Document:

exv10w1

 

Exhibit 10.1

PATENT LICENSE AGREEMENT

     This Patent License Agreement (this “Agreement”) is made by and between
the Board of Regents (“Board”) of The University of Texas System, an agency of
the State of Texas, whose address is 201 West 7th Street, Austin, Texas 78701
(“System”), through its component institution, The University of Texas Medical
Branch at Galveston, having a business address at 301 University Blvd.,
Galveston, Texas 77555 (“University”) and Chrysalis Biotechnology, Inc., a
Delaware corporation (“Licensee”), having a principal place of business located
at 2200 Market, Suite 600, Galveston, Texas 77550.

RECITALS

     A. WHEREAS, Board owns certain Patent Rights and Technology Rights related
to Licensed Subject Matter, which were developed at University, and some of
which are jointly owned with Monsanto;

     B. WHEREAS, Monsanto exclusively licensed its joint ownership in certain
of the Patent Rights to Board on May 15, 1991 pursuant to a license agreement
as set forth in Exhibit 1 attached hereto (the “Monsanto Agreement”), Monsanto
granted Board the right to grant sublicenses to third parties pursuant to the
Monsanto Agreement, and Board has filed for recordation of the Monsanto
Agreement with the United States Patent and Trademark Office to further
associate the Monsanto Agreement with certain of the Patent Rights jointly
owned with Monsanto in the United States;

     C. WHEREAS, Board desires to have the Licensed Subject Matter developed
and used for the benefit of Licensee, Board, and the public;

     D. WHEREAS, Licensee was formed to develop and commercially exploit the
Licensed Subject Matter;

     E. WHEREAS, Licensee and Board are parties to a previous Patent License
Agreement dated November 10, 1995, (as amended on March 30, 2000 and August 30,
2000) (“Previous License Agreement”) which this Agreement replaces;

     F. WHEREAS, pursuant to the Previous License Agreement, Board also granted
Licensee a sublicense in the rights granted from Monsanto to Board pursuant to
the Monsanto Agreement; and

     G. WHEREAS, Licensee has represented to Board, to induce Board to enter
into this Agreement, that Licensee is contemplating the sale of substantially
all its assets to OrthoLogic Corp., a Delaware corporation (“OLGC”), pursuant
to an Asset Purchase Agreement and Plan of Reorganization (the “Purchase
Agreement”), by and between Licensee and OLGC.

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     NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the adequacy and legal sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1. AMENDMENT. This Agreement amends and restates the Previous License
Agreement in its entirety. The Recitals set forth above are material to and
form part of this Agreement.

2. EFFECTIVE DATE. This Agreement shall be effective as of the Closing Date
(as defined in the Purchase Agreement), (the “Effective Date”).

3. DEFINITIONS. As used in this Agreement, the following terms shall have the
meanings indicated:

     "Carney” shall mean Darrell H. Carney, Ph.D.

     "Confidential Information” shall mean this Agreement, the contents of this
Agreement and all non-public or proprietary information of a party disclosed by
such party or its officers, representatives, agents, or employees to the other
party in connection with the performance of this Agreement. Subject to
exceptions set forth in Section 14.1(c) herein, such information shall be
Confidential Information if it would ordinarily be treated as confidential by
the disclosing party or would ordinarily be considered information of a
confidential nature in the industry, whether or not specifically marked as
such.

     "Effective Date” is defined in Section 2 above.

     "Licensed Field” shall mean all fields of use.

     "Licensed Process” shall mean any process which is covered in whole or in
part by an issued, unexpired valid claim contained in the Patent Rights.

     "Licensed Product” shall mean any product, component, or material which is
covered in whole or in part by an issued, unexpired, valid claim contained in
the Patent Rights.

     "Licensed Subject Matter” shall mean inventions and discoveries covered by
Patent Rights or Technology Rights within the Licensed Field.

     "Licensed Territory” shall mean the entire world.

     "Monsanto” shall mean Monsanto Company, a Delaware corporation, or the
party having legal ownership (through a merger, acquisition, or other
acquisition from Monsanto) of the Monsanto Agreement and the patent rights
described therein.

     "Net Sales” shall mean the gross revenues received by Licensee (and its
Sublicensees) from the Sale of each Licensed Product or Licensed Process, less
sales and use taxes actually paid, import and export duties actually paid,
outbound transportation prepaid or allowed,

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shipping insurance, amounts allowed or credited due to returns (not to
exceed the original billing or invoice amount), wholesale and cash discounts
actually granted and charges and portions of charges disallowed by third party
payors or care managers; provided, that if a Licensed Product is sold in
combination with other items (whether as part of the Sale of a combination
product, package, system, kit or tray or otherwise) at a unit price, whether
formulated or packaged together or separately, “Net Sales” shall mean the “Net
Sales” of such combination multiplied by (i) a fraction, A/A+B, where A is the
average selling price (“ASP”) of the Licensed Product when sold separately and
B is the ASP of the other items when sold separately, or (ii) if the ASP of the
Licensed Product or the other items are not available, a fraction determined by
the mutual agreement of the parties, which represents the proportionate
economic value of the Licensed Product relative to the proportionate economic
value contributed by the other items.

     "Patent Rights” shall mean any and all of Board’s rights in, to and under:

     (a) the patents and patent applications listed in Exhibit 2, as
updated from time to time pursuant to Section 5.4 hereof, and any and all
inventions and discoveries by University relating to TP508 Technology
conceived or reduced to practice prior to and during the two-year period
following the Effective Date, but shall not include any new technology
rights, described in Section 5.5 hereof, until such time as Licensee
elects to add such new technology rights pursuant to such Section 5.5;

     (b) all divisions, continuations, continuations-in-part,
registrations, reissues, reexaminations or extensions of any type and
corresponding foreign applications with respect to any of the
applications and patents described in the foregoing paragraph and which
relate to the manufacture, use or sale of TP508 Technology other than any
applications and patents in respect of new technology added to Licensed
Subject Matter pursuant to Section 5.5; and

     (c) the Monsanto Agreement and the licensed patent rights
thereunder.

     "Sale or Sold” shall mean the sale, transfer or disposition of a Licensed
Product or royalty-bearing use of a Licensed Process for value to a party other
than Licensee or a Subsidiary.

     "Sublicensee” shall mean any third party to whom Licensee has granted a
sublicense under the Patent Rights to make and sell Licensed Products or use a
Licensed Process.

     "Subsidiary” shall mean any business entity more than fifty percent (50%)
owned by Licensee, any business entity which owns more than fifty percent (50%)
of Licensee, or any business entity that is more than fifty percent (50%) owned
by a business entity that owns more than fifty percent (50%) of Licensee.

     "Technology Rights” shall mean Board’s and University’s rights in any
technical information, know-how, process, procedure, composition, method,
formula, protocol, technique, software, design, drawing or data relating to
Licensed Field, whether or not covered by Patent Rights, which relate to TP508
Technology, which are necessary to practice the inventions

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covered by the Patent Rights, and are made or developed by Carney or any
University employee working under the supervision or direction of Carney, prior
to or within two years after the Effective Date.

     "Term” shall have the meaning given to it in Section 7.1 of this
Agreement.

     “TP508 Technology” shall mean (i) any and all subject matter claimed in
Patent Rights; and (ii) peptides which bind to and/or stimulate a thrombin
receptor, compositions which contain such peptides, methods of producing such
peptides, detecting such peptides, and utilizing such peptides diagnostically
and/or therapeutically, including, but not limited to, thrombin derived
polypeptides, agonists or antagonists of the proteolytically or
non-proteolytically activated thrombin receptor or receptors or agonists and
antagonists of other cellular effects activated by proteolytic or
non-proteolytic thrombin interactions and which are made or developed by Carney
or any University employee working under the supervision or direction of
Carney.

     "University” is defined in the first paragraph of this Agreement.

4. WARRANTIES; SUPERIOR-RIGHTS; COVENANTS

     4.1 Except for the rights, if any, of the Government of the United States,
as set forth in Section 4.2, Board represents and warrants that it is the owner
of the entire right, title, and interest in and to the Licensed Subject Matter,
subject only to Monsanto’s rights under the Monsanto Agreement, and that it has
the exclusive right to grant licenses thereunder and has not granted licenses
thereunder to any other entity other than Licensee. The representations and
warranties of this Section 4.1 apply only to Patent Rights and Technology
Rights, but shall not apply to (i) any subject matter independently developed
by or rights of third parties who have no affiliation with or obligation to
assign rights or subject matter to the Board or University or (ii) any
purported assignment by Carney (or other named inventor) in violation of
his/her obligations under the University intellectual property policies.

     4.2 Licensee understands, acknowledges and agrees that: (i) the Licensed
Subject Matter may have been developed under a funding agreement with the
Government of the United States of America and, if so, that the Government may
have certain rights relative thereto; (ii) THIS AGREEMENT IS EXPLICITLY MADE
SUBJECT TO THE GOVERNMENT’S RIGHTS UNDER ANY SUCH AGREEMENT AND ANY APPLICABLE
LAW OR REGULATION; and (iii) to the extent that there is a conflict between any
such agreement, applicable law or regulation and this Agreement, the terms of
such Government agreement, applicable law or regulation shall prevail.

     4.3 Licensee understands, acknowledges and agrees that: (i) Board, by this
Agreement, makes no representation as to the operability or fitness for any
use, safety, efficacy, ability to obtain regulatory approval, patentability,
and/or breadth of the Licensed Subject Matter; and (ii) Board, by this
Agreement, also makes no representation as to whether there are any patents now
held, or which will be held, by others or by Board in the Licensed Field, nor
does Board make any representation that the inventions, products, processes, or
machines

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contained in Patent Rights do not infringe any other patents now held or
that will be held by others or by Board.

     4.4 Licensee, by execution hereof, acknowledges, covenants and agrees that
it has not been induced in any way by Board, System, University or its
employees to enter into this Agreement, and further warrants and represents
that (i) it has conducted sufficient due diligence with respect to all items
and issues pertaining to this Article 4 and all other matters pertaining to
this Agreement; and (ii) Licensee has adequate knowledge and expertise, or has
utilized knowledgeable and expert consultants, to adequately conduct the due
diligence and evaluate the risks inherent herein.

     4.5 Each of Board, acting by and through University, and University
represents, warrants and covenants that:

     (a) the Monsanto Agreement is in full force and effect and has not
been amended or modified and (i) to the knowledge of Board and
University, Board is in compliance with all its obligations thereunder in
respect of all obligations to be performed by Board and Board shall
remain in compliance with all its obligations thereunder to be performed
by Board prior to the potential assignment thereof to Licensee in
accordance with Section 6.2(c) hereof and; (ii) to the knowledge of Board
and University, each party other than Board and University is in
compliance with all its obligations thereunder and does not presently
plan to terminate or have the right to terminate such agreement; (iii)
such agreement is enforceable against Board in accordance with its terms
and, to the knowledge of Board and University, against each other party;
and (iv) Board and University shall take such action within the power of
Board and University as may be necessary to keep such agreement in full
force and effect; and

     (b) it has the power and actual authority to enter into and perform
its obligations under this Agreement, and this Agreement has been duly
authorized, executed and delivered by it and is enforceable against it in
accordance with its terms.

     4.6 The Board acknowledges that all material conditions of the Previous
License Agreement have been either satisfied by Licensee or are waived by Board
and that Licensee is not in breach of any term therein. Licensee acknowledges
that all material conditions of the Previous License Agreement have been either
satisfied by Board or are waived by Licensee and that Board is not in breach of
any term therein. Notwithstanding the foregoing, nothing in this Section 4.4
shall be construed as a waiver or modification by any party of any conditions,
rights or obligations set forth in this Agreement.

     4.7 Upon written request by either party, Licensee and Board shall
promptly update Exhibit 2 attached hereto to include all patent applications
and patents that are then within the Patent Rights.

5. LICENSE

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     5.1 Board hereby grants and agrees to grant to Licensee a royalty-bearing,
exclusive license under Licensed Subject Matter to manufacture, have
manufactured, sell, offer for Sale, import and use Licensed Product and
Licensed Process within the Licensed Territory within the Licensed Field;
provided, however:

     (a) Board and University and their respective employees, agents and
representatives may publish their own scientific findings from research
related to Licensed Subject Matter, but only in accordance with the
procedures set forth in Section 14.2; and

     (b) Board may use any information contained in the Licensed Subject
Matter generated by the University, other than Confidential Information,
for non-commercial research, including care of University patients,
teaching, applying for funding and other educational purposes.

     5.2 Licensee shall have the right to extend the license granted herein to
any Subsidiary provided that such Subsidiary consents to be bound by this
Agreement to the same extent as Licensee, including, but not limited to, the
provisions set forth under Article 6 hereof, and Licensee provides notification
to the Board of any such extension of the license herein to a Subsidiary. Any
such extension shall not be deemed to be a sublicense hereunder and shall not
be subject to the sublicense royalty payment obligations under Section 6.1(b).

     5.3 Licensee shall have the right to grant sublicenses consistent with
this Agreement provided that Licensee shall at all times be responsible for the
operations of its Sublicensees pursuant to such sublicense as if such
operations were carried out by Licensee, including the timely payment of
royalties to Board whether or not Sublicensee has timely paid royalties owed to
Licensee pursuant to such sublicense. Within thirty (30) days of execution,
modification, or termination of a sublicense by Licensee, Licensee further
agrees to deliver to Board a true and correct copy of such sublicense granted
by Licensee, and any modification or termination thereof.

     5.4 Licensee shall have sole discretion whether to file and over the
filing and prosecution of patent applications relating to the Licensed Subject
Matter, and shall be responsible for all costs related to filing, prosecuting,
and maintaining the Patent Rights. Licensee shall update Exhibit 2 to include
patent applications relating to TP 508 technology that are filed by Licensee
pursuant to this Section 5.4 within the two-year period following the Effective
Date. In addition, with respect to any patent within the Patent Rights, Board
hereby designates Licensee or its designee as its agent for the limited purpose
of obtaining an extension of such patent or governmental equivalent thereof
which extends the exclusivity of any of the Patent Rights where available in
any country in the world and, if reasonably necessary, Board hereby authorizes
Licensee to file in Board’s name or, at Licensee’s option, Board shall use
reasonable efforts to obtain such extension for Licensee or its Sublicensees,
at Licensee’s expense. In the event that Licensee fails to cure any breach in
this Agreement as set forth in Section 7.4, then such designation by Board of
Licensee as its agent for the limited purpose of obtaining any extension of
such Patent Rights is hereby revoked. Furthermore, Board and

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University shall provide reasonable assistance to facilitate Licensee’s or
its Sublicensees’ efforts to obtain any such extension.

     5.5 Licensee shall have the right to add to Licensed Subject Matter
University’s rights in any new technology applications that are not then
included in Patent Rights that are developed at University, provided that the
new technology applications: (i) whether or not Carney is named as an inventor
of such new technology applications consist of new or novel uses of (x) a
composition disclosed or claimed in a prior patent application or (y) a new
composition based on thrombin peptide technology developed at University; or
(ii) relate to TP508 Technology after the two-year period from the Effective
Date. Board may offer a license in any such new technology rights to third
parties, but only if (i) Board gives written notice of its intent to do so to
Licensee and (ii) Licensee does not elect within 90 days of such written notice
to add such new technology rights to Licensed Subject Matter pursuant to this
Section 5.5.

     5.6 Licensee and its successors in interest may record with the various
patent and trademark offices in which Patent Rights are pending or have issued,
a memorandum of exclusive license as provided in Exhibit 3, which University on
behalf of Board will sign upon request of Licensee.

     5.7 Board shall promptly, and in any event, within ten (10) business days
of any of the following occurrences, deliver to Licensee: (i) evidence of each
payment made by Board pursuant to Article 4 of the Monsanto Agreement, unless
Licensee shall have agreed to make such payments to Monsanto directly on
Board’s behalf; and (ii) true and complete copies of each notice, report or
other document delivered or received by Board pursuant to Articles 5 or 6 of
the Monsanto Agreement.

6. PAYMENTS AND REPORTS

     6.1 In consideration of rights granted by Board to Licensee under this
Agreement, Licensee agrees to pay Board the following:

     (a) Running royalties in an amount equal to two and a half percent
(2.5%) of Net Sales of each Licensed Product and each Licensed Process
manufactured, imported, exported, used, leased, or Sold by and/or for
Licensee and/or its Subsidiary and/or its Sublicensees, provided,
however, that the minimum annual running royalties payable to the Board
shall be $20,000 per calendar year, prorated for the first calendar year
following the Effective Date, and any amounts paid under any section of
this Agreement or the Patent Assignment Agreement to University or Board
by Licensee in a given year after the Effective Date shall count against
the minimum annual running royalties. Notwithstanding the foregoing, (i)
the running royalty rate shall be 3.3% in respect of Net Sales of
Licensed Products and Licensed Processes to the extent that such Licensed
Products or Licensed Processes arise from new technology rights that
Licensee elects to add to Licensed Subject Matter after the Effective
Date pursuant to Section 5.5 and such royalty rate shall not be subject
to increase pursuant to Section 6.2 and (ii) to the extent that a Sale
gives rise to the accrual of a running royalty under Section 5.a of the
Patent

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Assignment Agreement (or, but for the second paragraph of such
Section 5.a, would have given rise to such accrual) it shall not give
rise to the accrual of a running royalty under this 6.1(a).

It is understood and agreed by the parties that the payment of royalties
pursuant to this Section 6.1(a) shall be made only on the first Sale of a
Licensed Product or Licensed Process by Licensee, a Subsidiary or a
Sublicensee, and that subsequent Sales of the same Licensed Product or
Licensed Process for which royalties have been accrued pursuant to this
Section 6.1(a) shall not be subject to any additional accrual of
royalties (for example, and for illustration purposes only, if a royalty
accrues due to a Sale by Licensee of a Licensed Product to a Sublicensee
or a pharmaceutical distributor, a subsequent Sale by such Sublicensee or
such pharmaceutical distributor shall not generate a royalty payable to
Board).

     (b) **** of all cash and the fair market value (determined in
accordance with Section 6.6) of non-cash consideration received by
Licensee from a Sublicensee as a result of a sublicense for Licensed
Products or Licensed Processes including but not limited to licensing or
option fees, marketing fees, milestone payments, bonus payments and the
like, but excluding (i) payments received by Licensee for research
development pursuant to research grants; (ii) royalty payments received
by Licensee calculated on the basis of Net Sales of the Sublicensee;
(iii) payments received by Licensee as consideration for an assignment of
substantially all of the assets of Licensee or a controlling majority of
the stock of Licensee; and (iv) payments subject to the payment of
royalties under Section 5.b of the Patent Assignment Agreement. .

     (c) A fee of $75,000 plus all reasonable legal costs and fees
incurred by Board for filing, prosecuting, obtaining and maintaining
patents for each new patent application relating to new technology
applications Licensee elects to add to this Agreement as Licensed Subject
Matter pursuant to Section 5.5. This fee is not applicable to the Patent
Rights or to intellectual property relating to derivatives, new
formulations or methods of delivery of compositions, claimed or disclosed
in prior applications, or new compositions for uses that are already
disclosed or claimed, and other modifications or improvements of TP508
Technology. Fees paid to Board under this Section 6.1(c) shall count
against minimum annual running royalties payable pursuant to Section
6.1(a).

