        key scientific
discoveries as of the submission date of the progress report;

 

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

 

12.2.4                        current
schedule of anticipated events and milestones, including those event and
milestones specified in Article 11 (Due Diligence);

 

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

 

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

 

12.2.7                        a summary of
resources (dollar value) spent in the reporting period; and

 

12.2.8                        Licensee’s
progress in developing any New Licensed Products elected for commercial
development by Licensee pursuant to Section 4 of this Agreement.

 

12.3                        If Licensee
fails to submit a timely progress report to The Regents, then The Regents will
be entitled to terminate this Agreement, if Licensee fails to cure such failure
within the cure period set forth in Section 15 after notice.  If either party terminates this Agreement

 

17

 

 

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 thirty (30)
days of termination or expiration.

 

12.4                        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,
Joint Ventures, or Sublicensees.  Licensee
will notify The Regents of any change of its status or that of any Affiliate,
Joint Venture, or Sublicensee within thirty (30) days of the change in status.

 

12.5                        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.

 

12.6                        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, Licensee will make quarterly royalty and Sublicensee
Fee reports to The Regents on or before each February 28 (for the quarter
ending December 31), May 31 (for the quarter ending March 31), August 31
(for the quarter ending June 30) and November 30 (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:

 

12.6.1                        the gross invoice
prices and Net Sales of Licensed Products Sold or otherwise commercially
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;

 

12.6.2                        the quantity of
each type of Licensed Product Sold or otherwise commercially exploited in the
U.S.;

 

12.6.3                        the quantity of
each Licensed Product made in the U.S. but Sold or otherwise commercially
exploited outside the U.S.;

 

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

 

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

 

12.6.6                        the method,
used to calculate the Earned Royalty, specifying all deductions taken and the
dollar amount of each such deduction;

 

12.6.7                        the exchange
rates used, if any;

 

12.6.8                        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; and

 

18

 

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

 

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

 

13                                  BOOKS
AND RECORDS

 

13.1                        Licensee will
keep accurate books and records showing all Licensed Product under development,
manufactured, used, offered for Sale, imported, Sold and or otherwise
commercially exploited; all Net Sales, all Attributed Income; and all
sublicenses granted under the terms of this Agreement.  Such books and records will be preserved for
at least five (5) years after the date of the payment to which they
pertain and will be open to examination by representatives or agents of The
Regents during regular business hours to determine their accuracy and assess
Licensee’s compliance with the terms of this Agreement.  Any such examination shall be on reasonably
prior notice, and shall be conducted pursuant to a typical confidentiality
agreement and in a manner that does not materially disrupt the business of
Licensee and is subject to all reasonable conditions relating to access and
activities while on Licensee’s premises.

 

13.2                        The Regents
shall pay the fees and expenses of such examination.  lf, however, an error in royalties of more
than five percent (5%) of the total royalties due for any year is discovered in
any examination, then Licensee shall bear the fees and expenses of such
examination and shall remit such underpayment to The Regents within thirty (30)
days of the examination results.

 

14                                  LIFE OF
THE AGREEMENT

 

14.1                        Unless
otherwise terminated by operation of law, Paragraph 14.2, or by acts of the
parties in accordance with the terms of this Agreement, this Agreement will remain
in effect from the Effective Date until the expiration or abandonment of the
last of the Patent Rights licensed hereunder.

 

14.2                        This Agreement
will automatically terminate without the obligation to provide sixty (60) days’
notice as set forth in Article 15 (Termination By The Regents) upon the
filing of a petition for relief under the United States Bankruptcy Code by or
against Licensee as a debtor or alleged debtor.

 

14.3                        This Agreement
will automatically terminate immediately without the obligation to provide
sixty (60) days’ notice as set forth in Article 15 (Termination By The
Regents) if Licensee files a claim in a legal action that seeks to declare that
any portion of Regents 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. 
In the event a declaratory judgment results from such a filing, the
Licensee shall pay all attorneys fees incurred by The Regents for counsel
retained to defend The Regents against such declaratory judgment.

