Document:

Form of Investment Management Trust Agreement

 Exhibit 10.8 
  
 INVESTMENT MANAGEMENT TRUST AGREEMENT 
  
 This Agreement is made as of
                         , 2004 by and between Sand Hill IT Security Acquisition Corp. (the “Company”)
and American Stock Transfer & Trust Company (“Trustee”). 
  
 WHEREAS, the Company’s Registration Statement on Form S-1, No. 333-114861 (“Registration Statement”), for its initial public offering of securities (“IPO”) has been declared effective as of the date hereof by the
Securities and Exchange Commission (“Effective Date”); and 
  
 WHEREAS, Newbridge Securities Corporation and I-Bankers Securities Incorporated (collectively, the “Representatives”) are acting as the representatives of the underwriters in the IPO; and 
  
 WHEREAS, as described in the Company’s Registration Statement, and in
accordance with the Company’s Certificate of Incorporation, $20,400,000 of the gross proceeds of the IPO ($23,460,000 if the underwriters’ over-allotment option is exercised in full) will be delivered to the Trustee to be deposited and
held in a trust account for the benefit of the Company and the holders of the Company’s common stock, par value $.01 per share, issued in the IPO as hereinafter provided and in the event the Units are registered in Colorado, pursuant to Section
11-51-302(6) of the Colorado Revised Statutes. A copy of the Colorado Statute is attached hereto and made a part hereof (the amount to be delivered to the Trustee will be referred to herein as the “Property”; the stockholders for whose
benefit the Trustee shall hold the Property will be referred to as the “Public Stockholders,” and the Public Stockholders and the Company will be referred to together as the “Beneficiaries”); and 
  
 WHEREAS, the Company and the Trustee desire to enter into this Agreement to
set forth the terms and conditions pursuant to which the Trustee shall hold the Property; 
  
 IT IS AGREED: 
  
 1. Agreements and Covenants of
Trustee. The Trustee hereby agrees and covenants to: 
  
 (a) Hold
the Property in trust for the Beneficiaries in accordance with the terms of this Agreement, including the terms of Section 11-51-302(6) of the Colorado Statute in a segregated trust account (“Trust Account”) established by the Trustee
at a branch of JPMorgan Chase NY Bank selected by the Trustee; 
  
 (b) Manage, supervise and administer the Trust Account subject to the terms and conditions set forth herein; 
  
 (c) In a timely manner, upon the instruction of the Company, to invest and reinvest the Property in any “Government Security.” As used herein,
Government Security means any Treasury Bill issued by the United States, having a maturity of one hundred and eighty days or less; 
  
 (d) Collect and receive, when due, all principal and income arising from the Property, which shall become part of the “Property,” as such term
is used herein; 
  

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 Exhibit 10.8 
  

 (e) Notify the Company of all communications received by it with respect to any Property requiring
action by the Company; 
  
 (f) Supply any necessary information or
documents as may be requested by the Company in connection with the Company’s preparation of the tax returns for the Trust Account; 
  
 (g) Participate in any plan or proceeding for protecting or enforcing any right or interest arising from the Property if, as and when instructed by the
Company to do so; 
  
 (h) Render to the Company and to the
Representatives, and to such other person as the Company may instruct, monthly written statements of the activities of and amounts in the Trust Account reflecting all receipts and disbursements of the Trust Account; and 
  
 (i) Commence liquidation of the Trust Account only after receipt of and only
in accordance with the terms of a letter (“Termination Letter”), in a form substantially similar to that attached hereto as either Exhibit A or Exhibit B, signed on behalf of the Company by its President or Chairman of the Board and
Secretary, and complete the liquidation of the Trust Account and distribute the Property in the Trust Account only as directed in the Termination Letter and the other documents referred to therein. 
  
 2. Agreements and Covenants of the Company. The Company hereby agrees and covenants to:

  
 (a) Give all instructions to the Trustee hereunder in writing,
signed by the Company’s President or Chairman of the Board. In addition, except with respect to its duties under paragraph 1(i) above, the Trustee shall be entitled to rely on, and shall be protected in relying on, any verbal or telephonic
advice or instruction which it in good faith believes to be given by any one of the persons authorized above to give written instructions, provided that the Company shall promptly confirm such instructions in writing; 
  
 (b) Hold the Trustee harmless and indemnify the Trustee from and against, any
and all expenses, including reasonable counsel fees and disbursements, or loss suffered by the Trustee in connection with any action, suit or other proceeding brought against the Trustee involving any claim, or in connection with any claim or demand
which in any way arises out of or relates to this Agreement, the services of the Trustee hereunder, or the Property or any income earned from investment of the Property, except for expenses and losses resulting from the Trustee’s gross
negligence or willful misconduct. Promptly after the receipt by the Trustee of notice of demand or claim or the commencement of any action, suit or proceeding, pursuant to which the Trustee intends to seek indemnification under this paragraph, it
shall notify the Company in writing of such claim (hereinafter referred to as the “Indemnified Claim”). The Trustee shall have the right to conduct and manage the defense against such Indemnified Claim, provided, that the Trustee shall
obtain the consent of the Company with respect to the selection of 

  

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 Exhibit 10.8 
  

 
counsel, which consent shall not be unreasonably withheld. The Company may participate in such action with its own counsel; and 
  
 (c) Pay the Trustee an initial acceptance fee of $1,000 and an annual fee of
$3,000 (it being expressly understood that the Property shall not be used to pay such fee). The Company shall pay the Trustee the initial acceptance fee and first year’s fee at the consummation of the IPO and thereafter on the anniversary of
the Effective Date. The Trustee shall refund to the Company the fee (on a pro rata basis) with respect to any period after the liquidation of the Trust Fund. The Company shall not be responsible for any other fees or charges of the Trustee except as
may be provided in paragraph 2(b) hereof (it being expressly understood that the Property shall not be used to make any payments to the Trustee under such paragraph). 
  
