Document:

Exhibit 10.3

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

	
 
    

 

EXCLUSIVE LICENSE AGREEMENT

 

BETWEEN

 

ARCADIA BIOSCIENCES, INC.

 

AND

 

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

 

FOR

 

DROUGHT-RESISTANT PLANTS

 

	
 
    	
UC Case No.: 2005-095
    
	
 
    

 

 

TABLE OF CONTENTS

 

	
1.
    	
DEFINITIONS
    	
4
    
	
 
    	
 
    	
 
    
	
2.
    	
GRANT
    	
9
    
	
 
    	
 
    	
 
    
	
3.
    	
SUBLICENSES
    	
11
    
	
 
    	
 
    	
 
    
	
4.
    	
LICENSE ISSUE FEE/MAINTENANCE FEES
    	
12
    
	
 
    	
 
    	
 
    
	
5.
    	
ROYALTIES
    	
13
    
	
 
    	
 
    	
 
    
	
6.
    	
DILIGENCE
    	
14
    
	
 
    	
 
    	
 
    
	
7.
    	
PROGRESS AND ROYALTY REPORTS
    	
16
    
	
 
    	
 
    	
 
    
	
8.
    	
BOOKS AND RECORDS
    	
17
    
	
 
    	
 
    	
 
    
	
9.
    	
LIFE OF THE AGREEMENT
    	
18
    
	
 
    	
 
    	
 
    
	
10.
    	
TERMINATION BY THE REGENTS
    	
18
    
	
 
    	
 
    	
 
    
	
11.
    	
TERMINATION BY LICENSEE
    	
19
    
	
 
    	
 
    	
 
    
	
12.
    	
DISPOSITION OF LICENSED PRODUCTS UPON TERMINATION
    	
19
    
	
 
    	
 
    	
 
    
	
13.
    	
PATENT PROSECUTION AND MAINTENANCE
    	
20
    
	
 
    	
 
    	
 
    
	
14.
    	
MARKING
    	
22
    
	
 
    	
 
    	
 
    
	
15.
    	
USE OF NAMES AND TRADEMARKS
    	
22
    
	
 
    	
 
    	
 
    
	
16.
    	
LIMITED WARRANTIES
    	
22
    
	
 
    	
 
    	
 
    
	
17.
    	
PATENT INFRINGEMENT
    	
24
    
	
 
    	
 
    	
 
    
	
18.
    	
INDEMNIFICATION
    	
25
    
	
 
    	
 
    	
 
    
	
19.
    	
COMPLIANCE WITH LAWS/EXPORT CONTROLS
    	
27
    
	
 
    	
 
    	
 
    
	
20.
    	
GOVERNMENT APPROVAL OR REGISTRATION
    	
28
    
	
 
    	
 
    	
 
    
	
21.
    	
ASSIGNMENT
    	
28
    
	
 
    	
 
    	
 
    
	
22.
    	
NOTICES
    	
28
    
	
 
    	
 
    	
 
    
	
23.
    	
PAYMENTS
    	
29
    
	
 
    	
 
    	
 
    
	
24.
    	
WAIVER
    	
30
    
	
 
    	
 
    	
 
    
	
25.
    	
CONFIDENTIALITY
    	
30
    
	
 
    	
 
    	
 
    
	
26.
    	
FORCE MAJEURE
    	
32
    
	
 
    	
 
    	
 
    
	
27.
    	
SEVERABILITY
    	
32
    
	
 
    	
 
    	
 
    
	
28.
    	
APPLICABLE LAW; VENUE; ATTORNEYS’ FEES
    	
33
    
	
 
    	
 
    	
 
    
	
29.
    	
SCOPE OF AGREEMENT
    	
33
    

 

 

EXCLUSIVE LICENSE AGREEMENT FOR

DROUGHT-RESISTANT PLANTS

 

	
 
    	
U.C. Case No.: 2005-095
    

 

This EXCLUSIVE LICENSE AGREEMENT (“Agreement”) is effective July 2, 2010 (“Effective Date”), by and between (a) The Regents of the University of California (“The Regents”), a California corporation, having its statewide administrative offices at 1111 Franklin Street, 12th Floor, Oakland, California 94607-5200, acting through its Davis Campus Technology Transfer Services, at the University of California, Davis, 1850 Research Park Drive, Suite 100, Davis, CA 95618-6134, and (b) Arcadia Biosciences, Inc. (“Licensee”), an Arizona corporation having a principal place of business at 202 Cousteau Place, Suite 200, Davis, California 95618.  The Regents and Licensee will be referred to herein, on occasion, individually as a “Party” or collectively as the “Parties”.

 

RECITALS

 

WHEREAS, the invention entitled “Drought-Resistant Plants” (the “Invention”), as described in The Regents’ Case No. 2005-095, was conceived at the Davis campus of the University of California, Davis, by Dr. Eduardo Blumwald (“Eduardo Blumwald”), Dr. Amira Gepstein (“Amira Gepstein”), and Dr. Shimon Gepstein (“Shimon Gepstein”), with Eduardo Blumwald, Shimon Gepstein, and Amira Gepstein referred to herein collectively as “the Inventors”;

 

WHEREAS, at the time the Invention was conceived, Amira Gepstein and Shimon Gepstein, while on leave from the Technion Research and Development Foundation (“Technion”) of Haifa, Israel, were visiting scientists at the University of California, Davis, conducting research in the laboratory of Eduardo Blumwald;

 

WHEREAS, the Invention was conceived as a joint work of the Inventors, [...*...]

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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[...*...]

 

WHEREAS, patent applications based on the Invention, which patent applications and any patents issued thereon are included within Patent Rights (as that term is defined herein), were filed at the request of The Regents;

 

WHEREAS, the Inventors signed certain Assignment documents by which the Inventors assigned all right, title, and interest in and to the Patent Rights, and to the Invention as disclosed in the Patent Rights, to The Regents;

 

WHEREAS, The Regents and Licensee entered into a Letter Agreement (“Letter Agreement”) effective March 14, 2006 (UC Agreement Control No. 2006-30-0534), as extended by (1) the Extension Agreement effective September 11, 2006, (2) the Second Extension Agreement effective December 14, 2006, (3) the Third Extension Agreement effective March 21, 2007, and (4) the Fourth Extension Agreement effective June 26, 2007, which Letter Agreement, as so extended, terminated August 1, 2007, which granted Licensee an exclusive right to negotiate an option agreement, and under the terms of the option agreement, to negotiate an exclusive license under the Patent Rights;

 

WHEREAS, The Regents and Licensee entered into an Option Agreement effective August 1, 2007 (UC Agreement Control No. 2008-11-0080), which was subsequently modified by First Amendment (UC Control No. 2008-11-080 REVA) effective February 1, 2008, by Second Amendment (UC Control No. 2008-11-080 REVC) effective August 27, 2009, and by Third Amendment (UC Control No. 2008-11-0080 REVD) effective February 28, 2010, which Option Agreement granted Licensee an exclusive right to negotiate an exclusive license under the Patent Rights;

 

[...*...]

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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[...*...]

 

[...*...]

 

[...*...]

 

[...*...]

 

WHEREAS, Licensee is a “small entity” as defined in 37 CFR 1.27;

 

WHEREAS, The Regents and Licensee desire to have the Invention developed and commercialized so that products resulting therefrom may be available for public use and benefit; and

 

WHEREAS, Licensee desires to acquire, and The Regents desires to grant to Licensee, an exclusive license under the Patent Rights to manufacture, have manufactured, use, have used, sell, have sold, offer for sale, and import products, methods and services falling within the scope of the claims of the Patent Rights, in accordance with the terms herein.

 

Now, therefore, the Parties agree as follows:

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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1.                                      DEFINITIONS

 

1.1.                            “Affiliate” of Licensee (or Sublicensee, respectively) means any entity that, directly or indirectly, Controls Licensee (or Sublicensee, respectively), is Controlled by Licensee (or Sublicensee, respectively), or is under common Control with Licensee (or Sublicensee, respectively).  “Control” means (i) having the actual, present capacity to elect a majority of the directors of such entity, (ii) having the power to direct at least forty percent (40%) of the voting rights entitled to elect directors of such entity, or (iii) in any country where the local law will not permit foreign equity participation of a majority of the outstanding stock or voting rights, the ownership or control, directly or indirectly, of the maximum percentage of such outstanding stock or voting rights permitted by local law.

 

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

 

1.3.                            “Licensed Field of Use” means all uses.

 

1.4.                            “Licensed Method” means any process or method the use or practice of which, but for the license granted pursuant to this Agreement, (a) would infringe, or contribute to or induce the infringement of, a Valid Claim of any issued, unexpired patent under the Patent Rights, or (b) is covered by a claim in a pending patent application under Patent Rights.  As used in subsection (b) of this Paragraph 1.4, “covered by a claim in a pending patent application” means that such use or practice would, but for the license granted pursuant to this Agreement, constitute infringement, or contributory infringement, or inducement of infringement of such claim if such claim were issued.

 

1.5.                            “Licensed Product” means any product, material, kit, or other article of manufacture or composition of matter, the manufacture, use, Sale, offer for Sale, or import of which (a) would require the performance of Licensed Methods, or (b) but for the license granted pursuant to this Agreement, would infringe, or contribute to or induce the infringement of a Valid Claim of any issued, unexpired patent under Patent Rights, or (c) is covered by a claim in a pending patent application under the Patent Rights.  As used in subsection (c)

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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above of this Paragraph 1.5, “covered by a claim in a pending patent application” means that such manufacture, use, Sale, offer for Sale or import would, but for the license granted pursuant to this Agreement, constitute infringement, or contributory infringement, or inducement of infringement of such claim if such claim were issued.

 

1.6.                            “Licensed Service” means a service provided using Licensed Products or Licensed Methods, including without limitation any such service provided in the form of contract research or other research performed by Licensee on behalf of a third party.

 

1.7.                            “Licensed Territory” means United States of America and its territories and possessions, and any foreign countries where Patent Rights exist.

 

1.8.                            “Net Invoice Price” means (a) the gross invoice price charged and received by Licensee for a Licensed Product or Licensed Service, and/or the fair market value of any other consideration received by Licensee for a Licensed Product or Licensed Service, or (b) in those instances where the Licensed Product or Licensed Service is combined in any manner with any other product or service, the gross invoice price charged and received by Licensee for the combined product or service, and/or the fair market value of any other consideration received by Licensee, less the following items, but only to the extent that they actually pertain to the disposition of such Licensed Product or Licensed Service, and are separately billed:

 

(a)                                 allowances actually granted to customers for rejections, returns, or prompt payment or volume discounts;

 

(b)                                 freight, transport packing, or insurance charges associated with transportation;

 

(c)                                  taxes, including Deductible Value-Added Tax, tariffs or import/export duties based on Sales when included in the gross invoice price, but excluding value-added taxes other than Deductible Value-Added Tax; “Deductible Value-Added Tax” means value-added tax only to the extent that such value-added tax is actually incurred and is not reimbursable, refundable, or creditable under the tax authority of any country;

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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(d)                                 discounts or rebates paid or credited to customers, third-party payers, health-care systems, or administrators solely to promote the inclusion of a Licensed Product or Licensed Service in formulary programs;

 

(e)                                  wholesaler’s discounts or rebates to customers, third-party payers, health-care systems, or administrators solely to promote the inclusion of a Licensed Product or Licensed Service in formulary programs; and

 

(f)                                   rebates or discounts paid or credited pursuant to applicable law.