     6.2 Assignment Bonus. Licensee hereby acknowledges and agrees that Board
and University are under no obligation whatsoever herein to make any assignment
of the Patent Rights. University shall use reasonable efforts during the first
year after the Effective Date to attempt to obtain necessary approvals and
authorizations of, and to execute and deliver, or cause to be executed and
delivered, the Patent Assignment Agreement in substantially the form attached
hereto as Exhibit 4, pursuant to which, if approved by Board at a subsequent
date during the first year after the Effective Date, Board will assign to
Licensee all its right, title and interest in and to the Patent Rights, other
than new technology rights as set forth in Section 5.5 hereof, that are added
to Exhibit 2 in the two-year period following the Effective Date (but not its
obligations under the Monsanto Agreement), subject to continued royalty
payments and other

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obligations of Licensee set forth in the Patent Assignment Agreement, and
pursuant to which, among other things:

     (a) Licensee shall pay to the Board a cash assignment payment of
**** upon execution and delivery of the Patent Assignment Agreement, if
the Patent Assignment Agreement is executed and delivered by Board prior
to ****;

     (b) The running royalties payable by Licensee to the Board pursuant
to Section 6.1(a) shall be increased by 0.5% of Net Sales, except that
this increase shall not apply to the running royalties payable at the
rate of 3.3% relating to new technology applications that Licensee elects
to add to Licensed Subject Matter pursuant to Section 5.5; and

     (c) If Monsanto assigns its joint ownership interest in the Patent
Rights to Licensee prior to the date which is **** after the Effective
Date, then Licensee shall pay to the Board a cash assignment payment of
**** and the running royalties payable by Licensee to the Board pursuant
to Section 6.1(a) shall be increased by an additional 0.3% of Net Sales,
except that this increase shall not apply to the running royalties
payable at the rate of 3.3% relating to new technology applications that
Licensee elects to add to Licensed Subject Matter pursuant to Section
5.5.

     6.3 During the Term of this Agreement and for one (1) year thereafter,
Licensee shall keep complete and accurate records of its and its Sublicensees’
Sales and Net Sales of each Licensed Product and each Licensed Process under
the license granted in this Agreement in sufficient detail to enable the
royalties payable to Board hereunder to be determined. Licensee shall permit
Board or its representatives, at Board’s expense, to periodically examine its
books, ledgers, and records during regular business hours solely for the
purpose of and to the extent necessary to verify any report required under this
Agreement. In the event that the amounts due to Board are determined to have
been underpaid, Licensee shall immediately pay the Board the difference,
together with interest thereon at a per annum rate equal to the prime rate of
interest, as published by the Wall Street Journal, plus three percentage points
and if the amount underpaid is greater than two percent (2%) of the total
royalty, Licensee shall reimburse Board for all costs of such examination.

     6.4 Within thirty (30) days after each March 31, June 30, September 30,
and December 31, Licensee shall deliver to Board a true and accurate report,
giving such particulars of the business conducted by Licensee and its
Sublicensee(s), if any exist, during the preceding three (3) calendar months
under this Agreement as are pertinent to an account for payments hereunder.
Such report shall include at least: (a) the total Sales of Licensed Product and
Licensed Process by Licensee and by Sublicensees; (b) the total Net Sales; (c)
the calculation of royalties thereon; and (d) the total royalties so computed
and due Board. Licensee will report royalties to the University in categories
(specified by the University) based on the University intellectual property for
which the royalties are attributed. Simultaneously with the delivery of each
such report, Licensee shall pay to Board the amount, if any, due for the period
of such report. If no payments are due, it shall be so reported. Minimum
royalties, however, will be due and payable with the September 30 report to the
extent not covered by other payments hereunder

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during the preceding year. It is understood and agreed that if multiple
patents of the Patent Rights cover a single Licensed Product or Licensed
Process, only a single royalty as provided in Section 6.1 shall be paid.

     6.5 All amounts payable hereunder by Licensee shall be payable in United
States funds without deductions for taxes, assessments, fees, wire transfer
charges, or charges of any kind and shall be payable by either checks made
payable to The University of Texas Medical Branch and mailed to The University
of Texas Medical Branch at Galveston, Research Development Services, P.O. Box
4786-750, Houston, TX 77210-4786, or pursuant to wire transfer information or
as otherwise designated by Board within thirty (30) days written notice to
Licensee.

     6.6 Noncash payments received by Licensee which are subject to royalty
payments under this Agreement shall be valued at the fair market value (“FMV”)
thereof, determined in accordance with this Section 6.6. FMV shall be
determined as follows:

     (a) By mutual agreement between the parties if possible;

     (b) If the parties cannot reach a mutual agreement on FMV, then the
parties shall agree on an impartial third party mediator having at least
ten (10) years of accounting experience to assist the parties in
determining FMV, and the parties shall share equally in the fees and
costs of any such mediator; and

     (c) In the event the parties fail to reach an agreement on FMV
pursuant to mediation, then either party may submit the determination of
FMV to binding arbitration by a panel of three (3) arbitrators each
having at least ten (10) years of accounting experience and providing
each party an opportunity to present evidence of FMV to the arbitration
panel. Unless otherwise agreed by the parties, each of the University
and Licensee shall select one (1) arbitrator for the panel and the third
arbitrator shall be selected by the two other arbitrators designated by
the University and Licensee. The decision of the arbitrators in
determining FMV shall be final and binding on University and Licensee.

7. TERM AND TERMINATION; BREACH

     7.1 The term of this Agreement, unless terminated in accordance with this
Agreement (the “Term”), shall extend until the last patent included in the
Patent Rights has expired or has been found to be invalid or unenforceable by a
court of competent jurisdiction from which no appeal is available. Licensee
acknowledges and agrees that in no event shall Licensee take any action or omit
to take any action that causes any of the Patent Rights to lapse or fees not be
paid to avoid royalties hereunder or without providing University or Board the
opportunity to assume Licensee’s rights therein, including all right, title and
interest in any such Patent Rights thereafter.

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     7.2 Except in the cases of fraud in the inducement, mutual agreement of
the Board and Licensee, or any circumstance associated with Section 7.5 herein,
this Agreement is not terminable by the parties or by action at law or equity
for any reason.

     7.3 Except in the case of fraud in the inducement or circumstances
associated with Section 7.5 herein, Board’s sole remedy for default by Licensee
or breach of this Agreement by Licensee shall be an action for monetary damages
and not termination of this Agreement.

     7.4 Prior to the commencement of any action to enforce any breach of this
Agreement by Licensee, Board shall give Licensee written notice of any breach
hereof, and Licensee shall have 30 days to cure any payment breach and, if
curable, 90 days to cure any other breach. In any such action in which Board
is the prevailing party, Board shall be entitled to recover from Licensee its
reasonable attorneys fees and other direct out-of-pocket costs incurred in
connection therewith, and, in the case of the enforcement of any failure to pay
amounts due under Section 6.1 hereof, Licensee shall pay to Board a late fee
equal to the greater of $10,000 ($20,000 if such $10,000 fee has become payable
hereunder at least twice) or 10% of the payment amount for each such payment
not made within the applicable cure period, plus interest on such unpaid
amounts from the due date thereof until paid at a per annum rate equal to the
prime rate of interest, as published by the Wall Street Journal, plus three
percentage points.

     7.5 If at any time after an assignment of this Agreement by Licensee to an
entity not affiliated with OLGC the Licensee shall breach its payment
obligations hereunder and shall not cure such breach pursuant to Section 7.4
within 30 days from Board’s written notice thereof to Licensee, Licensee agrees
and acknowledges that Licensor immediately shall receive a vested security
interest in Licensee’s interests in this Agreement and Licensee will
immediately execute, in a form Board can record, a Security Agreement
substantially similar to the Security Agreement attached hereto as Exhibit 5 to
secure the payment of all such Licensee’s payment obligations hereunder.

8. INFRINGEMENT BY THIRD PARTIES

     8.1 Licensee shall have the first right of refusal to enforce at its
expense any of the Patent Rights against infringement by third parties and
shall be entitled to retain any recovery from such enforcement. Board shall
not communicate directly with any putative infringers, but shall notify
Licensee of all suspected infringement. Licensee shall pay Board a royalty in
the amount of five percent (5%) on any monetary recovery after deduction of all
attorney’s fees and costs. If required by a court pursuant to a court order,
Board consents to be joined as a party in any lawsuit by Licensee for patent
infringement relating to the Patent Rights. If the Board is so joined,
Licensee shall represent Board (at Licensee’s sole cost) in such proceedings
for all claims and issues relating to the Patent Rights and shall use
reasonable best efforts to cause to be dismissed or severed any counterclaim
against Board not related to the Patent Rights. To the extent such
counterclaims or other claims not relating to the Patent Rights are brought and
not dismissed or severed, Licensee shall not be required to assume the defense
thereof, but Licensee shall reasonably cooperate with the Board and its counsel
in connection with the defense thereof. Licensee shall retain sole control of
any litigation, subject to the statutory duties of the Attorney

11

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General of the State of Texas (other than litigation commenced by Board
pursuant to Section 8.2 hereof) relating to the Patent Rights, including choice
of legal counsel, venue, claims, counterclaims, and all related strategies,
issues, timing, and settlements. Licensee shall hold Board harmless and
indemnify Board for all reasonable attorneys fees and costs directly related to
any such enforcement of Patent Rights by Licensee and for all settlements,
awards and judgments against Board for all counterclaims against Board relating
to the Patent Rights and arising by virtue of the Board’s joinder as a party,
except to the extent based on intentional acts or omissions or willful
malfeasance by the Board, or its directors, officers, employees and agents.

     8.2 If Licensee shall fail to commence an action or take other appropriate
steps to enforce the Patent Rights within six months after Licensee receives
notice of a possible infringement by a third party, Board shall have the right
to enforce the Patent Rights upon 30 days prior written notice to Licensee
reasonably describing the circumstances underlying the claim of infringement.
Board shall be entitled to retain all recovery from any such enforcement by
Board, and Licensee shall fully cooperate with Board in any enforcement by
Board of the Patent Rights, provided Board pays Licensee’s reasonable direct
out-of-pocket expenses, excluding, but not limited to, attorneys’ fees, advisor
fees or fees relating to operations in the ordinary course of business.

     8.3 In any suit or dispute involving an infringer of the Licensed Subject
Matter, the Board and University shall cooperate fully with the Licensee,
subject to the statutory duties of the Attorney General of the State of Texas.
Licensee shall cooperate fully with the Board and University, and upon the
request and at the expense of the Board or University bringing suit, the
Licensee shall make available to the party bringing suit at reasonable times
and under appropriate conditions all relevant personnel, records, papers,
information, samples, specimens, and the like, during regular business hours,
which are in Licensee’s possession. Licensee shall give at least 60 days
advance written notice to Board or University prior to commencing enforcement
actions against an infringing party, unless a temporary or preliminary
injunction is being sought, in which case Licensee shall give at least 10 days
advance written notice; provided that, should there be exigent circumstances
and Licensee determines in good faith that immediate action is necessary
through a temporary restraining order or other ex parte proceeding, Licensee
shall give advance written notice thereof to Board or University as soon as
practicable under the circumstances.

9. ASSIGNMENT

     Licensee (and its successors and assigns) may assign this Agreement
without the prior written consent of Board in the event of a merger with a
third party (where Licensee (or its successors or assigns) is not the surviving
party), in the event of an acquisition of Licensee (or its successors or
assigns) by a third party, or in connection with the sale of substantially all
of Licensee’s (or its successors’ or assigns’) assets relating to this
Agreement to a third party, provided such third party in each incident assumes
all obligations owed to Board and University in this Agreement, agrees to
comply in all respects with the terms, conditions, and provisions of this
Agreement, and provides prompt notice thereof, in no event not more than ten
(10) business

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days from the occurrence thereof, to the Board. In addition, Licensee
(and its successors and assigns) may assign this Agreement with the prior
written consent of the Board, which shall not unreasonably be withheld. Without
limiting this Section 9, Board and University expressly agree that Licensee may
assign this Agreement to OLGC. In the event of any such permitted assignment,
the term, “Licensee” shall mean the successor by assignment of the assigning
Licensee’s rights and obligations hereunder.

10. PATENT MARKING

     Licensee shall mark permanently and legibly all Licensed Products
manufactured or Sold by it under this Agreement with such patent notice as may
be permitted or required under Title 35, United States Code.

11. INDEMNIFICATION

     11.1 Licensee shall hold harmless and indemnify Board, members of Board
(Regents), System and University, and their respective officers, employees,
agents and representatives (each, a “Licensee Indemnified Party”) from and
against any and all losses, damages, costs, expenses, liabilities, obligations,
claims, demands or causes of action (including without limitation those arising
on account of any infringement, injury or death of persons, or damage to
property) (“Losses”) caused by, or arising out of, or resulting from the
exercise or practice of the license granted hereunder by Licensee its
Subsidiaries or their officers, employees, agents or representatives, except to
the extent any such Losses arise from the grossly negligent acts or omissions
of any Licensee Indemnified Party. Licensee shall not be liable for any type
of indirect, special, consequential, exemplary or punitive damages (including,
without limitation, damages for loss of profits or expected savings) whatsoever
arising out of or in connection with this Agreement or its subject matter,
regardless of whether Licensee knows or should know of the possibility of such
damages.

     11.2 Board Indemnification.

     (a) To the extent authorized under the Constitution and laws of the
State of Texas, Board shall hold harmless and indemnify Licensee, its
officers, employees, agents and representatives, from and against any
Losses related to University’s obligation to pay royalties to Monsanto
under the Monsanto Agreement occurring or existing at any time before or
on the date that Monsanto assigns its joint ownership interest in the
Patent Rights to Licensee under Section 6.2(b) hereof. Board’s aggregate
liability under this Section 11.2(a) shall not exceed the amounts paid by
Licensee to Board under Section 6.1(a) and 6.1(b) hereof during the
one-year period preceding the date of the event that gave rise to such
liability.

     (b) To the extent authorized under the Constitution and laws of the
State of Texas, Board shall hold harmless and indemnify Licensee, its
officers, employees, agents and representatives from and against any
Losses caused by, or arising out of, or resulting

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from any breach, amendment, termination or other modification of the
Monsanto Agreement by Board, including any termination of the Monsanto
Agreement arising from any failure to pay royalties thereunder, except to
the extent such Losses arise from the negligent acts or omissions of any
Licensee.

     (c) Board shall, to the extent authorized under the Constitution and
laws of the State of Texas, indemnify and hold Licensee harmless from any
Losses resulting from the negligent acts or omissions of Board, its
agents or employees pertaining to the activities to be carried out
pursuant to this Agreement; provided, that (i) Board shall not hold
Licensee harmless from claims arising out of the negligent acts or
omissions, or willful malfeasance of Licensee, its officers, agents, or
employees, or any person or entity not subject to the University’s
supervision or control and (ii) Board shall not be liable for any type of
indirect, special, consequential, exemplary or punitive damages
(including, without limitation, damages for loss of profits or expected
savings) whatsoever arising out of or in connection with this Agreement
or its subject matter or the Monsanto Agreement, regardless of whether
Board knows or should know of the possibility of such damages.

12. INSURANCE

     12.1 Commencing no later than the Effective Date, or the date on which any
Licensed Subject Matter is distributed or Sold (including for the purpose of
obtaining regulatory approvals) by Licensee or by a Sublicensee, whichever
comes later, Licensee shall, at its sole cost and expense, procure and maintain
commercial general liability insurance in amounts not less than $3,000,000 per
incident and $3,000,000 annual aggregate, and Licensee shall use reasonable
efforts to have the Board, System, University, its Regents, officers, employees
and agents named as additional insured parties. Such commercial general
liability insurance shall provide (i) product liability coverage; (ii) broad
form contractual liability coverage for Licensee’s indemnification obligations
under this Agreement; and (iii) coverage for litigation costs. In no event
shall the minimum amounts of insurance coverage required herein be construed to
create a limit of Licensee’s liability with respect to its indemnification
obligations under this Agreement.

     12.2 Within fifteen (15) days of obtaining the insurance coverage required
under this Agreement, Licensee shall provide Board with written evidence of
such insurance coverage. Licensee shall provide Board with at least fifteen
(15) days prior written notice of the cancellation, non-renewal or material
change in such insurance.

     12.3 Licensee shall maintain such commercial general liability insurance
beyond the expiration or termination of this Agreement during (i) the period
that any Licensed Subject Matter developed pursuant to this Agreement is being
commercially distributed or Sold by Licensee or by a Sublicensee or agent of
Licensee; and (ii) the five (5) year period immediately following such period.

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with the Securities and Exchange Commission.

 

 

13. USE OF BOARD AND COMPONENT’S NAME

     Licensee shall not use the name of University, System, or Board in
relation to the Licensed Subject Matter without express written consent, except
for the clauses listed in Exhibit 6 attached hereto.

14. CONFIDENTIAL INFORMATION; PUBLICATION

     14.1 Confidential Information.

     (a) Each of the parties to this Agreement shall use at least the
same degree of care it uses to prevent the disclosure of its own
confidential information to prevent the disclosure of Confidential
Information disclosed to it by the other party. Each party warrants to
the other that such care is reasonably calculated to prevent the
disclosure of Confidential Information.

     (b) Confidential Information will be used by the parties solely as
needed to fulfill the business transactions described in this Agreement
(the “Authorized Purpose”). Each party agrees to limit circulation and
disclosure of the Confidential Information to its employees, agents,
advisors, and representatives who (i) have a need to know such
Confidential Information in order to accomplish the Authorized Purpose,
(ii) have been informed of the confidential and proprietary nature of the
Confidential Information, and (iii) have agreed not to disclose the
Confidential Information in contravention of this Agreement. Each party
will cause its employees, agents, advisors, and representatives to whom
Confidential Information is disclosed or transferred to maintain the
Confidential Information in accordance with the terms and conditions of
this Section 14.1 as though such employees, agents, advisors, and
representatives were parties to this Agreement.

     (c) Notwithstanding this Section 14.1, neither party shall have
liability to the other with regard to any Confidential Information of the
other which: (i) was in the public domain at the time it was disclosed
by the receiver or comes into the public domain through no fault of the
receiver; (ii) was independently developed by the receiver prior to the
receipt of the Confidential Information; (iii) becomes known to the
receiver from another source without breach of this Agreement by the
receiver and otherwise not in violation of the disclosing party’s rights;
or (iv) is disclosed pursuant to the order or requirement of a court,
internal reporting, administrative agency or other governmental body
including disclosure pursuant to federal and state law and regulations.
In no event shall Confidential Information of Licensee be imputed to any
other component institution of System, other than University, that did
not have access to the Confidential Information of Licensee. Also, after
the Effective Date, Licensee hereby agrees that it will provide
reasonable cooperation to University in University’s attempt to
effectuate the assignment of Monsanto’s rights pursuant to Section
6.2(c), including but not limited to, the disclosure of the existence of
this Agreement, non-Confidential Information related to this Agreement
and the consummation of the transactions hereunder, limited confidential
information related to this Agreement after either consent from Licensee
or Monsanto’s

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execution of a Nondisclosure, Non-Use Agreement, in form and
substance reasonably satisfactory to Licensee, with University or Board.
The parties’ obligations pursuant to this paragraph shall survive for a
period of three (3) years after the termination of this Agreement.