 3. Limitations of Liability. The Trustee shall have no responsibility or liability to: 
  
 (a) Take any action with respect to the Property, other than as directed in
paragraph 1 hereof and the Trustee shall have no liability to any party except for liability arising out of its own gross negligence or willful misconduct; 
  
 (b) Institute any proceeding for the collection of any principal and income arising from, or institute, appear in or defend any proceeding of any kind
with respect to, any of the Property unless and until it shall have received instructions from the Company given as provided herein to do so and the Company shall have advanced or guaranteed to it funds sufficient to pay any expenses incident
thereto; 
  
 (c) Change the investment of any Property, other than
in compliance with paragraph 1(c); 
  
 (d) Refund any depreciation
in principal of any Property; 
  
 (e) Assume that the authority of
any person designated by the Company to give instructions hereunder shall not be continuing unless provided otherwise in such designation, or unless the Company shall have delivered a written revocation of such authority to the Trustee; 

 
 (f) The other parties hereto or to anyone else for any action taken or
omitted by it, or any action suffered by it to be taken or omitted, in good faith and in the exercise of its own best judgment, except for its gross negligence or willful misconduct. The Trustee may rely conclusively and shall be protected in acting
upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Trustee), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its
provisions, but also as to the truth and acceptability of any information therein contained) which is believed by the Trustee, in good faith, to be genuine and to be signed or presented by the proper person or persons. The Trustee shall not be bound
by any notice or demand, or any waiver, modification, termination or rescission of this agreement or any of the terms hereof, unless evidenced by a written instrument delivered to the Trustee signed by the proper party or parties and, 

  

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 Exhibit 10.8 
  

 
if the duties or rights of the Trustee are affected, unless it shall give its prior written consent thereto; 
  
 (g) Verify the correctness of the information set forth in the Registration
Statement or to confirm or assure that any acquisition made by the Company or any other action taken by it is as contemplated by the Registration Statement; and 
  

(h) Pay any taxes on behalf of the Trust Account (it being expressly understood that the Property shall not be used to pay any such taxes and that such
taxes, if any, shall be paid by the Company from funds not held in the Trust Account). 
  
 4. Termination. This Agreement shall terminate as follows: 
  
 (a) If the Trustee gives written notice to the Company that it desires to resign under this Agreement, the Company shall use its reasonable efforts to locate a successor trustee. At such time that the Company notifies the Trustee that a
successor trustee has been appointed by the Company and has agreed to become subject to the terms of this Agreement, the Trustee shall transfer the management of the Trust Account to the successor trustee, including but not limited to the transfer
of copies of the reports and statements relating to the Trust Account, whereupon this Agreement shall terminate; provided, however, that, in the event that the Company does not locate a successor trustee within ninety days of receipt of the
resignation notice from the Trustee, the Trustee may submit an application to have the Property deposited with the United States District Court for the Southern District of New York and upon such deposit, the Trustee shall be immune from any
liability whatsoever; 
  
 (b) At such time that the Trustee has
completed the liquidation of the Trust Account in accordance with the provisions of paragraph 1(i) hereof, and distributed the Property in accordance with the provisions of the Termination Letter, this Agreement shall terminate except with respect
to Paragraph 2(b); or 
  
 (c) On such date after
                         , 2006 when the Trustee deposits the Property with the United States District Court for
the Southern District of New York in the event that, prior to such date, the Trustee has not received a Termination Letter from the Company pursuant to paragraph 1(i). 
  
 5. Miscellaneous. 
  
 (a) The Company and the Trustee each acknowledge that the Trustee will follow the security procedures set forth below with respect to funds transferred
from the Trust Account. Upon receipt of written instructions, the Trustee will confirm such instructions with an Authorized Individual at an Authorized Telephone Number listed on the attached Exhibit C. The Company and the Trustee will each restrict
access to confidential information relating to such security procedures to authorized persons. Each party must notify the other party immediately if it has reason to believe unauthorized persons may have obtained access to such information, or of
any change in its authorized personnel. In executing funds transfers, the Trustee will rely upon account numbers or other identifying numbers of a beneficiary, beneficiary’s bank or intermediary bank, 

  

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 Exhibit 10.8 
  

 
rather than names. The Trustee shall not be liable for any loss, liability or expense resulting from any error in an account number or other identifying
number, provided it has accurately transmitted the numbers provided. 
  
 (b) This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflict of laws. It may be executed in several counterparts, each one of which shall
constitute an original, and together shall constitute but one instrument. 
  
 (c) This Agreement contains the entire agreement and understanding of the parties hereto with respect to the subject matter hereof. This Agreement or any provision hereof may only be changed, amended or modified by a
writing signed by each of the parties hereto; provided, however, that no such change, amendment or modification may be made without the prior written consent of the Representative. As to any claim, cross-claim or counterclaim in any way relating to
this Agreement, each party waives the right to trial by jury. 
  
 (d) The parties hereto consent to the jurisdiction and venue of any state or federal court located in the City of New York for purposes of resolving any disputes hereunder. 
  
