Document:

Employment Agreement dated August 8, 2001 with Thomas Mino

  
 Exhibit 10.4

  
 EMPLOYMENT AGREEMENT 
  
 FOR 
  
 THOMAS D. MINO 
  
 This AGREEMENT, effective as of August 8, 2001, is made by and between LUMERA CORPORATION, a corporation of the State of Washington, having its
principal place of business at 11910 North Creek Parkway, Bothell, Washington 98011, (hereinafter referred to as the “Company”), and THOMAS D. MINO (hereinafter referred to as “Executive”). 
  
 W I T N E S S E T H 
  
 WHEREAS, the Company wishes to retain the services of the Executive to work
for the Company as its Chief Executive Officer (herein referred to as the “Position”) upon the terms and conditions hereinafter set forth; and 
  
 WHEREAS, in consideration for continued service in the Position, the Executive has agreed to enter into and be bound by the terms of this Agreement.

  
 NOW THEREFORE, in consideration of the foregoing and mutual
covenants herein contained, the parties agree as follows: 
  

	1.	EMPLOYMENT 

  

	 	1.1	The Company hereby employs Executive to serve in the Position and Executive hereby accepts such employment as of the effective date of this Agreement. 

  

	 	1.2	Executive will devote his best efforts and full time and attention to performing all duties assigned or delegated to him by the Board of Directors of the Company consistent with the
Position. 

  

	 	1.3	The term of employment shall end on September 3, 2004, unless this Agreement is extended by the parties. 

  

	2.	COMPENSATION – SALARY, BENEFITS AND VACATION 

  

	 	2.1	For his services hereunder for the period September 4, 2001, through December 31, 2002, Executive shall receive an annual salary of $225,000, payable in regular installments under
the payroll policies of the Company. 

  

	 	2.2	For years beginning after December 31, 2002, the level of Executive’s salary shall be reviewed by the Board of Directors on an annual basis and upon such review, may remain the
same or be increased in such amount as the Board of Directors, in its discretion, based upon merit, determines, provided that there shall be no decrease in the salary of the Executive without his consent. 

  

 Page 1 of 10 

	 	2.3	In addition to the salary to which Executive is entitled under Section 2.1, Executive shall be entitled to participate in benefit plans, if any, that the Company may offer or
establish from time to time for Executives of equal or lesser rank. Participation in benefit plans for the Executive shall terminate if the Company terminates similar benefits for Executives of equal or lessor rank. 

  

	 	2.4	If at any time the Company does not maintain medical and dental insurance coverage for all Executives, the Company shall reimburse the Executive for securing private coverage during
the term of this Agreement. 

  

	 	2.5	All salary and benefits, if any, shall be subject to the customary withholding of taxes as required by law. Except as otherwise provided in Section 8 hereof, Executive’s salary
and benefits end immediately upon the termination of employment. 

  

	 	2.6	Executive will accrue paid vacation at a rate of three (3) weeks per year of service in accordance with Company policy. 

  

	3.	INCENTIVE COMPENSATION 

  

	 	3.1	If the Company maintains a formal cash incentive plan for senior management, the Executive shall be eligible to participate in such plan with a target incentive opportunity at least
equal to the highest percentage opportunity provided to any other Executive covered under such plan. 

  

	 	3.2	If such a formal plan is not maintained by the Company, the Executive shall be eligible for consideration to receive an annual cash incentive payment from the Company.
Executive’s eligibility for such a discretionary incentive payment ends upon termination of employment. This amount shall be determined annually in the sole and complete discretion of the Board of Directors, which may take into account in its
decision, among other items, such items as: 

  

	 	3.2.1 	The financial performance of the Company, including, but not limited to revenues, operating income, and net income, if any; 

  

	 	3.2.2 	The individual accomplishments of the Executive; 

  

	 	3.2.3 	Other company achievements, including, but not limited to, product research, development and introduction; market offerings and the arrangement of strategic alliances; and

  

	 	3.2.4	Competitive practice for executives in similar situations. 

  

	 	3.3	The annual target cash incentive for the period beginning on the effective date of this Agreement and ending on December 31, 2001, shall be 50% of the Executive’s annual
salary, prorated for the period from the effective date through December 31, 2001. 

  

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	 	3.4	The annual target cash incentive for the period beginning on January 1, 2002 and ending on December 31, 2002, shall be 50% of the Executive’s annual salary.

  

	4.	STOCK OPTIONS 

  
 The Executive shall receive options to purchase common stock of the Company in the amounts set forth below. All such options shall be granted in
accordance with the stock option plan maintained by the Company and shall be subject to the terms and conditions set forth therein and in the stock option grant letter issued by the Company to Executive thereunder. If there are insufficient shares
available under the stock option plan in existence at the time of this Agreement, such shares shall be granted subject to the approval of shareholders at the next annual meeting subsequent to the execution of this Agreement. The options shall be
exercisable for ten (10) years from the date of grant and shall vest in installments as noted below. 
  

	 	4.1	An option to purchase up to 300,000 shares at a price of $10.00 per share. This option shall vest in installments as follows: 100,000 shares vest on September 1, 2002; 200,000
shares vest quarterly (25,000 shares/quarter) thereafter until September 1, 2004. 

  

	5.	BUSINESS EXPENSES 

  

	 	5.1	The parties acknowledge that Executive may incur, from time to time, for the benefit of the Company and in furtherance of the Company’s business, various expenses such as
travel, entertainment and promotional expenses. The Company agrees that it shall either pay such expenses directly, advance sums to Executive to be used for payment of such expenses, or reimburse Executive for such expenses incurred by him.

  

	 	5.2	The Company agrees to pay such expenses, in accordance with its written policies covering the payment of business expenses and to the extent that these expenses do not exceed limits
contained in such policies or applicable law. Executive agrees to submit to the Company such documentation as may be necessary to substantiate that all expenses paid or reimbursed pursuant to this Section 5 were reasonable and necessary for the
performance of his duties under this Agreement. 

  

	6.	PERFORMANCE OF EMPLOYMENT 

  

	 	6.1	Executive will observe and comply with such reasonable rules, regulations and policies as may from time to time be established by the Company or the Board of Directors, either
orally or in writing. 

  

	 	6.2	Executive specifically agrees that he will comply with the confidentiality and security rules established by the Company and the Board of Directors with respect to confidential and
financial information of the Company. 

  

	7.	EMPLOYMENT CONDUCT AND CONFIDENTIAL INFORMATION 

  

	 	7.1	Executive shall, at all times during the term of this Agreement, observe and conform to all laws regulating the business of the Company. 

  

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	 	7.2	Executive acknowledges and recognizes that during the term of this Agreement, he will necessarily become privy to certain confidential and proprietary information of the Company and
customers of the Company (hereinafter referred to as “Confidential Data”). Confidential Data shall include but not be limited to all information concerning the identity of the Company’s customers and suppliers, technical, financial
and business activities, plans, operations, proprietary software, systems, procedures or know-how of the Company and any information regarding customers of the Company and their business affairs or endeavors. Executive agrees that he will hold all
Confidential Data in the strictest confidence and that he will not disclose to any person or entity for any reason nor use any Confidential Data in any way other than on behalf of the Company or as the Company may otherwise direct.

  

	 	7.3	Executive agrees that all business records and files, including but not limited to memoranda, notes, client lists, and proposals pertaining to the business, services or processes of
the Company, shall be the sole property of the Company and he shall not retain, remove or copy such materials during the term of this Agreement or upon its termination or expiration, without the prior unanimous written consent of the Board of
Directors of the Company. Upon the termination of this Agreement, or at any other time upon the request of the Board of Directors of the Company, Executive shall deliver all such materials to the Company. 

  

	 	7.4	The foregoing obligations of Executive shall survive the termination or expiration of this Agreement. 

  

	8.	SEVERANCE PAYMENTS 

  

	 	8.1	If the Executive terminates the Agreement for any reason other than Constructive Termination (as defined in Section 8.3.5), or if the Company terminates the Agreement for Cause, no
severance payment of any kind shall be made. 

  

	 	8.2	If the Company terminates this Agreement for reasons other than Cause, or if the Executive is Constructively Terminated prior to a Change in Control, the Company shall:

  

	 	8.2.1 	Pay to the Executive a lump sum equal to the Executive’s salary of record for a period of one year, if the date of termination is prior to September 1, 2002, or for a period
equal to the greater of one year or the remaining period of this Agreement, if the date of termination is subsequent to August 31, 2002. 