     14.2 Board and University and their respective employees, agents and
representatives may publish their own scientific findings (but not Confidential
Information provided by Licensee to Board or University after the Effective
Date unless written waiver thereof is obtained from Licensee) from research
related to Licensed Subject Matter, only in accordance with the following
procedures:

     (a) prior to any publication relating to TP508 Technology, whether
orally, in the form of an abstract or manuscript or otherwise, such
information shall first be submitted to Licensee in writing for review
and comment;

     (b) after receiving such information for review and comment,
Licensee shall have 30 days to notify the entity or person which
submitted such information for review and comment (the “Requestor”) (i)
whether Licensee intends to apply for a patent for the subject matter of
the information and (ii) whether there is any Confidential Information of
Licensee contained therein, specifying such information that cannot be
published pursuant to this Section 14.2;

     (c) if within such 30-day period Licensee notifies Requestor that
Licensee will not file a patent application on the subject matter of the
information, Requestor may publish the information other than any
Confidential Information of Licensee identified by Licensee pursuant to
Section 14.2(b)(ii) hereof within the 30-day period;

     (d) if Licensee fails to communicate any decision to the Requestor
within such 30-day period, Requestor may publish the information; and

     (e) if within such 30-day period, Licensee notifies Requestor that
Licensee intends to file a patent application on the subject matter of
the information, Requestor may publish the information, other than any
Confidential Information of Licensee identified by Licensee pursuant to
Section 14.2(b)(ii) above, 60 days after the date Requestor receives such
notification or, if earlier, upon the filing by Licensee of a patent
application thereon.

15. GENERAL

     15.1 Except as provided in Section 6.6(c) hereof, any dispute or
controversy arising out of or relating to this Agreement, its construction or
its actual or alleged breach will be decided by mediation with the use of a
qualified mediator acceptable to each party. If the mediation does not result
in a resolution of such dispute or controversy, it will be finally decided by
an appropriate method of alternate dispute resolution, including without
limitation, arbitration, conducted in the city of Galveston, Texas in
accordance with the Commercial Dispute

16

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Resolution Procedures of the American Arbitration Association. The
arbitration panel will include members knowledgeable in the evaluation of
biotechnology. Judgment upon the award rendered may be entered in the highest
court or forum having jurisdiction, state or federal. The provisions of this
Article 15 will not apply to decisions on the validity of patent claims or to
any dispute or controversy as to which any treaty or law prohibits such
arbitration. The decision of the arbitration must be sanctioned by a court of
law having jurisdiction to be binding upon and enforceable by the parties

     15.2 This Agreement constitutes the entire and only agreement between the
parties for Licensed Subject Matter and all other prior negotiations,
representations, agreements, and understandings for Licensed Subject Matter 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.

     15.3 Any notice required by this License Agreement shall be given by
personal delivery or prepaid, first class, certified mail, return receipt
requested, addressed in the case of Board to:

	 	 	 
	

	 	Board of Regents
	

	 	The University of Texas System
	

	 	201 West 7th Street
	

	 	Austin, Texas 78701
	

	 	ATTENTION: Office of General Counsel
	

	 	FAX: (512) 499-4523
	

	 	PHONE: (512) 499-4462
	 
	 	 
	with copies to:

	 	University of Texas Medical Branch
	

	 	301 University Blvd., Route 0663
	

	 	Galveston, Texas 77555-0663
	

	 	ATTENTION: Director, Technology
	

	 	Development
Center

	

	 	FAX: (409) 747-1441
	

	 	PHONE: (409) 747-0551
	 
	 	 
	or in the case of Licensee (before

	 	Chrysalis BioTechnology, Inc.
	assignment of this Agreement to

	 	2200 Market, Suite 600
	OLGC) to:

	 	Galveston, Texas 77550
	

	 	ATTENTION: Director or President
	

	 	FAX: (409) 750-9253
	

	 	PHONE: (409) 750-9251
	 
	 	 
	or, in the case of Licensee (after

	 	OrthoLogic Corp.
	assignment of this Agreement to

	 	1275 West Washington Street
	OLGC) to:

	 	Tempe, AZ 85281-1210
	

	 	ATTENTION: President and CEO
	

	 	FAX: 602-286-2808

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	 	PHONE: 602-286-5500
	 
	 	 
	with a copy to:

	 	Quarles & Brady LLP
	

	 	One Renaissance Square
	

	 	Two North Central Avenue
	

	 	Phoenix, AZ 85004
	

	 	ATTENTION: Steven P. Emerick
	

	 	FAX: 602-417-2980
	

	 	PHONE: 602-230-5517

or such other addresses as may be given from time to time under the terms of
this notice provision. Notice shall be deemed given upon actual receipt.

     15.4 Licensee shall comply with all applicable federal, state and local
laws and regulations in the United States of America and all applicable laws of
countries other than the United States of America in connection with its
activities pursuant to this Agreement.

     15.5 This License Agreement shall be construed and enforced in accordance
with the laws of the United States of America and of the State of Texas.

     15.6 Failure of either party to enforce a right that under this Agreement
shall not act as a waiver of that right or the ability to later assert that
right relative to the particular situation.

     15.7 Headings included herein are for convenience only and shall not be
used to construe this Agreement.

     15.8 If any provision of this Agreement shall be found by a court to be
void, invalid or unenforceable, the same shall be reformed to comply with
applicable law or stricken if not so conformable, so as not to affect the
validity or enforceability of this Agreement.

[SIGNATURE PAGE FOLLOWS]

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with the Securities and Exchange Commission.

 

 

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

	 	 	 
	THE UNIVERSITY OF TEXAS MEDICAL

BRANCH, for itself and on behalf of
	 	 
	 
	 	 
	THE BOARD OF REGENTS OF THE

	 	 
	UNIVERSITY OF TEXAS SYSTEM

	 	CHRYSALIS BIOTECHNOLOGY, INC

	 	 	 	 	 	 	 
	By:

	 	/s/ John D. Stobo
	 	By:
	 	/s/ Dennis L. McWilliams
	

	 	
 
	 	 	 	
 
	Name:

	 	John D. Stobo
	 	Name:
	 	Dennis L. McWilliams
	Title:

	 	President
	 	Title:
	 	Chief Operating Officer
	Date:

	 	April 27, 2004
	 	Date:
	 	April 26, 2004

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with the Securities and Exchange Commission.

 

 

Exhibit 1

Monsanto Agreement

 

 

AGREEMENT

     THIS AGREEMENT effective as of the 15th day of May, 1991, between MONSANTO
COMPANY, a corporation of the State of Delaware, having offices at 700
Chesterfield Village Parkway, St. Louis, Missouri (“MONSANTO”), and the BOARD
OF REGENTS (“BOARD”) OF THE UNIVERSITY OF TEXAS SYSTEM (“SYSTEM”), an agency of
the State of Texas, whose address is 201 West 7th Street, Austin, Texas 78701;

     WHEREAS, the BOARD through work performed at the University of Texas
Medical Branch (“UNIVERSITY”), a component institution of the University of
Texas System and MONSANTO are joint owners of U.S. Patent Application Serial
Number 925,201, filed October 31, 1986;

     WHEREAS, the parties entered into a license Agreement effective the 1st
day of April, 1989, and MONSANTO elected to discontinue paying the costs for
foreign prosecution thereto on May 15, 1991;

     WHEREAS, the parties desire to and have as a purpose of this Agreement to
establish the terms and conditions under which MONSANTO will grant to
UNIVERSITY certain of its rights under Licensed Patents (as hereinafter
defined).

     NOW, THEREFORE, the parties agree as follows:

ARTICLE 1

DEFINITIONS

	1.1	 	“Licensed Patents”, as used herein, shall mean pending U.S. Patent
Application Serial Number 925,201, filed October 31, 1986, and all
divisions, continuations, continuations-in-part, reissues, reexaminations
thereof, and any corresponding Patents obtained in Austria, Belgium,
Canada, France, Great Britain, Germany, Greece, Italy, Japan,
Liechtenstein, Luxembourg, Netherlands, Spain, Sweden, and Switzerland.
	 
	1.2	 	“Licensed Products”, as used herein, shall mean any product or use of
such product covered by one or more claims of Licensed Patents.
	 
	1.3	 	“Net Sales”, as used herein, shall mean values actually received by the
UNIVERSITY from the sale of Licensed Products to a third party and values
received by the UNIVERSITY from its sublicensees from the sale of Licensed
Products, less any transportation charges,

 

 

	 	 	customary and reasonable discounts and commissions, returns, sales or excise
taxes and duties imposed on and paid by the seller with respect to such
sale.
	 
	1.4	 	“Other Products”, as used herein, shall mean only those products that, if
sold by MONSANTO or its licensee, would not infringe the claims of
Licensed Patents.

ARTICLE 2

PATENT APPLICATIONS

	2.1	 	The UNIVERSITY agrees to pay the cost incurred after May 20, 1991 of
securing and maintaining Licensed Patents including attorney fees for the
preparation and prosecution of the applications as well as filing,
issuance and maintenance fees. UNIVERSITY may, in its sole discretion,
pursue corresponding patents in Austria, Belgium, Canada, France, Great
Britain, Germany, Greece, Italy, Japan, Liechtenstein, Luxembourg,
Netherlands, Spain, Sweden, and Switzerland.
	 
	2.2	 	The UNIVERSITY shall not be required to prosecute any patent application
beyond the point of final rejection by the assigned Primary Examiner in
the United States Patent and Trademark Office or the equivalent stage of
prosecution in a patent application in a foreign country. However, if the
UNIVERSITY elects not to appeal a final rejection, it shall promptly so
inform MONSANTO in time to allow MONSANTO to appeal the rejection if it so
desires.

ARTICLE 3

LICENSE

	3.1	 	Subject to the terms of this Agreement, MONSANTO agrees to grant and
hereby grants the UNIVERSITY an exclusive, royalty-bearing license under
Licensed Patents to make, use and sell Licensed Products, including the
right to grant sublicenses, subject to Monsanto retaining a right to
practice the Licensed Patents for its internal operations including
research and production and sale of Other Products.

ARTICLE 4

PAYMENT AND COVENANTS

	4.1	 	In consideration of the license of Article 3, the UNIVERSITY shall pay to
MONSANTO a royalty of ten percent (10%) of Net Sales.
	 
	4.2	 	All amounts payable hereunder by UNIVERSITY shall be payable in United
States dollars. Checks shall be made payable to the Monsanto Company.

 

 

ARTICLE 5

REPORTS

	5.1	 	Beginning with the first sale of Licensed Products and within forty-five
(45) days following the last day of the months of June and December of
each calendar year until termination of this Agreement, the UNIVERSITY
shall submit to MONSANTO a written report setting forth the Net Sales of
Licensed Products sold by the UNIVERSITY and value received from all
sublicenses of the Licensed Patents and the amount of royalty owed to
MONSANTO for the immediately preceding semiannual period. With each
report, the UNIVERSITY shall pay MONSANTO the amount of royalty shown to
be due.
	 
	5.2	 	The UNIVERSITY shall keep such detailed records as may be necessary to
determine the payments due under 5.1. At the request of MONSANTO, the
UNIVERSITY shall permit an independent public accountant selected by
MONSANTO (unless one to which the UNIVERSITY has some reasonable
objection) to have access during ordinary business hours to such records
as may be necessary to determine for a period up to two (2) years prior to
the time of such requests:
	 
	(a)	 	the correctness of any report and/or payment made under this
Agreement; and/or
	 
	(b)	 	information as to the sum payable for such period in case of the
UNIVERSITY’S failure to render statements of payment as required by
Article 5.1 of this Agreement.
	 
	5.3	 	Any accountant appointed pursuant to paragraph 5.2 shall not disclose to
MONSANTO any information relating to the business of the UNIVERSITY except
that which should have been contained in a prior report pursuant to this
Agreement.

ARTICLE 6

TERM AND TERMINATION

	6.1	 	Unless earlier terminated as provided herein, this Agreement shall
terminate on the expiration date of the last patent within Licensed
Patents.
	 
	6.2	 	If either party shall be in default under or shall fail to comply with
the terms of this Agreement and such default or failure to comply is not
cured within sixty (60) days after receipt of written notice thereof, the
other party shall have the right to terminate this Agreement and the
license granted hereby by written notice to that effect to be effective
sixty (60) days after receipt of said notice.

 

 

	6.3	 	The UNIVERSITY may, upon three (3) months written notice to MONSANTO,
terminate this Agreement for any reason whatsoever.
	 
	6.4	 	Upon termination of this Agreement for any reason, the license granted to
the UNIVERSITY hereunder shall terminate; however, nothing herein shall be
construed to release either party from any obligation which matured prior
to the effective date of such termination and the UNIVERSITY’S obligations
pursuant to this Agreement shall remain in full force and effect until all
payments required to be made by the UNIVERSITY to MONSANTO have been made.

ARTICLE 7

WARRANTY; DISCLAIMER OF WARRANTY

	7.1	 	MONSANTO represents and warrants that it has the right to make
conveyances and grants in accordance with the Articles herein except for
the rights, if any, of the Government of the United States.
	 
	7.2	 	Except as specified in paragraph 7.1, MONSANTO makes no representation or
warranties, either express or implied, with respect to the Licensed
Patent(s) and specifically disclaims any implied warranties of
merchantability and fitness for a particular purpose.
	 
	7.3	 	Nothing in this Agreement shall be construed as:
	 
	(a)	 	a warranty or representation by MONSANTO as to the validity of the
Licensed Patents;
	 
	(b)	 	a warranty or representation by MONSANTO that anything made, used,
sold or otherwise disposed of under the license granted in this
Agreement does not or will not infringe the patents, copyrights,
trademarks, registered design or other intellectual property or
contractual rights of third parties;
	 
	(c)	 	an obligation by MONSANTO to bring or prosecute actions or suits
against third parties for infringement of patents, copyrights,
trademarks, registered design or other intellectual property or
contractual rights; or
	 
	(d)	 	the conferring by MONSANTO of rights to use in advertising
publicity or otherwise any trademark, service mark or tradename of
MONSANTO except in accordance with the express terms of this
Agreement.

 

 

ARTICLE 8

PATENT MARKING

	8.1	 	The UNIVERSITY and/or its sublicensees agree to mark permanently and
legibly all products and documentation manufactured or sold by it under
this Agreement with such patent notice as may be permitted or required
under Title 35, United States Code.

ARTICLE 9

CONFIDENTIAL INFORMATION

	9.1	 	UNIVERSITY and MONSANTO each agree that all information contained in
documents marked “confidential” which are forwarded to one by the other
shall be received in strict confidence, used only for the purposes of this
Agreement, and not disclosed by the recipient party (except as required by
law or court order), it’s agent or employees without the prior written
consent of the other party, unless such information:
	 
	(a)	 	was in the public domain at the time of disclosure;
	 
	(b)	 	later becomes part of the public domain through no act or omission
of the recipient party, it’s employees, agents, successor or
assignee;
	 
	(c)	 	is lawfully disclosed to the recipient party by third party having
the right to disclose it;
	 
	(d)	 	was already known by the recipient party at the time of
disclosure;
	 
	(e)	 	is independently developed; or
	 
	(f)	 	is required to be submitted to a government agency pursuant to any
pre-existing obligation.
	 
	9.2	 	Each party’s obligation of confidence hereunder shall be fulfilled by
using at least the same degree of care with the other party’s confidential
information as it uses to protect its own confidential information. This
obligation shall exist while this Agreement is in force and for a period
of three (3) years thereafter.

ARTICLE 10

GENERAL

	10.1	 	Nothing contained herein shall be deemed or construed to create between
the parties a partnership or joint venture. The UNIVERSITY shall not have
the authority to act on behalf of MONSANTO to commit MONSANTO in any
matter or cause whatsoever or to use

 

 

	 	 	MONSANTO’S name in any way not specifically authorized in this Agreement.
Neither party shall be liable for any act, omission, representation,
obligation or debt of the other party, even if informed of such act,
omission, representation, obligation or debt.
	 
	10.2	 	It is agreed that no waiver by either party hereto of any breach or
default of any of the covenants or requirements herein set forth shall be
deemed a waiver as to any subsequent and similar breach or default.
	 
	10.3	 	In the event that any part, section, paragraph or subparagraph of this
Agreement shall be held to be indefinite, invalid, illegal or otherwise
void or unenforceable, the entire Agreement shall not fail on account
thereof, and the balance of the Agreement shall continue in full force and
effect.
	 
	10.4	 	The UNIVERSITY shall comply with all applicable federal, state and local
laws and regulations in connection with its activities pursuant to this
Agreement.
	 
	10.5	 	THIS AGREEMENT SHALL BE CONSTRUED, INTERPRETED AND GOVERNED BY THE LAWS
OF THE STATE OF TEXAS. ANY CONTROVERSIES INVOLVING PATENTS SHALL BE
GOVERNED BY THE LAWS OF THE COUNTRY IN WHICH THE PATENT IN CONTROVERSY
ISSUED.
	 
	10.6	 	Any notice and other communications required or permitted under this
Agreement shall be deemed to be properly given when in writing and sent by
air mail addressed to the other party at the address set forth below:

	 	 	 	 	 
	

	 	UNIVERSITY:
	 	The Office of Sponsored Programs-Academic
	

	 	 	 	The University of Texas Medical Branch
	

	 	 	 	301 University Blvd.
	

	 	 	 	Galveston, Texas 77550
	

	 	 	 	Attn: Director
	 
	 	 	 	 
	

	 	MONSANTO:
	 	Monsanto Company
	

	 	 	 	800 North Lindbergh Blvd.
	

	 	 	 	St. Louis, Missouri 63198
	

	 	 	 	Attn: MCR - Group Patent Counsel
	 
	 	 	 	 
	

	 	BOARD:
	 	Board of Regents
	

	 	 	 	The University of Texas System
	

	 	 	 	201 West 7th Street
	

	 	 	 	Austin, Texas 78701
	

	 	 	 	Attn: System Intellectual Property Office

 

 

	10.7	 	This Agreement merges and supersedes all previous agreements and
understandings, whether or not written, respecting the same subject
manner.

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first shown above.

	 	 	 	 	 	 	 
	  	 	MONSANTO COMPANY
	 
	 	 	 	 	 	 
	

	 	By:
	 	/s/ P. Needleman	 	 
	

	 	 	 	
 	 	 
	

	 	Name:
	 	P. Needleman	 	 
	

	 	Title:
	 	Corporate Vice President and Chief Scientist	 	 
	 
	 	 	 	 	 	 
	

	 	Date:
	 	5/15/92	 	 
	 
	 	 	 	 	 	 
	 	 	THE UNIVERSITY OF TEXAS MEDICAL BRANCH
	 
	 	 	 	 	 	 
	

	 	By:
	 	/s/ Thomas N. James, M.D.	 	 
	

	 	 	 	
 	 	 
	

	 	Name:

Title:
	 	Thomas N. James, M.D.