 

1.9.                            “Net Royalty Revenues” means the value of any royalty revenues, licensee fees, or other consideration received by Licensee from a Sublicensee for a Licensed Product or Licensed Service less the following:

 

(a)                                 fees or commissions paid to any third party broker or the like in connection with the execution of the applicable Sublicense Agreement; and

 

(b)                                 that part of any tax or duty, other than income tax, actually paid by Licensee in connection with any sublicensing activities for which Licensee is not eligible for a refund of the tax paid (for greater clarity, if Licensee is eligible for a partial refund, only the portion of the tax paid that is not eligible to be refunded will be included in the deduction from gross revenues).

 

1.10.                     “Net Sales” means the Net Invoice Price, provided that in the instances described in Subparagraphs (a) and (b) below of this Paragraph 1.10, Net Sales will have the meaning set forth in such Subparagraphs, as follows:

 

(a)                                 In those instances where there is a Relationship-Influenced Sale of a Licensed Product or Licensed Service, Net Sales will be based on the Net Invoice Price at which the Relationship-Influenced Sale Purchaser resells such Licensed Product or Licensed Service.

 

(b)                                 In those instances where a Licensed Product or Licensed Service is not Sold, but is otherwise exploited, the Net Sales for such Licensed Product or Licensed Service will be the Net Invoice Price of products or services of

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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the same or similar kind and quality, Sold in similar quantities, currently being offered for Sale by the Licensee.  Where such products or services are not currently being offered for Sale by the Licensee, the Net Sales for a Licensed Product or Licensed Service otherwise exploited, for the purpose of computing royalties, will be the average Net Invoice Price at which products or services of the same or similar kind and quality, Sold in similar quantities, are then currently being offered for Sale by other manufacturers.  Where such products or services are not currently Sold or offered for Sale by the Licensee, or others, then the Net Sales will be the Licensee’s cost of manufacture of the Licensed Product or the cost of conducting the Licensed Service, determined by the Licensee’s customary accounting procedures, plus ten percent (10%).

 

1.11.                     “Patent Rights” means rights owned by, or otherwise licensable by, The Regents and Technion in the claims of the following:

 

(a)                                 U.S. National Stage Non-Provisional Patent Application Serial Number 11/909,262, entitled “Drought-Resistant Plants,” filed March 21, 2006, based on PCT Patent Application Serial Number PCT/US2006/010678, entitled “Drought-Resistant Plants,” filed March 21, 2006, which is in turn based on U.S. Provisional Patent Application Serial Number 60/664,035, entitled “Drought-Resistant Plants,” filed March 21, 2005;

 

(b)                                 Foreign National Stage Patent Applications in the following countries, based on the above-referenced PCT Patent Application:

 

(i)                                     Australia Patent Application Serial Number 2006226863;

 

(ii)                                  Brazil Patent Application Serial Number PI 0607732-3;

 

(iii)                               Canada Patent Application Serial Number 2601605;

 

(iv)                              China Patent Application Serial Number 200680009038.9;

 

(v)                                 Europe Patent Application Serial Number 06739467.6;

 

(vi)                              India Patent Application Serial Number 4024/KOLNP/2007;

 

(vii)                           Indonesia Patent Application Serial Number W00200703096;

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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(viii)                        Mexico Patent Application Serial Number 2007/011612; and

 

(ix)                              South Africa Patent Application Serial Number 2007/07905.

 

(c)                                  Continuing patent applications of any of the foregoing patent applications, including divisions, substitutions, extensions and continuations-in-part (but as to continuations-in-part, only to the extent the claims in the continuation-in-part applications are entitled to the priority date of any one or more of the foregoing patent applications);

 

(d)                                 Any U.S. or foreign patent issuing on any of the foregoing patent applications or continuing patent applications.

 

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

 

1.13.                     “Relationship-Influenced Sale” means a Sale of a Licensed Product or Licensed Service (a) between the Licensee and (i) an Affiliate of the Licensee, (ii) a Joint Venture of the Licensee, (iii) a Related Party of the Licensee, or (iv) a Sublicensee; or (b) between a Sublicensee and (i) an Affiliate of the Sublicensee, (ii) a Joint Venture of the Sublicensee, or (iii) a Related Party of the Sublicensee.

 

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

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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1.15.                     “Sale” means, for Licensed Products and Licensed Services, the act of selling, leasing or otherwise transferring, providing, or furnishing such product or service for any consideration.  Correspondingly, “Sell” means to make or cause to be made a Sale, and “Sold” means to have made or caused to be made a Sale.

 

1.16.                     “Sublicense” means a sublicense under this Agreement.

 

1.17.                     “Sublicensee” means a sublicensee under this Agreement.

 

1.18.                     “Sublicense Agreement” means a sublicense agreement under this Agreement.

 

1.19.                     “Valid Claim” means a claim of an issued patent in any country where the claim (i) has not expired, (ii) has not been disclaimed, (iii) has not been cancelled or superseded, or if cancelled or superseded, has been reinstated or is the subject of a continuation, continuation-in-part, reissue, or divisional application; and (iv) has not been revoked, held invalid, or otherwise declared unenforceable or not allowable by a tribunal or patent authority of competent jurisdiction over such claim in such country from which no further appeal has or may be taken.

 

2.                                      GRANT

 

2.1.                            Subject to the limitations set forth in this Agreement, including without limitation the rights reserved in Paragraph 2.2, The Regents hereby grants to Licensee an exclusive license under the Patent Rights to make, have made, use, have used, offer for Sale, import, Sell and have Sold Licensed Products and Licensed Services, and to practice Licensed Methods in the Licensed Field of Use in the Licensed Territory.

 

2.2.                            The license grant of Paragraph 2.1 is subject to the following retained rights:

 

(a)                                 the retained right of The Regents and Technion to publish any technical data and other information resulting from research performed by The Regents or by Technion, respectively, relating to the Invention, subject to (and only to the extent of) any obligations that The Regents or Technion, respectively, may owe Licensee with respect to such publishing (i) under any separate research funding agreement between The Regents or Technion, respectively, and Licensee or (ii) under any other separate agreement between The Regents or Technion, respectively, and Licensee, where such other separate agreement has a pre-publication review

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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clause (and other clauses as required under the policy of The Regents or Technion, respectively) similar to that found appropriate under the policy of The Regents or Technion, respectively, for research funding agreements;

 

(b)                                 the retained right of The Regents and Technion to make and use the Invention and associated technology for educational and research purposes;

 

(c)                                  the retained right of The Regents and Technion to practice the Patent Rights in order to make and use products, and to practice methods, for educational and research purposes; and

 

(d)                                 the retained right of The Regents to allow other educational and non-profit institutions to do any one or more of the activities of Subparagraphs 2.2 (a), (b), and (c) above, for educational and research purposes.

 

2.3.                            Paragraph 2.2 notwithstanding, The Regents and Licensee understand and agree to the provisions set forth below in this Paragraph 2.3, which provisions are in accordance with the corresponding provisions of the Inter-Institutional Agreement between The Regents and Technion:

 

(a)                                 It is the intent of The Regents and Licensee that licenses be granted by The Regents and/or Technion under the Patent Rights, for educational and research purposes, to any non-profit or educational institution, in order to promote research relating to the Invention worldwide.

 

(b)                                 It is understood and agreed that each of The Regents and Technion may grant such licenses, provided that, (i) any such licenses granted by Technion will be subject to prior written approval by The Regents, with such approval to take place no later than ten (10) days following request by Technion for such approval and with such approval not to be unreasonably withheld (and it is understood and agreed that, for avoidance of doubt, The Regents’ oversight of any such requested license by Technion is made only in order to ensure both consistency in the scope of such licenses and proper dovetailing of such licenses with the grant to Licensee under this Agreement); and (ii) The Regents will inform Technion of each license granted by The Regents for educational and research purposes to any non-profit or educational institution, every six (6) months.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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(c)                                  It is understood and agreed that every six (6) months The Regents will inform Technion of each such license granted by The Regents for educational and research purposes, to any non-profit or educational institution.

 

(d)                                 It is understood and agreed that, for avoidance of doubt, Technion has the right to provide license rights to Technion’s SARK:IPT construct and Technion’s transgenic plants containing the SARK:IPT construct, solely for educational and research purposes, to any non-profit or educational institution.

 

(e)                                  It is understood and agreed that The Regents and Technion have the reserved right to make and use the Invention, and to practice the Patent Rights, for educational and research purposes (“Further Research”), and that the results of such Further Research and any intellectual property rights generated therein (including without limitation, any inventions, developments, advancements or improvements to the Invention, know-how, technology or technological information ) will belong solely to the inventing Party and will not be part of, and will not be considered as part of, the Inter-Institutional Agreement or this Agreement.

 

(f)                                   It is understood and agreed that either The Regents or Technion, or both, may engage in sponsored research with Licensee, for further research and development based on the Invention, with no accounting of The Regents and Technion to each other, and that each of The Regents and Technion may freely and solely negotiate and agree on terms and conditions of such sponsored research as long as such sponsored research complies with the terms of the Inter-Institutional Agreement and this Agreement.

 

2.4.                            Nothing in this Agreement will be deemed to grant any rights or licenses to (a) The Regents, (b) Technion, or (c) any third party, to any of Licensee’s technology, including enabling technology needed to practice the Patent Rights.

 

3.                                      SUBLICENSES

 

3.1.                            The Regents hereby further grants to Licensee the right to grant to Affiliates of Licensee and to third parties a Sublicense under the rights granted to Licensee hereunder.  Every Sublicense will include:

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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(a)                                 a statement setting forth the date upon which Licensee’s exclusive license rights hereunder will expire;

 

(b)                                 a provision requiring the performance of all the obligations due to The Regents and Technion (and, if applicable, the United States Government) under this Agreement other than those rights and obligations specified in Article 4 (License Issue Fee/Maintenance Fees) and Paragraph 5.1 (Earned Royalties);

 

(c)                                  an equivalent provision for indemnification of The Regents and Technion as has been provided for in this Agreement.

 

3.2.                            Licensee will notify The Regents of each Sublicense granted hereunder and furnish to The Regents a copy of each such Sublicense Agreement and any amendments thereof.