  

	 	8.2.2 	Continue to provide medical and dental insurance to the Executive for the period of one year, if the date of termination is prior to September 1, 2002, or for a period equal to the
greater of one year or the remaining period of this Agreement, if the date of termination is subsequent to August 31, 2002. 

  

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	 	8.3	If the Executive is terminated or Constructively Terminated by the Company following a Change of Control, the Company shall: 

  

	 	8.3.1 	Pay to the Executive a lump sum equal to the Executive’s salary of record for a period of two (2) years; 

  

	 	8.3.2 	Pay to the Executive a lump sum equal to two (2) times the average of the Executive’s cash bonuses received in the two (2) preceding calendar years; 

 

	 	8.3.3 	Continue to provide medical and dental insurance to the Executive for a period of one (1) year on the same terms as if the Executive were an active Executive of the Company.

  

	 	8.3.4 	For purposes of this Agreement, a Change of Control shall be deemed to occur on any of the following events: 

  

	 	8.3.4.1 	Any “person,” including a “group” as determined in accordance with Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, is, or becomes, the
beneficial owner of securities of the Company representing more than thirty percent (30%) of the combined voting power of the Company’s then outstanding securities; 

  

	 	8.3.4.2 	As a result of, or in connection with, any tender offer or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the
foregoing transactions (a “Transaction”), the persons who constituted the Board of Directors the Company prior to the Transaction cease to constitute a majority of the Board of Directors of the Company or any successor to the Company;

  

	 	8.3.4.3 	The Company is merged or consolidated with another Company and as a result of the merger or consolidation, less than fifty percent (50%) of the outstanding voting securities of the
surviving or resulting Company shall then be owned in the aggregate by the former stockholders of the Company; 

  

	 	8.3.4.4 	A tender offer or exchange offer is made and consummated for the ownership of securities of the Company representing more than thirty percent (30%) of the combined voting power of
the Company’s then outstanding voting securities; or 

  

	 	8.3.4.5 	The Company transfers substantially all of its assets to another Company of which the Company owns less than fifty percent (50%) of the outstanding voting securities.

  

	 	8.3.5 	For purposes of this Agreement, Constructive Termination means: 

  

	 	8.3.5.1 	The reduction of the Executive’s salary or target incentive; 

  

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	 	8.3.5.2 	The demotion or reduction in duties of the Executive; 

  

	 	8.3.5.3 	The relocation of the Executive’s place of employment more than 50 miles from the existing place of employment; or 

  

	 	8.3.5.4 	Breach by the Company or its successor of any material provision of this Agreement. 

  

	 	8.4	For purposes of this Agreement, “Cause” shall be defined as any of the following: 

  

	 	8.4.1 	Repeated failure or refusal of the Executive to carry out the reasonable directions of the Board of Directors of the Company consistent with the duties and obligations of the
Executive; 

  

	 	8.4.2 	Willful violation of state or federal law involving the commission of a crime against the Company or a felony adversely affecting the Company; or 

  

	 	8.4.3 	Any material breach of this Agreement or of any covenant herein or the falsification of any material representation or warranty not corrected as provided in Section 8.5 hereof.

  

	 	8.5	If a breach of this Agreement by either party is relied upon as a justification for any action taken by a party pursuant to any provision of this Agreement, before such action is
taken, the party asserting the breach shall give the other party written notice of the existence and nature of the breach and the opportunity to correct such breach during the thirty (30) day period following the delivery of such notice.

  

	9.	RESTRICTIVE COVENANT AND INJUNCTIVE RELIEF. During the term of this agreement: 

  

	 	9.1	Executive shall not, directly or indirectly, as an individual or representative of any other person and/or entity, deal with or solicit for business purposes that are in competition
with any product or service offered by the Company, any current customer of the Company or any person and/or entity that is, or has commenced negotiations to become, a customer of the Company. 

  

	 	9.2	Executive shall not, directly or indirectly, solicit, raid, entice, or induce any other Executive of the Company to become employed by or associated with any other person or entity.

  

	 	9.3	Executive shall not, directly or indirectly, as an Executive, consultant, agent, partner, principal, stockholder (other than as a holder of less than one percent (1%) of the shares
of a publicly or privately held company), officer, director, or in any other individual or representative capacity, engage in any business activity that is competitive with any products or services offered by the Company at the time of the
Executive’s termination. 

  

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	 	9.4	The parties hereto acknowledge that the Executive’s services, knowledge and experience are unique and of special value to the Company, and that, in the event of a breach or
threatened breach by Executive of any of his obligations under this Agreement, including but not limited to those set forth in this Section 9, the Company will not have an adequate remedy at law. Accordingly, in the event of any breach or threatened
breach of any provision of this Agreement by Executive, the Company shall be entitled to such equitable and injunctive relief as may be available to restrain Executive and any other individual or entity participating in breach or threatened breach,
from violating the provisions of this Agreement. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available at law for such breach or threatened breach, including the recovery of damages and the immediate
termination of Executive’s employment hereunder. 

  
 If the Company terminates the Agreement for reasons other than Cause, or if the Executive is Constructively Terminated, the provisions of this Section 9 will remain in force for the term of any severance payments paid to Executive as
described under Section 8 above. If the Executive terminates the Agreement for any reason other than Constructive Termination, or if the Company terminates the Agreement for Cause, the provisions of this Section 9 will remain in force for a period
of twenty-four (24) months after the termination of this Agreement. 
  

	10.	INVENTIONS, CREATIONS AND DISCOVERIES 

  

	 	10.1	Executive acknowledges that during the course of his employment he may, either alone or in conjunction with others, be involved with the creation, authorship or development of
inventions, materials or property, including but not limited to the field of electro-optic polymers or related materials for telecommunications or data communications applications (hereinafter referred to as “Materials”). Executive agrees
that he will disclose all such Materials to the Board of Directors of the Company. Executive acknowledges that all such Materials shall be the property of the Company whether or not patent or copyright applications are filed with respect thereto
from the date of their conception. If an assignment is necessary to transfer ownership thereof to the Company, Executive agrees that this Agreement, without more, shall constitute such an assignment. At the Company’s request, Executive shall be
required to make or assist in the filing of letters of patent, copyright applications or the like with respect to such Materials. In connection therewith, Executive agrees to execute all documents necessary or beneficial to establish or maintain the
Company’s rights in such property, applications or the like. All such filings shall be made, if possible, in the name of the Company, at its expense. If made during the term of his employment, Executive shall receive no additional compensation
therefor. If such filings are required after the termination of the Executive’s employment by the Company, he shall receive reasonable compensation for his assistance. 

  

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	 	10.2	Pursuant to RCW 49.44.140, the Company has no rights under Section 10.1 of this Agreement to any invention for which no equipment, supplies, facilities, or trade secret information
of the Company was used and which was developed entirely on Executive’s own time, unless: (a) the invention relates (i) directly to the business of the Company or (ii) to the Company’s actual or demonstratably anticipated research or
development; or (b) the invention results from any work performed by Executive for the Company. 

  

	 	10.3	The obligations of Executive under Section 10.1 shall survive the termination or expiration of this Agreement. 

  

	11.	ASSIGNMENT. The rights of either party shall not be assigned or transferred without the other party’s consent, nor shall the duties of either party be delegated
in whole or in part without the other party’s consent. Any unauthorized assignment, transfer or other delegation shall be of no force or effect. 

  

	12.	AMENDMENTS. No amendments or additions to this Agreement shall be binding unless in writing and signed by both parties. 

  

	13.	GOVERNING LAW. This Agreement shall be governed in all respects by the laws of the State of Washington. 

  

	14.	BINDING ARBITRATION. Any disagreement, dispute, controversy or claim arising out of or in any way related to this Agreement, the subject matter hereof or
the interpretation hereof or any arrangements relating hereto or contemplated herein or the breach, termination or invalidity hereof or the provision or failure to provide for any other benefits pursuant to any other bonus or compensation plans,
stock option plan, life insurance or benefit plan or similar plan or agreement with the Company shall be settled exclusively and finally by binding arbitration. If this Section 14 conflicts with any provision in any such plan or agreement, this
provision requiring arbitration shall control. 