 

19

 

14.4                        Any termination
or expiration of this Agreement will not affect the rights and obligations set
forth in the following Articles:

 

	
  Article I

  	
   

  	
  Definitions

  
	
  Paragraph
  5.8

  	
   

  	
  Late
  Payments

  
	
  Article 6

  	
   

  	
  License
  Issue Fee

  
	
  Article 8

  	
   

  	
  Payments
  on Sublicenses

  
	
  Paragraphs
  9.1 and 9.3

  	
   

  	
  Earned
  Royalties and Minimum Annual Royalties

  
	
  Article 13

  	
   

  	
  Books
  and Records

  
	
  Article 14

  	
   

  	
  Life
  of the Agreement

  
	
  Article 17

  	
   

  	
  Disposition
  of Licensed Products on Hand Upon Termination or Expiration

  
	
  Article 18

  	
   

  	
  Use
  of Names and Trademarks

  
	
  Article 19

  	
   

  	
  Limited
  Warranty

  
	
  Article 20

  	
   

  	
  Limitation
  of Liability

  
	
  Paragraphs
  21.4 & 21.5

  	
   

  	
  Patent
  Prosecution and Maintenance

  
	
  Article 24

  	
   

  	
  Indemnification

  
	
  Article 25

  	
   

  	
  Notices

  
	
  Article 29

  	
   

  	
  Governing
  Laws; Venue; Attorneys Fees

  
	
  Article 32

  	
   

  	
  Confidentiality

  

 

 

14.5                        The termination
or expiration of this Agreement will not relieve 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 accrued right of The
Regents, including the right to receive Earned Royalties in accordance with
Articles 8 (Payments on Sublicenses), 9 (Earned Royalties and Minimum Annual
Royalties) and 17 (Disposition of Licensed Products Upon Termination or
Expiration).

 

15                                  TERMINATION
BY THE REGENTS

 

If
Licensee 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
Licensee.  If Licensee fails to repair
such material default within sixty (60) 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 Licensee.

 

16                                  TERMINATION
BY LICENSEE

 

Licensee
has the right at any time to terminate this Agreement by providing a Notice of
Termination to The Regents.  Moreover,
Licensee will be entitled to terminate the rights under 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 21.5) will be effective sixty (60) days
from the effective date of such notice.

 

20

 

17                                  DISPOSITION
OF LICENSED PRODUCTS UPON TERMINATION OR EXPIRATION

 

17.1                        Upon early
termination (but not expiration) of this Agreement, within a period of one
hundred and twenty (120) days after the date of termination, Licensee is
entitled to dispose of all previously made or partially made Licensed Product,
but no more, provided that the Sale or use of such Licensed Product is subject
to the terms of this Agreement, including, but not limited to, the rendering of
reports and payment of Earned Royalties, Sublicense Fees and any other payments
therefor required under this Agreement. 
Licensee will not otherwise use or practice the Patent Rights, or
practice the Licensed Method, in a manner constituting patent infringement
after the date of early termination.

 

17.2                        If applicable
Patent Rights exist at the time of any making, Sale, offer for Sale, or import of
a Licensed Product or the time of any Sale, offer for Sale, then Earned
Royalties shall be paid at the times provided herein and royalty reports shall
be rendered in connection therewith, notwithstanding the absence of applicable
Patent Rights with respect to such Licensed Product at any later time.  Otherwise, no Earned Royalties shall be paid
on the Sales of such product.  Any fees
or other payments accrued and owed to The Regents at the time of expiration of
the Agreement not based on the Sales of a Licensed Product will be paid to The
Regents at the time such fee or other payment would have been due had this
Agreement not expired.

 

18                                  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 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 the
Director, Office of Technology Management of the University of California, San
Francisco, the use by 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.

 

19                                  LIMITED
WARRANTY

 

19.1                        The Regents
warrants to Licensee that it has the lawful right to grant the license rights
granted under this Agreement, that it believes it owns the Patent Rights and
that, to the knowledge of the licensing professional responsible for
administration of this Agreement after reasonable investigation and inquiry and
as of the Effective Date, it has not granted to any third party any license
rights in the licensed Field of Use under any of the Patent Rights.

 

19.2                        Except as
expressly set forth in this Agreement, this license and the associated
Inventions, Patent Rights, Licensed Products, and Licensed Methods 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, 

 

21

 

LICENSED PRODUCTS, OR
LICENSED METHODS WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK OR OTHER
RIGHTS.