 

3.3.                            Affiliates of Licensee and Affiliates of Sublicensee will have no licenses under Patent Rights except as granted by Sublicense pursuant to this Agreement.

 

3.4.                            Licensee will collect and guarantee payment of all monies and other consideration due The Regents from Sublicensees, and will deliver all reports due The Regents and received from Sublicensees.

 

3.5.                            Upon termination of this Agreement for any reason, all Sublicenses that are granted by Licensee pursuant to this Agreement, where the Sublicensee is in compliance with its Sublicense Agreement as of the date of such termination, will remain in effect and will be assigned to The Regents, except that The Regents will not be bound to perform any duties or obligations set forth in any Sublicenses that extend beyond the duties and obligations of The Regents set forth in this Agreement.

 

3.6.                            Licensee is responsible for enforcement of the terms of Sublicense Agreements.

 

4.                                      LICENSE ISSUE FEE/MAINTENANCE FEES

 

4.1.                            Licensee will pay to The Regents a non-creditable, non-refundable license issue fee (“License Issue Fee”) of [...*...] due within fifteen (15) days of the Effective Date of this Agreement.  The License Issue Fee is non-refundable and not an advance against royalties or other payments due under this Agreement.

 

4.2.                            Licensee will pay to The Regents a license maintenance fee (“License Maintenance Fee”) of [...*...], the first of which will be due on the second anniversary

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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of the Effective Date, with each subsequent License Maintenance Fee becoming due on each subsequent anniversary of the Effective Date thereafter.  Each License Maintenance Fee will be treated as a minimum annual royalty payment and will be credited against Earned Royalties due for the calendar year in which payment of the License Maintenance Fee is made.

 

5.                                      ROYALTIES

 

5.1.                            Licensee will pay to The Regents earned royalties (“Earned Royalties”) at the rate of [...*...] of the Net Sales of all Licensed Products and Licensed Services, and [...*...] of Net Royalty Revenues.

 

5.2.                            Notwithstanding the provisions of Paragraph 5.1, for each additional license to patent rights that is held by Licensee under a written, compensation-bearing agreement with a third party and that is necessary for Licensee to practice the Patent Rights in order to make Net Sales (which third party license agreements will be subject to verification by The Regents), the royalty rate for such Net Sales will be decreased by [...*...].  For example, if one such additional license is required, the royalty rate for Net Sales will be decreased to [...*...], and if two such additional licenses are required, the royalty rate for Net Sales will be decreased to [...*...].  In no event will the royalty rate for Net Sales be less than [...*...].

 

5.3.                            Earned Royalties accruing to The Regents will be paid to The Regents semi-annually within two (2) months after the end of each calendar half as follows: August 31 (for first half) and February 28 (for second half).

 

5.4.                            All payments due The Regents will be payable in United States dollars.

 

5.5.                            When Licensed Products and Licensed Services are Sold for monies other than United States dollars, Earned Royalties will first be determined in the foreign currency of the country in which the Sale was made and then converted into equivalent United States dollars.  The exchange rate will be that rate quoted in the Wall Street Journal on the last business day of the reporting period.

 

5.6.                            Licensee will make all payments under this Agreement either by check or electronic transfer, payable to “The Regents of the University of California” and Licensee will

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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forward such payments to The Regents at the address shown in Paragraph 23.1 below. Payments due for Sales occurring in any country outside the United States will not be reduced by any taxes, fees, or other charges imposed by the government of such country on the remittance, except for and subject to offsets to Net Invoice Price in accordance with Subparagraphs 1.8 (a) — (f).  Licensee will be responsible for all bank transfer charges.

 

5.7.                            If any patent or patent application, or any claim thereof, included within Patent Rights expires or is held invalid in a final decision by a court of competent jurisdiction and last resort and from which no appeal has been or can be taken, all obligation to pay Earned Royalties based on such patent, patent application or claim, or any claims patentably indistinct therefrom will cease as of the date of such expiration or final decision.  Licensee will not, however, be relieved from paying any Earned Royalties that accrued before such expiration or decision or that are based on another valid patent or claim not expired or involved in such decision.

 

6.                                      DILIGENCE

 

6.1.                            Licensee, upon execution of this Agreement, will diligently proceed with the development, manufacture, and Sale of Licensed Products, Licensed Services, and Licensed Methods, and will diligently market them in quantities sufficient to meet the market demand.

 

6.2.                            In addition to its obligations under Paragraph 6.1, Licensee specifically commits to achieving the following milestones (either itself, or through its Sublicensees) in its activities under this Agreement:

 

(a)                                 Milestone #1:  Greenhouse Proof of Concept — on or before [...*...];

 

(b)                                 Milestone #2:  Field Proof of Concept — on or before [...*...];

 

(c)                                  Milestone #3:  Regulatory Submission — on or before [...*...];

 

(d)                                 Milestone #4:  Regulatory Approval — on or before [...*...]; and

 

(e)                                  Milestone #5:  Commercial Launch of a Licensed Product — on or before [...*...].

 

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6.3.                            If The Regents believes that Licensee has failed to meet any milestone set forth in Paragraphs 6.1 and 6.2 by the date set forth therein (if applicable), The Regents will provide written notice to Licensee of the same within a reasonable time.  License will have one hundred and twenty (120) days from the date of such written notice (“Cure Period”) to complete the stated milestone or otherwise fulfill the stated diligence obligations.  If Licensee is unable to complete the stated milestone or otherwise fulfill the stated diligence obligations within the Cure Period, Licensee may extend the completion date of such milestone or diligence obligation for a period of six (6) months from the expiration of the Cure Period upon the payment of [...*...], due within ten (10) days of expiration of the Cure Period.  Licensee may further extend the completion date of any milestone or diligence obligation for an additional six (6) months upon payment of an additional [...*...].  Additional extensions may be granted only by mutual written agreement of the Parties.  All such payments to extend deadlines are in addition to the annual License Maintenance Fee payment specified in Paragraph 4.2.  Should Licensee opt not to pay to extend the completion date or if Licensee should fail to complete the stated milestone or otherwise fulfill the stated diligence obligations by any extended target date, then The Regents may provide written notice to Licensee that the license granted in Paragraph 2.1 has been converted to a non-exclusive license, effective as of the date of expiration of the Cure Period or any extended target date, whichever is later.

 

(a)                                 Unless earlier terminated in accordance with other provisions of this Agreement, the non-exclusive license will remain in effect for one (1) year from the date of conversion under this Paragraph 6.3.  If at the end of such one-year period, Licensee has satisfied its diligence obligations (allowing for any extensions pursuant to this Paragraph 6.3), then the non-exclusive license will continue in effect, provided that, subsequent to the end of such one-year period, The Regents will not be entitled to grant any additional licenses to third parties under Patent Rights (for so long as Licensee continues to be in compliance with Licensee’s diligence obligations under this Agreement), other than (i) the rights reserved by The Regents for other educational and non-profit institutions under Paragraph 2.2, (ii) licenses already granted by The Regents during such one-year period, and (iii)

 

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licenses granted by The Regents in accordance with the terms of option agreements, agreements to negotiate, or letters of intent that are entered by The Regents during such one-year period.

 

(b)                                 If at the end of such one-year period, Licensee has not satisfied its diligence obligations (allowing for any extensions pursuant to Paragraph 6.3), then The Regents may, at its sole discretion, exercise its rights under Article 10.

 

6.4.                            All notices referenced in this Article 6 will be subject to Article 22 (Notices).

 

7.                                      PROGRESS AND ROYALTY REPORTS

 

7.1.                            For the period beginning July 1, 2010, within sixty (60) days of each subsequent June 30 and December 31, Licensee will submit to The Regents a semi-annual progress report (“Progress Report”) covering Licensee’s activities related to the development and testing of all Licensed Products, Licensed Services and Licensed Methods and the obtaining of necessary governmental approvals, if any, for marketing in the United States.  The Progress Reports will be made for all development activities until the first Sale occurs in the United States.

 

7.2.                            Each Progress Report will be a sufficiently detailed summary of activities of Licensee and any Sublicensees so that The Regents may evaluate and determine Licensee’s progress in development of Licensed Products, Licensed Services, and Licensed Methods, and in meeting its diligence obligations under Article 6, and will include (but not be limited to) the following: summary of work completed and in progress; current schedule of anticipated events and milestones, including diligence milestones under Paragraph 6.2; anticipated market introduction dates for the Licensed Territory; and Sublicensees’ activities during the reporting period.

 

7.3.                            In Licensee’s Progress Report immediately subsequent to the first Sale of Licensed Products or Licensed Services by Licensee or a Sublicensee, Licensee will report the date of such first Sale.

 

7.4.                            After the first Sale of a Licensed Product or Licensed Service, Licensee will make semi-annual royalty reports (“Royalty Reports”) to The Regents within two (2) months after the

 

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calendar halves ending June 30 and December 31 of each year.  Each Royalty Report will include at least the following:

 

(a)                                 The nature and number of Licensed Products and Licensed Services Sold during the reporting period;

 

(b)                                 Calculation of Net Sales for the period pursuant to Paragraph 1.10;

 

(c)                                  Calculation of Net Royalty Revenues for the period pursuant to Paragraph 1.9;

 

(d)                                 Calculation of total Earned Royalties due The Regents pursuant to Paragraph 5.1; and

 

(e)                                  Names and addresses of any new Sublicensees along with a summary of the material terms of each new Sublicense Agreement entered into during the reporting period.

 

7.5.                            If no Sales of a Licensed Product or Licensed Service have occurred during the report period, a statement to this effect is required in the Progress Report or Royalty Report for that period.

 

8.                                      BOOKS AND RECORDS

 

8.1.                            Licensee will keep full, true, and accurate books of accounts containing all particulars that may be necessary for the purpose of showing the amount of Earned Royalties payable to The Regents and Licensee’s compliance with other obligations under this Agreement.  Said books of accounts will be kept at Licensee’s principal place of business or the principal place of business of the appropriate division of Licensee to which this Agreement relates.  Said books and the supporting data will be open at all reasonable times during normal business hours upon reasonable notice, for two (2) years following the end of the calendar year to which they pertain, to the inspection and audit by representatives of The Regents for the purpose of verifying Licensee’s royalty statement or compliance in other respects with this Agreement.  Such representatives will be bound to hold all information in confidence except as necessary to communicate Licensee’s non-compliance with this Agreement to The Regents.

 

8.2.                            The fees and expenses of The Regents’ representatives performing such an examination will be borne by The Regents.  However, if an error in underpaid Earned Royalties to The

 

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Regents of more than ten percent (10%) of the total Earned Royalties due for any year is discovered, then the fees and expenses of these representatives will be borne by Licensee.

 

9.                                      LIFE OF THE AGREEMENT

 

9.1.                            Unless otherwise terminated by the operation of law or by acts of the Parties in accordance with the terms of this Agreement, this Agreement will commence on the Effective Date and will remain in effect for the life of the last-to-expire patent or last-to-be-abandoned patent application licensed under this Agreement, whichever is later.