 (e) Any notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be
in writing and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery or by facsimile transmission: 
  
 if to the Trustee, to: 
  
 American Stock Transfer & Trust Company 
 59 Maiden Lane 
 New York, New York 10038 
 Attn:
                                        

 Fax No.:
                                     
  
 if to the Company, to: 
  
 Sand Hill IT Security Acquisition Corp. 
 3000 Sand Hill Road 
 Building 1, Suite 240

 Menlo Park, California 94025 
 Attn: Humphrey P. Polanen, Chief Executive Officer 
 Fax No.:
                                     
  
 in either case with a copy to: 
  
 Newbridge Securities Corporation 
 1451 W. Cypress Creek Road 
  

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 Exhibit 10.8 
  

 Ft. Lauderdale, Florida 33309-1953 
 Attn: Guy S. Amico 
 Fax: (954) 229-9937

  
 and 
  
 I-Bankers Securities Incorporated 
 3340 Indian Creek Ct. 
 Ft. Worth, Texas 76180

 Attn: Michael McCrory 
 Fax:
(817) 428-2779 
  
 (f) This Agreement may not be assigned by the
Trustee without the prior consent of the Company. 
  
 (g) Each of
the Trustee and the Company hereby represents that it has the full right and power and has been duly authorized to enter into this Agreement and to perform its respective obligations as contemplated hereunder. The Trustee acknowledges and agrees
that it shall not make any claims or proceed against the Trust Account, including by way of set-off, and shall not be entitled to any funds in the Trust Account under any circumstance. 
  
 IN WITNESS WHEREOF, the parties have duly executed this Investment Management Trust Agreement as of the date first written
above. 
  

			
	AMERICAN STOCK TRANSFER
& TRUST COMPANY, as Trustee
		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 
	
	SAND HILL IT SECURITY
ACQUISITION CORP.
		
	 By:
	 	 
	 	 	 Humphrey P. Polanen

	 	 	 Chief Executive Officer

  

 -6- 

 Exhibit 10.8 
  

 EXHIBIT A 
  
 [LETTERHEAD OF COMPANY] 
  
 [INSERT DATE] 
  
 American Stock Transfer & Trust Company 
 59 Maiden Lane 
 New York, New York 10038 
 Attn:
                                     

	Re:	Trust Account No. [                    ] 

 Termination Letter 
  
 Gentlemen: 
  
 Pursuant to
paragraph 1(i) of the Investment Management Trust Agreement between Sand Hill IT Security Acquisition Corp. (“Company”) and American Stock Transfer & Trust Company (“Trustee”), dated as of
                    , 2004 (“Trust Agreement”), this is to advise you that the Company has entered into an agreement (“Business
Agreement”) with                      (“Target Business”) to consummate a business combination with Target Business
(“Business Combination”) on or about [INSERT DATE]. The Company shall notify you at least 24 hours in advance of the actual date of the consummation of the Business Combination (“Consummation Date”). 
  
 In accordance with the terms of the Trust Agreement, we hereby authorize you
to commence liquidation of the Trust Account to the effect that, on the Consummation Date, all of funds held in the Trust Account will be immediately available for transfer to the account or accounts that the Company shall direct on the Consummation
Date. 
  
 On the Consummation Date (i) counsel for the Company
shall deliver to you written notification that (a) the Business Combination has been consummated (b) the provisions of Section 11-51-302(6) and Rule 51-3.4 of the Colorado Statute have been met, and (ii) the Company shall deliver to you written
instructions with respect to the transfer of the funds held in the Trust Account (“Instruction Letter”). You are hereby directed and authorized to transfer the funds held in the Trust Account immediately upon your receipt of the
counsel’s letter and the Instruction Letter, in accordance with the terms of the Instruction Letter. In the event that certain deposits held in the Trust Account may not be liquidated by the Consummation Date without penalty, you will notify
the Company of the same and the Company shall direct you as to whether such funds should remain in the Trust Account and distributed after the Consummation Date to the Company. Upon the distribution of all the funds in the Trust Account pursuant to
the terms hereof, the Trust Agreement shall be terminated. 
  
 In
the event that the Business Combination is not consummated on the Consummation Date described in the notice thereof and we have not notified you on or before the original Consummation Date of a new Consummation Date, then the funds held in the Trust
Account shall be reinvested as provided in the Trust Agreement on the business day immediately following the Consummation Date as set forth in the notice. 
  

 Exhibit 10.8 
  

			
	Very truly yours,
	
	SAND HILL IT SECURITY
ACQUISITION CORP.
		
	 By:
	 	 
	 	 	 Humphrey P. Polanen,

	 	 	 Chief Executive Officer

		
	 By:
	 	 
	 	 	 Cary M. Grossman, Secretary

  

 Exhibit 10.8 
  

 EXHIBIT B 
  
 [LETTERHEAD OF COMPANY] 
  
 [INSERT DATE] 
  
 American Stock Transfer & Trust Company 
 59 Maiden Lane 
 New York, New York 10038 
 Attn:
                                     

	Re:	Trust Account No. [                    ] Termination Letter

  
 Gentlemen: 
  
 Pursuant to paragraph 1(i) of the Investment Management Trust Agreement
between Sand Hill IT Security Acquisition Corp. (“Company”) and American Stock Transfer & Trust Company (“Trustee”), dated as of
                    , 2004 (“Trust Agreement”), this is to advise you that the Board of Directors of the Company has voted to
dissolve and liquidate the Company. Attached hereto is a copy of the minutes of the meeting of the Board of Directors of the Company relating thereto, certified by the Secretary of the Company as true and correct and in full force and effect.