 

19.3                        This Agreement
does not:

 

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

 

19.3.2                        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

 

19.3.3                        obligate The
Regents to bring or prosecute actions or suits against third parties for patent
infringement except as provided in Article 23 (Patent Infringement); or

 

19.3.4                        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

 

19.3.5                        obligate The
Regents to furnish any New Developments, know-how, technology or information
not provided in Patent Rights.

 

20                                  LIMITATION
OF LIABILITY

 

THE
REGENTS AND LICENSEE WILL NOT 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 LICENSEE,
SUBLICENSEES, JOINT VENTURES, OR AFFILIATES OR THE REGENTS 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 LICENSEE (AS APPLICABLE) HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES, PROVIDED THAT THE FOREGOING PROVISION SHALL NOT BE CONSTRUED TO LIMIT
LICENSEE’S INDEMNIFICATION OBLIGATION UNDER THIS AGREEMENT.

 

21                                  PATENT
PROSECUTION AND MAINTENANCE

 

21.1                        As long as
Licensee has paid Patent Prosecution Costs as provided for in this Article 21
(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 selected from the list of law firms previously
approved by The Regents and reasonably acceptable to Licensee.  The Regents’ counsel will take instructions
only from The Regents.  The Regents will
provide Licensee with copies of all relevant documentation so that Licensee
will be informed of the continuing 

 

22

 

prosecution and may comment
upon such documentation sufficiently in advance of any initial deadline for
filing a response, provided, however, that if Licensee has not commented upon
such documentation in a reasonable time for The Regents to sufficiently
consider 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 Licensee’s comments,
if any.  Licensee agrees to keep this
documentation confidential as provided for in Article 32
(Confidentiality).

 

21.2                        The Regents
shall use reasonable efforts to amend any patent application to include claims
reasonably requested by Licensee to protect the products and services
contemplated to be Sold, or the Licensed Method to be practiced, under this
Agreement.

 

21.3                        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.  Licensee shall
prepare all documents and The Regents agrees to execute the documents and to take
additional action as Licensee reasonably requests in connection therewith.  Licensee shall be liable for all costs
relating to such application.

 

21.4                        Licensee will
bear the costs of preparing, filing, prosecuting and maintaining all United
States patents and patent applications contemplated by this Agreement (“Patent
Prosecution Costs”).  Patent Prosecution
Costs billed by The Regents’ counsel will be rebilled to Licensee and are due
within thirty (30) days of rebilling by The Regents.  These Patent Prosecution Costs will include,
without limitation, patent prosecution costs for the Inventions 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.  Prior Patent Prosecution Costs will be due
upon execution of this Agreement and billing by The Regents and as of the
Effective Date totals [*].

 

21.5                        Licensee will
be obligated to pay any Patent Prosecution Costs incurred during the three
(3)-month period after receipt by either party of a Notice of Termination, even
if the invoices for such Patent Prosecution Costs are received by Licensee
after the end of the three (3)-month period following receipt of a Notice of
Termination.  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 three (3)-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 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 Licensee not to maintain such application(s) or patent(s).

 

21.6                        The Regents may
file, prosecute or maintain patent applications or patents at its own expense
in any country in which Licensee has not elected to file, prosecute or maintain
patent applications or patents in accordance with this Article 21 (Patent
Prosecution and Maintenance) and those applications, resultant patents and
patents will not be subject to this Agreement.

 

23

 

22                                  PATENT
MARKING

 

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.

 

23                                  PATENT
INFRINGEMENT

 

23.1                        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 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
The Regents nor Licensee will 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 Licensee 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 Regents and if a declaratory judgment action is filed by such
infringer against The Regents, then Licensee’s right to initiate a suit against
such infringer for infringement under Paragraph 23.2 below will terminate
immediately without the obligation of The Regents to provide notice to
Licensee.  Both The Regents and Licensee
will use their diligent efforts to cooperate with each other reasonably and in
good faith to terminate such infringement without litigation.

 

23.2                        If infringing
activity of potential commercial significance by the infringer has not been
abated within ninety (90) days following the date the Infringement Notice is
given, then Licensee may institute suit for patent infringement against the
infringer.  The Regents may voluntarily
join such suit at its own expense, but may not otherwise 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 The Regents as a party in a suit initiated by
Licensee without The Regents’ prior written consent.  If, in a suit initiated by Licensee, The
Regents is involuntarily joined other than by Licensee, then 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.