 

9.2.                            Any termination of this Agreement will not affect the rights and obligations set forth in the following articles:

 

	
Article   1
    	
Definitions
    
	
Article   8
    	
Books   and Records
    
	
Article   9
    	
Life   of the Agreement
    
	
Article   12
    	
Disposition   of Licensed Products Upon Termination
    
	
Article   15
    	
Use   of Names and Trademarks
    
	
Article   16
    	
Limited   Warranties
    
	
Article   18
    	
Indemnification
    
	
Article   22
    	
Notices
    
	
Article   23
    	
Payments
    
	
Article   25
    	
Confidentiality
    
	
Article   28
    	
Applicable   Law; Venue; Attorneys’ Fees
    
	
Article   29
    	
Scope   of Agreement
    

 

9.3.                            Any termination of this Agreement will not relieve Licensee of its obligation to pay any monies due or owing at the time of such termination and will not relieve any obligations, of either Party to the other Party, established prior to termination.

 

10.                               TERMINATION BY THE REGENTS

 

10.1.                     Except as otherwise provided in Article 6 (Diligence) of this Agreement, if Licensee should violate or fail to perform any term of this Agreement, then The Regents may give written notice of such default (“Notice of Default”) to Licensee.  If Licensee should fail to repair such default within sixty (60) days of the effective date of such notice, The Regents will have the right to terminate this Agreement and the licenses herein by a second written notice (“Notice of Termination”) to Licensee.  If a Notice of Termination is sent to Licensee, this Agreement will automatically terminate on the effective date of such notice.  Such termination will not relieve Licensee of its obligation to pay any royalty or

 

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license fees owing at the time of such termination and will not impair any accrued rights of The Regents.  The aforementioned notices will be subject to Article 22 (Notices).

 

10.2.                     Notwithstanding Paragraph 10.1, this Agreement will terminate immediately, upon written notice given by The Regents in its sole discretion, if Licensee files a claim including in any way the assertion that any portion of The Regents’ Patent Rights is invalid or unenforceable, where the filing of such claim is by the Licensee, by a third party on behalf of the Licensee, or by a third party at the written urging of the Licensee.

 

10.3.                     Notwithstanding Paragraph 10.1, this Agreement will terminate immediately, upon written notice given by The Regents in its sole discretion, in the event of the filing of a petition for relief under the United States Bankruptcy Code by or against Licensee as a debtor or alleged debtor.

 

11.                               TERMINATION BY LICENSEE

 

11.1.                     Licensee will have the right at any time to terminate this Agreement in whole or as to any portion of Patent Rights by giving notice in writing to The Regents.  Such notice of termination will be subject to Article 22 (Notices) and, except as otherwise provided in Paragraph 13.4, termination of this Agreement (in whole or in part, as the case may be) will be effective sixty (60) days after the effective date of such notice.

 

11.2.                     Any termination pursuant to Paragraph 11.1 will not relieve Licensee of any obligation or liability accrued hereunder prior to such termination or rescind anything done by Licensee or any payments made to The Regents hereunder prior to the time such termination becomes effective, and such termination will not affect in any manner any rights of The Regents arising under this Agreement prior to such termination.

 

12.                               DISPOSITION OF LICENSED PRODUCTS UPON TERMINATION

 

12.1.                     Upon termination of this Agreement under Article 10 (Termination by The Regents) or Article 11 (Termination by Licensee) of this Agreement, for a period not to exceed three (3) years after the date of termination, Licensee may complete and Sell any partially made Licensed Products and continue to render any previously commenced Licensed Services, and continue the practice of Licensed Methods only to the extent necessary to do the foregoing; provided, that all such Sales will be subject to the terms of this Agreement

 

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including, but not limited to, the payment of royalties at the rate and at the time provided herein and the rendering of reports thereon.

 

13.                               PATENT PROSECUTION AND MAINTENANCE

 

13.1.                     The Regents will diligently prosecute and maintain the United States and foreign patent applications and patents under Patent Rights, subject to Licensee’s reimbursement of The Regents’ out-of-pocket costs under Paragraph 13.3 below.  The Regents will have sole responsibility for retaining and instructing patent counsel.  The Regents will, however, promptly provide, subject to Article 25 (Confidentiality), Licensee with copies of all official patent office correspondence and other documentation relevant thereto so that Licensee may be informed of the continuing prosecution and may comment upon such correspondence sufficiently in advance of any initial deadline for filing a response; provided, however, if Licensee has not commented upon such documentation in reasonable time for The Regents to sufficiently consider Licensee’s comments prior to the deadline for filing a response with the relevant government patent office, The Regents will be free to respond appropriately without consideration of Licensee’s comments, if any.

 

13.2.                     The Regents will use reasonable efforts to prepare or amend any patent application within Patent Rights to include claims reasonably requested by Licensee and desirable to protect the Licensed Products or Licensed Services contemplated to be Sold or Licensed Methods to be practiced under this Agreement.

 

13.3.                     Subject to Paragraph 13.4, all costs actually incurred by The Regents during the term of this Agreement for prosecuting and maintaining, and if authorized by Licensee, for preparing and filing, all United States and corresponding foreign patent applications and resulting patents under Patent Rights (“Patent Prosecution Costs”) which have not been previously paid by Licensee, will be paid by Licensee, so long as the licenses under Patent Rights granted to Licensee herein remain exclusive.  The costs of all interferences, oppositions, reexaminations, and reissues will be deemed to be Patent Prosecution Costs and also will be borne by Licensee (but only to the extent authorized by Licensee and actually incurred by The Regents during the term of this Agreement).  Licensee will reimburse The Regents for all eligible Patent Prosecution Costs within thirty (30) days following receipt of an itemized invoice from The Regents for Patent Prosecution Costs.

 

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If, however, The Regents reduces the exclusive licenses granted herein to non-exclusive licenses pursuant to Paragraph 6.3, and The Regents grants additional license(s) to all or a portion of the Patent Rights, the costs of preparing, filing, prosecuting and maintaining such subsequently licensed patent applications and patents will be divided equally among the licensed parties from the effective date of each subsequently granted license agreement.

 

13.4.                     Subject to the limitations set forth in Paragraph 13.3, Licensee’s obligation to underwrite and to pay all United States and foreign patent filing, prosecution, and maintenance costs for Patent Rights will continue for so long as this Agreement remains in effect, provided however, that Licensee may terminate its obligation to pay Patent Prosecution Costs with respect to any particular patent application or patent under Patent Rights in any or all designated countries upon written notice to The Regents stating that further Patent Prosecution Costs with respect to that particular patent application or patent are no longer authorized, and further provided that such Patent Prosecution Costs either have not been incurred by The Regents as of such written notice or, if incurred by The Regents subsequent to such written notice, are actually and necessarily incurred by The Regents as a result of Licensee’s notice occurring too late to cancel actions or withdraw instructions to act previously authorized by Licensee.  The Regents may continue prosecution and/or maintenance of such patent application(s) or patent(s) at its sole discretion and expense, provided, however, that Licensee will have no further rights or licenses thereto under such Patent Rights.  Licensee’s decision to terminate its rights with respect to any specific patent(s) and/or patent application(s) within the Patent Rights will not affect Licensee’s continuing rights in the remainder of the Patent Rights.

 

13.5.                     Licensee will promptly inform The Regents of any change in Licensee’s small entity status, as defined in 37 CFR 1.27, or of any Sublicense to an entity which does not have small entity status, as defined in 37 CFR 1.27.  With respect to all patents and patent applications in Canada, if any, The Regents is hereby advised that Licensee does not wish to claim small entity status, irrespective of whether Licensee would qualify as a small entity under Canadian law.  Moreover, with respect to all patents and patent applications in the United States, The Regents is hereby advised that Licensee does not wish to claim small entity status.

 

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14.                               MARKING

 

14.1.                     Licensee will mark all Licensed Products Sold under this Agreement, or their containers, in accordance with applicable patent marking laws.

 

15.                               USE OF NAMES AND TRADEMARKS

 

15.1                        This Agreement does not confer any right to use any name, trade name, trademark, or other designation of either Party or of Technion (including contraction, abbreviation or simulation of any of the foregoing) in advertising, publicity or other promotional activities.  Such use of the name “The Regents of the University of California,” or the name of any campus of the University of California, or the name and logo of Technion Research & Development Foundation Ltd, and/or the Technion — The Israel Institute of Technology, are prohibited.

 

16.                               LIMITED WARRANTIES

 

16.1.                     The Regents warrants that it has the lawful right to grant this license.  As affirmed by Technion in the signature blocks below, Technion acknowledges and agrees that, by virtue of the Inter-institutional Agreement (which Technion has the right and authority to enter into), The Regents has the right to grant the exclusive license under this Agreement.

 

16.2.                     Licensee acknowledges The Regents’ representation that, to the extent of the actual knowledge (as of the Effective Date) of The Regents’ Executive Director of UC Davis InnovationAccess at the Davis campus, The Regents is not aware of any claim, action, proceeding or investigation, whether governmental or by a third party, pending or threatened, excluding any patent office proceeding, that questions the validity or enforceability of the Patent Rights, and that The Regents makes no warranty respecting the existence of any basis for any such claim, action, proceeding or investigation.  Licensee acknowledges Technion’s representation (which representation is affirmed by Technion in the signature blocks below) that, to the extent of the actual knowledge (as of the Effective Date) of Technion’s Manager, Technion is not aware of any claim, action, proceeding or investigation, whether governmental or by a third party, pending or threatened, excluding any patent office proceeding, that questions the validity or enforceability of the Patent Rights, and that Technion makes no warranty respecting the existence of any basis for any such claim, action, proceeding or investigation.

 

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16.3.                     Notwithstanding anything to the contrary in the foregoing Paragraphs 16.1 and 16.2, if Licensee becomes aware of any such third party right, dispute, claim, action, proceeding, or investigation after the Effective Date, Licensee may terminate this Agreement in accordance with Article 11 (Termination by Licensee) above.

 

16.4.                     Except as expressly set forth in Paragraphs 16.1 and 16.2 of this Agreement, the license granted and the associated Invention are provided WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESSED OR IMPLIED.  THERE IS NO REPRESENTATION OR WARRANTY BY THE REGENTS OR TECHNION THAT THE INVENTION, THE PATENT RIGHTS, LICENSED PRODUCTS, LICENSED SERVICES OR LICENSED METHODS WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT.

 

16.5.                     IN NO EVENT WILL THE REGENTS OR TECHNION BE LIABLE FOR ANY INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR THE USE OF THE INVENTION, THE PATENT RIGHTS, LICENSED METHODS, LICENSED SERVICES OR LICENSED PRODUCTS.