President	 	 
	 
	 	 	 	 	 	 
	

	 	Date:
	 	6-5-92	 	 
	 
	 	 	 	 	 	 
	 	 	BOARD OF REGENTS OF THE UNIVERSITY

OF TEXAS SYSTEM
	 
	 	 	 	 	 	 
	

	 	By:
	 	/s/ Thomas G. Ricks	 	 
	

	 	 	 	
 	 	 
	

	 	Name:

Title:
	 	Thomas G. Ricks

Acting Vice Chancellor for Asset Management	 	 
	 
	 	 	 	 	 	 
	

	 	Date:
	 	6-24-92	 	 

 

 

	 	 	 	 	 	 	 
	  	 	Approved as to Form:
	 
	 	 	 	 	 	 
	 	 	THE UNIVERSITY OF TEXAS SYSTEM

OFFICE OF GENERAL COUNSEL
	 
	 	 	 	 	 	 
	

	 	By:
	 	/s/ Georgia Harper	 	 
	

	 	 	 	
 	 	 
	

	 	Name:

Title:
	 	Georgia Harper

Attorney	 	 

 

 

Chrysalis Patent and Patent Applications Licensed from the University of Texas

Exhibit 2

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	PATENT or	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	PUBLICATION	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	NO. /	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	ISSUE or	 	 
	 	 	 	 	 	 	APP NO./	 	 	 	PARENT NO./	 	 	 	PUBLICATION	 	 
	REF. NO.
	 	COUNTRY
	 	TITLE
	 	FILE DATE
	 	FILE TYPE
	 	FILE DATE
	 	INVENTOR(S)
	 	DATE
	 	STATUS

	3033.1000-000

	 	US
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	60/217,583

07/12/00
	 	PROV
	 	N/A
	 	Darrell H. Carney
	 	N/A
	 	Expired
	3033.1000-001

	 	US
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	09/904,090

07/12/01
	 	US
	 	60/217,583

7/12/00
	 	Darrell H. Carney
	 	20020061852A1

05/23/02
	 	Filed
	3033.1000-003

	 	PCT
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	PCT/US01/21944

07/12/01
	 	PCT
	 	60/217,583

07/12/00
	 	Darrell H. Carney
	 	WO02/004008

01/17/02
	 	Expired
	3033.1000-004

	 	Taiwan
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	90116938

07/11/01
	 	Taiwan
	 	60/217,583

07/12/00
	 	Darrell H. Carney
	 	 	 	Filed
	3033.1000-005

	 	Thailand
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	066866

07/11/01
	 	Thailand
	 	60/217,583

07/12/00
	 	Darrell H. Carney
	 	 	 	Filed
	3033.1000-007

	 	PCT
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	PCT/US02/01396

01/16/02
	 	PCT
	 	N/A
	 	Darrell H. Carney
	 	WO03/061689

07/31/03
	 	Filed
	3033.1000-008

	 	US
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	10/050,611

01/16/02
	 	CONT
	 	09/904,090

07/12/01

60/217,583

07/12/00
	 	Darrell H. Carney
	 	20020187933

12/12/02
	 	Filed
	3033.1000-009

	 	EPC
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	01957136.3
07/12/01
	 	EPC
	 	PCT/US01/21944

07/12/01
	 	Darrell H. Carney
	 	1253937B

09/10/03
	 	Granted
	3033.1000-010

	 	Japan
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	2002508462

07/12/01
	 	JAPAN
	 	PCT/US01/21944

07/12/01
	 	Darrell H. Carney
	 	 	 	Filed
	3033.1000-011

	 	Australia
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	2001278907

07/12/01
	 	Australia
	 	PCT/US01/21944

07/12/01
	 	Darrell H. Carney
	 	 	 	Filed
	3033.1000-012

	 	Canada
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	2415778

07/12/01
	 	Canada
	 	PCT/US01/21944

07/12/01
	 	Darrell H. Carney
	 	 	 	Filed
	3033.1000-013

	 	China
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	018154581

07/12/01
	 	China
	 	PCT/US01/21944

07/12/01
	 	Darrell H. Carney
	 	 	 	Filed

 

 

Chrysalis Patent and Patent Applications Licensed from the University of Texas

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	PATENT or	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	PUBLICATION	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	NO. /	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	ISSUE or	 	 
	 	 	 	 	 	 	APP NO./	 	 	 	PARENT NO./	 	 	 	PUBLICATION	 	 
	REF. NO.
	 	COUNTRY
	 	TITLE
	 	FILE DATE
	 	FILE TYPE
	 	FILE DATE
	 	INVENTOR(S)
	 	DATE
	 	STATUS

	3033.1000-014

	 	Austria
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	01957136.3
07/12/01
	 	EPC
	 	PCT/US01/21944

07/12/01
	 	Darrell H. Carney
	 	1253937

09/10/03
	 	Granted
	3033.1000-015

	 	Belgium
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	01957136.3
07/12/01
	 	EPC
	 	PCT/US01/21944

07/12/01
	 	Darrell H. Carney
	 	1253937

09/10/03
	 	Granted
	3033.1000-016

	 	France
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	01957136.3
07/12/01
	 	EPC
	 	PCT/US01/21944

07/12/01
	 	Darrell H. Carney
	 	1253937

09/10/03
	 	Granted
	3033.1000-017

	 	Germany
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	01957136.3
07/12/01
	 	EPC
	 	PCT/US01/21944

07/12/01
	 	Darrell H. Carney
	 	60100740.9-08
09/10/03
	 	Granted
	3033.1000-018

	 	Great

Britain
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	01957136.3
07/12/01
	 	EPC
	 	PCT/US01/21944

07/12/01
	 	Darrell H. Carney
	 	1253937

09/10/03
	 	Granted
	3033.1000-019

	 	Italy
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	01957136.3
07/12/01
	 	EPC
	 	PCT/US01/21944

07/12/01
	 	Darrell H. Carney
	 	1253937

09/10/03
	 	Granted
	3033.1000-020

	 	Netherlands
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	01957136.3
07/12/01
	 	EPC
	 	PCT/US01/21944

07/12/01
	 	Darrell H. Carney
	 	1253937

09/10/03
	 	Granted
	3033.1000-021

	 	Switzerland
	 	METHODS OF THERAPY WITH THROMBIN

DERIVED PEPTIDES
	 	01957136.3
07/12/01
	 	EPC
	 	PCT/US01/21944

07/12/01
	 	Darrell H. Carney
	 	1253937

09/10/03
	 	Granted
	3033.1001-000*

	 	US
	 	THROMBIN DERIVED POLYPEPTIDES:

COMPOSITIONS AND METHODS FOR USE
	 	06/925,201

10/31/86
	 	US
	 	-
	 	Darrell H. Carney,
et al.
	 	5,352,664

10/04/94
	 	Issued
	3033.1001-001*

	 	US
	 	THROMBIN DERIVED POLYPEPTIDES:

COMPOSITIONS AND METHODS FOR USE
	 	08/007,173

01/21/93
	 	DIV
	 	06/925,201

10/31/86
	 	Darrell H. Carney,
et al.
	 	5,500,412

03/19/96
	 	Issued
	3033.1001-002*

	 	US
	 	THROMBIN DERIVED POLYPEPTIDES:

COMPOSITIONS AND METHODS FOR USE
	 	08/538,504

09/29/95
	 	CONT
	 	06/925,201

10/31/86
	 	Darrell H. Carney,
et al.
	 	6,627,731

09/30/03
	 	Issued
	3033.1001-003*

	 	US
	 	THROMBIN DERIVED POLYPEPTIDES:

COMPOSITIONS AND METHODS FOR USE
	 	09/630,484

08/02/00
	 	CIP
	 	08/538,504

09/29/95
	 	Darrell H. Carney,
et al.
	 	 	 	Filed
	3033.1001-004*

	 	US
	 	THROMBIN DERIVED POLYPEPTIDES:

COMPOSITIONS AND METHODS FOR USE
	 	09/631,137

08/02/00
	 	CIP
	 	08/538,504

09/29/95
	 	Darrell H. Carney,
et al.
	 	6,630,572

10/07/03
	 	Issued
	3033.1001-008*

	 	EPC
	 	THROMBIN DERIVED POLYPEPTIDES:

COMPOSITIONS AND METHODS FOR USE
	 	87907652.9
10/30/87
	 	EPC
	 	PCT/US87/02882

10/30/87
	 	Darrell H. Carney,
et al.
	 	0328552

05/05/94
	 	Issued

 

 

Chrysalis Patent and Patent Applications Licensed from the University of Texas

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	PATENT or	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	PUBLICATION	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	NO. /	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	ISSUE or	 	 
	 	 	 	 	 	 	APP NO./	 	 	 	PARENT NO./	 	 	 	PUBLICATION	 	 
	REF. NO.
	 	COUNTRY
	 	TITLE
	 	FILE DATE
	 	FILE TYPE
	 	FILE DATE
	 	INVENTOR(S)
	 	DATE
	 	STATUS

	3033.1001-009*

	 	Switzerland
	 	THROMBIN DERIVED POLYPEPTIDES:

COMPOSITIONS AND METHODS FOR USE
	 	879076529

10/30/87
	 	Switzerland
	 	87907652.9

10/30/87
	 	Darrell H. Carney,
et al.
	 	0328552

05/05/94
	 	Issued
	3033.1001-010*

	 	France
	 	THROMBIN DERIVED POLYPEPTIDES:

COMPOSITIONS AND METHODS FOR USE
	 	879076529

10/30/87
	 	France
	 	87907652.9

10/30/87
	 	Darrell H. Carney,
et al.
	 	0328552

05/05/94
	 	Issued
	3033.1001-011*

	 	Great

Britain
	 	THROMBIN DERIVED POLYPEPTIDES:

COMPOSITIONS AND METHODS FOR USE
	 	879076529

10/30/87
	 	Great

Britain
	 	87907652.9

10/30/87
	 	Darrell H. Carney,
et al.
	 	0328552

05/05/94
	 	Issued
	3033.1001-012*

	 	Italy
	 	THROMBIN DERIVED POLYPEPTIDES:

COMPOSITIONS AND METHODS FOR USE
	 	879076529

10/30/87
	 	Italy
	 	87907652.9

10/30/87
	 	Darrell H. Carney,
et al.
	 	0328552

05/05/94
	 	Issued
	3033.1001-013*

	 	Netherlands
	 	THROMBIN DERIVED POLYPEPTIDES:

COMPOSITIONS AND METHODS FOR USE
	 	879076529

10/30/87
	 	Nether-lands
	 	87907652.9

10/30/87
	 	Darrell H. Carney,
et al.
	 	0328552

05/05/94
	 	Issued
	3033.1001-014*

	 	Germany
	 	THROMBIN DERIVED POLYPEPTIDES:

COMPOSITIONS AND METHODS FOR USE
	 	879076529

10/30/87
	 	Germany
	 	87907652.9

10/30/87
	 	Darrell H. Carney,
et al.
	 	0328552

05/05/94
	 	Issued
	3033.1001-015*

	 	Sweden
	 	THROMBIN DERIVED POLYPEPTIDES:

COMPOSITIONS AND METHODS FOR USE
	 	879076529

10/30/87
	 	Sweden
	 	87907652.9

10/30/87
	 	Darrell H. Carney,
et al.
	 	0328552

05/05/94
	 	Issued
	3033.1001-016*

	 	Canada
	 	THROMBIN DERIVED POLYPEPTIDES:

COMPOSITIONS AND METHODS FOR USE
	 	595965

04/06/89
	 	Canada
	 	06/925,201

04/06/89
	 	Darrell H. Carney,
et al.
	 	1341108

10/30/00
	 	Issued
	3033.1001-017*

	 	Japan
	 	THROMBIN DERIVED POLYPEPTIDES:

COMPOSITIONS AND METHODS FOR USE
	 	5070531987

10/30/87
	 	Japan
	 	PCT/US87/02882

10/30/87
	 	Darrell H. Carney,
et al.
	 	3054150

04/07/00
	 	Issued
	3033.1001-018*

	 	Belgium
	 	THROMBIN DERIVED POLYPEPTIDES:

COMPOSITIONS AND METHODS FOR USE
	 	879076529

10/30/87
	 	Belgium
	 	87907652.9

10/30/87
	 	Darrell H. Carney,
et al.
	 	0328552

05/05/94
	 	Issued
	3033.1002-000

	 	US
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	60/219,300

07/19/00
	 	PROV
	 	N/A
	 	Darrell H. Carney,
et al.
	 	N/A	 	Expired
	3033.1002-001

	 	US
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	09/909,122

07/19/01
	 	CIP
	 	60/219,300

07/19/00
	 	Darrell H. Carney,
et al.
	 	20020128202A1

09/12/02
	 	Filed
	3033.1002-003

	 	PCT
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	PCT/US01/22641

07/18/01
	 	PCT
	 	60/219,300

07/19/00
	 	Darrell H. Carney,
et al.
	 	WO02/05836

01/24/02
	 	Expired
	3033.1002-004

	 	US
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	10/050,692

01/16/02
	 	CONT
	 	09/909,122

07/19/01

60/219,300

07/19/00
	 	Darrell H. Carney,
et al.
	 	20020182205A1

12/5/02
	 	Filed

 

 

Chrysalis Patent and Patent Applications Licensed from the University of Texas

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	PATENT or	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	PUBLICATION	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	NO. /	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	ISSUE or	 	 
	 	 	 	 	 	 	APP NO./	 	 	 	PARENT NO./	 	 	 	PUBLICATION	 	 
	REF. NO.
	 	COUNTRY
	 	TITLE
	 	FILE DATE
	 	FILE TYPE
	 	FILE DATE
	 	INVENTOR(S)
	 	DATE
	 	STATUS

	3033.1002-006

	 	PCT
	 	STIMULATION OF BONE GROWTH AND

CARTILAGE FORMATION WITH THROMBIN

PEPTIDE DERIVATIVES
	 	PCT/US02/01451

01/17/02
	 	PCT
	 	N/A
	 	Darrell H. Carney,
et al.
	 	WO03/061690

4/16/03
	 	Filed
	3033.1002-007

	 	EPC
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	EPC
	 	PCT/US01/22641

07/18/01
	 	Darrell H. Carney,
et al.
	 	1301196B

11/26/03
	 	Granted
	3033.1002-008

	 	Japan
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	2002511768

07/18/01
	 	Japan
	 	PCT/US01/22641

07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Filed
	3033.1002-009

	 	Australia
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	20021276977

07/18/01
	 	Australia
	 	PCT/US01/22641

07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Filed
	3033.1002-010

	 	Canada
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	2416487

07/18/01
	 	Canada
	 	PCT/US01/22641

07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Filed
	3033.1002-011

	 	China
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	018158226

07/18/01
	 	China
	 	PCT/US01/22641

07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Filed
	3033.1002-012

	 	Hong Kong
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	031074300

10/15/03
	 	Hong Kong
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	1055250A

01/02/04
	 	Filed
	3033.1002-013

	 	Austria
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	Austria
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Disclosure
	3033.1002-014

	 	Belgium
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	Belgium
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Disclosure
	3033.1002-015

	 	Cyprus
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	Cyprus
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Disclosure
	3033.1002-016

	 	Denmark
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	Denmark
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Disclosure
	3033.1002-017

	 	Finland
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	Finland
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Disclosure
	3033.1002-018

	 	France
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	France
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Disclosure
	3033.1002-019

	 	Germany
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	Germany
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	60101339.5-08
11/26/03
	 	Granted

 

 

Chrysalis Patent and Patent Applications Licensed from the University of Texas

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	PATENT or	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	PUBLICATION	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	NO. /	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	ISSUE or	 	 
	 	 	 	 	 	 	APP NO./	 	 	 	PARENT NO./	 	 	 	PUBLICATION	 	 
	REF. NO.
	 	COUNTRY
	 	TITLE
	 	FILE DATE
	 	FILE TYPE
	 	FILE DATE
	 	INVENTOR(S)
	 	DATE
	 	STATUS

	3033.1002-020

	 	Great Britain
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	Great Britain
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Disclosure
	3033.1002-021

	 	Greece
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	Greece
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Disclosure
	3033.1002-022

	 	Ireland
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	Ireland
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Disclosure
	3033.1002-023

	 	Italy
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	Italy
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Disclosure
	3033.1002-024

	 	Luxembourg
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	Luxembourg
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Disclosure
	3033.1002-025

	 	Monaco
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	Monaco
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Disclosure
	3033.1002-026

	 	Netherlands
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	Netherlands
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Disclosure
	3033.1002-027

	 	Portugal
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	Portugal
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Disclosure
	3033.1002-028

	 	Spain
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	Spain
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Disclosure
	3033.1002-029

	 	Sweden
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	Sweden
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Disclosure
	3033.1002-030

	 	Switzerland
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	Switzerland
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Disclosure
	3033.1002-031

	 	Turkey
	 	STIMULATION OF BONE GROWTH WITH

THROMBIN PEPTIDE DERIVATIVES
	 	01954752.0
07/18/01
	 	Turkey
	 	EPC 01954752.0
07/18/01
	 	Darrell H. Carney,
et al.
	 	 	 	Disclosure
	3033.1003-000

	 	US
	 	STIMULATION OF CARTILAGE GROWTH

WITH AGONISTS OF THE

NONPROTEOLYTICALLY ACTIVATED

THROMBIN RECEPTOR
	 	60/219,800

07/20/00
	 	PROV
	 	N/A
	 	Darrell H. Carney,
et al.
	 	N/A	 	Expired
	3033.1003-001

	 	US
	 	STIMULATION OF CARTILAGE GROWTH

WITH AGONISTS OF THE

NONPROTEOLYTICALLY ACTIVATED

THROMBIN RECEPTOR
	 	09/909,348

07/19/01
	 	CIP
	 	60/219,800

07/20/00
	 	Darrell H. Carney,
et al.
	 	20020042373A1

04/11/02
	 	Filed

 

 

Chrysalis Patent and Patent Applications Licensed from the University of Texas

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	PATENT or	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	PUBLICATION	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	NO. /	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	ISSUE or	 	 
	 	 	 	 	 	 	APP NO./	 	 	 	PARENT NO./	 	 	 	PUBLICATION	 	 
	REF. NO.
	 	COUNTRY
	 	TITLE
	 	FILE DATE
	 	FILE TYPE
	 	FILE DATE
	 	INVENTOR(S)
	 	DATE
	 	STATUS