 

23.3                        If, within a
hundred and twenty (120) 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, then The Regents may institute suit for patent infringement against
the infringer.  If The Regents institutes
such suit, then 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.

 

23.4                        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 

 

24

 

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 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 forty-five (45) days of the date of such notice under the Act to either
party.

 

23.5                        Any recovery or
settlement received in connection with any suit will first be shared by The
Regents and Licensee equally to cover any litigation costs each incurred and
next shall be paid to The Regents or Licensee to cover any litigation costs it
incurred in excess of the litigation costs of the other.  In any suit initiated by Licensee, any
recovery in excess of litigation costs will be shared between Licensee and The
Regents as follows:  (a) for any
recovery other than amounts paid for willful infringement:  (i) The Regents will receive [*] of the net recovery if The Regents was not a party in
the litigation and did not incur any out-of-pocket and invoiced litigation
costs that were not reimbursed by Licensee (or its designee) prior to Licensee’s
receipt of the recovery, (ii) The Regents will receive [*] of the net recovery if The Regents was a party in the
litigation whether joined as a party under the provisions of Paragraph 23.2 or
otherwise, but The Regents did not incur any out-of-pocket and invoiced
litigation costs that were not reimbursed by Licensee (or its designee) prior
to any settlement or judgment resulting in Licensee’s receipt of the recovery,
and (iii) The Regents will receive [*] of the
recovery if The Regents incurred out-of-pocket and invoiced litigation costs in
connection with the litigation in amounts reasonably equal to at least half of
the out-of-pocket and invoiced costs incurred by Licensee; and (b) for any
recovery for willful infringement, The Regents will receive [*] of the recovery. 
In any suit initiated by The Regents, any recovery in excess of
litigation costs will belong to The Regents. 
The Regents 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 Article 23
(Patent Infringement).

 

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

 

23.7                        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).

 

23.8                        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
Licensee.

 

24                                  INDEMNIFICATION

 

24.1                        Licensee will,
and will require its Sublicensees to, indemnify, hold harmless and defend The
Regents, the sponsors of the research that led to the Inventions, and the
inventors of

 

25

 

 

any inventions claimed in
patents or patent applications under Patent Rights (including the Licensed
Products, and Licensed Methods contemplated thereunder) and their employers,
and the officers, employees and agents of any of the foregoing, against any and
all claims, suits, losses, damage, costs, fees and expenses resulting from, or
arising out of, the exercise of this license or any sublicense.  This indemnification will include, but not be
limited to, any product liability.  If
The Regents reasonably believes that there will be a conflict of interest or it
will not otherwise be adequately represented by counsel chosen by Licensee to
defend The Regents in accordance with this Paragraph 24.1, then The Regents may
retain counsel of its choice to represent it. 
If The Regents retains such counsel due to a conflict of interest, the
Licensee will pay all expenses for such representation.  If The Regents retains such counsel because it
believes it will not otherwise be adequately represented by counsel chosen by
the Licensee, then The Regents will pay all expenses for such
representation.  If The Regents retains
such counsel, Licensee will not be responsible for indemnifying The Regents for
any losses, damage, costs, fees and expenses that result from inadequate
defense provided by such counsel.

 

24.2                        During the term
of this Agreement and for three (3) years following its termination, the
Licensee, at its sole cost and expense, will insure its activities in
connection with any work performed hereunder and will obtain and maintain the
following insurance (or an equivalent program of self-insurance):

 

24.2.1                        Comprehensive
or commercial form general liability insurance (contractual liability included)
with limits as follows:

 

	
  Each Occurrence

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  Personal and Advertising Injury

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  General Aggregate (commercial form only)

  	
   

  	
  $

  	
  2,000,000

  	
   

  

 

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

 

24.3                        Notwithstanding
Paragraph 24.2, no later than the earlier of: i) sixty (60) days before the
anticipated date of market introduction of any Licensed Product; or ii) sixty
(60) days before the first use of any Licensed Product in a human under this
Agreement, 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 the following insurance (or an equivalent program of self-insurance)
during the term of this Agreement and for three (3) years following its
termination:

 

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

 

	
  Each Occurrence

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
  Products/Completed Operations Aggregate

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
  Personal and Advertising Injury

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
  General Aggregate (commercial form only)

  	
   

  	
  $

  	
  10,000,000

  	
   

  

 

26

 

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

 

24.4                        If the
insurance under Paragraphs 24.2 and 24.3 is written on a claims-made form, it
shall continue for three (3) years following termination or expiration of
this Agreement.  The insurance shall have
a retroactive date of placement prior to or coinciding with the Effective Date
of this Agreement.