 

16.6.                     Nothing in this Agreement is or will be construed as:

 

(a)                                 A warranty or representation by The Regents or Technion as to the validity, enforceability or scope of the Patent Rights; or

 

(b)                                 A warranty or representation that anything made, used, or Sold under any license granted in this Agreement is or will be free from infringement of patents of third parties; or

 

(c)                                  An obligation to bring or prosecute actions or suits against third parties for patent infringement, except as provided in Article 17; or

 

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

 

(e)                                  An obligation to furnish new developments, improvements, enhancements,

 

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advancement to the Invention and/or related know-how, data or information which are not included in the patents and patent applications under the Patent Rights.

 

17.                               PATENT INFRINGEMENT

 

17.1.                     In the event that Licensee learns of the substantial infringement of any Patent Rights, Licensee will promptly provide The Regents with notice and reasonable evidence of such infringement (“Infringement Notice”).  During the period and in a jurisdiction where Licensee has exclusive rights under this Agreement, neither Party will notify a third party, including the infringer, of the infringement without first obtaining consent of the other Party, which consent will not be unreasonably withheld.  Both Parties will use diligent efforts, in cooperation with each other, to terminate such infringement without litigation.

 

(a)                                 If such infringing activity has not been abated within ninety (90) days following the effective date of the Infringement Notice, Licensee may institute suit for patent infringement against the infringer.  The Regents may voluntarily join such suit at The Regents’ expense, but The Regents may not thereafter separately commence suit against the infringer for the acts of infringement that are the subject of Licensee’s suit or any judgment rendered in that suit.  Licensee may not join The Regents or Technion (“Owners”) in a suit initiated by Licensee without The Regents’ prior written consent.  If, in a suit initiated by Licensee, an Owner is involuntarily joined other than by Licensee, Licensee will pay any costs incurred by an Owner arising out of such suit, including but not limited to, any fees actually and necessarily incurred by an Owner for legal counsel that an Owner selects and retains to represent it in the suit.

 

(b)                                 If, within one hundred twenty (120) days following the effective date of the Infringement Notice, the infringing activity has not been abated and if Licensee has not brought suit against the infringer, The Regents may in its sole discretion institute suit for patent infringement against the infringer.  If The Regents institutes such suit, Licensee may not join such suit without The Regents’ consent and may not thereafter separately commence suit against the infringer for the acts of infringement that are the subject of The Regents’ suit or any judgment rendered

 

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in that suit.

 

17.2.                     Such legal action as is decided upon will be at the expense of the Party on account of whom suit is brought and all recoveries recovered thereby will belong to such Party, provided that legal action brought jointly by the Owners and Licensee and participated in by both will be at the joint expense of both the Owners and Licensee, and all recoveries will be allocated in the following order:  (a) to each Owner and Licensee, reimbursement for its attorneys’ costs, fees, and other related out-of-pocket expenses to the extent each Owner and Licensee paid for such costs, fees, and expenses until all such costs, fees, and expenses are consumed for each Owner and Licensee; and (b) any remaining amount shared jointly by both the Owners and Licensee in proportion to the share of expenses paid by each Owner and Licensee, provided that (i) in no event will The Regents’ share be less than five percent (5%) of such remaining amount if The Regents is a party to the suit, and (ii) in no event will Technion’s share be less than five percent (5%) of such remaining amount if Technion is a party to the suit.

 

17.3.                     Each Party will cooperate with the other Party in litigation instituted hereunder but at the expense of the party on account of whom suit is brought.  Such litigation will be controlled by the party bringing the action, except that the Owners may be represented by counsel of their choice in any suit brought by Licensee.

 

17.4.                     Any agreement made by Licensee for the purposes of settling litigation or other dispute will comply with the requirements of Article 3 above.  In no event may Licensee admit liability or wrongdoing on behalf of The Regents or Technion without The Regents’ or Technion’s prior written consent.

 

17.5.                     The Parties acknowledge that Technion has obligations to The Regents, with respect to any legal action to enforce Patent Rights, in accordance with the provisions of the Inter-Institutional Agreement.

 

18.                               INDEMNIFICATION

 

18.1.                     Licensee will indemnify, hold harmless, and defend The Regents and Technion, and their respective officers, employees, and agents; the sponsor(s) of the research that led to the Invention; and the inventors of any patents and patent applications under Patent Rights and their employers, against any and all claims, suits, losses, damages, costs, fees, and

 

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expenses resulting from or arising out of exercise of this license or any Sublicense.  This indemnification will include, but not be limited to, any product liability.

 

18.2.                     Licensee, at its sole cost and expense, will insure its activities in connection with any work performed hereunder and will obtain, keep in force, and maintain the following insurance:

 

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

 

	
Each Occurrence
    	
 
    	
$
    	
3,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Products/Completed Operations Aggregate
    	
 
    	
$
    	
3,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Personal and Advertising Injury
    	
 
    	
$
    	
3,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
General Aggregate
    	
 
    	
$
    	
3,000,000
    	
 
    

 

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

 

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

 

18.3.                     The coverage and limits referred to in Subparagraphs 18.2(a) and 18.2(b) will not in any way limit the liability of Licensee under this Article 18. Upon the execution of this Agreement, Licensee will furnish The Regents with certificates of insurance evidencing compliance with all requirements, and Licensee will promptly notify The Regents of any material modification of the insurance coverages. Such certificates will:

 

(a)                                 provide for thirty (30) days’ (ten (10) days for non-payment of premium) advance written notice to The Regents of any cancellation of insurance coverages;

 

(b)                                 indicate that The Regents and Technion have each been endorsed as an additional insured under the coverage described above in Paragraph l8.2; and

 

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

 

18.4.                     The Regents will promptly notify Licensee in writing of (a) any claim or suit brought against The Regents for which The Regents intends to invoke the provisions of this Article 18, and (b) any claim or suit brought against Technion for which Technion has informed The Regents that Technion intends to invoke the provisions of this Article 18.  Licensee will keep The Regents and Technion, respectively, informed of Licensee’s defense of any claims pursuant to this Article 18.

 

19.                               COMPLIANCE WITH LAWS/EXPORT CONTROLS

 

19.1.                     Licensee will comply with all applicable international, national, state, regional, and local laws and regulations in performing its obligations hereunder and in Licensee’s use, manufacture, Sale, or import of the Licensed Products or Licensed Services, or in Licensee’s practice of Licensed Methods.  The Licensee will observe all applicable United States and foreign laws and regulations governing the transfer to foreign countries of technical data related to Licensed Products, including without limitation with respect to the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations.

 

19.2.                     Licensee understands that The Regents is subject to United States laws and regulations (including the Arms Export Control Act, as amended, and the Export Administration Act of 1979), controlling the export of technical data, computer software, laboratory prototypes and other commodities, and The Regents’ obligations to Licensee under this Agreement are contingent on and subject to compliance with such laws and regulations.  The transfer of certain technical data and/or commodities may require a license from the cognizant agency of the United States Government and/or written assurances by Licensee that Licensee will not export such technical data and/or commodities to certain foreign countries without prior approval of such agency.  The Regents neither represents that such a license will not be required nor that, if required, it will be issued.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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20.                               GOVERNMENT APPROVAL OR REGISTRATION

 

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

 

21.                               ASSIGNMENT

 

21.1.                     This Agreement is personal to Licensee.  Licensee may not assign or transfer this Agreement, except by merger or acquisition of all or substantially all of Licensee’s business to which this Agreement relates or by operation of law, without The Regents’ prior written consent, which consent will not be unreasonably withheld.  For purposes of this Paragraph 21.1, The Regents will be deemed to have reasonable grounds for such withholding of consent in the event that being in contractual privity with the proposed assignee would be inconsistent with maintenance of The Regents’ reputation and status as a public university, or in the event that the proposed assignee in the view of The Regents would not be technically or financially capable of properly carrying out its duties under this Agreement.  If The Regents refuse to grant such consent, The Regents will provide to Licensee, with particularity and in writing, a full explanation of the reasons for refusing consent.  This Agreement is binding upon and will inure to the benefit of The Regents, its successors and assigns.

 

22.                               NOTICES

 

22.1.                     Any notice required to be given to either Party under this Agreement will be deemed to have been properly given and to be effective:

 

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

 

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

 

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

 

to the respective addresses given below, or to another address as designated in writing by the Party changing its address:

 

	
To   The Regents:
    	
UC   Davis InnovationAccess
    
	
 
    	
Technology   Transfer Services
    
	
 
    	
1850   Research Park Drive, Suite 100
    
	
 
    	
Davis,   CA 95618-6134
    
	
 
    	
Attn.:
    	
Director   (UC Case No.: 2005-095)
    
	
 
    	
 
    
	
To   Licensee:
    	
Arcadia   Biosciences, Inc.
    
	
 
    	
202   Cousteau Place, Suite 200
    
	
 
    	
Davis,   CA 95616
    
	
 
    	
Attn.:
    	
Eric   J. Rey
    
	
 
    	
 
    	
President   and CEO
    

 

22.2.                     Either Party may change its address upon written notice to the other Party.

 

23.                               PAYMENTS

 

23.1.                     Payments to The Regents will be made to the following address:

 

	
The Regents of the University of California
    
	
Innovation Alliances & Services
    
	
1111 Franklin Street, 5th Floor
    
	
Oakland, CA 94607-5200
    
	
Attention:
    	
Executive   Director, Research Administration and Technology Transfer
    
	
 
    	
Referring   to: UC Case No. 2005-095
    

 

23.2.                     If monies owed to The Regents under this Agreement are not received by The Regents when due, Licensee will pay to The Regents interest charges at a rate of ten percent (10%) per annum.  Such interest will be calculated from the date payment was due until actually received by The Regents.  Such accrual of interest will be in addition to, and not in lieu of, enforcement of any other rights of The Regents related to such late payment.  Acceptance of any late payment will not constitute a waiver under Article 24 (Waiver) of this Agreement.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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24.                               WAIVER

 

24.1.                     The failure of either Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement will not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other Party.  None of the terms and conditions of this Agreement can be waived except by the written consent of the Party waiving compliance.

 

25.                               CONFIDENTIALITY

 

25.1.                     Subject to Paragraphs 25.3, 25.4 and 25.5, each Party will hold the other Party’s proprietary business and technical information, data, experimental results, financial information and reports, patent prosecution material, and other proprietary information, including the negotiated terms of this Agreement (collectively “Proprietary Information”), in confidence and against disclosure to third parties with at least the same degree of care as it exercises to protect its own data and information of a similar nature, provided that, The Regents may disclose Proprietary Information of Licensee (including reports under Article 7 and including other Proprietary Information of Licensee which is directly related to the Patent Rights or licensing thereof)  to Technion under the confidentiality provision of the Inter-Institutional Agreement, or under other written confidentiality agreement between The Regents and Technion.  This obligation will expire five (5) years after the termination or expiration of this Agreement.