	3033.1003-003

	 	PCT
	 	STIMULATION OF CARTILAGE GROWTH

WITH AGONISTS OF THE

NONPROTEOLYTICALLY ACTIVATED

THROMBIN RECEPTOR
	 	PCT/US01/22668

07/19/01
	 	PCT
	 	09/909,348

07/19/01

60/219,800

07/20/00
	 	Darrell H. Carney,
et al.
	 	WO02/07748

01/31/02
	 	Expired
	3033.1003-004

	 	US
	 	STIMULATION OF CARTILAGE GROWTH

WITH AGONISTS OF THE

NONPROTEOLYTICALLY ACTIVATED

THROMBIN RECEPTOR
	 	10/050,688

01/16/02
	 	CONT
	 	09/904,090

07/12/01

60/217,583

07/12/00
	 	Darrell H. Carney,
et al.
	 	20020198154A1

12/26/02	 	Filed
	3033.1003-005

	 	EPC
	 	STIMULATION OF CARTILAGE GROWTH

WITH AGONISTS OF THE

NONPROTEOLYTICALLY ACTIVATED

THROMBIN RECEPTOR
	 	01952846.2
07/19/01
	 	EPC
	 	PCT/US01/22668

07/19/01
	 	Darrell H. Carney,
et al.
	 	 	1259598A

11/27/02	 	 	Allowed
	3033.1003-006

	 	Japan
	 	STIMULATION OF CARTILAGE GROWTH

WITH AGONISTS OF THE

NONPROTEOLYTICALLY ACTIVATED

THROMBIN RECEPTOR
	 	2002513481

07/19/01
	 	Japan
	 	PCT/US01/22668

07/19/01
	 	Darrell H. Carney,
et al.
	 	 	 	 	 	Filed
	3033.1003-007

	 	Australia
	 	STIMULATION OF CARTILAGE GROWTH

WITH AGONISTS OF THE

NONPROTEOLYTICALLY ACTIVATED

THROMBIN RECEPTOR
	 	2001273561

07/19/01
	 	Australia
	 	PCT/US01/22668

07/19/01
	 	Darrell H. Carney,
et al.
	 	 	 	 	 	Filed
	3033.1003-008

	 	Canada
	 	STIMULATION OF CARTILAGE GROWTH

WITH AGONISTS OF THE

NONPROTEOLYTICALLY ACTIVATED

THROMBIN RECEPTOR
	 	2416404

07/19/01
	 	Canada
	 	PCT/US01/22668

07/19/01
	 	Darrell H. Carney,
et al.
	 	 	 	 	 	Filed
	3033.1003-009

	 	China
	 	STIMULATION OF CARTILAGE GROWTH

WITH AGONISTS OF THE

NONPROTEOLYTICALLY ACTIVATED

THROMBIN RECEPTOR
	 	018158218

07/19/01
	 	China
	 	PCT/US01/22668

07/19/01
	 	Darrell H. Carney,
et al.
	 	CN1458974

11/26/03
	 	Filed
	3033.1003-010

	 	Hong Kong
	 	STIMULATION OF CARTILAGE GROWTH

WITH AGONISTS OF THE

NONPROTEOLYTICALLY ACTIVATED

THROMBIN RECEPTOR
	 	03103723.5
05/27/03
	 	Hong Kong
	 	PCT/US01/22668

07/19/01
	 	Darrell H. Carney,
et al.
	 	 	1052367	 	 	Filed
	3033.1004-000

	 	US
	 	THROMBIN PEPTIDE DERIVATIVE DIMERS
	 	60/393,579

07/02/02
	 	PROV
	 	N/A
	 	Darrell H. Carney,
et al.
	 	 	 	 	 	Filed
	3033.1004-002

	 	PCT
	 	THROMBIN PEPTIDE DERIVATIVE DIMERS
	 	PCT/US03/20626
	 	PCT
	 	N/A
	 	Darrell H. Carney,
et al.
	 	WO2004/005317

01/15/04
	 	Filed
	3033.1006-000

	 	US
	 	THROMBIN PEPTIDE DERIVATIVES
	 	60/393,580

07/02/02
	 	PROV
	 	N/A
	 	Darrell H. Carney,
et al.
	 	 	 	 	 	Filed
	3033.1006-002

	 	PCT
	 	THROMBIN PEPTIDE DERIVATIVES
	 	PCT/US03/20635

07/01/03
	 	PCT
	 	60/393,580

0/02/02
	 	Darrell H. Carney,
et al.
	 	WO2004/014937

02/19/04
	 	Filed
	3033.1007-000

	 	US
	 	DIMERS OF THROMBIN

POLYPEPTIDE FRAGMENTS
	 	 	 	Disclosure
	 	N/A
	 	N/A	 	 	 	 	 	 

 

 

Chrysalis Patent and Patent Applications Licensed from the University of Texas

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	PATENT or	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	PUBLICATION	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	NO. /	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	ISSUE or	 	 
	 	 	 	 	 	 	APP NO./	 	 	 	PARENT NO./	 	 	 	PUBLICATION	 	 
	REF. NO.
	 	COUNTRY
	 	TITLE
	 	FILE DATE
	 	FILE TYPE
	 	FILE DATE
	 	INVENTOR(S)
	 	DATE
	 	STATUS

	3033.1008-000

	 	US
	 	METHOD FOR PROMOTING HEALING OF

CHRONIC DERMAL ULCERS
	 	60/308,198

07/27/01
	 	PROV
	 	N/A
	 	Darrell H. Carney
	 	N/A	 	Expired
	3033.1008-002

	 	PCT
	 	METHOD FOR PROMOTING HEALING OF

CHRONIC ULCERS
	 	PCT/US02/01151

01/16/02
	 	PCT
	 	60/308,198

07/27/01
	 	Darrell H. Carney
	 	WO03/013569

2/20/03
	 	Filed
	3033.1008-003

	 	Australia
	 	METHOD FOR PROMOTING HEALING OF

CHRONIC ULCERS
	 	 	 	Australia
	 	PCT/US02/01151

01/16/02
	 	Darrell H. Carney
	 	 	 	Filed
	3033.1008-004

	 	Canada
	 	METHOD FOR PROMOTING HEALING OF

CHRONIC ULCERS
	 	 	 	Canada
	 	PCT/US02/01151

01/16/02
	 	Darrell H. Carney
	 	 	 	Filed
	3033.1008-005

	 	China P.R.
	 	METHOD FOR PROMOTING HEALING OF

CHRONIC ULCERS
	 	 	 	China P.R.
	 	PCT/US02/01151

01/16/02
	 	Darrell H. Carney
	 	 	 	Disclosure
	3033.1008-006

	 	EPC
	 	METHOD FOR PROMOTING HEALING OF

CHRONIC ULCERS
	 	02703130.1
01/16/02
	 	EPC
	 	PCT/US02/01151

01/16/02
	 	Darrell H. Carney
	 	 	 	Filed
	3033.1008-007

	 	Japan
	 	METHOD FOR PROMOTING HEALING OF

CHRONIC ULCERS
	 	 	 	Japan
	 	PCT/US02/01151

01/16/02
	 	Darrell H. Carney
	 	 	 	Filed
	3033.1008-007

	 	US
	 	METHOD FOR PROMOTING HEALING OF

CHRONIC ULCERS
	 	10/766,752

01/27/04
	 	CON
	 	PCT/US02/01151

01/16/02
	 	Darrell H. Carney
	 	 	 	Filed
	3033.1009-000

	 	US
	 	PHARMACEUTICAL COMPOSITION FOR

THROMBIN PEPTIDE DERIVATIVES
	 	60/533,730

12/31/03
	 	PROV
	 	60/533,730

12/31/03
	 	Darrell H. Carney,
et al.
	 	 	 	Filed

*Co-owned by Pfizer, with interest exclusively licensed to The University of
Texas through original Agreement with Monsanto (Monsanto Pharmaceuticals was
acquired by Pharmacia, which was subsequently acquired by Pfizer)

 

 

Exhibit 3

Memorandum of Exclusive License

[IDENTIFICATION OF PATENT/PATENT APPLICATION]

Memorandum of Exclusive License

PLEASE TAKE NOTICE:

     The Board of Regents of The University of Texas System, an agency of The
State of Texas, through its component institution, The University of Texas
Medical Branch at Galveston, has granted to Orthologic Corp., of 1275 West
Washington Street, Tempe, Arizona, an exclusive license of its rights in the
above-captioned patent/patent application.

	 	 	 	 	 	 	 
	 	 	THE UNIVERSITY OF TEXAS, MEDICAL

BRANCH FOR ITSELF AND ON BEHALF OF

THE BOARD OF REGENTS OF THE

UNIVERSITY OF TEXAS SYSTEM
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	
	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	
	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	
	 	 
	

	 	Date:	 	 	 	 
	

	 	 	 	
	 	 

 

 

Exhibit 4

Form of Patent Assignment Agreement

 

 

PATENT ASSIGNMENT AGREEMENT

     This Patent Assignment Agreement (this “Assignment Agreement”), effective
the           day of         , 2004 (the “Effective Date”), is by and
between the Board of Regents (“Board” or “Assignor”) of The University of Texas
System, an agency of the State of Texas, whose address is 201 West 7th Street,
Austin, Texas 78701 (“System”), through its component institution, The
University of Texas Medical Branch at Galveston, having a business address at
301 University Blvd., Galveston, Texas 77555 (“University”) and Orthologic
Corp., a Delaware corporation, having a principal place of business located at
1275 West Washington Street, Tempe, AZ 85281 (“OLGC” or “Assignee”).

W I T N E S S E T H:

     WHEREAS, Assignor owns certain Patent Rights related to Licensed Subject
Matter, as set forth in a Patent License Agreement (“License Agreement”) dated
       , 2004, attached hereto as Appendix A, which were developed at
University, and some of which may be jointly owned with Monsanto Company, a
Delaware corporation (“Monsanto”); and

     WHEREAS, Assignee has represented to Assignor, to induce Assignor to enter
into this Assignment Agreement, that OLGC or Assignee, pursuant to an Asset
Purchase Agreement (the “Purchase Agreement”), by and between Chrysalis
Biotechnology, Inc. (“CBI”) and OLGC, bought substantially all of the assets of
CBI and desires to acquire the Patent Rights from the Assignor for additional
consideration to be paid to Assignor in the form of both an up-front payment
and an increased royalty rate.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the adequacy and legal sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

	1.	 	Definitions.
	 
	a.	 	Terms defined above and elsewhere in this Assignment Agreement shall have
their specified meanings. Capitalized terms used herein but not defined
herein shall have the meanings specified by the License Agreement.
	 
	b.	 	The following terms shall have the following meanings:

          “Assignee” means OLGC, its successors and assigns.

          “Assignee Product” means Licensed Product as such term is defined in
the License Agreement.

          “Assignee Process” means Licensed Process as such term is defined in
the License Agreement.

****Text has been omitted pursuant to a confidentiality request.
Omitted text has been filed with the Securities and Exchange Commission.

 

 

          “Monsanto Agreement” that license agreement described in Recital B
of the License Agreement and attached to the License Agreement as Exhibit
1.

          “Sublicensee” means the same as set forth in the License Agreement,
but shall also include any licensee of Assignee of the Licensed Subject
Matter or Patent Rights after the Effective Date of this Assignment
Agreement.

          “Term” has the meaning given to it in Section 6 of this Assignment
Agreement.

2. Assignment.

     Assignor hereby sells, assigns, transfers, and sets over unto Assignee,
with only those warranties set forth in the License Agreement related to
warranty of title, including the same limitations therein, its entire right,
title, and interest, if any, in, to, and under the Patent Rights and the
inventions claimed therein, together with any and all claims Assignor may have
for damages by reason of past infringement of the Patent Rights by third
parties, along with the right to sue for and collect the same; provided that
the foregoing shall not include the Monsanto Agreement or the Assignor’s rights
therein or thereunder, which agreement and rights therein and thereunder shall
continue to be sublicensed to Assignee pursuant to the License Agreement unless
assigned to Assignee by Monsanto.

3. Confirmatory Assignment.

     Assignor agrees to execute a confirmatory assignment of the Patent Rights
substantially in the form attached as Appendix B hereto for recordation with
the United States Patent and Trademark Office and, as required, in foreign
patent offices. Assignor agrees to fully cooperate with Assignee in
transferring its rights to the Patent Rights to Assignee in accordance herewith
and to execute all lawful documents, which may be reasonably required, all at
the sole cost and expense of Assignee, including all documents in the U.S. and
foreign jurisdictions, in recordable form, necessary to vest title to the
Patent Rights in Assignee.

4. Intent of Assignment.

     Assignor and Assignee agree that this Assignment Agreement is intended
only to cover the Patent Rights as defined in the License Agreement (other than
the Assignor’s rights in and under the Monsanto Agreement) and those added
thereto in the two (2) year period after the Effective Date as set forth in the
Purchase Agreement. This Assignment Agreement shall not cover any new
technology patent applications or patents as described and defined in Section
5.5 of the License Agreement. Assignee hereby acknowledges and agrees this
Assignment Agreement does not include or cover in any way, other inventions,
patent applications, patents, or other intellectual property rights owned or
licensed by Board, System, or University.

5. Payment and Records.

	a.	 	At the time of execution of this Assignment Agreement Assignee hereby
pays and delivers to Assignor an amount of ****. From the Effective Date
of this Assignment Agreement until the expiration of the Term, Assignee
also shall pay to the Assignor running royalties of 3.0% (3.3% if
Monsanto’s interest in the Monsanto Agreement shall already have been
assigned to

****Text has been omitted pursuant to a confidentiality request.
Omitted text has been filed with the Securities and Exchange Commission.

 

 

	 	 	Assignee as contemplated in Section 6.2(c) of the License Agreement) of Net
Sales of each Assignee Product or Assignee Process manufactured, imported,
exported, used, leased, or sold by and/or for Assignee and/or its
Sublicensees. Upon the assignment by Monsanto to Assignee of Monsanto’s
interests in the patent rights subject to the Monsanto Agreement as
contemplated by and within the time specified in Section 6.2(c) of the
License Agreement, Assignee shall pay to Assignor an amount equal to ****
and the rate of running royalties payable under this Section 5.a shall be
increased to 3.3% from the date of such assignment.

     It is understood and agreed by the parties that the payment of royalties
pursuant to this Section 5.a shall be made only on the first sale of an
Assignee Product or Assignee Process by Assignee, a Subsidiary or a
Sublicensee, and that subsequent sales of the same Assignee Product or Assignee
Process for which royalties have been accrued pursuant to this Section 5.a
shall not be subject to any additional accrual of royalties (for example, and
for illustration purposes only, if a royalty accrues due to a sale by Assignee
of an Assignee Product to a Sublicensee or a pharmaceutical distributor, a
subsequent sale by such Sublicensee or such pharmaceutical distributor shall
not generate a royalty payable to Assignor).

	b.	 	Assignee shall further pay to Assignor **** of all cash and the fair
market value (determined in accordance with Section 6.6 of the License
Agreement) of non-cash consideration received by Assignee during the Term
from a Licensee as a result of a license or sublicense for each Assignee
Product or Assignee Process including but not limited to licensing or
option fees, marketing fees, milestone payments, bonus payments and the
like, but excluding (i) payments received by Assignee for research
development pursuant to research grants; (ii) royalty payments received by
Assignee calculated on the basis of Net Sales of the Licensee or
Sublicensee; and (iii) payments received by Assignee as consideration for
an assignment of substantially all of the assets of Assignee or a
controlling majority of the stock of Assignee.
	 
	c.	 	If Assignee fails to timely pay royalties as required and fails to timely
cure the same within 30 days from Assignor’s written notice thereof to
Assignee, Assignee agrees and acknowledges that Assignor immediately shall
receive a vested security interest in Assignee’s interests in the Patent
Rights, and Assignee will immediately execute, in a form Assignor may
record, a Security Agreement substantially similar to the Security
Agreement attached hereto as Appendix C to secure the payment of all such
Assignee’s payment obligations hereunder. Assignee also shall cooperate,
timely and fully, with Assignor in further securing its interest in the
Patent Rights pursuant to the Security Agreement and all other rights
related thereto. In any such action in which Assignor is the prevailing
party, Assignor shall be entitled to recover from Assignee its reasonable
attorneys fees and other direct out-of-pocket costs incurred in connection
therewith, and, in the case of the enforcement of any failure to pay
amounts due under Section 5.a or b hereof, Assignee shall pay to Assignor
a late fee equal to the greater of $10,000 ($20,000 if such $10,000 fee
has become payable hereunder at least twice) or 10% of the payment amount
for each such payment not made within the applicable cure period, plus
interest on such unpaid amounts from the due date thereof until paid at a
per annum rate equal to the prime rate of interest, as published by the
Wall Street Journal, plus three percentage points.

****Text has been omitted pursuant to a confidentiality request.
Omitted text has been filed with the Securities and Exchange Commission.

 

 

	d.	 	During the Term and for three (3) years thereafter, Assignee shall keep
complete and accurate records of its and its Sublicensees’ Sales and Net
Sales of each Assignee Product and each Assignee Process under this
Assignment Agreement in sufficient detail to enable the royalties payable
to Assignor hereunder accurately to be determined. Assignee shall permit
Assignor or its representatives, at Assignor’s expense, to periodically
examine its books, ledgers, and records during regular business hours
solely for the purpose of and to the extent necessary to verify any report
required under this Assignment Agreement. In the event that the amounts
due to Assignor are determined to have been underpaid, Assignee shall
immediately pay the Assignor the difference, together with interest
thereon at a per annum rate equal to the prime rate of interest, as
published by the Wall Street Journal, plus three percentage points and if
the amount underpaid is greater than two percent (2%) of the total
royalty, Assignee shall reimburse Assignor for all costs of such
examination.
	 
	e.	 	Within thirty (30) days after each March 31, June 30, September 30, and
December 31, Assignee shall deliver to Assignor a true and accurate
report, giving such particulars of the business conducted by Assignee and
its Sublicensee(s), if any exist, during the preceding three (3) calendar
months under this Assignment Agreement as are pertinent to an account for
payments hereunder. Such report shall include at least: (a) the total
Sales of Assignee Product and Assignee Process by Assignee and by
Sublicensees; (b) the total Net Sales; (c) the calculation of royalties
thereon; and (d) the total royalties so computed and due Assignor.
Assignee will report royalties to the University in categories (specified
by the University) based on the University intellectual property for which
the royalties are attributed. Simultaneously with the delivery of each
such report, Assignee shall pay to Assignor the amount, if any, due for
the period of such report. If no payments are due, it shall be so
reported. Minimum royalties, however, will be due and payable with the
September 30 report to the extent not covered by other payments hereunder
during the preceding year. It is understood and agreed that if multiple
patents of the Patent Rights cover a single Assignee Product or Assignee
Process, only a single royalty shall be paid.
	 
	f.	 	All amounts payable hereunder by Assignee shall be payable in United
States funds without deductions for taxes, assessments, fees, wire
transfer charges, or charges of any kind and shall be payable either by
checks made payable to The University of Texas Medical Branch and mailed
to The University of Texas Medical Branch at Galveston, Research
Development Services, P.O. Box 4786-750, Houston, TX 77210-4786, or
pursuant to wire transfer information or as otherwise designated by
Assignor within thirty (30) days written notice to Assignee.
	 
	g.	 	Noncash payments received by Assignee, which are subject to royalty
payments under this Assignment Agreement, shall be valued at the fair
market value (“FMV”) thereof. FMV shall be determined as follows:
	 
	(i)	 	By mutual agreement between the parties if possible;
	 
	(ii)	 	If the parties cannot reach a mutual agreement on FMV, then the parties
shall agree on an impartial third party mediator having at least ten (10)
years of accounting experience to assist the parties in determining FMV,
and the parties shall share equally in the fees and costs of any such
mediator; and

****Text has been omitted pursuant to a confidentiality request.
Omitted text has been filed with the Securities and Exchange Commission.