 

24.5                        The coverage
and limits referred to in Paragraph 24.2.1 and 24.2.2 above will not in any way
limit the liability of Licensee under this Article 24
(Indemnification).  Upon the execution of
this Agreement, Licensee will furnish The Regents with certificates of
insurance evidencing compliance with all requirements.  Such certificates will:

 

24.5.1                        Provide for
thirty (30) days’ (ten (10) days for non-payment of premium) advance
written notice to The Regents of any cancellation of insurance coverage;
Licensee will promptly notify The Regents of any material modification of the
insurance coverage;

 

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

 

24.5.3                        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.

 

24.6                        The Regents
will promptly notify Licensee in writing of any claim or suit brought against
The Regents for which The Regents intends to invoke the provisions of this Article 24
(Indemnification).  Licensee will keep
The Regents informed of its defense of any claims pursuant to this Article 24
(Indemnification).

 

25                                  NOTICES

 

25.1                        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:
on the date of delivery if delivered in person; on the date of mailing if
mailed by first-class certified mail, postage paid; or 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.

 

	
  In
  the case of Licensee:

  	
  Chief
  Executive Officer

  
	
   

  	
  BioProtection
  Systems Corporation

  
	
   

  	
  2901
  South Loop Drive, Suite 3360

  
	
   

  	
  Ames, IA
  50010

  
	
   

  	
   

  
	
  In
  the case of The Regents:

  	
  Director

  

 

27

 

	
   

  	
  Office
  of Technology Management

  
	
   

  	
  185
  Berry Street, Suite 4603

  
	
   

  	
  San
  Francisco, California 94107

  
	
   

  	
  RE:
  [*]

  

 

26                                  ASSIGNABILITY

 

This
Agreement is personal to the Licensee. 
The Licensee may not assign or transfer this Agreement, including by
merger, operation of law, or otherwise, without The Regents’ prior written
consent, except that such consent will not be required in the case of
assignment or transfer to an Affiliate or to a party that succeeds to all or
substantially all of Licensee’s business or assets relating to this Agreement,
whether by sale, merger, operation of law or otherwise, provided that such
assignee or transferee promptly agrees to be bound by the terms and conditions
of this Agreement and signs The Regents’ standard substitution of party letter
(the form of which is attached hereto as Appendix B).  Any attempted assignment by the Licensee in
violation of this Article 26 (Assignment) will be null and void.  This Agreement is binding upon and will inure
to the benefit of The Regents, its successors and assigns.

 

27                                  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.

 

28                                  FORCE
MAJEURE

 

28.1                        Except for
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.

 

28.2                        Either party to
this Agreement, however, will have the right to terminate this Agreement upon
thirty (30) 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 28.1 for a period of one (1) year.

 

29                                  GOVERNING
LAWS; VENUE; ATTORNEYS’ FEES

 

29.1                        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 

 

28

 

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.

 

29.2                        Any legal
action brought by the parties hereto relating to this Agreement will be
conducted in San Francisco, California,

 

29.3                        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.

 

30                                  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,
Licensee will assume all legal obligations to do so.  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. 
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.

 

31                                  COMPLIANCE
WITH LAWS

 

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.  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. 
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.

 

32                                  CONFIDENTIALITY

 

32.1                        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 five (5) years after the
termination or expiration of this Agreement.

 

32.2                        Each of
Licensee and The Regents may use and disclose the other party’s Proprietary
Information to its respective employees, agents, consultants, contractors and,
in the case of Licensee, its Sublicensees, provided that such parties are bound
by a like duty of confidentiality as that found in this Article 32
(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 

 

29

 

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 that such terms be kept in confidence in accordance
with the provisions of this Article 32 (Confidentiality).  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
Licensee unless Licensee has already made such disclosure publicly.  Further, Licensee may disclose the existence
and terms of this Agreement: (a) in confidence to its directors, officers,
investors and professional service providers and to bona fide prospective
investors, acquirors, strategic partners, or merger partners and their
respective professional advisors; and (b) publicly to the extent required
by applicable law or regulation, and provided that Licensee uses reasonable
efforts to obtain an order protecting the confidentiality of sensitive
technical or financial terms hereof to the extent such order is legally
available.