 

25.2.                     Written Proprietary Information may be labeled or marked confidential or proprietary.  If the Proprietary Information is orally disclosed, it may be reduced to writing or some other physically tangible form, marked and labeled as confidential or proprietary by the disclosing Party and delivered to the receiving Party after the oral disclosure. In no event, however, will absence of labeling or marking affect the proprietary nature of Proprietary Information or the confidentiality obligations of the receiving Party.

 

25.3.                     Nothing contained herein will in any way restrict or impair the right of Licensee or The Regents to use, disclose, or otherwise deal with any information or data which:

 

(a)                                 at the time of disclosure to a receiving Party is available to the public or thereafter becomes available to the public by publication or otherwise through no act or omission of the receiving Party; or

 

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(b)                                 the receiving Party can show by written records was in its possession prior to the time of disclosure to it hereunder and was not acquired directly or indirectly from the disclosing Party; or

 

(c)                                  is independently made available to the receiving Party without restrictions as a matter of right by a third party; or

 

(d)                                 is independently developed by employees of the receiving Party who did not have access to the information disclosed by the disclosing Party; or

 

(e)                                  is subject to disclosure under the California Public Records Act or other requirements of law.

 

25.4.                     Licensee and The Regents may disclose Proprietary Information to their employees, agents, consultants, and contractors, provided that such Parties have a need to know such Proprietary Information and are bound by a like duty of confidentiality as that found in this Article 25.  In addition, Licensee will be free to disclose to potential Sublicensees the terms and conditions of this Agreement upon their request, provided such disclosure is made under a suitable confidentiality agreement.  Further, The Regents will be free to release to the inventors and senior administrators employed by The Regents the terms and conditions of this Agreement upon their request.  If such release is made, The Regents will inform such employees of the confidentiality obligations set forth above and will request that they do not disclose such terms and conditions to others.  Should a third party inquire whether a license to Patent Rights is available, The Regents may disclose the existence of this Agreement and the extent of the grant in Articles 2 and 3 to such third party, but will not disclose the name of Licensee unless (a) Licensee has already made such disclosure publicly, (b) Licensee otherwise consents to such disclosure, or (c) such disclosure is required under the California Public Records Act or other requirements of law.

 

25.5.                     Licensee and The Regents may disclose Proprietary Information that is required to be disclosed (i) to a governmental entity or agency in connection with seeking any governmental or regulatory approval, governmental audit, or other governmental requirement, (ii) or otherwise by law, provided that the receiving Party uses commercially reasonable efforts to give the other Party sufficient notice of such required disclosure to 

 

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allow such other Party reasonable opportunity to object to, and to take legal action to prevent, such disclosure.

 

25.6.                     Licensee and The Regents agree to destroy or return to the disclosing Party Proprietary Information received from the other in its possession within fifteen (15) days following the effective date of termination of this Agreement.  However, each Party may retain one copy of Proprietary Information of the other solely for archival purposes in non-working files for the sole purpose of verifying the ownership of the Proprietary Information, provided such Proprietary Information will be subject to the confidentiality provisions set forth in this Article 25.  Licensee and The Regents agree to provide each other, within thirty (30) days following termination of this Agreement, with a written notice that Proprietary Information has been returned or destroyed.

 

26.                               FORCE MAJEURE

 

26.1.                     Except for Licensee’s obligation to make any payments to The Regents hereunder, and subject to Paragraph 26.2, the Parties will not be responsible for any failure to perform due to the occurrence of any catastrophic or major events beyond their reasonable control that render their performance impossible or onerous, including, without limitation, accidents (environmental, toxic spill, etc.); acts of nature or natural disasters such as earthquakes, fires or floods; biological or nuclear incidents; casualties; governmental acts, orders, restrictions, laws, proclamations, edicts, ordinances, or regulations; war, riot, or insurrection; acts of terrorism; strikes, lockouts, or other serious labor disputes; local, national, or state emergency; and power failure and power outages.  When any such events have abated, the Parties’ respective obligations hereunder will resume.

 

26.2.                     Either Party to this Agreement will have the right to terminate this Agreement upon thirty (30) days’ prior written notice if either Party is unable to fulfill its obligations under this Agreement due to any of the causes specified in Paragraph 26.1 continuing for a period of one (1) year or longer.

 

27.                               SEVERABILITY

 

27.1.                     The provisions of this Agreement are severable, and in the event that any provision of this Agreement is determined to be invalid, illegal or unenforceable under any controlling body of law, such invalidity, illegality, or enforceability will not in any way affect the

 

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validity or enforceability of the remaining provisions hereof, and this Agreement will be construed as if such invalid, illegal, and/or unenforceable provisions had never been contained herein.

 

28.                               APPLICABLE LAW; VENUE; ATTORNEYS’ FEES

 

28.1.                     THIS AGREEMENT WILL BE CONSTRUED, INTERPRETED, AND APPLIED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, excluding any choice of law rules that would direct the application of the laws of another jurisdiction, except that the scope and validity of any patent or patent application under Patent Rights will be determined by the applicable law of the country of such patent or patent application.  Any legal action brought by the Parties relating to this Agreement will be conducted in San Francisco, California. The prevailing Party in any legal action under this Agreement will be entitled to recover its reasonable attorneys’ fees in addition to its costs and necessary disbursements.

 

29.                               SCOPE OF AGREEMENT

 

29.1.                     Neither Party will use this Agreement as a basis to invoke the CREATE Act, 35 U.S.C. 103 (c) (2), without the written consent of the other Party.

 

29.2.                     This Agreement (and the Inter-Institutional Agreement) incorporates the entire agreement between the Parties with respect to the subject matter hereof and supersedes all previous communications, representations, agreements, or understandings, whether oral or written, between the Parties relating to the subject matter hereof, including, but not limited to, the Option Agreement.

 

29.3.                     Headings appear solely for convenience of reference. Such headings are not part of this Agreement and will not be used to construe it.

 

29.4.                     No amendment or modification of this Agreement will be valid or binding upon the Parties unless made in writing and signed by an authorized representative of each Party.

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement (and Technion has signed to confirm its review and acknowledgment as a third-party beneficiary under this Agreement, and to affirm its acknowledgment and agreement under Paragraph 16.1 and its representation under Paragraph 16.2) below in triplicate originals, or counterparts thereof, by their respective duly authorized officers or representatives.

 

	
THE   REGENTS OF THE UNIVERSITY  OF   CALIFORNIA
    	
 
    	
ARCADIA   BIOSCIENCES, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By
    	
/s/
    	
 
    	
By
    	
/s/
    
	
 
    	
David   R. McGee
    	
 
    	
 
    	
Eric   J. Rey 
    
	
 
    	
Executive   Director, UC Davis 
    	
 
    	
 
    	
President   and CEO
    
	
 
    	
InnovationAccess
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date
    	
July 2,   2010
    	
 
    	
Date
    	
July 2,   2010
    

 

	
REVIEWED   AND ACKNOWLEDGED, AND AFFIRMED AS TO TECHNION’S ACKNOWLEGEMENT AND AGREEMENT   IN PARAGRAPH 16.1 AND TECHNION’S REPRESENTATION IN PARAGRAPH 16.2:
    	
 
    
	
 
    	
 
    
	
TECHNION   RESEARCH & DEVELOPMENT FOUNDATION
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/
    	
 
    
	
 
    	
(Signature)
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
 
    	
(Please   print)
    	
 
    
	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    
	
Date:
    	
July 2,   2010
    	
 
    

 

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34Exhibit 10.4

 

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ASSIGNMENT AND ASSUMPTION OF CONTRACT

 

THIS ASSIGNMENT AND ASSUMPTION OF LICENSE AGREEMENT by and between Seaphire International, Inc. and The University of Toronto Innovations Foundation dated February 14, 2002 (“Assignment”) is made this 2nd day of January 2003 by Seaphire International Inc., an Arizona corporation (“Assignor”) to Arcadia Biosciences, Inc., an Arizona corporation (“Assignee”).

 

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor hereby assigns, sells, transfers, sets over and unto Assignee all of Assignor’s estate, right, title and interest in and to the License Agreement attached hereto, and Assignee hereby assumes and accepts such assignment.

 

By acceptance of this Assignment, Assignee hereby assumes the performance of all of the terms, covenants and conditions imposed upon Assignor under the Agreement including the obligation to make payments under the Agreement.

 

Assignee hereby agrees to indemnify, defend and hold harmless Assignor, its agents and its and their successors and assigns from and against any and all claims, losses, liabilities and expenses, including reasonable attorneys’ fees, suffered or incurred by Assignor by reason of any breach by Assignee of any of its obligations under this Assignment or by reason of any breach by Assignee of any of its obligations under the License Agreement arising after the date of this Assignment.

 

In the event any party hereto institutes any action or proceeding against the other party with regard to this Assignment, the prevailing party in such action or proceeding shall be entitled to recover from the other party, all costs and expenses of the action or proceeding, including actual attorneys’ fees, charges and costs, in addition to any other relief to which it may be entitled.

 

This Assignment shall be binding upon and inure to the benefit of the successors, assignees, personal representatives, heirs and legatees of all the respective parties hereto.

 

IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this Assignment as of the day and year first above written.

 

	
“ASSIGNOR
    	
 
    	
“ASSIGNEE”
    
	
 
    	
 
    	
 
    
	
Seaphire International, Inc.
    	
 
    	
Arcadia Biosciences, Inc.
    
	
an Arizona corporation
    	
 
    	
an Arizona corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/
    	
 
    	
By:
    	
/s/
    
	
Title:
    	
 
    	
 
    	
Title:
    	
President
    

 

 

LICENSE AGREEMENT

 

THIS EXCLUSIVE LICENSE AGREEMENT is made this 14 day of February 2002 (the “Effective Date”), by and between:

 

THE UNIVERSITY OF TORONTO INNOVATIONS FOUNDATION, a corporation without share capital incorporated under the laws of the Province of Ontario whose full post office address is Suite 200, 243 College Street, Toronto, Ontario M5T 1R5, Canada UTTF (hereinafter “UTIF”),

 

-and-

 

SEAPHIRE INTERNATIONAL, INC. a company, having its business address at 4455 East Camelback Road, Suite B-200, Phoenix, Arizona 85018, (hereinafter “Seaphire”).

 

-and-

 

EDUARDO BLUMWALD, MARIS APSE, GIL AHARON AND WAYNE SNEDDEN (hereinafter collectively “Owners” and each is an “Owner”);

 

-and-

 

THE GOVERNING COUNCIL OF THE UNIVERSITY OF TORONTO, a corporation incorporated under a special act of the Ontario Legislature (hereinafter “the University”).