  

	 	14.1	The arbitration shall be conducted through Judicial Arbitration and Mediation Services/Endispute (henceforth referred to as “JAMS”) to be held before such arbitrator as
the parties may agree, or if they are unable to agree, to be selected by obtaining five proposed arbitrators from JAMS and alternately striking names until one name remains. 

  

	 	14.2	The arbitration shall be conducted in accordance with the Judicial Arbitration and Mediation Services Rules of Practice and Procedure as are then in effect, except as modified by
the agreement of the parties. 

  

	 	14.3	Either party may initiate a claim by contacting JAMS. 

  

	 	14.4	The decision of the arbitrator shall be final and binding on all parties and the parties waive their right to trial de novo or appeal, except and only for the purpose of
enforcing the decision of the arbitrator, for which purpose the parties hereby agree that the Superior Court of King Country Washington shall have jurisdiction. 

  

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	 	14.5	The prevailing party shall be entitled to recover reasonable attorneys’ fees and the costs of bringing or defending the arbitration and any action for enforcement, the amount
of the awards being determined by the arbitrator. 

  

	15.	PARAGRAPH HEADINGS. The paragraph headings used in this Agreement are included solely for convenience and shall not affect or be used in connection with
the interpretation of this Agreement. 

  

	16.	WAIVER, MODIFICATION, CANCELLATION. Any waiver, alteration or modification of any of the provisions of this Agreement or cancellation or replacement of this
Agreement shall not be valid unless in writing and signed by all of the parties hereto. 

  

	17.	HEIRS AND SUCCESSORS. This Agreement shall be binding upon the Company, Executive and their successors, heirs, personal representatives and
transferees. 

  

	18.	WAIVER. The waiver by either party of a breach of any provision contained herein must be in writing and shall in no way be construed as a waiver of any
succeeding breach of such provision or the waiver of the provision itself. 

  

	19.	NOTICE. Whenever under the provisions of this Agreement notice is required to be given, it shall be in writing and shall be deemed given when hand
delivered or mailed, postage prepaid by registered or certified mail, return receipt requested, addressed to the Executive or the Company at the following addresses: 

  

			
	 Executive:            
	  	 Thomas D. Mino
 c/o Lumera Corporation
 19910 North Creek Parkway
 Bothell, WA 98011

		
	 Company:            
	  	 Lumera Corporation
 19910 North Creek
Parkway
 Bothell, WA 98011
 Attn: Secretary

  
 Either party hereto
may change his or its address for purposes of this Agreement by notification to the other party in accordance with this Section. 
  

	20.	SEVERABILITY. If any provision of this Agreement is held invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired thereby. 

  

	21.	ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties regarding the subject matter hereof and supersedes all prior agreements,
understandings and negotiations regarding the same. 

  

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 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

  

					
	LUMERA CORPORATION	 	 	 	 
			
	 /s/ Richard F. Rutkowski
	 	 	 	  
	
	 	 	 	

	 Richard F. Rutkowski, Vice Chairman
	 	 	 	 Witness

  

					
	EXECUTIVE	 	 	 	 
			
	 /s/ Thomas D. Mino            8/11/01
	 	 	 	  
	
	 	 	 	

	 Thomas D. Mino
	 	 	 	 Witness

  

 Page 10 of 10Sponsored Research Agreement effective October 20, 2000

  
 Exhibit 10.5

  
 SPONSORED RESEARCH
AGREEMENT 
  
 between 
  
 The University of Washington 
  
 and 
  
 Lumera Corporation 
  
 Effectively Dated October 20, 2000 

 TABLE OF CONTENTS 
  

					
	Recitals	  	1
			
	1.0	  	 Definitions
	  	1
			
	2.0	  	 Research Plan, Project Work, Principal Investigator and Reports
	  	3
			
	3.0	  	 Company Payments
	  	4
			
	4.0	  	 Confidential Information
	  	5
			
	5.0	  	 University Publication Rights
	  	7
			
	6.0	  	 Intellectual Property
	  	7
			
	7.0	  	 Patents, Patent Costs and Option to License
	  	8
			
	8.0	  	 Technology Transfer; Option Exercise and License Agreement
	  	9
			
	9.0	  	 University Disclaimer; Company Assumption of Risk and Release
	  	9
			
	10.0	  	 Indemnification
	  	10
			
	11.0	  	 Early Termination, Nonrenewal and Termination
	  	10
			
	12.0	  	 Notices
	  	11
			
	13.0	  	 Other Sponsored Research Agreements
	  	11
			
	14.0	  	 Compliance with Applicable Laws
	  	12
			
	15.0	  	 Internal Revenue Code
	  	12
			
	16.0	  	 Sublicenses and Assignments
	  	12
			
	17.0	  	 Relationship of the Parties
	  	13
			
	18.0	  	 Disputes; Attorney’s Fees and Legal Costs
	  	13
			
	19.0	  	 Miscellaneous
	  	14

  

 - i - 

 List of Exhibits 
  

			
	 Exhibit 1
	  	 Project Goals and Objectives

		
	 Exhibit 2
	  	 Background Intellectual Property

		
	 Exhibit 3
	  	 Company Representative, Principal Investigator, and Certain University Personnel

		
	 Exhibit 4
	  	 Company Payments

		
	 Exhibit 5
	  	 Notices

		
	 Exhibit 6
	  	 Form of Research Plan

		
	 Exhibit 7
	  	 Progress Report Information

  

 - ii - 

 SPONSORED RESEARCH AGREEMENT 
  
 This Research Agreement is entered into by and between the University of Washington (the “University”) and Lumera,
Inc. (the “Company”) as of the Effective Date, subject to the following terms and conditions. 
  
 Recitals 
  
 WHEREAS, Company desires to sponsor certain research to be conducted under the direction of the University; 
  
 WHEREAS, the University desires to conduct the Project as defined herein and is willing to grant certain rights to Company upon the terms and conditions
set forth herein and in a related Exclusive Licensing Agreement also entered into in connection with this Agreement; 
  
 WHEREAS, the University and Company desire to achieve the goals and objectives of the Project as described in Exhibit 1 attached hereto and to
appropriately commercialize the results of the Project; 
  
 WHEREAS, Lumera desires to sponsor directed research by the University for the ongoing development of new and/or improved nonlinear electro-optic materials and devices designed to address a broad range of microphotonics applications based
on a mutually agreed Research Plan. 
  
 NOW, THEREFORE, in
consideration of the foregoing and the mutual agreements set forth herein, the University and Company do hereby agree as follows: 
  

	1.0	Definitions 

  
 Unless the context clearly requires otherwise, the following capitalized terms, used in either the singular or plural, shall be defined as follows:

  
 1.1 “Agreement” means this Sponsored Research Agreement,
including the exhibits attached hereto, which are incorporated by reference herein. 
  
 1.2 “Company” means Lumera, Inc., a Washington corporation. 
  
 1.3 “Company Representative” means the representative designated by Company and described in Exhibit 3 to be the primary contact with Principal Investigator with respect to Project Work. 

 
 1.4 “Company Personnel” means Company staff, employees, contractors,
subcontractors, and volunteers and any other similar persons or entities to the limited extent that any of the foregoing are performing Project Work and other similar activities related to the Project. 
  
 1.5 “Confidential Information,” “University Confidential Information,”
“Company Confidential Information” and “Joint Confidential Information” have the meanings set forth in Section 4.1 of this Agreement. 
  

 Page 1 of 14 Pages 

 1.6 “Disclosure” means the disclosure of Intellectual Property and Research Results described in Section
8.1 of this Agreement. 
  
 1.7 “Effective Date” means October 20,
2000. 
  
 1.8 “Exclusive Licensing Agreement” means an exclusive
licensing agreement entered into by and between the Parties as of the Effective Date of this Agreement. 
  
 1.9 “Good Cause” means: (i) the University’s failure, without legal excuse, to perform its material obligations under this Agreement; or (ii) the substantial failure of the Project to make
reasonable progress towards achieving the goals and objectives described in Exhibit 1. 
  
 1.10 “Intellectual Property,” “University Intellectual Property,” “Company Intellectual Property,” “Joint Intellectual Property,” “Background Intellectual Property,” “University
Background Intellectual Property,” and “Company Background Intellectual Property” means the meanings set forth in Section 6.1 of this Agreement. 
  