 

32.3                        All written
Proprietary Information disclosed by a party 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
thirty (30) days after the oral disclosure.

 

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

 

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

 

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

 

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

 

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

 

Each
of Licensee or The Regents also may disclose the other party’s Proprietary
Information to the extent that such Proprietary Information is required to be
disclosed (i) to a governmental entity or agency in connection with
seeking any governmental or regulatory approval, governmental audit, or other
governmental contractual requirement or (ii) by law or court order,
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

 

32.5                        Upon
termination of this Agreement, Licensee and The Regents will destroy or return
any of the disclosing party’s Proprietary Information in its possession within
fifteen (15) days following the termination of this Agreement.  Licensee and The Regents will provide each
other, within thirty (30) 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.

 

33                                  MISCELLANEOUS

 

33.1                        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.

 

33.2                        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.

 

33.3                        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.

 

33.4                        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.

 

33.5                        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

 

33.6                        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 Licensee any rights, remedies
or other benefits under, or by reason of, this Agreement.

 

33.7                        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.

 

31

 

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

 

	
  Licensee

  	
   

  	
  The
  Regents of the University of 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Charles J. Link

  	
   

  	
  By:

  	
  /s/
  Joel B. Kirschbaum

  
	
   

  	
  (Signature)

  	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
  Name:
  Charles J. Link

  	
   

  	
  Name:
  Joel B. Kirschbaum

  
	
   

  	
   

  	
   

  
	
  Title:
  Chief Executive Officer

  	
   

  	
  Title:
  Director, UCSF Office of 

  
	
   

  	
   

  	
  Technology Management

  
	
  Date:
  July 3, 2008

  	
   

  	
  Date:
  7/29/08

  

 

32

 

APPENDIX A

 

KNOW-HOW

 

	
  1.

  	
  [*]

  
	
   

  	
   

  
	
  2.

  	
  [*]

  
	
   

  	
   

  
	
  3.

  	
  [*]

  

 

33

 

APPENDIX B

 

UCSF
Case Nos. [*]

 

CONSENT TO SUBSTITUTION OF PARTY

 

This
substitution of parties (“Agreement”) is effective this day of
                    ,
20    , among The Regents of the University of California (“The
Regents), a California corporation, having its statewide administrative offices
at 1111 Franklin Street, 12th Floor, Oakland, California 94607-5200 and acting
through its Office of Technology Management, University of California San
Francisco (“UCSF”), 185 Berry Street, Suite 4603, San Francisco,
California 94107; BioProtection Systems Corporation, a Delaware corporation,
having a principal place of business at 2901 South Loop Drive, Suite 3360,
Ames, Iowa 50010-8646 (“BPS”); and [new licensee name] [(“YYY”)] a
                                    
corporation, having a principal place of business at
                                      .

 

BACKGROUND

 

A.            The Regents and BPS entered into a
License Agreement effective
                
      (UC Control No.     -     -  
    ), entitled [*], wherein
BPS was granted certain rights.

 

B.            BPS desires that [YYY] be
substituted as Licensee (defined in the License Agreement) in place of BPS, and
The Regents is agreeable to such substitution.

 

C.            [YYY] has read the License Agreement
and agrees to abide by its terms and conditions.

 

The
parties agree as follows:

 

1.             [YYY] assumes all liability and
obligations under the License Agreement and is bound by all its terms in all
respects as if it were the original Licensee of the License Agreement in place
of BPS.

 

2.             [YYY] is substituted for BPS,
provided that [YYY] assumes all liability and obligations under the License
Agreement as if [YYY] were the original party named as Licensee as of the
effective date of the License Agreement.

 

3.             The Regents releases BPS from all
liability and obligations under the License Agreement arising before or after
the effective date of this Agreement.

 

1

 

The
parties have executed this Agreement in triplicate originals by their
respective authorized officers on the following day and year.

 

 

	
  BIOPROTECTION
  SYSTEMS CORPORATION

  	
   

  	
  THE
  REGENTS OF THE UNIVERSITY OF CALIFORNIA

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  (Signature)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
  (Please print)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:
  [Licensing Officer] 

  
	
   

  	
   

  	
   

  	
  Office of Technology Management

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [YYY] COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  (Please print)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  

 

2

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