 

WITNESSETH

 

WHEREAS, the Owners have made an invention and created (developed) know-how relating to genes for genetically engineering salt tolerance in plants, referred to herein as “Salt Tolerance Technology”;

 

WHEREAS, at the time of inventing the Salt Tolerance Technology, Eduardo Blumwald was employed by the University, Maris Apse and Gil Aharon were students of the University, and Wayne Snedden was a post-doctoral fellow at the University;

 

WHEREAS, the University has assigned to the Owners its entire right, title and interest in and to the technology by an agreement in writing dated May 14, 1998;

 

WHEREAS, the Owners have, by an agreement dated March 2, 1998, granted to UTIF the sole and exclusive worldwide right to grant licenses in and to the Salt Tolerance Technology;

 

WHEREAS, UTIF and Owners have filed patent applications, namely a U.S. patent application having Serial No. 09/271,584 on March 18, 1999 and a PCT patent application having

 

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Serial No. PCT/CA99/00219 on March 17, 1999 covering aspects of the Salt Tolerance Technology, UTTF having the sole and exclusive worldwide right to grant any and all licenses to the patent applications and any continuation, divisional, continuation-in-part, re-issue, and re-examination patent applications and resulting patents based thereon, as well as all corresponding foreign patents and patent applications claiming priority therefrom;

 

WHEREAS, Seaphire desires to acquire an exclusive license to make, have made, use and sell the Salt Tolerance Technology described in the patent applications within the field of use and within the Domestic Territory and Foreign Territory, and UTIF is willing to grant such a license under the terms and conditions set form hereafter,

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

1.             Definitions.

 

1.1          “Bioremediation” as used herein shall mean removal of salt and other minerals or compounds from a substrate or solution by means of any transgenic organism. For example, Bioremediation could include turf grass used for land reclamation purposes or alfalfa used for water purification.

 

1.2          “Confidential Information” as used herein shall mean this Agreement and its terms and conditions, the Know-How and Technical Data, and any information, which is non-public, confidential or proprietary in nature, including, without limitation, business information, trade secrets, and any information related to the Licensed Technology, whether written, oral or in electronic form, provided that tangible materials are marked as confidential, and provided that information given orally is identified as confidential at the time of disclosure, and confirmed as confidential in writing within fifteen (15) days, but shall not include information that:

 

(a)                                 is or becomes disclosed to the public other than as a result of any act by the receiving Party;

 

(b)                                 is rightfully received from a third party without similar restriction and without breach of this Agreement;

 

(c)                                  the receiving party is able to demonstrate, in writing, was known to it on a non-confidential basis before such information was disclosed to such Party by or on behalf of another Party; or

 

(d)                                 was independently developed by a Party without the use of any of another Party’s Confidential Information.

 

1.3                               “Currency” as used herein in all statements of or references to dollar amounts in this Agreement are to lawful money of the United States.

 

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1.4                               “Disputes” means all disputes, differences, controversies, claims, counterclaims or other matters arising out of or in connection with this Agreement or the breach of it or in respect of any defined legal relationship associated with it or derived from it.

 

1.5                               “Domestic Territory” shall mean the United States and its possessions.

 

1.6                               “Enabling Technology” as used herein shall mean any technology owned by an arm’s length third party that Seaphire determines, in its sole discretion, is required to effectively commercialize the Salt Tolerance Technology. For example, and without limitation, Enabling Technology includes gene expression promoter technology, methods for inserting genes and promoters into plants, and gene expression terminator technology.

 

1.7                               “Field of Use” as used herein shall mean any and all uses for any and all plants, including transgenic plants, the products from which are sold or used for food, feed, industrial, therapeutic, and other uses, including use for the production of crops for the purpose of Bioremediation.

 

1.8                               “Foreign Territory” shall mean all countries outside the United States and its possessions.

 

1.9                               “Improvement” shall mean any modification in the structure, design, or any other aspect of the Invention, whether patentable or unpatentable, which depends upon the Invention for its use or effectiveness or which increases the effectiveness of the Invention, including, without limitation, any modification of a part, component, assembly or process or apparatus for the manufacturing thereof intended to perform or produce results similar to those performed or produced by those of the Invention which Improvement is owned by or licensed to or under an obligation of assignment to UTIF during the term of this Agreement.

 

1.10                        “Invention” means the Salt Tolerance Technology to which UTIF owns exclusive licensing rights and which is described in the Licensed Patents, Technical Data or Know-How.

 

1.11                        “Know-How” shall mean the general and specific knowledge, experience and information, whether or not in written or printed form, applicable to the design, manufacture, production, service and sale of the Invention.

 

1.12                        “Licensed Product(s)” means gene(s) for genetically engineering salt tolerance in Plants, Plants expressing or containing such genes, or any product, compound or substance arising or derived from Plants expressing or containing such genes, or other compound or method, any of which (i) fall within the scope of any issued and unexpired patent claim(s) resulting from any of the patent applications based on the Licensed Technology that are enforceable in the jurisdiction in which Licensed Products are made, used, sold, or offered for sale, or which (ii) fall within the scope of any claims in patent applications based on the Licensed Technology that UTIF, the

 

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Owners, and the University believe in good faith to be patentable, which claims are pending, but not yet issued, in the jurisdiction in which Licensed Products are made, used, sold, or offered for sale.

 

1.13                        “Licensed Technology” means the technology which is the subject of U.S. patent application having serial No. 09/271,584 filed on March 18, 1999 and PCT patent application having Serial No. PCT/CA99/00219 filed on March 17, 1999, both having UTIF recorded as the sole and exclusive owner of any and all licensing rights to the patents, and directed to genes for achieving salt tolerance in plants, including transgenic plants, and including any continuation, divisional, continuation-in-part, re-issue, and re-examination patent applications and resulting patents based thereon, as well as all corresponding foreign patents and patent applications claiming priority from any of the foregoing, which are owned by or licensed to or under an obligation of assignment to UTIF during the term of this Agreement (the “Licensed Patents”).

 

1.14                        “Net Sales” as used herein shall mean Seaphire’s collected gross sales of Licensed Products and any matter containing the Licensed Products, less the following:

 

(a)                                 commissions paid to any third party and reasonable trade, quantity, or cash discounts, but with respect to any of the preceding adjustments, only insofar as actually allowed or paid in connection with the sale in question;

 

(b)                                 credits or allowances, if any, given or made on account of rejection or return of defective Licensed Product; and

 

(c)                                  sales taxes, excise taxes, and manufactured goods duties actually paid by Seaphire with respect to any Licensed Product.

 

1.15                        “Parties” means UTIF, Owners, the University and Seaphire collectively, and “Party” means any of them.

 

1.16                        “Plant” means any transgenic plant.

 

1.17                        “Technical Data” means any and all documents in whatever form, including but not limited to writings, computer disks, computer tapes, and electronic records, containing design and technical information, engineering or production data, drawings, plans, specifications, techniques, methods, processes, trade secrets, reports, models, market research data, and any and all other material or matter used by or in possession of UTIF and the Owners and applicable to the design, manufacture, production, service and sale of the Invention.

 

1.18                        “Royalty Revenue” as used herein shall mean the revenues realized by Seaphire from any royalty, continuing, or use-based payments relating to the Licensed Products.

 

1.19                        “Sublicense Fees” as used herein shall mean any and all lump sum payments, cash consideration, non-cash consideration, and/or equity received as an initial, up-front

 

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fee in exchange for granting any sublicense to the Licensed Products less any commissions associated with the grant of any sublicense that are paid to any third party, but shall not include any non-cash consideration which consists of license rights to Enabling Technology.

 

1.20        The following Appendices and Schedules form part of this Agreement and are:

 

Appendix A — Details of Prior Negotiations (to be provided after execution of this Agreement)

 

Appendix B — Technical Milestones

 

Appendix C — Research Plan

 

Schedule 1 — Dispute Resolution

 

2.             Grants.

 

2.1          UTIF hereby grants to Seaphire the exclusive license under the Licensed Technology, Know-How, and Technical Data to make, have made, use, sell and otherwise commercialize Licensed Products for the Field of Use, including any Improvements, within the Domestic Territory and Foreign Territory, and the unlimited right to sublicense the same to others.

 

2.2          UTIF shall furnish to Seaphire all Technical Data and Know-How owned by or in possession of UTIF which is applicable to the Invention and/or Licensed Products and further agrees to seek and provide to Seaphire any further Technical Data and Know How related to the Invention and/or Licensed Products which is in possession of the Owners.

 

2.3          UTIF agrees to keep Seaphire informed of any Improvements, and Seaphire shall have an exclusive right to license and sublicense such Improvements during the term of this Agreement, subject to the terms and conditions hereof.

 

2.4          Seaphire shall take no action to have any rights of Owners, the University, or UTIF in the Licensed Technology declared invalid or unenforceable and shall not assist any other party in taking such action.

 

3.             Reserved Rights.

 

3.1          UTIF, on behalf of the Owners and the University, reserves a perpetual, royalty-free right and license:

 

a)             to use any and all of the Licensed Technology, Know-How, Improvements, and Technical Data for the purpose of research and teaching; and

 

b)             to publish or disclose any technical information and research results concerning the Invention in accordance with Paragraph 3.2 below.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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3.2    UTIF and/or Owners will provide a copy of any proposed publication or disclosure to Seaphire for its review at least thirty (30) days before submission for publication or disclosure.

 

3.3    Any Improvements resulting from the Owner’s use of the Licensed Technology, Know-How and/or Technical Data for research and teaching [...*...].

 

3.4    Any rights to Improvements obtained by UTIF resulting from the University’s use of the Licensed Technology, Know-How and/or Technical Data for research and teaching [...*...].

 

3.5    Upon the written request of Seaphire received within twenty (20) days of the receipt of such proposed publication or disclosure by Seaphire, UTIF and/or Owners will, at the Seaphire’s option:

 

a)             delay publication up to thirty additional (30) days to allow the UTIF and/or Owners to secure intellectual property protection of any Licensed Technology that would be disclosed by such publication; and/or

b)             delete any Confidential Information provided by Seaphire from the proposed publication or disclosure.

 

4.             Sublicensing.

 

4.1          Subject to any obligations of confidentiality to third parties, UTIF shall provide Seaphire with information detailing UTIF’s prior negotiations with other parties regarding the Licensed Technology. Such information will include party name and contact details, field of use discussed, and license terms discussed and will be attached to this Agreement as Appendix A.

 

4.2          Seaphire shall have the exclusive right to sublicense its rights hereunder, with no right of approval by UTIF, but will provide UTIF with advance notice of any discussions or negotiations with potential sublicensees and UTIF will have the option to attend all such discussions or negotiations as an observer at its own expense.

 

4.3          Seaphire agrees to provide UTIF with an executed copy of any sublicense agreement that is entered into by Seaphire upon execution of such license.