 1.11 “OIPTT” means the University’s Office of Intellectual Property and Technology Transfer. 
  
 1.12 “Option to License” means the option to obtain a license to
Intellectual Property as described in Section 7.3 of this Agreement. 
  
 1.13
“Party” or “Parties” mean the University and/or Company as the context requires. 
  
 1.14 “Principal Investigator” means Dr. Larry Dalton and any other principal investigator thereafter assigned by the University and approved by Company
pursuant to Section 2.6 of this Agreement to manage the Project and supervise Project Work. 
  
 1.15 “Project” means the research project that is the subject of this Agreement whose goals and objectives are described in Exhibit 1 and whose work plan will be outlined in the Research Plan.

  
 1.16 “Project Period” means the period of time described in
Section 2.3 of this Agreement. 
  
 1.17 “Project Schedule” means
the schedule for the Project and conduct of Project Work described in the Research Plan. 
  
 1.18 “Project Work” means all work, research, study and analysis performed by the University Personnel and Company Personnel on behalf of and during the existence of the Project as generally described
in the Research Plan, but shall not include any work, research, study or analysis performed by University Personnel or Company Personnel in connection with any other research agreements or any other arrangements, other than the Project, to which the
Parties may now or hereafter become a party. 
  
 1.19 “Research
Plan” means a written plan to be mutually agreed upon by the Parties after the execution of this Agreement that includes a summary, in outline form, of the research activities and an estimated schedule, to be undertaken by University
Personnel in accomplishing 

  

 Page 2 of 14 Pages 

 
the goals and objectives of the Project and in carrying out Project Work, the general form of which is attached as Exhibit 6. 
  
 1.20 “Research Results” means all Intellectual Property, Confidential
Information, data, other information, materials, and work products developed as part of the Project and as a result of Project Work, including without limitation all inventions, discoveries, products, devices, models, prototypes, computer software,
documentation, and technical data, regardless of whether protectable by patents, copyrights, or otherwise. 
  
 1.21 “Scholarly Disclosure” means usual and customary scientific and scholarly disclosures of Project Results and Project Work (whether performed directly by University Personnel or otherwise), of
Intellectual Property, of information connected with or arising from Project Work, and of any Confidential Information incidental to disclosure of any of the foregoing, including presentations at scientific and governmental meetings and publications
(whether in the form of written, electronic, or other media) in scientific, scholarly or professional journals. 
  
 1.22 “Start Date” means the date set forth in the Research Plan. 
  

1.23 “University of Washington,” “University,” and “UW” all mean the University of Washington, a public institution of
higher education and an agency of the State of Washington, having its principal campus located in Seattle, Washington. 
  
 1.24 “University Personnel” means the Principal Investigator, University faculty, staff, employees, students, fellows, visiting scholars, contractors,
subcontractors, and volunteers and any other similar persons or entities to the limited extent that any of the foregoing are performing Project Work and other similar activities related to the Project, the initial roster for which is partially set
forth in Exhibit 3 and the Research Plan. 
  

	2.0	Research Plan, Project Work, Principal Investigator and Reports 

  
 2.1 Promptly after execution of this Agreement, representatives of the Parties will meet and confer in good faith for the purpose of outlining the terms of a Research
Plan consistent with the goals and objectives of the Project as set forth in Exhibit 1 and diligently work towards preparation of a mutually agreeable Research Plan within the time period stated herein. Unless extended by mutual agreement of the
Parties, no later than forty-five (45) days after execution of this Agreement, the Parties will execute a document setting forth a mutually agreeable Research Plan, generally in the form attached hereto as Exhibit 6. Upon execution, the Research
Plan shall be deemed to be an amendment to and become part of this Agreement. In the event a Research Plan is not executed within such period, this Agreement and the Exclusive Licensing Agreement shall thereupon terminate. 
  
 2.2 The University will make all reasonable efforts to achieve the goals and objectives of
the Project and to carry out the Project Work within the Project Period substantially in accordance with Exhibit 1 and the Research Plan, using commonly accepted professional standards of workmanship and effort, subject to the Company providing the
support described in Article 4.0 of this Agreement. 
  

 Page 3 of 14 Pages 

 2.3 The Project Period shall consist of a period of time beginning on the Start Date and ending three (3) years after the
Start Date, except if as provided in Section 11.2, Company for Good Cause elects not to renew this Agreement, the Project Period shall end two (2) years after the Start Date. 
  
 2.4 The University shall have the exclusive and sole authority to manage, control and direct the Project, conduct Project Work, and
supervise University Personnel and any Company Personnel working at University facilities pursuant to the mutual agreement of the Parties; providing, however, that Company shall have reasonable opportunities to advise and consult with the University
and Principal Investigator regarding the Project and the conduct of Project Work. 
  
 2.5 Company understands that because the Project is experimental in nature, the outcome is inherently uncertain and unpredictable. Company agrees and understands that the University makes no representation, guarantee or warranty, express or
implied, regarding the outcome of the Project, the Research Results or the patentability, legal protectability or usefulness of any Intellectual Property arising from the Project. 
  
 2.6 The University shall promptly advise Company of any change in the employment status of the Principal Investigator that could adversely
affect the Project and conduct of Project Work. If the Principal Investigator ceases to be associated with the University or otherwise becomes unavailable to manage the Project and supervise Project Work, the Principal Investigator shall be replaced
by a qualified research scientist nominated by the University and reasonably acceptable to Company. If no such Principal Investigator is identified, Company shall have the right to terminate this Agreement upon not less than thirty (30) days’
written notice to the University prior to the due date of the next payment under Exhibit 4. 
  
 2.7 The University shall provide Company quarterly progress reports (or as often as otherwise specified in the Project Schedule) during the period Project Work is being conducted. Progress reports may be oral or
written, or a combination thereof, depending on the nature of the information conveyed. If requested by Company, the University shall confirm such oral progress reports with written reports. The reports shall include the information described in
Exhibit 7. All such progress reports shall be considered Confidential Information under this Agreement. 
  
 2.8 The University shall provide Company a final written report within ninety (90) after the conclusion of the Project Work (or such other time period specified in the Project Schedule) summarizing the Research
Results, including any discoveries made or innovations developed during the course of the Project, and other pertinent findings and results from the Project and describing the methods used and the results obtained. 
  

	3.0	Company Payments 

  
 3.1 Company shall pay the University the amounts in the manner and on the dates as described in Exhibit 4. 
  
 3.2 If, as of the end of the quarter in which the first anniversary of the Start Date occurs (and from time to time thereafter as may be necessary and appropriate), the
Company’s total payments under Section 3.1 of this Agreement exceed the University’s total incurred expenditures for performance of Project Work under this Agreement (including all amounts 

  

 Page 4 of 14 Pages 

 
irrevocably committed and all amounts expended as indirect costs in accordance with University’s normal and customary practices) by more than $750,000,
the Parties agree to renegotiate in good faith a reasonable revision to the payment schedule described in Exhibit 4 such that the Company’s payments under this Agreement do not exceed, at any time, approximately $750,000 more than the
University’s anticipated actual expenditures. 
  
 3.3 In the event the
University terminates this Agreement pursuant to Section 11.1 herein, the Company payments as described Exhibit 4 shall be adjusted to cease as of the effective date of any such early termination by the University, subject to payment by the Company
of any additional amounts described in Section 11.4 herein. 
  
 3.4 Unless
otherwise expressly agreed in writing by the Parties, the University shall have sole right and interest to all equipment and other tangible materials purchased, acquired or otherwise used in the Project, whether as in-kind support from Company,
purchased by the University using funds paid to the University by Company, or otherwise. 
  
 3.5 Company agrees to pay simple interest at the rate of twelve percent (12%) per annum on any amounts more than thirty (30) days overdue under this Agreement. 
  

	4.0	Confidential Information 

  
 4.1 For purposes of this agreement, the following terms shall have the indicated meanings: 
  
 4.1.1 “Confidential Information” shall mean all non-public information pertaining to the Project, Project Work and
Research Results in written, graphic, oral or other tangible form, including without limitation all data, algorithms, formulae, techniques, improvements, technical drawings, computer software and materials. 
  
 4.1.2 “University Confidential Information” means Confidential
Information owned by the University or whose use or disclosure is legally controlled by the University. 
  
 4.1.3 “Company Confidential Information” means Confidential Information owned by the Company or whose use or disclosure is legally controlled by
Company. 
  