  
 In accordance with the terms of the Trust Agreement, we hereby
(a) certify to you that the provisions of Section 11-51-302(6) and Rule 51-3.4 of the Colorado Statute have been met and (b) authorize you, to commence liquidation of the Trust Account. You will notify the Company and
                     (“Designated Paying Agent”) in writing as to when all of the funds in the Trust Account will be available for
immediate transfer (“Transfer Date”). The Designated Paying Agent shall thereafter notify you as to the account or accounts of the Designated Paying Agent that the funds in the Trust Account should be transferred to on the Transfer Date so
that the Designated Paying Agent may commence distribution of such funds in accordance with the Company’s instructions. You shall have no obligation to oversee the Designated Paying Agent’s distribution of the funds. Upon the payment to
the Designated Paying Agent of all the funds in the Trust Account, the Trust Agreement shall be terminated. 
  

			
	Very truly yours,
	
	SAND HILL IT SECURITY
ACQUISITION CORP.
		
	 By:
	 	 
	 	 	 Humphrey P. Polanen,

	 	 	 Chief Executive Officer

		
	 By:
	 	 
	 	 	 Cary M. Grossman, Secretary

  

 Exhibit 10.8 
  

 EXHIBIT C 
  
 AUTHORIZED INDIVIDUAL(S) 
  
 AUTHORIZED FOR TELEPHONE CALL BACK 
  

			
	COMPANY:	 	 Sand Hill IT Security Acquisition Corp.
 3000 Sand
Hill Road
 Building 1, Suite 240
 Menlo Park, California
94025
 Attn:
 Telephone:
 Attn:
 Telephone:

		
	TRUSTEE:	 	 American Stock Transfer & Trust Company
 59 Maiden
Lane
 New York, New York 10038
 Attn:
 Telephone:Research Agreement with California Institute of Technology.

 Exhibit 10.2 
  
 RESEARCH AGREEMENT 
  
 RESEARCH AGREEMENT between the CALIFORNIA INSTITUTE OF TECHNOLOGY, of Pasadena, California, U.S.A., hereinafter referred to as “Institute,” and Arrowhead
Research Corporation of 150 South Los Robles Avenue, Suite 480, Pasadena, CA 91101, hereinafter referred to as “Sponsor.” 
  
 WHEREAS, the research program relating to the works of Dr. Charles Patrick Collier, hereinafter referred to as “Investigator”, and the Sponsor, and will further
the instructional and research objectives of the Institute in a manner consistent with its status as a nonprofit, tax-exempt, educational institution. 
  
 NOW, THEREFORE, the parties hereto agree as follows: 
  
 1. STATEMENT OF WORK. The Institute agrees to use its best effort to carry out the work defined in the Statement of Work attached as Exhibit I.

  
 2. PRINCIPAL INVESTIGATOR. The research will be supervised by
Dr. Charles Patrick Collier. If, for any reason, he/she is unable to continue to serve as Principal Investigator, and a successor acceptable to both the Institute and the Sponsor is not available, this Agreement shall be terminated as provided in
Article 11. 
  
 3. PERIOD OF PERFORMANCE. The research shall be
conducted during the period of 10/1/2003 — 9/30/2008. This Agreement and the period of performance may be extended by mutual agreement of the parties. 
  
 4. REIMBURSEMENT OF COSTS. In consideration of the foregoing, the Sponsor will reimburse the Institute for all direct and indirect costs incurred in the
performance of the research which shall not exceed $162,000 per year of the total estimated project cost of $810,000 without written authorization from the Sponsor. If the Agreement is extended the dollar value of costs to be reimbursed may be
increased by mutual agreement to cover additional work performed during the extension. 
  
 5. PAYMENT. Payment shall be made as follows: $162,000 per year, for five (5) years. All payments to the Institute shall be net, and free and clear of all taxes, duties and other levies, 
  
 6. ACCOUNTS AND RECORDS. The Institute agrees to maintain books, records,
documents, and other evidence pertaining to all costs and expenses to the extent and in such detail as will properly reflect all net costs, direct and indirect, of labor, materials, equipment, supplies and services, and other costs, and expenses of
whatever nature incurred in the performance of this research. 
  
 7. TRAVEL. Travel costs shall be paid in accordance with applicable Institute policies. 

 8. PERSONAL PROPERTY. Title to all personal property to be used in the performance of this research and
purchased with funds supplied under this Agreement, shall vest in the Institute upon delivery. 
  
 9. TECHNICAL DATA. 
  
 a.
Ownership of, and the right to register copyright to documents related to computer hardware and software and associated documentation (hereinafter “Documents”) shall remain in the Institute. The Sponsor shall be granted a nonexclusive,
nontransferable, royalty-free license to use Documents, but only for Sponsor’s own internal purposes. The Sponsor further agrees not to provide or otherwise make available Documents, or any copy or modification thereof in any form to any third
party, except as may be permitted in writing by the Institute. As used herein “modification” shall mean any source tapes, listings or other documentation in any identifiable or separately usable form included in any program developed by
Sponsor in machine readable or printed form, where such source tapes, listings, or other documentation remains essentially the same in both form and function as when originally provided by the Institute to the Sponsor. 
  
 b. All technical data other than Documents resulting from the research
program under this Agreement shall be the property of the Institute; however, a copy of all such technical data shall be provided to the Sponsor upon request, and, subject to Article 12 hereof, Sponsor shall have the right to use and disclose all
such technical data as it sees fit. 
  