 

 

	(iii)	 	In the event the parties fail to reach an agreement on FMV pursuant to
mediation, then either party may submit the determination of FMV to
binding arbitration by a panel of three (3) arbitrators each having at
least ten (10) years of accounting experience and providing each party an
opportunity to present evidence of FMV to the arbitration panel. Unless
otherwise agreed by the parties, each of the University and Assignee shall
select one (1) arbitrator for the panel and the third arbitrator shall be
selected by the two other arbitrators designated by the Assignor and
Assignee. The decision of the arbitrators in determining FMV shall be
final and binding on Assignor and Assignee.

6. Term

     The term of this Assignment Agreement, unless terminated in accordance
with this Assignment Agreement (the “Term”), shall extend until the last patent
included in the Patent Rights has expired or has been found to be invalid or
unenforceable by a court of competent jurisdiction from which no appeal is
available. Assignee acknowledges and agrees that in no event, shall Assignee
take any action or omit to take any action that causes any of the Patent Rights
to lapse or fees not be paid to avoid royalties hereunder or without providing
Assignor the opportunity to assume Assignee’s rights therein, including all
right, title and interest in any such Patent Rights thereafter.

7. Notice.

     Any notice required by this License Agreement shall be given by personal
delivery or prepaid, first class, certified mail, return receipt requested,
addressed in the case of Assignor to:

	 	 	 
	

	 	Board of Regents

The University of Texas System

201 West 7th Street

Austin, Texas 78701

ATTENTION: Office of General Counsel

FAX: (512) 499-4523

PHONE: (512) 499-4462
	 
	 	 
	with copies to:

	 	University of Texas Medical Branch
	 
	 	 
	

	 	301 University Blvd., Route 0663

Galveston, Texas 77555-0663

ATTENTION: Director, Technology

Development Center

FAX: (409) 747-1441

PHONE: (409) 747-0551

	 
	 	 
	or in the case of Assignee (before
assignment of this Assignment
Agreement to OLGC) to:

	 	Chrysalis BioTechnology, Inc.

2200 Market, Suite 600

Galveston, Texas 77550

ATTENTION: Director or President

FAX: (409) 750-9253

 ****Text has been omitted pursuant to a confidentiality request.
Omitted text has been filed with the Securities and Exchange Commission.

 

 

	 	 	 
	

	 	PHONE: (409) 750-9251
	 
	 	 
	or, in the case of Assignee (after
assignment of this Assignment
Agreement to OLGC) to:

	 	OrthoLogic Corp.

1275 West Washington Street

Tempe, AZ 85281-1210

ATTENTION: President and CEO

FAX: 602-286-2808

PHONE: 602-286-5500
	 
	 	 
	with a copy to:

	 	Quarles & Brady LLP

One Renaissance Square

Two North Central Avenue

Phoenix, AZ 85004

ATTENTION: Steven P. Emerick

FAX: 602-417-2980

PHONE: 602-230-5517

or such other addresses as may be given from time to time under the terms of
this notice provision. Notice shall be deemed given upon actual receipt.

8. Texas Law.

     Assignor and Assignee agree that this Assignment Agreement shall be
construed in accordance with the laws of the State of Texas and shall be
binding upon the parties, and, if any, their successors, assignees, or
transferees.

****Text has been omitted pursuant to a confidentiality request.
Omitted text has been filed with the Securities and Exchange Commission.

 

 

     IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Assignment Agreement in duplicate on the dates
indicated below.

	 	 	 	 	 	 	 
	THE UNIVERSITY OF TEXAS MEDICAL BRANCH,

for itself and on behalf of	 	 	 	 
	 
	 	 	 	 	 	 
	THE BOARD OF REGENTS OF THE

UNIVERSITY OF TEXAS SYSTEM	 	ORTHOLOGIC CORP.
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	

	 	

	 	 	 	

	Name:

	 	 	 	Name:	 	 
	

	 	

	 	 	 	

	Title:

	 	 	 	Title:	 	 
	

	 	

	 	 	 	

	Date:

	 	 	 	Date:	 	 

****Text has been omitted pursuant to a confidentiality request.
Omitted text has been filed with the Securities and Exchange Commission.

 

 

APPENDIX A

Patent License Agreement

[Filed herewith]

 

 

APPENDIX B

ASSIGNMENT

     WHEREAS, The Board of Regents of the University of Texas System, an agency
of the State of Texas (“Assignor”) may have certain ownership rights to and
interests in the following (collectively, the “Patent Rights”):

	1.	 	Patents and Patent Applications: All of the patent and patent
applications attached hereto as Appendix B1 and the inventions claimed
therein;
	 
	2.	 	All substitutions for and divisions, continuations,
continuations-in-part, renewals, reissues, extensions, and the like of the
Patents and Patent Applications and like grant, including, without
limitation, those obtained or permissible under past, present and future
laws and statutes;
	 
	3.	 	All rights of action on account of past, present, and future unauthorized
use of the Patent Rights and for infringement of the patents and patent
applications, and like protection;
	 
	4.	 	The right of Assignee (as hereinafter defined) to file and have patents
issued or granted in its name applications for patents and like protection
for the Patent Rights in any country or countries; and
	 
	5.	 	All international rights of priority associated with the Patent Rights,
patents, patent applications, and like protection.

     WHEREAS, Orthologic Corp., a Delaware corporation (“Assignee”), desires to
acquire all of the rights to and interests of Assignor in the Patent Rights;

 

 

     NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor does hereby sell,
assign, transfer, and set over unto Assignee all of its rights, titles and
interests in, to, and under the Patent Rights and the inventions claimed
therein, together with all claims for damages by reason of past infringement of
such Patent Rights by third parties, with the right to sue for and collect the
same. The assignment made hereby is made without any warranty whatsoever,
including but not limited to warranties of ownership or title.

	 	 	 	 	 
	By:
	 	 	 	 
	

	 	
	 	 
	Title
	 	 	 	 
	

	 	
	 	 
	Date:
	 	 	 	 
	

	 	
	 	 
	

	 	 
	 	 
	STATE OF TEXAS

	 	§
	

	 	 
	 	 
	

	 	 	 	§
	

	 	 
	 	 
	COUNTY OF

	 	§
	

	 	

	 	 

     SUBSCRIBED to before me by            ,    
     (Title),          (Board), known by me to be the same, on this the
           day of             , 2004.

	 	 	 
	 

	 	

	

	 	Notary Public in and for
	 

	 	 
	

	 	THE STATE OF TEXAS
	 

	 	 
	

	 	My Commission Expires:    
	

	 	

 

 

Appendix B1

[Filed as Exhibit 2 to Patent License Agreement]

 

 

APPENDIX C

     Form of Security Agreement (Patents)

 

 

SECURITY AGREEMENT

(Patents)

     This Security Agreement dated as of [      ] (this “Agreement”), is
made by [ASSIGNEE], a [STATE] corporation (the “Debtor”), in favor of the Board
of Regents of the University of Texas System, an agency of the State of Texas
(the “Secured Party”) through its component institution, The University of
Texas Medical Branch at Galveston (the “University”).

INTRODUCTION

     Reference is made to that certain Patent Assignment Agreement dated as of
[       ] (as amended, restated, modified, or supplemented from
time to time, the “Patent Assignment Agreement”), between the Secured Party and
the Debtor. The Patent Assignment Agreement, among other things, contemplates
a possibility of the grant of a security interest in Assignee’s interest
therein upon the occurrence of certain events.

     NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Debtor agrees with the Secured Party as follows:

Section 1. DEFINITIONS

     1.1 Terms defined above and elsewhere in this Agreement shall have their
specified meanings. Capitalized terms used herein but not defined herein shall
have the meanings specified in the Patent Assignment Agreement. Capitalized
terms that are neither defined herein nor in the Patent Assignment Agreement
shall have the meanings specified in Article 9 of the UCC.

     1.2 The following terms shall have the following meanings:

     “Carney” means Darrel H. Carney, Ph.D.

     “Collateral” means any and all of the Debtor’s present and future rights
in and to the Patent Rights assigned to Debtor under the Patent Assignment
Agreement and the inventions claimed therein, and all proceeds thereof.

     “Event of Default” means a default of the Debtor in its payment
obligations under the Patent Assignment Agreement.

     “Patent License Documents” means the Patent Assignment Agreement, and any
other documents made or delivered from time to time in connection therewith,
but shall not include that certain Patent License Agreement dated as of
        , 2004 between the Secured Party and the Debtor.

 

 

     “Secured Obligations” means (a) all principal, interest, fees,
reimbursements, indemnifications, and other amounts now or hereafter owed by
the Debtor to the Secured Party under this Agreement, the Patent Assignment
Agreement, and the other Patent Assignment Documents; and (b) any increases,
extensions, and rearrangements of the foregoing obligations under any
amendments, supplements, and other modifications of the agreements creating the
foregoing obligations.

     “UCC” means the Uniform Commercial Code as in effect on the date hereof in
the State of Texas.

Section 2. COLLATERAL; GRANT

     2.1 Grant of Security Interest. The Debtor hereby grants to the Secured
Party a security interest in all of the Debtor’s present and future right,
title, and interest in and to the Collateral to secure the payment and
performance of the Secured Obligations. To the extent that the Collateral is
not subject to the UCC, the Debtor collaterally assigns all of the Debtor’s
right, title, and interest in and to such Collateral to the Secured Party to
secure the payment and performance of the Secured Obligations to the full
extent that such a collateral assignment is possible under the relevant law.

     2.2 Debtors Remain Liable. Anything herein to the contrary
notwithstanding: (a) the Debtor shall remain liable under any contracts and
agreements included in the Collateral of the Debtor to the extent set forth
therein to perform the Debtor’s obligations thereunder to the same extent as if
this Agreement had not been executed; (b) the exercise by the Secured Party of
any rights hereunder shall not release the Debtor from any obligations under
any contracts and agreements included in the Collateral of the Debtor; and (c)
the Secured Party shall not have any obligation under any contracts and
agreements included in the Collateral of the Debtor by reason of this
Agreement, nor shall the Secured Party be obligated to perform or fulfill any
of the obligations of the Debtor thereunder, including any obligation to make
any inquiry as to the nature or sufficiency of any payment that the Debtor may
be entitled to receive thereunder, to present or file any claim, or to take any
action to collect or enforce any claim for payment thereunder.

     2.3 Financing Statements. The Debtor represents and warrants to and
agrees with the Secured Party as follows:

          (a) As of the date of this Agreement, the true and correct name of the
Debtor as listed on the Debtor’s certificate of incorporation is the name
specified for the Debtor on the signature page of this Agreement. The Debtor
has had no prior names other than [     ]. The Debtor has not used
and does not use any trade names other than
[     ]. As of the date
of this Agreement, the Debtor is organized under the laws of the State of
[     ]. Without advance written notice to the Secured Party and
reasonable opportunity for the Secured Party to take action to protect the
Secured Party’s interests hereunder, the Debtor shall not change its name,
reincorporate or otherwise reorganize, or change its jurisdiction of
organization.

 

 

          (b) The Debtor authorizes the Secured Party to file one or more financing
statements, or other documents describing any or all of the Collateral in any
filing or recording office.

Section 3. REMEDIES

     3.1 General Remedies. During the existence of an Event of Default, the
Secured Party may, at the Secured Party’s option, exercise one or more of the
following remedies:

          (a) To the extent permitted by law, the Secured Party may exercise all the
rights and remedies of a secured party under the UCC.

          (b) The Secured Party may prosecute actions in equity or at law for the
specific performance of any covenant or agreement herein contained or in aid of
the execution of any power herein granted or for the enforcement of any other
appropriate legal or equitable remedy.

          (c) The Secured Party may instruct any obligors owing payments to the
Debtor with respect to the Collateral, including royalty payments, to make all
such payments directly to the Secured Party.

          (d) The Secured Party may foreclose on any Collateral in any manner
permitted by the courts of or in the State of Texas or the state in which any
Collateral is located. If the Secured Party should institute a suit for the
collection of the Secured Obligations and for foreclosure under this Agreement,
the Secured Party may at any time before the entry of a final judgment dismiss
the same, and take any other action permitted by this Agreement.

          (e) To the extent permitted by law, the Secured Party may exercise all the
foreclosure rights and remedies of a secured party under the UCC. In
connection therewith, the Secured Party may sell any Collateral at public or
private sale, at the office of the Secured Party or elsewhere, for cash or
credit and upon such other terms as the Secured Party deems commercially
reasonable. The Secured Party may sell any Collateral at one or more sales,
and the security interest granted hereunder shall remain in effect as to the
unsold portion of the Collateral. The Secured Party shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given.
The Secured Party may adjourn any sale by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was adjourned. In the event that any sale hereunder is
not completed or is defective in the opinion of the Secured Party, the Secured
Party shall have the right to cause subsequent sales to be made hereunder. Any
statements of fact or other recitals made in any bill of sale, assignment, or
other document representing any sale hereunder, including statements relating
to the occurrence of an Event of Default, acceleration of the Secured
Obligations, notice of the sale, the time, place, and terms of the sale, and
other actions taken by the Secured Party in relation to the sale may be
conclusively relied upon by the purchaser at any sale hereunder. The Secured
Party may delegate to any agent the performance of any acts in connection with
any sale hereunder, including the sending of notices and the conduct of the
sale.

 

 

          (f) All costs and expenses incurred by the Secured Party in enforcement or
preservation of its rights under this Agreement, including attorneys’ fees and
out-of-pocket expenses, shall be reimbursed by the Debtor to the Secured Party
on demand.

     3.2 Application of Proceeds.

          (a) Unless otherwise specified herein, any cash proceeds received by the
Secured Party from the sale of, collection of, or other realization upon any
part of the Collateral or any other amounts received by the Secured Party
hereunder may be, at the reasonable discretion of the Secured Party (i) held by
the Secured Party as cash collateral for the Secured Obligations or (ii)
applied to the Secured Obligations.

          (b) Amounts applied to the Secured Obligations shall be applied in the
following order:

          First, to the payment of the costs and expenses of exercising the
Secured Party’s rights hereunder, whether expressly provided for herein
or otherwise; and

          Second, to the payment of the Secured Obligations in the order set
forth by the Secured Party.

Any surplus cash collateral or cash proceeds held by the Secured Party after
payment in full of the Secured Obligations and the termination of any
commitments of the Secured Party to any Debtor shall be paid over to the Debtor
or to whomever may be lawfully entitled to receive such surplus.

     3.3 Remedies Cumulative. The Secured Party’s remedies under this
Agreement and the Patent License Documents shall be cumulative, and no delay in
enforcing this Agreement and the Patent License Documents shall act as a waiver
of the Secured Party’s rights hereunder or thereunder.

Section 4. GENERAL

     4.1 Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE UNITED STATES OF AMERICA AND THE STATE OF
TEXAS.

     4.2 Notice. All notices and other communications from the Secured Party
to the Debtor provide for in this Agreement shall be delivered in the manner
and to the addresses set forth in the Patent Assignment Agreement.

     4.3 General. If any provision in this Agreement is held to be
unenforceable, such provision shall be severed and the remaining provisions
shall remain in full force and effect. All representations, warranties, and
covenants of the Debtor in this Agreement shall survive the execution of this
Agreement and the other Patent License Documents. If a due date for an amount
payable is not specified in this Agreement, the due date shall be the date on
which the Secured Party demands payment therefor. The provisions of this
Agreement may be waived or

 

 

amended only in a writing signed by the party against whom enforcement is
sought. This Agreement shall bind and inure to the benefit of the Debtor and
the Secured Party and their respective successors and assigns. The Debtor may
not assign its rights or delegate its duties under this Agreement; provided,
that Debtor may assign its rights and delegate its duties to the assignee of
Debtor’s rights under the Patent Assignment Agreement in connection with any
assignment permitted thereunder, so long as such assignee assumes and agrees to
perform all of Debtor’s obligations hereunder. This Agreement may be executed
in multiple counterparts each of which shall constitute one and the same
agreement.

[SIGNATURE PAGE FOLLOWS]

 

 

     THIS WRITTEN AGREEMENT AND THE OTHER PATENT LICENSE DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

     EXECUTED as of the date first above written.

	 	 	 	 	 
	 	 	[ASSIGNEE]
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	THE BOARD OF REGENTS OF THE 
 UNIVERSITY OF TEXAS SYSTEM
	 
	 	 	 	 
	

	 	BY:
	 	THE UNIVERSITY OF TEXAS MEDICAL 
 BRANCH
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

 

 

Exhibit 5

Form of Security Agreement

 

 

SECURITY AGREEMENT

(License)

     This Security Agreement dated as of [        ] (this “Agreement”), is
made by [LICENSEE], a [STATE] corporation (the “Debtor”), in favor of the Board
of Regents of the University of Texas System, an agency of the State of Texas
(the “Secured Party”) through its component institution, The University of
Texas Medical Branch at Galveston (the “University”).

INTRODUCTION

     Reference is made to that certain Patent License Agreement dated as of
[         ] (as amended, restated, modified, or supplemented from
time to time, the “Patent License Agreement”), between the Secured Party and
the Debtor. The Patent License Agreement, among other things, contemplates a
possibility of the grant of a security interest in Licensee’s interest therein
upon the occurrence of certain events.

     NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Debtor agrees with the Secured Party as follows:

Section 1. DEFINITIONS

     1.1 Terms defined above and elsewhere in this Agreement shall have their
specified meanings. Capitalized terms used herein but not defined herein shall
have the meanings specified by the Patent License Agreement. Capitalized terms
that are neither defined herein nor in the Patent License Agreement shall have
the meanings specified in Article 9 of the UCC.

     1.2 The following terms shall have the following meanings:

     “Collateral” means any and all of the Debtor’s present and future rights
in and to the Patent License Agreement and all proceeds thereof:

     “Event of Default” means a default of the Debtor in its payment
obligations under the Patent License Agreement.

     “Patent License Documents” means the Patent License Agreement, and any
other documents made or delivered from time to time in connection therewith,
but shall not include that certain Patent Assignment Agreement dated as of
         , 2004, between Debtor and Secured Party.

 

 

     “Secured Obligations” means (a) all principal, interest, fees,
reimbursements, indemnifications, and other amounts now or hereafter owed by
the Debtor to the Secured Party under this Agreement, the Patent License
Agreement, and the other Patent License Documents; and (b) any increases,
extensions, and rearrangements of the foregoing obligations under any
amendments, supplements, and other modifications of the agreements creating the
foregoing obligations.

     “UCC” means the Uniform Commercial Code as in effect on the date hereof in
the State of Texas.

Section 2. COLLATERAL; GRANT

     2.1 Grant of Security Interest. The Debtor hereby grants to the Secured
Party a security interest in all of the Debtor’s present and future right,
title, and interest in and to the Collateral to secure the payment and
performance of the Secured Obligations. To the extent that the Collateral is
not subject to the UCC, the Debtor collaterally assigns all of the Debtor’s
right, title, and interest in and to such Collateral to the Secured Party to
secure the payment and performance of the Secured Obligations to the full
extent that such a collateral assignment is possible under the relevant law.