 4.1.4 “Joint Confidential Information”
means Confidential Information jointly owned by the University and Company or whose use or disclosure is legally controlled jointly by the University and Company. 
  
 4.2 Notwithstanding any other provisions of this Article 4.0 of this Agreement, a Party shall be free from any obligations of
confidentiality hereunder regarding any information which is or becomes: 
  
 4.2.1 already known to such Party, other than under an obligation of confidentiality, at the time of disclosure; 
  
 4.2.2 generally available to the public or otherwise part of the public domain at the time of disclosure to such Party; 
  

 Page 5 of 14 Pages 

 4.2.3 generally available to the public or otherwise part of the public domain after its disclosure other
than through any act or omission of such Party in breach of this Agreement or other agreement or legal obligation; 
  
 4.2.4 subsequently lawfully disclosed to such Party by a third party under no obligation of confidentiality to the other Party; 
  
 4.2.5 independently developed by such Party as documented by written
evidence; 
  
 4.2.6 approved for release by written authorization
of the other Party; 
  
 4.2.7 furnished to a third party by the
other Party without a similar restriction on the third party’s rights; or 
  
 4.2.8 disclosed pursuant to the requirement of a governmental agency or was legally required to be disclosed, including with respect to the University, disclosures of public records pursuant to RCW 42.17.250 et seq.,
and any administrative rules adopted pursuant thereto. 
  
 4.3 Subject to the
University’s publications rights set forth in Article 5.0 and the limitations of Sections 4.2 and 4.7 of this Agreement, the University and Company agree not to engage in unauthorized disclosure or use of Confidential Information and to take
reasonable measures to prevent unauthorized disclosure and use of Confidential Information, including without limitation taking reasonable measures to prevent creating a premature bar to a United States or foreign patent application. Each Party
shall limit access to Confidential Information received from the other Party to those persons having a need to know in connection with the Project or in the operation of the business of the Company and shall use reasonable efforts to ensure that any
such person receiving Confidential Information understands its confidential nature and agrees not to make unauthorized disclosure or use thereof. Each Party further agrees to employ no less than the same measures to protect Confidential Information
that it uses to protect its own valuable information. 
  
 4.4 The Parties will
take reasonable measures to mark and identify all Confidential Information as confidential. Confidential Information disclosed in oral form shall be identified as such by the disclosing Party to the other Party in writing within thirty (30) days of
any such disclosure. Information that is not marked or not identified in writing as confidential within such period shall not be Confidential Information. Upon termination of the Project and to the extent otherwise consistent with this Agreement,
any Confidential Information of the disclosing Party shall be promptly returned or destroyed upon written request of the disclosing Party. 
  
 4.5 In no event shall the obligations of confidentiality set forth in this Agreement be construed to limit either Party’s right to independently develop products or
conduct research without the use of the other Party’s Confidential Information, except as may be expressly limited by this Agreement or any other applicable agreements between the Parties. 
  
 4.6 The Parties agree that, unless otherwise mutually agreed to in writing, the obligations
regarding nondisclosure, protection and nonuse of Confidential Information set forth in this Agreement shall, in any event, end three (3) years after disclosure of Confidential Information. 
  

 Page 6 of 14 Pages 

	5.0	University Publication Rights 

  
 5.1 Notwithstanding any other provision in this Agreement to the contrary, the University reserves the right to make or permit to be made “Scholarly
Disclosures” subject only to the express limitations with respect thereto as described in this Article 5.0 of this Agreement. 
  
 5.2 To prevent unauthorized disclosure of Company Confidential Information, Joint Confidential Information, Company Background Intellectual Property, or materials
proprietary to Company, and to protect possible patent rights with respect to Intellectual Property, the University shall provide Company Representative with a copy or other appropriate description of any proposed Scholarly Disclosure no less than
thirty (30) days prior to public disclosure thereof. 
  
 5.3 If during such thirty
(30) day review period, Company reasonably determines that information of the Company restricted from public disclosure is included in the proposed Scholarly Disclosure and so notifies the University in writing describing with particularity the
information not entitled to be disclosed by the University as Scholarly Disclosure, the University will at Company’s request remove such information from the proposed Scholarly Disclosure. 
  
 5.4 If during such thirty (30) day review period, Company reasonably determines that a patent
application would be adversely affected by the proposed Scholarly Disclosure and so notifies the University in writing describing with particularity the nature of the potential patent claims that would be so adversely affected, the University will
delay such Scholarly Disclosure for a period of up to an additional ninety (90) days for the purpose of preparing and filing an appropriate patent application. 
  

	6.0	Intellectual Property 

  
 6.1 For purposes of this agreement, the following terms shall have the indicated meanings: 
  
 6.1.1 “Intellectual Property” means the following rights developed in the course of, or as a direct result of the
Project: any and all patents or rights to patent, copyrights, trademarks, and any and all technical data and computer software within the scope of Confidential Information. 
  
 6.1.2 “University Intellectual Property” means Intellectual Property developed solely by University Personnel.

  
 6.1.3 “Company Intellectual Property” means
Intellectual Property developed solely by Company Personnel. 
  
 6.1.4 “Joint Intellectual Property” means Intellectual Property developed jointly by Company Personnel and University Personnel, except that in the case of works subject to copyright, “Joint Intellectual Property” shall
mean only those works in which the University and Company intend that their contributions be merged into inseparable or interdependent parts of a unitary whole. 
  
 6.1.5 “Background Intellectual Property” means intellectual property not arising within the Project but of use to
the Project, the rights to which are controlled by the University 

  

 Page 7 of 14 Pages 

 
or Company, as the case may be, and which is expressly made available to the Project by the controlling party as further set forth in Exhibit 2. 

 
 6.1.6 “University Background Intellectual Property” means
Background Intellectual Property under the control of the University. 
  
 6.1.7 “Company Background Intellectual Property” means Background Intellectual Property under the control of Company. 
  
 6.2 Nothing in this Agreement shall be interpreted as granting or conveying to a Party any ownership interest in the other Party’s Background Intellectual Property,
except as provided in the Exclusive Licensing Agreement. 
  
 6.3 Title to
University Intellectual Property shall be vested in the University and title to Company Intellectual Property shall be vested in the Company. Title to Joint Intellectual Property shall be vested jointly as tenants in common in the University and
Company and neither Party may use Joint Intellectual Property except as provided in the Exclusive Licensing Agreement or other written agreement between the Parties. 
  

	7.0	Patents, Patent Costs and Option to License 

  
 7.1 Subject to Section 7.2 of this Agreement, the University shall have the sole and exclusive right to file or have filed and to prosecute or have prosecuted and shall
undertake to pay all, reasonable costs thereof, all United States and foreign patent applications relating to University Intellectual Property and Joint Intellectual Property, providing that prior to any such filing, the University shall consult
with Company. The Parties agree to use the Seattle, Washington law firm of Christensen, O’Connor, Johnson and Kindness as legal counsel for all patent matters and to change such counsel only by mutual agreement. 
  
 7.2 In the event the University elects not to file any patent applications relating to all or
a portion of University Intellectual Property or Joint Intellectual Property or in the event the University elects to abandon any such previously filed patent applications, it shall provide timely notice thereof to Company, and to the extent lawful
and otherwise consistent with University policies regarding such matters, the University will, upon Company’s written request, assign such rights to Company. 
  
 7.3 In addition to the license granted to Company by University under the Exclusive Licensing Agreement, in consideration of Company’s
agreement to pay all reasonable costs of prosecuting the patent applications referred to Section 7.1, the University hereby grants Company an option to license the Intellectual Property, including Joint Intellectual Property, and to certain
additional University Background Intellectual Property not previously licensed to Company by University as described in Section 8.4 of this Agreement (the “Option to License”) exercisable in accordance with Article 8.0 of this Agreement.
In the event Company fails to pay any such patenting costs within thirty (30) days of invoice from the University, Company’s Option to License will terminate. 
  