 10. PUBLICATIONS. It is
anticipated that the Principal Investigator may publish information regarding technical developments and/or research findings made by Institute employees under this Agreement. For such publications Principal Investigator agrees to submit a copy of
the proposed publication to the Sponsor, preferably at least thirty (30) days prior to, but in no case later than simultaneously with submission for publication. Sponsor may request reasonable changes and/or deletions be made in any proposed
publication. The Principal investigator will consider such changes but retains the sole right to determine whether such changes or deletions will be made. If Sponsor believes that the subject matter to be published warrants patent protection, it
will identify the subject matter requiring protection and notify the Institute. Institute agrees to use its best efforts to file a U. S. patent application prior to any date that would result in preventing the obtaining of a valid patent rights
throughout the world when the Sponsor so identifies subject matter requiring patent protection from a review of the planned publication. Notwithstanding any other provision of this Article 10, if the Institute is unable to file a U.S. nonprovisional
patent application in accordance with the preceding sentence, Institute shall file a U.S. provisional patent application, at its expense, prior to any date that would result in preventing the obtaining of valid patent rights throughout the world
when Sponsor so identifies subject matter requiring patent protection from a review of a planned publication. 
  
 11. TERMINATION. The Principal Investigator or the Sponsor shall have the right to terminate this Agreement upon sixty (60) calendar days’ written
notice. In the event of termination by the Sponsor, the Institute shall make no further commitments and must take all 

 reasonable action to cancel outstanding obligations. The Institute shall be entitled to reimbursement for all costs
incurred including reasonable cancellation charges for any purchase orders, subcontracts or other commitments made prior to notice of termination. The Office of Management and Budget Circular A-21 shall be used in determining the allowable costs.

  
 In the event the Institute employs personnel specifically for
this work, it shall be entitled to fill reimbursement for the salaries, benefits, and overhead for such personnel for a period of up to one (1) year (the balance of the one-year term). It is agreed by the PI and the Sponsor, that an updated
Statement of Work will be mutually agreed upon at the end of each year. 
  
 12. USE OF NAME. The Sponsor agrees that it will not use the name of the California Institute of Technology in any advertising or publicity material, or make any form of presentation or statement in relation to research or testing done at
the Institute which would constitute an express or implied endorsement by the Institute of any commercial product or service, and that it will not authorize others to do so, without first having obtained written approval from the Institute.
Similarly, the Institute agrees that it will not use Sponsor’s Corporate name without its prior written concurrence. 
  
 13. PATENTS, 
  
 a. Definition: “Subject Invention” means any invention or discovery, whether or not patentable, conceived or first actually reduced to
practice in the course of, or under this Agreement. “Joint Subject Invention” means any invention or discovery, whether or not patentable, (a) conceived or first actually reduced to practice in the course of, or under this Agreement,
jointly by institute and Sponsor Employees, (b) first actually reduced to practice by Institute Employees using Sponsor’s facilities and equipment, or (c) first actually reduced to practice by Sponsor Employees using Institute facilities and
equipment. The term “Subject Invention” includes, but is not limited to, any art, method, process, machine, manufacture, design or composition of matter, or any new and useful improvement thereof, or any variety of plant, which is or may
be patentable under the patent laws of the United States of America. 
  
 b. Reporting of Inventions. The Institute shall report each Subject Invention to the Sponsor as soon as possible after becoming aware of the conception or reduction to practice thereof. 
  
 c. Filing of Applications. 
  
 1. The Institute shall retain title to each institute Subject Invention. As
to each such Institute Subject Invention, Sponsor can request Institute to file a patent application and Institute agrees to do so provided Sponsor covers the cost of filing and maintaining the patent application, patents issuing therefrom and
foreign counterparts, if any. The Institute shall have the right thereafter to elect whether or not it will file a patent application covering Subject Invention. Patent applications relating to such Subject Invention(s) shall be filed by the
institute in its name. 
  
 2. Joint Subject Inventions shall be
jointly owned by Institute and Sponsor. Patent 

 applications relating to a Subject Invention made jointly by Institute personnel and other persons participating in the
work supported by this Agreement shall be filed as mutually agreed by the parties, at Sponsor’s expense unless Sponsor has not initiated the filing of such patent applications, and Institute and Sponsor shall together select independent patent
counsel satisfactory to both parties to prepare and prosecute any such applications. Patent applications relating to Joint Subject Inventions shall be filed in the names of Institute and the Sponsor. 
  
 3. Subject Inventions made solely by person(s) who are not Institute
personnel shall be owned by Sponsor provided such personnel do not first actually reduce to practice a Subject Invention using institute facilities and equipment, in which case the Subject Invention shall be a Joint Subject invention as defined
above. Patent applications owned by Sponsor shall be filed by Sponsor. 
  
 4. As regards l3.c.1. and 13.c.2., both parties shall have the right to review and comment upon applications and correspondence with the Patent Office and shall be provided with drafts thereof sufficiently in advance to reasonably allow,
for such review and comment. 
  
 5. Institute agrees that it will
cause to be signed by concerned Institute personnel all documents necessary to obtain patent protection as set forth above, and that Institute will do whatever Sponsor reasonably requests to obtain and maintain such patent rights, at the expense of
Sponsor. 
  