     2.2 Debtors Remain Liable. Anything herein to the contrary
notwithstanding: (a) the Debtor shall remain liable under any contracts and
agreements included in the Collateral of the Debtor to the extent set forth
therein to perform the Debtor’s obligations thereunder to the same extent as if
this Agreement had not been executed; (b) the exercise by the Secured Party of
any rights hereunder shall not release the Debtor from any obligations under
any contracts and agreements included in the Collateral of the Debtor; and (c)
the Secured Party shall not have any obligation under any contracts and
agreements included in the Collateral of the Debtor by reason of this
Agreement, nor shall the Secured Party be obligated to perform or fulfill any
of the obligations of the Debtor thereunder, including any obligation to make
any inquiry as to the nature or sufficiency of any payment that the Debtor may
be entitled to receive thereunder, to present or file any claim, or to take any
action to collect or enforce any claim for payment thereunder.

     2.3 Financing Statements. The Debtor represents and warrants to and
agrees with the Secured Party as follows:

          (a) As of the date of this Agreement, the true and correct name of the
Debtor as listed on the Debtor’s certificate of incorporation is the name
specified for the Debtor on the signature page of this Agreement. The Debtor
has had no prior names other than [   ]. The Debtor has not used
and does not use any trade names other than [   ]. As of the date
of this Agreement, the Debtor is organized under the laws of the State of
[   ]. Without advance written notice to the Secured Party and
reasonable opportunity for the Secured Party to take action to protect the
Secured Party’s interests hereunder, the Debtor shall not change its name,
reincorporate or otherwise reorganize, or change its jurisdiction of
organization.

 

 

          (b) The Debtor authorizes the Secured Party to file one or more financing
statements, or other documents describing any or all of the Collateral in any
filing or recording office.

Section 3. REMEDIES

     3.1 General Remedies. During the existence of an Event of Default, the
Secured Party may, at the Secured Party’s option, exercise one or more of the
following remedies:

          (a) To the extent permitted by law, the Secured Party may exercise all the
rights and remedies of a secured party under the UCC.

          (b) The Secured Party may prosecute actions in equity or at law for the
specific performance of any covenant or agreement herein contained or in aid of
the execution of any power herein granted or for the enforcement of any other
appropriate legal or equitable remedy.

          (c) The Secured Party may instruct any obligors owing payments to the
Debtor with respect to the Collateral, including royalty payments, to make all
such payments directly to the Secured Party.

          (d) The Secured Party may foreclose on any Collateral in any manner
permitted by the courts of or in the State of Texas or the state in which any
Collateral is located. If the Secured Party should institute a suit for the
collection of the Secured Obligations and for foreclosure under this Agreement,
the Secured Party may at any time before the entry of a final judgment dismiss
the same, and take any other action permitted by this Agreement.

          (e) To the extent permitted by law, the Secured Party may exercise all the
foreclosure rights and remedies of a secured party under the UCC. In
connection therewith, the Secured Party may sell any Collateral at public or
private sale, at the office of the Secured Party or elsewhere, for cash or
credit and upon such other terms as the Secured Party deems commercially
reasonable. The Secured Party may sell any Collateral at one or more sales,
and the security interest granted hereunder shall remain in effect as to the
unsold portion of the Collateral. The Secured Party shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given.
The Secured Party may adjourn any sale by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was adjourned. In the event that any sale hereunder is
not completed or is defective in the opinion of the Secured Party, the Secured
Party shall have the right to cause subsequent sales to be made hereunder. Any
statements of fact or other recitals made in any bill of sale, assignment, or
other document representing any sale hereunder, including statements relating
to the occurrence of an Event of Default, acceleration of the Secured
Obligations, notice of the sale, the time, place, and terms of the sale, and
other actions taken by the Secured Party in relation to the sale may be
conclusively relied upon by the purchaser at any sale hereunder. The Secured
Party may delegate to any agent the performance of any acts in connection with
any sale hereunder, including the sending of notices and the conduct of the
sale.

 

 

          (f) All costs and expenses incurred by the Secured Party in enforcement or
preservation of its rights under this Agreement, including attorneys’ fees and
out-of-pocket expenses, shall be reimbursed by the Debtor to the Secured Party
on demand.

     3.2 Application of Proceeds.

          (a) Unless otherwise specified herein, any cash proceeds received by the
Secured Party from the sale of, collection of, or other realization upon any
part of the Collateral or any other amounts received by the Secured Party
hereunder may be, at the reasonable discretion of the Secured Party (i) held by
the Secured Party as cash collateral for the Secured Obligations or (ii)
applied to the Secured Obligations.

          (b) Amounts applied to the Secured Obligations shall be applied in the
following order:

First, to the payment of the costs and expenses of exercising the
Secured Party’s rights hereunder, whether expressly provided for herein
or otherwise; and

Second, to the payment of the Secured Obligations in the order set
forth by the Secured Party.

Any surplus cash collateral or cash proceeds held by the Secured Party after
payment in full of the Secured Obligations and the termination of any
commitments of the Secured Party to any Debtor shall be paid over to the Debtor
or to whomever may be lawfully entitled to receive such surplus.

     3.3 Remedies Cumulative. The Secured Party’s remedies under this
Agreement and the Patent License Documents shall be cumulative, and no delay in
enforcing this Agreement and the Patent License Documents shall act as a waiver
of the Secured Party’s rights hereunder or thereunder.

Section 4. GENERAL

     4.1 Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE UNITED STATES OF AMERICA AND THE STATE OF
TEXAS.

     4.2 Notice. All notices and other communications from the Secured Party
to the Debtor provide for in this Agreement shall be delivered in the manner
and to the addresses set forth in the Patent License Agreement.

     4.3 General. If any provision in this Agreement is held to be
unenforceable, such provision shall be severed and the remaining provisions
shall remain in full force and effect. All representations, warranties, and
covenants of the Debtor in this Agreement shall survive the execution of this
Agreement and the other Patent License Documents. If a due date for an amount
payable is not specified in this Agreement, the due date shall be the date on
which the Secured Party demands payment therefor. The provisions of this
Agreement may be waived or

 

 

amended only in a writing signed by the party against whom enforcement is
sought. This Agreement shall bind and inure to the benefit of the Debtor and
the Secured Party and their respective successors and assigns. The Debtor may
not assign its rights or delegate its duties under this Agreement; provided,
that Debtor may assign its rights and delegate its duties to the assignee of
Debtor’s rights under the Patent License Agreement in connection with any
assignment permitted thereunder, so long as such assignee assumes and agrees to
perform all of Debtor’s obligations hereunder. This Agreement may be executed
in multiple counterparts each of which shall constitute one and the same
agreement.

[SIGNATURE PAGE FOLLOWS]

 

 

THIS WRITTEN AGREEMENT AND THE OTHER PATENT LICENSE DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

     EXECUTED as of the date first above written.

	 	 	 	 	 
	 	 	[LICENSEE]
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	THE BOARD OF REGENTS OF THE 
UNIVERSITY OF TEXAS SYSTEM
	 
	 	 	 	 
	

	 	BY:
	 	THE UNIVERSITY OF TEXAS MEDICAL 
BRANCH
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

 

 

Exhibit 6

Approved Statements Regarding Board, System and University

     1. All factual descriptions of this Amended and Restated Patent License
Agreement and any future amendments, waivers, modifications and other changes
hereto and supplements hereof.

     2. All factual statements regarding action taken or to be taken by
Licensee, Board or University under, pursuant to, or in connection with this
Amended and Restated Patent License Agreement.

     3. All factual statements regarding the ownership of or other interest in
the Patent Rights, and Dr. Carney’s association with the University.

     4. Any other factual statements with the prior written consent of
University, which consent shall not unreasonably be withheld.exv10w2

 

Exhibit 10.2

CONSULTING AGREEMENT

     This
Consulting Agreement (the “Agreement”) dated as of
                ,
2004, is by and between OrthoLogic Corp., a Delaware corporation (the
“Company”), and Darrell Carney, Ph.D. (“Consultant”).

RECITAL:

     The Company desires to engage Consultant, and Consultant desires to accept
such engagement, on the terms and conditions set forth in this Agreement.

AGREEMENT:

     In consideration of the conditions and covenants contained herein, the
parties agree as follows:

     1. Engagement. The Company hereby engages Consultant and Consultant
hereby accepts such engagement with the Company, under the terms and conditions
set forth in this Agreement (the “Engagement”).

     2. Duties.

          (a) During the Engagement, Consultant shall perform such consulting
services for the Company as the Company may reasonably request Consultant to
perform. Consultant shall initially serve as General Manager of the CBI
Division of the Company (“GM”). Consultant shall operate and manage the
business operations of the CBI Division subject to the general policies of the
Company and the supervision of the Vice President and Chief Technology Officer.
Consultant shall devote time as required for the performance of services for
the Company hereunder. A more specific list of Consultant’s duties is set
forth in Exhibit A.

          (b) The Company recognizes that Consultant currently serves as professor
in the Department of Human Biological Chemistry and Genetics at the University
of Texas Medical Branch in Galveston (“UTMB”), and that unless and until
Consultant shall no longer serve in such position, Consultant will determine
the portion of his business time to be devoted to UTMB and the portion of his
business time to be devoted to the Company, provided, that Consultant shall
devote to the affairs of the Company such time as is necessary to carry out his
duties hereunder. Subject to his duties to UTMB, Consultant shall devote all
of his business time, attention, and energies to the business and affairs of
the Company and use his best efforts to advance the interests of the Company.

          (c) During the Initial Term, the Consultant shall serve as the Chairman of
the Company’s Scientific Advisory Board.

     3. Term. Unless terminated for cause as provided herein, the Engagement
shall commence on
                , 2004 and continue through the second
anniversary of the

1

 

commencement date (the “Initial Term”). Thereafter the
Engagement will be terminable by either party with or without cause pursuant to
Section 5 of this Agreement.

     4. Fees and Expenses.

          (a) The Company shall pay to Consultant a fee of $200,000 per year,
payable in equal monthly installments or, at the discretion of the Company, on
the Company’s regular employee payroll schedule.

          (b) The Company shall pay or reimburse Consultant for all reasonable
travel and other expenses incurred or paid by Consultant, with the prior
approval of the Company, in connection with the performance of services under
this Agreement. Payment shall be made within 30 days following the
presentation of expense statements or vouchers and supporting information
consistent with the Company’s reimbursement policies.

          (c) The Consultant shall be eligible for performance bonuses and stock
option programs created for the Consultant by the Company’s Board of Directors
on an annual basis in its sole discretion.

     5. Termination. Consultant’s Engagement by the Company shall terminate as
set forth below. No termination shall affect any rights or obligations
accruing prior thereto or any continuing obligations of the parties hereunder.

          (a) The Engagement shall be terminable by the Company for cause during the
Initial Term of the Engagement. After the Initial Term, the Engagement will be
terminable by either party with or without cause 45 days after notice of
termination is given by either party. If the Company terminates the Engagement
during the Initial Term for cause, or after the Initial Term with or without
cause, the Company shall have no further obligation to pay the Consultant his
consulting fee. If the Company terminates the Engagement during the Initial
Term without cause and provided the Consultant first executes a Severance
Agreement in the form then used by the Company, the Company shall continue to
pay the Consultant his consulting fee for the time period that is the greater
of (i) the remaining period on the Initial Term, or (ii) 12 months, in either
case payable monthly, or, at the discretion of the Company, on the Company’s
regular employee payroll schedule.

          (b) Either party may terminate the Engagement for cause by giving the
other party 10 days notice, which shall specify the cause for the termination.
Cause shall include material neglect of duties, violations of ethical policies
(including insider trading policies) established by the Company, and commission
of acts of dishonesty that negatively affect the Consultant’s standing in the
academic community or challenge Consultant’s research integrity. However,
during such 10-day period, if the reason for termination is curable and the
party receiving notice cures the specified cause, the Engagement shall not
terminate.

          (c) Additionally, the Engagement shall terminate immediately upon the
death or disability of the Consultant. For this purpose, the Consultant shall
be deemed to be disabled if

2

 

he is unable substantially to perform the duties
required by the Engagement for a continuous period of 30 days or for any 30
days within any 90-day period.

          (d) If, upon a merger in which the Company is not the surviving entity or
upon the sale of substantially all the Company’s assets, the entity who steps
into the shoes of the Company under this Agreement requires the Consultant to
relocate over 30 miles outside of Galveston, Texas, such requirement will be deemed under this Agreement as
a termination without cause.

     6. Loyalty During Engagement Term. Except as it relates to his employment
as a professor at the University of Texas, the Consultant will not engage in
any way whatsoever, directly or indirectly, in any business that is in the
business of developing growth factors, proteins, peptides and small molecules
intended for tissue repair or regeneration, nor solicit, or in any other manner
work for or assist any such business. During the term of Consultant’s
engagement by the Company, Consultant will undertake no planning for or
organization of any such business activity, and Consultant will not combine or
conspire with any employee of the Company or any other person or entity for the
purpose of organizing any such competitive business activity.

     7. Injunctive Relief. It is agreed that the restrictions contained in
Section 6 of this Agreement are reasonable, but it is recognized that damages
in the event of the breach of any of those restrictions will be difficult or
impossible to ascertain; and, therefore, Consultant agrees that, in addition to
and without limiting any other right or remedy the Company may have, the
Company shall have the right to an injunction against Consultant issued by a
court of competent jurisdiction enjoining any such breach without showing or
proving any actual damage to the Company.

     8. Part of Consideration. Consultant also agrees, acknowledges,
covenants, represents and warrants that he is fully and completely aware that,
and further understands that, the restrictive covenants contained in Section 6
of this Agreement and in the Intellectual Property, Confidentiality and
Non-Competition Agreement dated
                , 2004 between the Company and the Consultant
(the “IP Agreement”) which is incorporated herein are an essential part of the
consideration for the Company entering into this Agreement and that the Company
is entering into this Agreement in full reliance on such acknowledgments,
covenants, representations and warranties.

     9. Nondelegability of Consultant’s Rights and Company Assignment Rights.
The obligations, rights and benefits of Consultant hereunder are personal and
may not be delegated, assigned or transferred in any manner whatsoever, nor are
such obligations, rights or benefits subject to involuntary alienation,
assignment or transfer. Upon mutual agreement of the parties, the Company upon
reasonable notice to Consultant may transfer Consultant to an affiliate of the
Company, which affiliate shall assume the obligations of the Company under this
Agreement. This Agreement shall be assigned automatically to any entity
merging with or acquiring the Company.

3

 

     10. Amendment. Except for any documents regarding the grant of stock
options, this Agreement and the IP Agreement contain, and their terms
constitute, the entire agreement of the parties and supersede any prior
agreements, and they may be amended only by a written document signed by both
parties to the respective agreements.

     11. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Arizona,
exclusive of the conflict of law provisions thereof, and the parties agree that any litigation
pertaining to this Agreement shall be in courts located in Maricopa County,
Arizona.

     12. Attorneys’ Fees. If any party finds it necessary to employ legal
counsel or to bring an action at law or other proceeding against the other
party to enforce any of the terms hereof, the party prevailing in any such
action or other proceeding shall be paid by the other party its reasonable
attorneys’ fees as well as court costs all as determined by the court and not a
jury.

     13. Notices. All notices and other communications required or permitted
to be given under this Agreement shall be in writing and shall be considered
given and delivered when personally delivered to the party to whom such notice
or communication is addressed, or one business day after posting with an
overnight courier, or when confirmation is received if sent by facsimile, or
five business days after deposit in the United States mail, postage prepaid,
with return receipt requested, properly addressed to a party at the address set
forth below, or at such other address as such party shall have specified by
notice given in accordance with this Section:

	 	 	 
	If to the Company, to:

	 	OrthoLogic Corp.

1275 W. Washington St.

Tempe, AZ 85281

James T. Ryaby, Ph.D.

Attn: Senior Vice President of Research

And Clinical Affairs

(602) 286-5326

	 
	 	 
	If to Consultant, to:

	 	Darrell Carney, Ph.D.

     14. Entire Agreement. This Agreement and the IP Agreement constitute the
final written expressions of the agreement between the parties with regard to
Consultant’s engagement and are complete and exclusive statements of those
terms. They supersede all understandings and negotiations concerning the
matters specified herein and therein. Any representations, promises,
warranties or statements made by either party that differ in any way from the
terms of this written Agreement or the IP Agreement shall be given no force or
effect. The parties specifically represent, each to the other, that there are
no additional or supplemental agreements between them related in any way to the
matters herein contained unless specifically included or

4

 

referred to herein. No addition to or modification of any provision of this Agreement and the IP
Agreement shall be binding upon any party unless made in writing and signed by
all parties.

     15. Waiver. The waiver by either party of the breach of any covenant or
provision in this Agreement shall not operate or be construed as a waiver of
any subsequent breach by either party.

     16. Invalidity of any Provision. The provisions of this Agreement are
severable, it being the intention of the parties hereto that should any
provisions hereof be invalid or unenforceable, such invalidity or
unenforceability of any provision shall not affect the remaining provisions
hereof, but the same shall remain in full force and effect as if such invalid
or unenforceable provisions were omitted.

     17. Attachments. The IP Agreement and all attachments or exhibits to this
Agreement are incorporated herein by this reference as though fully set forth
herein. In the event of any conflict, contradiction or ambiguity between the
terms and conditions in this Agreement and any of its attachments, the terms of
this Agreement shall prevail.

     18. Interpretation of Agreement. When a reference is made in this
Agreement to an article or section, such reference shall be to an article or
section of this Agreement unless otherwise indicated. The headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. Whenever the words
“include,” “includes,” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation.”

     19. Headings. Headings in this Agreement are for informational purposes
only and shall not be used to construe the intent of this Agreement.

     20. Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same agreement.

     21. Binding Effect; Benefits. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
successors, executors, administrators and assigns. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the
parties hereto or their respective heirs, successors, executors, administrators
and assigns any rights, remedies, obligations or liabilities under or by reason
of this Agreement.

     22. Indemnification. The Company will indemnify Consultant for all costs,
expenses, losses and damages arising out of the Company’s promotion,
manufacture or use of its products (including, but not limited to Chrysalin)
provided that Consultant agrees to promptly notify the Company of any such
indemnifiable claims, and to give sole control of litigation and settlement of
such claims to the Company, and to participate in the defense thereof.
Consultant will indemnify the Company, its directors, officers and employees,
for all costs, expenses, losses and damages arising from its breach or its
affiliates’ breach of this Agreement.

5

 

     This Agreement has been executed by the parties as the date first written
above.

     IN WITNESS WHEREOF, Consultant and the Company have executed this
Agreement as of the day and year first written above.

	 	 	 
	COMPANY	 	CONSULTANT
	 
	 	 
	OrthoLogic Corp.

	 	Darrell Carney, Ph.D.
	 
	 	 
	By:
	 	 
	
 

	 	
 
	Thomas R. Trotter

Chief Executive Officer
	 	 

6

 

Exhibit A — Consultant’s Duties

     1. General management of the CBI Division of OrthoLogic, Corp.

     2. TBA

7

 

INTELLECTUAL PROPERTY

AND CONFIDENTIALITY AGREEMENT

     This
Agreement made as of the
         day of
                , 2004, between
OrthoLogic Corp., a Delaware corporation with its principal place of business
in Arizona (the “Company”), and Darrell Carney, a consultant of the Company
(the “Contractor”).