 Page 8 of 14 Pages 

	8.0	Technology Transfer; Option Exercise and License Agreement 

  
 8.1 The University and Company shall make all reasonable efforts to ensure that their respective University Personnel and Company Personnel prepare, sign and submit a
comprehensive Written disclosure to OIPTT of all Intellectual Property, Research Results and any other matters that are potentially protectable as to ownership (the “Disclosure”) prior to any public disclosure thereof. Within thirty (30)
days of receipt of any such Disclosure, the University will provide Company a copy thereof together with a general description of any University Background Intellectual Property to the extent that the University: (i) reasonably believes such
University Background Intellectual Property would be beneficial to a successful exploitation of the matters set forth in the Disclosure; (ii) is reasonably aware of the existence of the University Background Intellectual Property; and (iii) is able,
within limitations imposed by any obligations to third parties, to disclose and/or license the University Background Intellectual Property to Company. 
  
 8.2 Company shall have a period of three (3) months from the date upon which the University delivers any such Disclosure to Company to exercise the Option to License. If
Company fails to exercise the Option to License within such period by notifying the University in writing of its unconditional exercise thereof, Company’s Option to License shall thereupon terminate, without further notice by the University, at
the end of such exercise period. 
  
 8.3 If Company exercises the Option to
License, such rights shall become Licensed Patents and/or Licensed Subject Matter under the Exclusive Licensing Agreement subject to all of the terms and conditions therein. 
  
 8.4 In the event Company so elects in writing and subject to the limitations specified in Section 8.1 of this Agreement, the University
shall include within the license described in Section 8.3 of this Agreement, such University Background Intellectual Property as is reasonably beneficial to practice and commercially exploit the Intellectual Property that is the subject of the
Option to License; providing, however, such University Background Intellectual Property shall be included only to the extent consistent with any applicable laws, rules and regulations governing the University. 
  

	9.0	University Disclaimer; Company Assumption of Risk and Release 

  
 9.1 FOR PURPOSES OF ARTICLE 9.0 OF THIS AGREEMENT, “SUBJECT MATTER” MEANS ALL INTELLECTUAL PROPERTY, CONFIDENTIAL INFORMATION, TECHNICAL INFORMATION, OTHER
INFORMATION, DATA, PATENTS, COPYRIGHTS, PROPRIETARY MATTER, AND ANY OTHER MATTER ARISING FROM PROJECT WORK AND OTHER PROJECT ACTIVITIES. 
  
 9.2 THE SUBJECT MATTER IS PRELIMINARY AND EXPERIMENTAL IN NATURE. COMPANY HAS BEEN PROVIDED A FULL OPPORTUNITY TO REVIEW AND INQUIRE ABOUT THE SUBJECT MATTER PRIOR TO
USE. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE UNIVERSITY MAKES NO REPRESENTATIONS AND DISCLAIMS: ALL WARRANTEES, BOTH EXPRESS AND IMPLIED, WITH RESPECT TO THE UTILITY, PATENTABILITY, SAFETY, 

  

 Page 9 of 14 Pages 

 
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE SUBJECT MATTER; AND THAT COMPANY USE OF THE SUBJECT MATTER WILL NOT INFRINGE ANY THIRD PARTY
PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS. ALL OBLIGATIONS OR LIABILITIES ON THE PART OF THE UNIVERSITY FOR DAMAGES, INCLUDING BUT NOT LIMITED TO, INCIDENTAL, DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES, ARISING OUT OF OR IN CONNECTION WITH THE
FURNISHING, PERFORMANCE, OR USE OF THE SUBJECT MATTER ARE DISCLAIMED. IF COMPANY UTILIZES ANY OF THE SUBJECT MATTER, COMPANY DOES SO AT ITS OWN RISK AND RELEASES AND DISCHARGES THE UNIVERSITY, ITS REGENTS, OFFICERS, AGENTS, EMPLOYEES, AND STUDENTS,
FROM ALL LOSSES, CLAIMS, DAMAGES, AND EXPENSES (INCLUDING ATTORNEY’S FEES AND LEGAL COSTS) ARISING FROM COMPANY’S USE OF THE SUBJECT MATTER. 
  

	10.0	Indemnification 

  
 10.1 Except for those matters referred to in Sections 9.1, 9.2 and 10.2 of this Agreement, the Parties agree to defend, indemnify, and hold each other harmless from losses, claims, damages, and expenses (including
reasonable attorneys’ fees and legal costs) arising from the negligent acts or omissions of their respective officers, employees, and agents acting in the course and scope of their duties under this Agreement. However, neither Party assumes
responsibility for indirect or consequential damages suffered by the other Party or by any person, firm, or corporation not a Party to this Agreement. 
  
 10.2 Company agrees to defend, indemnify, and hold University harmless from losses, claims, damages, and expenses (including reasonable attorneys’ fees and legal
costs) resulting from any theory of product liability (including, but not limited to, actions in the form of tort, warranty or strict liability) concerning any product, process or service made, used, or sold pursuant to any right or license granted
under this Agreement, except to the extent attributable to the gross negligence or willful misconduct of the University, its officers, employees, and agents. 
  
 10.3 When invoking its rights under Sections 10.1 or 10.2 of this Agreement, a Party shall promptly notify the other Party of the action, claim or other matter which
gives rise to the defense and indemnity obligation and shall cooperate fully with the defense or settlement of the action, claim or other matter. The indemnifying Party shall have full control of the defense or settlement of the action, claim or
other matter and shall ensure that all indemnified liabilities of the indemnified Party are fully discharged. 
  

	11.0	Early Termination, Nonrenewal and Termination 

  
 11.1 University may terminate this Agreement prior to the completion of the Project and Project Work upon sixty (60) days’ written notice to Company. In the event of
any such early termination by the University, the Company’s payments to the University shall be adjusted as provided in Section 3.3 of this Agreement. 
  
 11.2 During the period beginning eighteen (18) months after the Start Date and ending twenty-one (21) months after the Start Date, Company may, for Good Cause only, elect
not to renew this 

  

 Page 10 of 14 Pages 

 
Agreement prior to the completion of the Project and Project Work upon written notice to University during such period. Any such notice of nonrenewal shall
be effective not earlier than two (2) years after the Start Date and shall specify with particularly what facts shall constitute Good Cause. 
  
 11.3 Upon failure of a Party to cure a material breach of this Agreement within sixty (60) days after written demand thereof from the non-breaching Party, the
non-breaching Party shall have the right to terminate this Agreement upon five (5) business days’ written notice to the breaching Party, including, with respect to the University, the right to terminate the Option to License and any licenses
arising from the exercise of the Option to License. 
  
 11.4 In the event of any
early termination or nonrenewal of this Agreement, the University will take reasonable steps to mitigate costs and expenses arising from any outstanding obligations; providing, however, Company shall pay all non-cancelable costs incurred by the
University for a period of three (3) months following any termination by Company, including any employment, graduate student and contractual commitments. 
  
 11.5 In no event will Company be entitled to a refund of the payments or other support, or any part thereof, nor will Company be relieved of any obligations arising under
this Agreement or under any license agreement entered into by Company pursuant to this Agreement (including payment of any amounts due under all such agreements), prior to any termination of this Agreement, whether by the University, Company or
operation of law. 
  

	12.0	Notices 

  
 12.1 Any notice to a Party provided pursuant to the terms of this Agreement shall be delivered either in person, mailed by registered mail (return receipt requested and postage prepaid), or transmitted by facsimile or
electronic mail with operator confirmation, and addressed as indicated in Exhibit 5 attached hereto. 
  
 12.2 Notice shall be deemed effective upon the earlier of: (i) actual delivery to the Party; (ii) five (5) days after the date on which such notice was postmarked within the United States; or (iii) receipt by
facsimile or other electronic means with operator confirmation. All notices given by facsimile or other electronic means shall be immediately followed by delivery in person or delivery by first class mail. 
  

	13.0	Other Sponsored Research Agreements 

  
 13.1 The Parties understand and agree that nothing herein shall preclude either the University or the Company from entering into sponsored research agreements or other
activities with each other or with third parties that may be related to but the conduct of which are otherwise outside and independent of the Project, Project Work, and other Project activities on condition that any such sponsored research
agreements or other activities are not inconsistent with the rights and obligations of the Parties to this Agreement. 
  

 Page 11 of 14 Pages 

	14.0	Compliance with Applicable Laws 

  
 14.1 Company agrees to abide by all applicable federal, state, and local laws and regulations pertaining to the management and commercial deployment of any intellectual
property or other rights transferred to Company under this Agreement or under any other agreement entered into pursuant to this Agreement. 
  