 6. If Sponsor is not interested in having a patent
application filed with respect to a particular Subject Invention made solely by Institute personnel or jointly, Sponsor shall advise Institute of such fact within sixty (60) days from the date the Subject Invention was disclosed to Sponsor by
Institute, or sooner if necessary to avoid loss of patent rights. Institute may then at its own expense, file and prosecute such patent application, and such patent application and any patents issuing therefrom shall not be included within the
rights licensed to Sponsor pursuant to this Agreement, and Institute shall be free to license its rights in such patent to any party. 
  
 d. Licenses. 
  
 1. For any Subject Invention for which Institute has any rights, Sponsor shall receive a nonexclusive, royalty-free, irrevocable license to use the
invention covered by the license for its own internal purposes. However, such a nonexclusive license will not include the right to sublicense and is nontransferable, except in the event of the transfer or sale of all or substantially all of
Sponsor’s assets to a third party. 
  
 2. Sponsor shall have
the option to acquire, upon mutually agreeable terms, a royalty bearing, exclusive, or nonexclusive world-wide license in the Field, including the right to sublicense, to make, have made, use, lease and sell products embodying or produced through
the use of any Subject invention. Said option must be exercised by written notice to Institute within six (6) months after receiving from Institute written notice of the filing of a patent application. If Sponsor elects to exercise its option to
acquire a license on mutually agreeable terms within the prescribed time period, both parties agree to negotiate license terms on fair and reasonable terms in good faith at prevailing market rates. All such negotiations including the execution of a
license 

 agreement shall be completed within six (6) months of written notice to Institute of Sponsor’s exercise of said
option. If Sponsor fails to agree to terms and conditions within the six (6) month time period, Sponsor shall be deemed to have waived said option, and the Institute shall be free to license a third party; provided, however, that for a period of
three (3) years after written notice of Sponsor’s exercise of its option to Subject Invention(s), the Institute shall not agree to license a third party on more favorable terms than were offered to Sponsor without first offering Sponsor a
license on those more favorable terms and providing Sponsor with ninety (90) days in which to accept such offer. If Sponsor fails to notify Institute within the ninety (90) days that it has accepted such terms, Sponsor shall be deemed to have
rejected the offer and Institute shall, thereafter, be free to license its rights in the Subject Invention(s) to other parties. If Sponsor notifies Institute within the ninety (90) days that it accepts such an offer, Institute shall be deemed to
have entered into a binding license agreement with respect to such terms. 
  
 3. Any license granted to Sponsor pursuant to paragraph 13.d.2. shall be subject to the California Institute of Technology Patent Policy and Institute’s prior agreements with other sponsors and shall provide: (a)
for a reasonable royalty on net sales of products utilizing the licensed technology to be paid to the Institute; (b) for Institute to retain a nonexclusive license, with the right to grant sublicenses, for research purposes only; (c) if and to the
extent applicable to the licensed Subject Invention, that the rights of the United. States of America as set forth in Public Laws 96-517 and 98-620 (codified at 35 U.S.C. 200 et seq.) are especially reserved, and that Sponsor shall comply
with the provisions, of 35 U.S.C. 204, as amended from time to time; and (d) that nothing contained in this clause shall imply a license to the Sponsor under any patent, patent application or other invention other than a Subject Invention as defined
herein. 
  
 e. Government Rights. Under certain
circumstances, it is possible that the research may he supported in part by one or more agencies of the U.S. Government. If this should occur, the reporting of inventions or discoveries and the disposition of title to patent applications or patents
resulting therefrom will be subject to the terms and conditions: of the Institute’s contractual agreements with any such agency and agencies. If such circumstance develops and if the Sponsor desires to acquire rights, the Institute agrees to
make every possible effort to acquire title to such inventions and to offer the Sponsor the option for acquisition of rights as outlined in the preceding paragraph, subject to the prior rights of, or conditions imposed thereon by, the U.S.
Government. 
  
 14. CONFIDENTIALITY OF SPONSOR’S INFORMATION.
Sponsor may wish, front time to time, in connection with work contemplated under this Agreement, to disclose confidential information to Institute personnel. To protect the confidentiality of such information, Sponsor may request the Principal
Investigator, who has the right to refuse to accept such information, to sign a confidentiality agreement with Sponsor, in the form of Exhibit 2 hereto. Such a request shall not extend to other research personnel. Institute will not be responsible
for any failure of individual performance under such confidentiality agreement 
  
 15. LIABILITY. 
  
 a.
Indemnification. Sponsor shall defend, indemnify and hold harmless Institute, and its trustees, officers, employees and agents and their respective successors, heirs and assigns (the 

 “Indemnitees”), against any and all liability, damage, loss, or expense (including’ attorneys’ fees
and expenses of litigation) that may be incurred by or imposed upon the Indemnitees or any of them, in connection with any claim, suit, demand, action or judgment arising out of the following: 
  
 1. the design, production, manufacture, sale, use in commerce, lease or
promotion by Sponsor or by an Affiliate or sublicensee of the Sponsor of any product, process or service relating to or developed pursuant to this Agreement; or 
  

2. any other activities to be carried out pursuant to this Agreement. 
  