RECITALS

     A. The Contractor is engaged by the Company, or is about to be engaged by
the Company, as a consultant (the “Engagement”) pursuant to the terms of the
Consultant Agreement dated as of    , 2004 between the Consultant and the
Company and which is incorporated by reference into this Agreement.

     B. The Contractor has been, or will be, given access by the Company to
confidential and proprietary information of the Company.

     C. The Company has retained the Contractor pursuant to the terms of the
Engagement.

     D. During the term of the Engagement, Contractor may, in the course of
providing services under the Engagement, create or develop Inventions and/or
Creations for the Company, as defined herein, that are intended to be owned
exclusively by the Company, and the parties understand that Company shall
exclusively own all such Inventions and Creations.

AGREEMENTS

     IN CONSIDERATION of the foregoing and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Contractor and
the Company agree as follows:

     1. Nondisclosure of Proprietary Information. The Company invents,
develops, manufactures and markets processes and products that involve
experimental or inventive work. The Company’s success depends upon the
protection of these processes and products by patent, by copyright, or by
secrecy. The Contractor has had, or may have, access to the Company’s
Proprietary Information, as defined in this Section 1. Access to this
Proprietary Information is given to the Contractor only if the Contractor
agrees to keep that information secret as follows:

          (a) “Proprietary Information” is all information, in whatever
form, tangible or intangible, pertaining in any manner to the
business of the Company, or any of its agents or employees, which
was produced by any employee, consultant, or independent contractor
of the Company including: (i) any and all methods, inventions,
improvements, information, data or discoveries, whether or not
patentable, that are secret, proprietary, confidential or generally
undisclosed, (including information originated or provided by the
Contractor) in any area of knowledge, including information
concerning trade secrets, processes, software, products, patents,
patent applications, inventions, formulae, apparatus, techniques,
technical data, clinical data, clinical trials, improvements,
specifications, servicing, attributes and relative attributes relating to any of the Company’s equipment, devices,
processes, or products, or research and

1

 

development thereof, including
all information relating to the Chrysalin peptide and Chrysalin
preclinical and human clinical study data, products, engineering
reports, drawings, diagrams, computer programs and data, peptide
formulation information, specifications, prototypes, models,
apparatus, techniques, know-how, marketing plans, other data,
improvements, strategies, forecasts, customer lists, technical
requirements of customers, and participating investigator lists,
unless such information is in the public domain to such an extent as
to be readily available to competitors; and (ii) the identities of the
Company’s customers and potential customers (“Customers”) including
Customers the Contractor successfully cultivates or maintains during
his Engagement using the Company’s products, name or infrastructure;
the identities of contact persons at Customers; the preferences,
likes, dislikes and technical and other requirements of Customers and
contact persons with respect to product types, pricing, sales calls,
timing, sales terms, rental terms, lease terms, service plans, and
other marketing terms and techniques; the Company’s business methods,
practices, strategies, forecasts, know-how, pricing, and marketing
plans and techniques; the identity of key accounts; the identity of
potential key accounts; and the identities of the Company’s key
employees and key business partners. Proprietary Information shall
not include information which (i) is known to Contractor on a
non-confidential basis prior to disclosure by the Company; (ii) is or
hereafter becomes known to the general public without breach or fault
on the part of Contractor; (iii) is disclosed to Contractor by a third
party without restriction on disclosure and without breach of any
nondisclosure obligation; or (iv) is independently developed by
Contractor from information not protected under this Agreement by
Contractor while Contractor has no access to related information
disclosed by the Company.

          (b) The Contractor acknowledges that the Company has exclusive
property rights to all Proprietary Information and the Contractor
hereby assigns any and all rights Contractor might otherwise possess
in any Proprietary Information to the Company. Except as required
in the performance of the duties of his Engagement with the Company,
the Contractor will not at any time during or after the term of his
Engagement, without the prior written consent of the Company,
directly or indirectly use, communicate, disclose, disseminate,
lecture upon, publish articles or otherwise put in the public
domain, any Proprietary Information or any other information of a
secret, proprietary, confidential or general undisclosed nature
relating to the Company, its products, Customers, processes or
services, including information relating to testing, research,
development, manufacturing, marketing or selling.

          (c) All documents, records, notebooks, notes, memoranda, data
bases, and similar repositories containing Proprietary Information
made or compiled by the Contractor at any time, including any and
all copies thereof, are and shall be the property of the Company,
shall be held by him in trust solely for the benefit of the Company,
and shall be delivered to the Company by him on the termination of
his Engagement or at any other time upon the request of the Company.

          (d) The Contractor agrees to certify in writing at or before
final termination of the Engagement that the Contractor no longer
has in the Contractor’s possession, custody or control of any copies
of any business documents generated at or relating to the Company
nor any Proprietary Information, whether in hard copy, on a
computer’s hard drive, on disks or in any other form or media.

2

 

          (e) All information regarding the Company’s business disclosed
to, learned by or developed by the Contractor during the course of
the Engagement shall be presumed to be Proprietary Information.

          (f) For five years after the termination of his consulting
engagement for the Company, the Consultant agrees to provide
notification, at the start of any new engagement or employment, to
all subsequent employers or contracting parties who are involved in
any way in the pharmaceuticals industry or are otherwise competitors
of the Company, of the terms and conditions of this Agreement, along
with a copy of this Agreement.

     2. Inventions.

          (a) “Inventions” shall mean discoveries, concepts and ideas,
whether patentable or not, including improvements, know-how, data,
processes, methods, formulae and techniques, as well as improvements
thereof or know-how related thereto, but only those which Consultant
makes, discovers or conceives, either solely or jointly with others,
in the course of performing his consulting services for the Company
pursuant to this Agreement, or with the use of the Company’s
facilities, materials or personnel, or arising from the Company’s
Confidential Information, including, but not limited to, Chrysalin,
its derivatives and variations, and any ancillary products to
Chrysalin’s distribution, disbursement, storage or distribution, and
thrombin peptide or TP508 Technology, as defined in the Patent
License Agreement dated
                  . All Inventions shall be
solely the property of the Company and the Contractor agrees to
perform the requirements of this Section with respect thereto
without the payment by the Company of any royalty or any
consideration other than as provided in this Agreement.

          (b) The Contractor shall maintain written notebooks in which he
shall set forth on a current basis information as to all Inventions
describing in detail the procedures employed and the results
achieved as well as information as to any studies or research
projects undertaken on the Company’s behalf, whether or not in the
Contractor’s opinion a given project has resulted in an Invention.
The written notebooks shall at all times be the property of the
Company and shall be surrendered to the Company upon termination of
his Engagement or upon request of the Company.

          (c) The Contractor shall apply, at the Company’s request and
expense, for United States and foreign letters patent either in the
Contractor’s name or otherwise as the Company shall desire.

          (d) The Contractor hereby assigns to the Company all of his
rights to Inventions, applications for United States Patent and/or
foreign letters patent and to United States and/or foreign letters
patent granted upon Inventions, including without limitation, all
renewals, reissues, extensions, continuations, divisions or
continuations-in-part thereof.

          (e) The Contractor shall acknowledge and deliver promptly to the
Company without charge to the Company but at its expense such
written instruments (including applications and assignments) and do
such other acts, such as giving testimony in support of the
Contractor’s inventorship, as may be necessary in the opinion of the
Company to obtain,

3

 

maintain, extend, reissue and enforce United
States and/or foreign letters patent relating to the Inventions and
to vest the entire right and title thereto in the Company or its
nominee.

          (f) The Contractor’s obligation to assist the Company in
obtaining and enforcing patents for Inventions in any and all
countries shall continue beyond the Engagement, but the Company
shall compensate the Contractor at a reasonable rate for time
actually spent by him at the Company’s request on such assistance.
If the Company is unable for any reason whatsoever to secure the
Contractor’s signature to any lawful and necessary document required
to apply for or execute any patent application with respect to any
Inventions, including renewals, reissues, extensions, continuations,
divisions or continuations-in-part thereof, the Contractor hereby
irrevocably designates and appoints the Company and its duly
authorized officers and agents, as his agents and attorneys-in-fact
to act for and in his behalf and instead of the Contractor, to
execute and file any application and to do all other lawful
permitted acts to further the prosecution and issuance of patents
with the same legal force and effect as if executed by the
Contractor.

          (g) As a matter of record the Contractor has identified on
Exhibit A, attached hereto, all inventions or improvements relevant
to the activity of the Company which have been made or conceived or
first reduced to practice by the Contractor alone or jointly with
others prior to his Engagement by the Company, that he desires to
remove from the operation of this Section 2; and the Contractor
covenants that such list is complete as of the date of this
Agreement. The Consultant may update the list on a periodic basis.
If there is no such list or if no Exhibit A is attached, the
Contractor represents that he has made no such inventions and
improvements at the time of signing this Agreement.

          (h) The Contractor will not assert any rights under any
inventions, discoveries, concepts or ideas, or improvements thereof,
or know-how related thereto, as having been made or acquired by him
prior to his being engaged by the Company or during the term of his
Engagement if based on or otherwise related to Proprietary
Information.

          (i) No provisions of this Section shall be deemed to limit the
restrictions applicable to the Contractor under Section 1.

     3. Creations.

          (a) “Creations” shall include, without limitation, all designs,
logos, slogans, improvements, plans, developments, marks, names,
symbols, phrases, graphics, advertising, images, art work,
processes, business methods, trade secrets, any and all
copyrightable expression, all copyrightable works, and all
patentable subject matter, in all media (whether existing now or to
be invented), that are conceived, created, made, developed, or
acquired by or for Contractor as a result of the services performed
by him during the Engagement and for the Company, whether or not
protected by statute and including all derivative works.

          (b) Creations shall be deemed “work made for hire” under the
United States Copyright laws, Title 17 of the United States Code,
and the Company will be deemed the author of the work product.

4

 

          (c) Contractor hereby assigns to Company its entire right, title,
and interest, if any, in and to any and all Creations, including
without limitation all copyright rights, patent rights, trade
secrets, trademark rights and associated goodwill, along with all
rights to derivative works and the right to apply for and obtain any
applicable registrations and all other available legal protections
for the Creations.

          (d) The Contractor shall acknowledge and deliver promptly to the
Company without charge to the Company but at its expense such
written instruments (including applications and assignments) and do
such other acts, such as giving testimony in support of the
Creations, as may be necessary in the opinion of the Company to
obtain, maintain, extend, reissue and enforce any applicable
registrations relating to the Creations and to vest the entire right
and title thereto in the Company or its nominee.

     4. Shop Rights. The Company shall also have the royalty-free right to use
in its business, and to make, use and sell products, processes and/or services
derived from any inventions, discoveries, concepts and ideas, whether or not
patentable, including processes, methods, formulas and techniques, as well as
improvements thereof or know-how related thereto, which are not within the
scope of Inventions as defined in Section 2 but which are conceived or made by
the Consultant during the period Consultant is engaged by the Company or with
the use or assistance of the Company’s facilities, materials or personnel.

     5. Non-solicitation of Customers or Employees of Company.

          (a) For a period of one year after termination of his Engagement,
the Contractor agrees that he will not solicit the business of any
company that was a Customer or strategic partner of the Company at
any time during the Consultant’s Engagement by the Company,
provided, however, if the Consultant becomes employed by or
represents a business that exclusively sells products that do not
compete with products then marketed or intended to be marketed by
the Company, such contact shall be permissible.

          (b) During the term of his Engagement and for a period of one
year after termination of his Engagement, the Contractor will not
solicit any of the Company’s employees for a competing business or otherwise induce or attempt to induce such
employees to terminate their employment with the Company.

     6. Exclusive Engagement. During the period of this Engagement by the
Company, the Consultant shall not, without the Company’s express written
consent, engage in any employment, consulting activity or business other than
for the Company or for the University of Texas. Activity as a passive investor
in or outside director for another business enterprise shall not be considered
a violation of this section for so long as such business enterprise is not
competing or conducting business with the Company and so long as such
activities do not adversely impact Consultant’s performance of job duties.

     7. Non-Compete. The parties acknowledge that the Consultant has acquired
or will acquire much knowledge and information concerning the Company’s
business and Customers as the result of the Consultant’s Engagement. The
parties further acknowledge that the scope of business in which the Company is
engaged is nationwide and very competitive, that such

5

 

business is one in which
few companies can compete successfully, and that competition by the Consultant
in that business would injure the Company severely. Accordingly, Consultant
agrees that during this Engagement and for a period of one year following the
end of the Engagement (i) if he is paid a severance under section 5 of his
Consulting Agreement; or (ii) if he is paid his Non-Compete Fee (as defined
below); Consultant will not take any of the following actions:

          (a) Engage in work activity or in conjunction with a company that
is in the business of developing growth factors, proteins, peptides
or small molecules intended for tissue repair or regeneration;

          (b) With respect to any Customer that Consultant worked with
during the Engagement, directly or indirectly, sell or attempt to
sell products for or on behalf of any business that manufactures,
assembles, distributes, offers or sells any products that compete
with products in human clinical trials, manufactured, assembled,
distributed, offered or sold by the Company;

          (c) With respect to any Customer or client with which Consultant
worked during the Engagement and to which the Company has made a
proposal or sale, or with which the Company has been having
discussions, persuade or attempt to persuade such Customer not to
transact business with the Company, or instead to transact business
with another person or organization; or

          (d) Work directly or indirectly in any position that requires the
Consultant to disclose Proprietary Information.

If the Consultant’s Engagement ends without a severance payment under section 5
of the Consulting Agreement, the Company will have 60 days following the end of
the Consultant’s Engagement to notify the Consultant of its decision to avail
itself of the option pay him a Non-Compete Fee, which is the sum equal to 50
percent of his last 12 month’s regular consulting fees, payable in accordance
with the Company’s regular payroll schedule, in exchange for Consultant’s
adherence to the non-compete restrictions in this section 7.

     8. Compliance with Law and Amendment by Court: If there is any conflict
between any provision of this Agreement and any statue, law, regulation or
judicial precedent, the latter shall prevail, but the provisions of this
Agreement thus affected shall be curtailed and limited only to the extent
necessary to bring them within the requirements of the law. If any part of
this Agreement shall be held by a court of proper jurisdiction to be
indefinite, invalid or otherwise unenforceable, the entire Agreement shall not
fail on account thereof, but: (i) the balance of the Agreement shall continue
in full force and effect unless such construction would clearly be contrary to
the intention of the parties or would result in an unconscionable injustice;
and (ii) the court shall amend the Agreement to the extent necessary to make
the Agreement valid and enforceable.

     9. Freedom From Engagement Restrictions. The Contractor represents and
warrants that the Contractor has not entered into any agreement, whether
express, implied, oral, or written, that poses an impediment to the
Contractor’s Engagement by the Company including the Contractor’s compliance
with the terms of this Agreement. In particular, the Contractor is not subject
to a preexisting non-competition agreement, and no restrictions or limitations
exist

6

 

respecting the Contractor’s ability to perform fully the Contractor’s
obligations with the Company including the Contractor’s compliance with the
terms of this Agreement.

     10. Third Party Trade Secrets. During the Contractor’s Engagement by the
Company, the Contractor agrees not to copy, refer to, or in any way use
information which is proprietary to any third party (including any previous
employer). The Contractor represents and warrants that the Contractor has not
improperly taken any documents, listings, hardware, software, discs, or any
other tangible medium that embodies proprietary information from any third
party, and that the Contractor does not intend to copy, refer to, or in any way
use information which is proprietary to any third party in performing the
Contractor’s duties for the Company.

     11. Legitimate Business Purpose. Contractor hereby acknowledges and
agrees that each and every provision of this Agreement serves a legitimate
business purpose and exists to protect the legitimate business interests of the
Company.

     12. Injunctive Relief; Legal Fees. The Contractor acknowledges that a
breach of this Agreement is likely to result in irreparable and unreasonable
harm to the Company, that damages caused by a breach would be extremely
difficult to calculate, and that injunctive relief, as well as damages, would
be appropriate. If any party finds it necessary to employ legal counsel or to
bring an action at law or other proceeding against the other party to enforce
any of the terms hereof, the party prevailing in any such action or other
proceeding shall be paid by the other party its reasonable attorneys’ fees as
well as court costs all as determined by the court and not a jury.

     13. Survival. The obligations described in Sections 1, 2, 3, 4, 5, 7 and
12 of this Agreement shall survive any termination of this Agreement.

     14. Successors and Assigns. This Agreement is personal to the Contractor
and any may not be assigned by Contractor. Any and all rights acknowledged or
granted to the Company under this Agreement may be freely assigned by the
Company.

     15. Prior Agreements; Waiver. If Contractor currently has a written
confidentiality or non-compete agreement with the Company, this Agreement will
supersede all provisions of that agreement that cover the same subject matter
as this Agreement. This Agreement constitutes the entire Agreement between the
parties pertaining to the subject matter contained in it and supersedes those
provisions of all prior and contemporaneous agreements, representations and
understandings of the parties pertaining to the same subject matter. No waiver
of any of the provisions of this Agreement shall be deemed to, or shall
constitute a waiver of, any other provisions, whether or not similar, nor shall
any waiver constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver.

     16. Governing Law. This Agreement is entered into in Arizona and shall be
governed by the laws of the State of Arizona for all purposes. The parties
hereby submit themselves to the courts of the State of Arizona, located in the
County of Maricopa, for the purpose of personal jurisdiction in any action to
enforce this Agreement.

     17. Construction. The language in all parts of this Agreement shall in all
cases be construed as a whole according to its fair meaning and not strictly
for or against either party.

7

 

The headings contained in this Agreement are for
reference purposes only and will not affect the meaning or interpretation of
this Agreement in any way. All terms used in one number or gender shall be
construed to include any other number or gender as the context may require.
The parties agree that each party has reviewed this Agreement and has had the
opportunity to have counsel review the same and that any rule of construction
to the effect that ambiguities are to be resolved against the drafting party
shall not apply in the interpretation of this Agreement. Whenever the words
“include,” “includes,” or “including” are used in the Agreement, they shall be
deemed to be followed by the words “without limitation.”

     18. Consultation. The Consultant is advised to obtain the advice of legal
counsel before signing this Agreement. By their signatures below, the
Consultant and the Company’s representative acknowledge that they have each
read the entire contents of this Agreement, that they fully understand the
terms and conditions hereof, and that each has independently had an opportunity
to review and discuss the Agreement with the advisor(s) or counsel of their
respective choosing.

OrthoLogic Corp.

Thomas R. Trotter

For the Company

Darrell Carney

General Manager of the CBI Division of OrthoLogic Corp.

Date

8

 

EXHIBIT A

Ladies and Gentlemen:

          The following is a complete list of all inventions or improvements
relevant to the subject matter of my engagement by OrthoLogic (the “Company”)
which have been made or conceived or first reduced to practice by me alone or
jointly with others prior to my engagement by the Company:

                              No inventions or improvements

 

                              See below

 

           

           

                              Additional sheets attached

           

           

	 
	

	Name

	 

	Date:

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