 14.2 Company understands that the University is subject to the laws and regulations of the United States, including the export of technical data, computer software,
laboratory prototypes and other commodities (including the Arms Export Control Act, as amended, and the Export Administration Act of 1979), and that the University’s obligations hereunder are contingent upon compliance with all applicable laws
and regulations, including those for export control. Company understands that any transfer of any intellectual property or other rights to Company under this Agreement or under any other agreement entered into pursuant to this Agreement, including
transfers to Company’s affiliates and permitted uses by certain third parties, may require a license from a cognizant agency of the United States Government and/or written assurances by Company that Company shall not transfer data or
commodities to certain foreign countries without the prior approval of an appropriate agency of the United States government. The University neither represents that any such export license shall not be required, nor that, if required, it shall be
issued. 
  
 14.3 In the event the University receives any funding from a funding
agency of the U. S. government for the Project, Company understands and agrees that the intellectual property or other similar rights covered by this Agreement may be subject to the rights and limitations of U.S. Public Laws 96-517 and 98-620, 35
USC §§200-211, and various implementing regulations, including those codified at 37 CFR Part 401, known generally and collectively as the “Bayh-Dole Requirements.” In such case, the Parties agree to include, where applicable, in
any application for a U.S. Patent a statement fully identifying the rights of the U.S. government under the Bayh-Dole Requirements; and Company acknowledges that the University shall be required to grant the U.S. government a worldwide,
non-exclusive, royalty-free license for such invention covered by any Patent notwithstanding anything in this Agreement to the contrary. 
  

	15.0	Internal Revenue Code 

  
 15.1 The University will comply with any present or future requirements of the Internal Revenue Code and its regulations with respect to providing information that may
affect the allowance of tax credits for payments made to qualified organizations for basic research. Upon request, the University will inform Company, within ninety (90) days after the close of Company’s taxable year, what proportion of
payments and other support provided by Company pursuant to this Agreement were expended on basic research during the taxable year. 
  

	16.0	Sublicenses and Assignments 

  
 16.1 Except as otherwise expressly permitted herein or by the Exclusive Licensing Agreement, neither Party shall sublicense, assign, or otherwise transfer any rights,
duties or obligations, other than a right to receive payment of money, conferred by this Agreement and exhibits attached hereto without the prior, written consent of the other Party. Any such attempt to sublicense, 

  

 Page 12 of 14 Pages 

 
assign, or transfer by a Party without such consent shall be null and void. Any sublicenses, assignments, or transfers shall be subject to the terms of this
Agreement, including the duties of confidentiality herein. 
  

	17.0	Relationship of the Parties 

  
 17.1 Each Party agrees that it will not use the name, trademark or other identifier of the other Party for any advertising, promotion, or other commercially related
purpose without the express prior written consent of the other Party. 
  
 17.2 The
Parties each agree and understand that they are each acting as independent contractors and nothing contained herein shall be construed to be inconsistent with such relationship or status. Under no circumstances, shall either Party be considered an
agent, representative or employee of the other Party. This Agreement shall not constitute, create, nor in any way be interpreted as giving rise to any joint venture, partnership, profit-sharing, or other similar business relationship of any kind
between the Parties. 
  

	18.0	Disputes; Attorney’s Fees and Legal Costs 

  
 18.1 Prior to commencing any legal action, the Parties will attempt in good faith to resolve through negotiation any dispute, claim or controversy arising out of or
relating to this Agreement. Either Party may initiate such negotiations by providing written notice to the other Party specifying that this provision of this Agreement is being utilized and setting forth the subject of the dispute and the relief
requested. The Party receiving such notice will respond in writing within five business (5) days with a statement of its position on and recommended solution to the dispute. If the dispute is not resolved by this exchange of correspondence, then
representatives of each Party with full settlement authority shall meet at a mutually agreeable time and place in Seattle, Washington within ten business (10) days of the date of the initial notice in order to exchange relevant information and
perspectives, and to attempt in good faith to resolve the dispute. If the dispute is not resolved by these negotiations, the matter will be submitted to a mutually agreeable and recognized mediation service prior to initiating legal action. Any such
mediation shall be conducted in Seattle, Washington and the costs of the mediation service shall be shared equally by the Parties. 
  
 18.2 This Agreement shall be governed by and enforced according to the laws of the State of Washington, without giving effect to its or any other jurisdiction’s
choice of law provisions, and the Superior Court of Washington for King County shall have exclusive jurisdiction and venue of all disputes arising under this Agreement, except that in any case where the courts of the United States shall have
exclusive jurisdiction over the subject matter of the dispute, the United States District Court for the Western District of Washington, Seattle division, shall have exclusive jurisdiction and venue. 
  
 18.3 The prevailing Party in any action sought to enforce or interpret this Agreement or any
provision of this Agreement shall be entitled to its reasonable attorney’s fees and costs, including any appeals thereon, as determined by a court in conjunction with any such legal proceeding. 
  

 Page 13 of 14 Pages 

	19.0	Miscellaneous 

  
 19.1 No waiver or modification of this Agreement shall be valid or enforceable unless it is in writing and signed by both Parties. The waiver by any Party of the other Party’s default under or breach of any
provision of this Agreement shall not operate or be construed as a waiver by a Party of any subsequent default under or breach of this Agreement by the other Party. 
  
 19.2 This Agreement, the exhibits attached hereto, and the Exclusive Licensing Agreement, including the exhibits attached thereto, embody
the entire understanding of the parties and supersede all previous communications, representations, or understandings, either oral or written, between the Parties relating to the subject matter hereof. 
  
 19.3 If any of the provisions of this Agreement shall be determined to be illegal or
unenforceable by a court of competent jurisdiction, the other provisions shall remain in force and effect. 
  
 19.4 This Agreement shall inure to the benefit of and be binding upon each Party’s successors and assigns. 
  
 19.5 Nonperformance by a Party, other than payment of any amounts due hereunder by Company, shall not operate as a default under or breach of the terms of this Agreement
to the extent and for so long any such nonperformance is due to: strikes or other labor disputes; prevention or prohibition by law; the loss or injury to products in transit; an Act of God; or war or other cause beyond the control of such Party.

  
 19.6 The headings herein are for convenience and reference only and shall not
govern the interpretation of any of the terms of this Agreement. 
  
 The University and Company, each agreeing to be bound hereby, do hereby assent to the above Agreement by the signatures of their duly-authorized representatives. 
  

									
	 The University of Washington
	 	 	 	 Lumera Corporation
 a Washington Corporation

					
	By:	 	 /s/ Carol Zuiches
	 	 	 	By:	 	 /s/ Todd R. McIntyre

	 	 	
	 	 	 	 	 	

	 Name:
	 	 Carol Zuiches
	 	 	 	 Name:
	 	 Todd R. McIntyre

					
	 Title:
	 	 Director, Grant and Contract Services
	 	 	 	 Title:
	 	 Vice President

					
	 Date:
	 	 October 20, 2000
	 	 	 	 Date:
	 	 October 20, 2000

  

 Page 14 of 14 Pages 

 EXHIBIT 1 
  

PROJECT GOALS AND OBJECTIVES 
  
 A. Develop new and/or improved nonlinear electro-optic materials and devices designed to address a broad range of microphotonics applications. 
  
 B. Advance development of a new class of nonlinear optical materials currently under
development at the University that appear to offer the potential to enable a range of light modulation components and systems for a variety of optical processing and communications applications. 
  