 Sponsor’s indemnity under 1. shall apply to any liability, damage, or loss or expense whether or not it is attributable to the
negligent activities cit the Indemnitees. Sponsor’s indemnification under 2. shall not. apply to any liability damage, loss or expense to the extent that it is attributable to the negligence or willful misconduct of the Indemnitees. 

 
 b. Warranties. Institute makes no warranties, express or implied,
as to any matter whatsoever, including, without limitation, the condition of the research or any invention(s) or product(s), whether tangible, conceived, discovered, or developed under this Agreement; or the merchantability, or fitness for a
particular purpose of the research or any such invention or product. Institute shall not be liable for any direct, consequential, or other damages suffered by Sponsor, any licensee, or any others resulting from the use of the research or any such
invention or product. 
  
 16. INDEPENDENT CONTRACTOR. For the
purpose of this Agreement and all services to be provided hereinunder, the parties shall be, and shall be deemed to be, independent contractors and not agents or employees of the other party. Neither party shall have the authority to make any
statements, representations or commitments of any kind, or to take any action that shall be binding on the other party, except as may be explicitly provided for herein or authorized in writing. 
  
 17. GENERAL. 
  
 a. This Agreement may not be assigned by either party without the prior written consent of the other party. 
  
 b. This Agreement constitutes the entire and only agreement between the
parties relating to the work that is covered by the attached Statement of Work and supported with funds provided by this Agreement, and all prior negotiations, representations, agreements and understandings are superseded hereby. No agreements
altering or supplementing the terms hereof may be made except by means of a written document signed by the duly authorized representatives of the parties. 

 18. NOTICES. All notices or other administrative documents shall be directed as follows: 
  

							
	 To: Sponsor
	 	 To: California Institute of Technology

	 Arrowhead Research Corporation
	 	 Office of Sponsored Research

	 150 South Los Robles Avenue
	 	 (M/C 213-6)

	 Suite 480
	 	 California Institute of Technology

	 Pasadena, CA 91l01
	 	 1200 E. California Blvd

	 Phone: (626) 792-5549
	 	 Pasadena, CA 91125

	 Fax: (626)449-6299
	 	 Phone: (626) 395-6357

	 	 	 Fax: (626) 584-0963

		
	 SPONSOR
	 	 CALIFORNIA INSTITUTE OF TECHNOLOGY

				
	 NAME:
	 	 R. Bruce Stewart
	 	 NAME:
	 	 DAVID J. MAYO

	 	 	 	 	 	 	 Associate Director of Sponsored

	 	 	 	 	 	 	 Research

	 	 	 	 	 	 	 California Institute of Technology

	 SIGN:
	 	 /s/ R. Bruce Stewart

	 	 SIGN:
	 	 /s/ David J. Mayo

	 DATE:
	 	 September 21, 2003
	 	 DATE:
	 	 September 29, 2003

 EXHIBIT I 
  

Pat Collier, Division of Chemistry and Chemical Engineering, California Institute of Technology 
 Re: Research Agreement with Arrowhead Research 
  
 OUTLINE OF RESEARCH OBJECTIVES AND PLAN OF WORK 
  
 My group is
interested in understanding and controlling assemblies of dynamically interacting biomolecules. In particular, we are interested in the diverse class of biological functions involved in information transfer. For example, we are striving to learn how
to control collective effects at the molecular level that, in cells, give rise to coordinated behavior displayed by signaling pathways and biochemical reaction networks that are important for cellular functioning, such as signal
amplification. As a means toward achieving this vision, we have spent our initial efforts at developing new tools that are combinations of single-molecule fluorescence spectroscopy and scanning probe microscopy. To date, we have received two grant
awards for this project. 
  
 Our work involves developing the means for
controlling the spatial positioning and chemical coupling between fully functioning proteins, and sensitively detecting signatures of emergent behavior in biochemical reactions. We are taking two complementary approaches toward this goal. In one
approach, we are adapting the use of organofunctional silane chemistry, a flexible and general method for capturing biomolecules on silicon oxide surfaces, including fabricating DNA, small-molecule and protein microarrays, with dip-pen
nanolithography in order to pattern fully functional enzymes on a chip with nanoscopic precision (J Am. Chem. Soc., in press). We look for collective behavior from a “circuit” of coupled enzymatic reactions using fluorescence
imaging. 
  
 Another critical tool that we need for this project is a method for
continuous interrogation and control of biochemical reaction dynamics with single molecule sensitivity. Along these lines, we are attaching, imaging with and chemically and biologically functionalizing single-wall carbon nanotubes (SWNTs) to atomic
force microscope (AFM) tips as true molecular-scale manipulation tools in physiologically relevant environments. We have developed robust, high-yield methods for constructing SWNT tips suitable for imaging single macromolecules in both dry and wet
environments at a resolution better than 3 nm. We are designing nanotube probes that have a novel role: to trigger specific biochemical reactions. To do this, we are learning how to functionalize the very ends of nanotube tips with redox-active
enzymatic cofactors in order to electrically trigger specific enzymatic reactions at surfaces, in reconstituted bilayer membranes and in cells. The consequences of these triggering events can then be read out in real time by single-molecule
fluorescence and/or AFM sensing. This introduces a method for studying the initiation and propagation of biochemical reaction pathways using molecular triggers which are precisely defined in spatial and temporal coordinates, as well as chemical
magnitude. 
  
 DELIVERABLES TO ARROWHEAD RESEARCH 
  
 The deliverables will consist of a technical report supplied to Arrowhead Research at each
anniversary of the start date of this research agreement. Each technical report will include details of scientific progress and results covered by the work outlined in the research agreement, as well 

 as highlighting specifically those results that may be of possible commercial interest to Arrowhead Research. In
addition, at the end of each year, Collier agrees to submit a follow-on Statement of Work, mutually agreeable to both parties, that will reflect any changes in research goals or that identifies new opportunities that both Collier and Arrowhead
Research wish to pursue. Caltech will also provide reprints of any publications in scientific journals resulting from the work outlined in the research agreement. In addition, brief (one page), nontechnical reports on our research progress, intended
for a general audience including stockholders of Arrowhead Research, will be supplied on request. 
  
 BUDGET JUSTIFICATION 
  
 Budget
Request Summary: The PI is requesting a total dollar amount of $810,000 for the full five year period of the research agreement with Arrowhead Research. The amount of $162,000 per year includes direct costs such as salaries and benefits for
two post-doctoral researchers, domestic travel, and supplies and expenses, and indirect costs, at the Indirect Cost Rate of 62%. 
  
 Salaries: The salaries of two full-time postdoctoral research associates, at $32,000 per person per year, will be supported by this research agreement.
Postdoctoral associates receive fringe benefits amounting to 27% of their yearly salary. 
  
 Supplies and Expenses: The requested amount of $16,720 per year for routine supplies and expenses is based on an estimate of $8,360 per person per year. These funds will be used to purchase items such as
chemical reagents, optical supplies (lenses, mirrors, and opto-mechanical components such as kinematic mounts and translation stages), glassware, silicon and silicon-nitride AFM tips, machine shop, electrical shop and glass shop charges, computers,
monitors and printers. The funds also estimate yearly charges from the microfabrication user facility in the Applied Physics Department and the TEM facility in the Materials Science Department at Caltech. 
  
 Equipment: There is no equipment component to this budget. 
  
 Domestic Travel: Funds of $2000 per year will be used to pay for expenses
incurred for three conference visits to meetings such as (but not limited to) the American Chemical Society, the American Physical Society, the Biophysical Society and Gordon Research Conferences. These funds cover travel expenses, conference fees
and lodging. 

 EXHIBIT 2 
  

CONFIDENTIALITY AGREEMENT 
  
 The undersigned investigator,
                                 (“Investigator”) declares that he or
she has read and is familiar with the provisions of the agreement dated                      between
                             (“Sponsor”) and the Institute, and hereby agrees to be bound by
the terms and conditions thereof. Investigator further agrees to keep confidential any proprietary information received from Sponsor, which is designated in writing by Sponsor as being confidential, for a period of three (3) years from the date it
is received, provided that this obligation shall not apply to any information which: 
  
 a. was already known to the Investigator as evidenced by his/her written records; 
  
 b. is or later becomes publicly known under circumstances involving no breach of this agreement by the Investigator; 
  
 c. is lawfully disclosed to the Investigator by a third party free of
restrictions upon disclosure. 
  
 The confidentiality obligations
of Investigator will not preclude disclosure pursuant to a valid subpoena, court order or requirements of applicable law. 
  

			
	  

	 Signature
	 	 Date

	
	

	 Printed Name of Investigator, Title

	
	 WITNESSED BY:

	
	

	 Signature
	 	 Date

	
	

	 Printed Name of Witness

 Amendment 1 to Research Agreement 
  
 between 
  
 Arrowhead Research Corporation 
  
 and 
  
 California Institute of Technology 
 (Pat Collier, Principal Investigator)

  
 The purpose of this amendment is to modify the Agreement to reflect
additional effort on the part of project personnel. Specifically, an additional postdoctoral researcher will be hired to work on the research. This additional effort is estimated to cost $478,764, for the remainder of the existing agreement period.

  
 Therefore, the following changes are made to the Agreement: 
  
 Article I - Statement Work, replace with the following: 
  
 The Institute agrees to use its best effort to carry out the work as
defined in the Statement of Work attached as Exhibit 1, and as modified on February 19, 2004. 
  
 Article 4 - Reimbursement of costs, replace with the following: 
  
 In consideration of the foregoing, the Sponsor will reimburse the Institute for all direct and indirect costs incurred in the performance of the
research, which shall not exceed the following annual amounts: 
  

			
	 Year 1: $235,894 ($162,000 +$ 73,894);
	  	 Year 4: $263,218:

	 Year 2: $263,218;
	  	 Year 5: $263,218

	 Year 3: $263,218;
	  	 

  
 or the total estimated project cost of
$1,288,764, without written authorization from the Sponsor. If the Agreement is extended, the dollar value of costs to be reimbursed may be increased by mutual agreement to cover additional work performed during the extension. 
  
 Article 5 - Payment, replace with the following: 
  
 Institute shall submit invoices annually, on or shortly after the
anniversary date of this agreement and in accordance with the amounts specified in Article 4. Sponsor shall make payment within thirty (30) days of receipt of invoice. All payments to the Institute shall be net, and free and clear of all taxes,
duties and other levies. 
  
 All other terms and conditions remain the same

							
	 ARROWHEAD RESEARCH
	 	 CALIFORNIA INSTITUTE OF TECHNOLOGY

	 Name:
	 	R. Bruce Stewart	 	Name:	 	David J. Mayo
	 Title:
	 	President	 	Title:	 	Assc. Director of Sponsored Research
				
	 Sign:
	 	 /s/ R. Bruce Stewart

	 	Sign:	 	 /s/ David J. Mayo

	 Date:
	 	February 26, 2004	 	Date:	 	February 26, 2004

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