 C. Support rapid commercialization of the underlying materials technology. 
  

 Exhibit 1, Page 1 of 1 Page 

 EXHIBIT 2 
  

BACKGROUND INTELLECTUAL PROPERTY 
  
 A. University Intellectual Property Description: Licensed Patents and Licensed Subject Matter, as defined in the Exclusive Licensing Agreement, in existence as of the
Effective Date 
  
 B. Company Intellectual Property Description: None 

 

 Exhibit 2, Page 1 of 1 Page 

 EXHIBIT 3 
  

COMPANY REPRESENTATIVE, PRINCIPAL INVESTIGATOR AND 
  
 CERTAIN UNIVERSITY PERSONNEL 
  
 A. Company Representative: Todd R. McIntyre 
  
 B. Principal Investigator: Dr. Larry R. Dalton 
  
 C. University Personnel: Dr. Bruce H. Robinson, Dr. Alex Jen, and such other persons as described in the Research Plan 
  

 Exhibit 3, Page 1 of 1 Page 

 EXHIBIT 4 
  

PAYMENTS AND PAYMENT SCHEDULE 
  

	A.	Payments 

  

	 	1.	Total Project Payments: $9,000,000.001 (or
$6,000,000.002) 

  

	 	2.	Project Payment Amount: Equal payments of $750,000.00 each 

  

	 	3.	Number of Project Payments: Twelve (12)1 (or
eight (8)2) 

  

	 	4.	Project Payments shall be due and payable according to the following Schedule: 

  
 a. Payment #1 ($750,000.00): upon execution of Research Plan 
  
 b. Payments #2 through 121 (or Payments #2 through #82): on the first day of the next quarter
immediately following the Start Date (.e.g., January 1 April 1, July 1, and October 1, as the case may be), except that, if the first day of such quarter occurs less than thirty (30) days after the Start Date, then on the first day of the second
quarter immediately following the Start Date and on the first day of each successive quarter thereafter until paid in full3 
  
 c. In the event any payment hereunder is not
made in a timely manner, the due dates for all remaining payments under the foregoing payment schedule shall be accelerated by one (1) quarter and Section 3.2 shall be adjusted to reflect such acceleration. As used in this subparagraph c.,
“timely manner” shall mean within five (5) business days from written notice by the University of failure to make such payment. 

	1	If Company renews this Agreement 

  

	2	If, for Good Cause, Company does not renew this Agreement as provided in Section 11.2 herein

  

	3	Subject to possible renegotiation pursuant to Section 3.2 herein and/or possible adjustment
as described in Sections 3.3 and 11.1 herein 

  

 Exhibit 4, Page 1 of 2 Pages 

	B.	Payment Method 

  
 By check payable to University of Washington delivered or mailed as follows: 
  
 Director, Grant and Contract Accounting 
 The University of Washington 
 3917 University Way N.E., Room 150 
 Box 351122 
 Seattle, Washington 98195-1122

 U.S.A. 
  
 - OR - 
  
 By wire transfer (with written notice thereof to the Director, Grant and Contract Accounting at above address) as follows: 
  
 Bank of America 
 Metropolitan Branch

 1309 – Fourth Avenue 
 Seattle, Washington 98101 
 U.S.A. 
  
 Bank Routing No.: 1250-00024 
 University of
Washington Account No.: 6204500 
 University of Washington Grant No.:
                     
  
  

 Exhibit 4, Page 2 of 2 Pages 

 EXHIBIT 5 
  

NOTICES 
  

	A.	Legal Notices 

  

	 	1.	To the University: 

  
 Director, Office of Grant and Contract Services 
 University of Washington 
 3935 University Way, N.E. 
 Box 355754 
 Seattle, Washington 98105-6613 
 U.S.A. 
  
 (206) 685-1732 (Facsimile) 
 gcsvcs@u.washington.edu (Electronic Mail) 
  
 With a
Copy to: 
  
 University of Washington 
 Office of Intellectual Property and Technology Transfer 
 University District Building, Suite 200 
 1107 N.E. 45th Street 
 Seattle, Washington 98105-4631

 U.S.A. 
  
 (206) 685-4767 (Facsimile) 
 OIPTT@u.washington.edu (Electronic Mail) 
  

	 	2.	To the Company: 

  
 Lumera Corporation 
 19910 North Creek Parkway

 P.O. Box 3008 
 Bothell,
Washington 98011 
 U.S.A. 
  
 (425) 415-6901 (Facsimile) 
 todd_mcintyre@lumera.com (Electronic Mail) 
  

 Exhibit 5, Page 1 of 2 Pages 

	B.	Research, Technical and Nonlegal Matters 

  

	 	1.	To the University: 

  
 Dr. Larry Dalton 
 University of Washington

 Department of Chemistry 
 202D
Bagley Hall 
 Box 351700 
 Seattle, Washington 98195-1700 
 U.S.A. 
  
 (206) 685-8665 (Facsimile) 
 dalton@chem.washington.edu (Electronic Mail) 
  

	 	2.	To the Company: 

  
 Todd McIntyre 
 Lumera Corporation 

19910 North Creek Parkway 
 P.O. Box 3008

 Bothell, Washington 98011 
 U.S.A. 
  
 (425) 415-6901 (Facsimile) 
 todd_mcintyre@lumera.com (Electronic Mail) 
  

 Exhibit 5, Page 2 of 2 Pages 

 EXHIBIT 6 
  

RESEARCH PLAN 
  

	A.	Start Date:                     ,     , 2000

  

	B.	University Personnel 

  

	 	1.	Principal Investigator: Dr. Larry Dalton 

  

	 	2.	Certain University Personnel: 

  

	 	a.	Dr. Bruce Robinson 

  

	 	b.	Dr. Alex Jen 

  

	C.	Project Work Description and Estimated Schedule 

  

									
	 AGREED TO:
  
 The University of Washington
	 	 	 	Lumera Corporation
					
	 By:
	 	 	 	 	 	 By:
	 	 
	 	 	
	 	 	 	 	 	

	 Name:
	 	 	 	 	 	 Name:
	 	 
	 	 	
	 	 	 	 	 	

	 Title:
	 	 	 	 	 	 Title:
	 	 
	 	 	
	 	 	 	 	 	

	 Date:
	 	 	 	 	 	 Date:
	 	 
	 	 	
	 	 	 	 	 	

  

									
	REVIEWED:	 	 	 	 
					
	 By:
	 	 	 	 	 	 By:
	 	 
	 	 	
	 	 	 	 	 	

	 Name:
	 	 Dr. Larry Dalton
	 	 	 	 Name:
	 	 
	 	 	 	 	 	 	 	 	

	 Title:
	 	 Principal Investigator
	 	 	 	 Title:
	 	 
	 	 	 	 	 	 	 	 	

	 Date:
	 	 	 	 	 	 	 	 
	 	 	
	 	 	 	 	 	 

  

 Exhibit 6, Page 1 of 1 Page 

 EXHIBIT 7 
  

PROGRESS REPORTS 
  

	I.	MOST RECENTLY COMPLETED QUARTER 

  

	 	A.	Status Report 

  

	 	1.	Overview 

  

	 	a.	Important New Developments and Problems 

  

	 	b.	Material Deviations from Research Plan 

  

	 	c.	Progress towards Previously Identified Goals 

  

	 	2.	Activities 

  

	 	a.	Materials Produced and/or Tested 

  

	 	b.	Devices Produced and/or Tested 

  

	 	c.	Test and other Research Results 

  

	 	d.	Other 

  

	 	3.	Intellectual Property and Scholarly Disclosures 

  

	 	a.	Intellectual Property Disclosures (Section 8.1 of Agreement) 

  

	 	i.	New Materials 

  

	 	ii.	Other 

  

	 	b.	Patent Applications 

  

	 	i.	New Filings 

  

	 	ii.	Status of Pending Applications 

  

	 	iii.	Applications in Preparation 

  

	 	c.	Proposed Scholarly Disclosures (Article 5.0 of Agreement) 

  

	 	4.	Personnel 

  

	 	a.	Review of Current Roster 

  

	 	b.	Significant Changes 

  

	 	B.	Financial 

  

	 	1.	Expenditures (Subject to Availability of Information) 

  

	 	a.	Labor 

  

	 	b.	Capital Equipment 

  

	 	c.	Other Capital 

  

	 	d.	Other 

  

	 	2.	Issues 

  

 Exhibit 7, Page 1 of 2 Pages 

	II.	NEXT QUARTER 

  

	 	A.	Project Planning 

  

	 	1.	Planned Activities 

  

	 	a.	Proposed Changes to Research Plan 

  

	 	b.	Goals 

  

	 	2.	Intellectual Property and Scholarly Disclosures 

  

	 	a.	Anticipated Patent Applications 

  

	 	b.	Proposed Scholarly Disclosures 

  

	 	3.	Personnel 

  

	 	a.	Review of Anticipated Roster 

  

	 	b.	Possible Significant Changes 

  

	 	B.	Financial 

  

	 	1.	Estimated Anticipated Expenditures 

  

	 	a.	Labor 

  

	 	b.	Capital Equipment 

  

	 	c.	Other Capital 

  

	 	d.	Other 

  

	 	2.	Issues 

  

 Exhibit 7, Page 2 of 2 Pages

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