 

4.4          Seaphire is responsible for any and all activities of any sublicensee and the sublicensee shall adhere to all confidentiality and indemnity requirements set forth in this Agreement. Each sublicense granted by Seaphire shall require the sublicensee to indemnify Seaphire under provisions substantially equivalent to those of Section 12.2 of this Agreement. No term or condition of any sublicense granted by Seaphire shall be less favorable to UTIF than the terms and conditions of the license granted herein. The above limitation shall not be interpreted to apply to those economic consequences to UTIF inherent to a sublicense arrangement and accordingly addressed by the Royalty Revenue and Sublicense Fee sharing provisions of Paragraphs 6.3 and 6.4. Seaphire shall not, however, sublicense its rights hereunder for a royalty less than that specified in Paragraph 6.3 of this Agreement.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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5.             Representations and Obligations of UTIF and Owners.

 

5.1          UTIF and Owners covenant, represent and warrant, as of the Effective Date:

 

(a)           that Owners have granted to UTIF the sole and exclusive right to grant any and all licenses to the Invention, including without limitation, Licensed Technology, Improvements, Technical Data and Know-How, relating thereto, in a written agreement dated March 2, 1998;

 

(b)           that such Invention is the subject of currently pending U.S. and Canadian patent applications;

 

(c)           that, to the best of UTIF’s and Owners’ knowledge, Seaphire’s contemplated manufacture, use, sublicense and sale of the Licensed Products and the use of Technical Data and Know-How do not infringe the intellectual property rights of any third party, including any patent heretofore issued in the United States, and do not infringe upon or conflict with any other patents or applications for patents, including foreign patents and applications;

 

(d)           that there is no other person, firm, corporation or other entity who has obtained from UTIF, the Owners or the University any license or right to license the Invention, Improvements, the Licensed Technology, the Technical Data and/or Know-How;

 

(e)           that there are no outstanding options, licenses, or agreements, of any kind relating to the Invention or Licensed Technology or to the manufacture, use or sale of the Licensed Products, or Improvements to the Invention;

 

(f)            that there have never been, and are hot currently, any disputes of any kind relating to the Invention or Licensed Technology or to the manufacture, use or sale of the Licensed Products, or Improvements to the Invention; and

 

(g)           that UTIF and Owners have full right and power to grant the rights, licenses and privileges herein given.

 

5.2          UTIF warrants and agrees that any and all maintenance fees and/or annuities that have or may come due on the Licensed Patents which have already been filed and which are currently the subject of pending patent applications described in Paragraph 1.13 will be paid promptly within statutory time limits so that the Licensed Patents remain valid and enforceable at all times during the existence of this Agreement.

 

5.3          UTIF, OWNERS AND THE UNIVERSITY HEREBY EXPRESSLY DISCLAIM ANY OTHER WARRANTY, EXPRESS OR IMPLIED, CONDITION OR TERM OF ANY KIND RELATING TO THE LICENSED PRODUCTS, LICENSED TECHNOLOGY, TECHNICAL DATA, KNOW-HOW OR IMPROVEMENTS, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, ANYWARRANTY OF NON-INFRINGEMENT OF THIRD PARTY PATENT RIGHTS, ORANY WARRANTY OF PRODUCT PERFORMANCE OR OF SAFETY OF THE LICENSED

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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PRODUCTS. EXCEPT AS SPECIFICALLY STATED IN THIS AGREEMENT, THELICENSED TECHNOLOGY, TECHNICAL DATA, KNOW-HOW AND IMPROVEMENTS ARE LICENSED UNDER THIS AGREEMENT “AS-IS.”

 

6.             Royalties, Reports and Payments.

 

6.1          Seaphire shall pay to UTIF an initial technology access fee of [...*...] (the “Initial Access Fee”) upon the signing of this Agreement.

 

6.2          Upon the achievement of certain technical milestones by Seaphire, the requirements for which are outlined and attached to this Agreement as Appendix B, Seaphire shall pay to UTIF specific technology milestone fees as follows:

 

(a)           Technical Milestone No. 1 — Upon Seaphire [...*...] Seaphire shall pay UTIF a technology milestone fee of [...*...] ([...*...]) (the “Technical Milestone No. 1 Fee”).

 

(b)           Technical Milestone No. 2 - Upon Seaphire [...*...] Seaphire shall pay UTIF a technology milestone fee of [...*...] ([...*...]) (the “Technical Milestone No. 2 Fee”).

 

(c)           Technical Milestone No. 3 - Upon [...*...] Seaphire shall pay UTIF a technology milestone fee of [...*...] ([...*...]) (the “Technical Milestone No. 3 Fee”).

 

(d)           Technical Milestone No. 4 — Upon Seaphire [...*...] Seaphire shall pay UTIF a technology milestone fee of [...*...] ([...*...]) (the “Technical Milestone No. 4 Fee”).

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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(e)           Technical Milestone No. 5 — Upon obtaining United States Department of Agriculture (USDA) and United States Food and Drug Administration (USFDA) regulatory approval on any plant species incorporating the Invention, and namely the sodium antiport gene, Seaphire shall pay UTIF a technology milestone fee of [...*...] ([...*...]) (the ‘Technical Milestone No. 5 Fee”).

 

(f)            Seaphire shall use reasonable efforts to market and sell the Licensed Products and to commercialize the Invention Seaphire shall provide funds to carry out the Research Plan set forth in Appendix C, subject to the terms of the specific research agreements pertaining thereto.

 

6.3          Beginning on the Effective Date and continuing until expiration of each of the patents relating to the Licensed Technology or until such patents covering Licensed Products are declared invalid by a court of final jurisdiction, or until such pending patent applications are abandoned without any possibility of revival or reinstatement, Seaphire shall pay to UTIF [...*...]%) of all Net Sales and Royalty Revenue realized by Seaphire from the sale of the Licensed Products. However, in the event that Seaphire is required to pay royalties on any Enabling Technology in order to realize sales or revenue from the Licensed Products, the percent of royalties paid to UTIF will be reduced according to amounts actually paid by Seaphire, with a maximum reduction of [...*...] percent [...*...]%). In the event that Seaphire pays to a third party any other consideration apart from royalties to obtain Enabling Technology, the parties agree to negotiate in good faith to reach a fair value for such consideration with that value being recovered by Seaphire in the form of reduced royalty payments to UTIF.

 

6.4          In granting any sublicenses to the Licensed Products in which Sublicense Fees due upon issuance of the sublicense are received by Seaphire, Seaphire shall pay a percentage of the same to UTIF as follows:

 

(a)           Seaphire shall pay UTIF [...*...] percent [...*...]%) of any initial Sublicense Fees for any sublicenses which result from Seaphire’s grant of any sublicenses for use in turf grass or forage crops, or solely for purposes of Bioremediation, if such sublicenses) are executed within one (1) year from the Effective Date of this Agreement to any of those parties listed in Appendix A to this Agreement having had prior negotiations with UTIF with respect to those specific crops or solely for Bioremediation. Seaphire shall make reasonable efforts to enter into such sublicenses within one (1) year from the Effective Date of tins Agreement

 

(b)           Seaphire shall pay UTIF [...*...]%) of any initial Sublicense Fees for any sublicenses which result from Seaphire’s grant of any sublicense for use in any crops other than turf grass or forage crops, or for uses other than solely for purposes of Bioremediation, if such sublicense(s) are executed within one (1) year from the Effective Date of this Agreement to any of those parties listed in Appendix A to this Agreement. Seaphire shall make reasonable efforts to enter into such sublicenses within one (1) year from the Effective Date of this Agreement.

 

(c)           Seaphire shall pay UTIF [...*...] percent [...*...]%) of any other initial Sublicense Fees for any sublicenses that it receives which do not fall within Paragraphs 6.4(a) and 6.4(b) of this Section.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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6.5          If the patents relating to the Licensed Technology covering the Licensed Products expire or are declared invalid by a court of final jurisdiction in any given jurisdiction, or if the patents fail to issue in a particular jurisdiction, Seaphire is not required to pay any unpaid technology milestone payments provided for in Paragraphs 6.2 or 6.4 above, or the royalty provided for in Paragraph 6.3 above, in that jurisdiction.

 

6.6          In addition to any amounts payable by Seaphire to UTIF under Paragraphs 6.1-6.4, Seaphire shall pay any taxes applicable thereon which would be charged to Seaphire in accordance with the laws of Canada and its provinces, including, without limitation, any provincial sales tax or goods and services tax relating thereto. UTIF shall assist Seaphire in obtaining any and all applicable refunds of taxes paid.

 

6.7          Seaphire agrees to make written reports to UTIF semi-annually for the fiscal periods running from January 1 to June 30 and July 1 to December 31 of each year, stating in each such report the Net Sales. Royalty Revenue, and Sublicense Fees paid to Seaphire for the Licensed Products under the License herein granted during the period for which the report is rendered, such report to be made to UTIF within sixty (60) days following each such fiscal period.

 

6.8          Simultaneously with the making of each report provided for in Paragraph 6.6 of this section, Seaphire agrees to pay to UTIF the payments and royalty provided for in Paragraphs 6.2, 6.3 and 6.4 of this Section with respect to the Net Sales, Royalty Revenue and Sublicense Fees paid to Seaphire for the Licensed Products during the period covered by such report.

 

6.9          UTIF and Seaphire shall provide to each other quarterly reports on progress relating to the Inventions, their commercialization, market prospects, and other matters of mutual interest.

 

7.             Keeping Records.

 

7.1          Seaphire agrees to keep records of its and its sublicensees’ manufacture, use or sale of Licensed Products for a period of seven (7) years following such manufacture, use, or sale with respect to which payments hereunder are to be made to UTIF in sufficient detail to enable payments hereunder by Seaphire to be determined, and further agrees to permit its books and records to be examined from time to time to the extent reasonably necessary to verify the reports provided for in Section 6, provided that reasonable advance notice is given by UTIF, with such examination to be made at the expense of UTIF by any auditor appointed by UTIF who is acceptable to Seaphire, such acceptance which is not to be unreasonably withheld. In the event that any such examination shows an underpayment of more than ten percent (10%) with respect to any examined period, Seaphire shall bear all reasonable costs of such examination and shall promptly remit the underpayment to UTIF.

 

8.             Term and Termination.

 

8.1          Unless otherwise terminated as set forth herein, this Agreement shall continue in force until the expiration date of the last issued patent relating to the Licensed Products.

 

8.2          UTIF shall have the right to terminate this Agreement, upon sixty (60) days written notice to Seaphire if Seaphire fails or refuses to make any payments hereunder (except in the event

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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that Seaphire in good faith believes that UTIF has breached any of its obligations under this Agreement and has given UTIF written notice thereof, or in the event that there is a noticed Dispute between the Parties with respect to any amounts owed by Seaphire, and in either case the disputed payment amount may be withheld), fails to make reasonable efforts to market and sell the Licensed Products or to commercialize the Licensed Technology, fails to provide funding for the Research Plan set forth in Appendix C in accordance with the terms of any agreements pertaining thereto, or materially defaults in the performance of any of its other obligations set form in this Agreement, unless all material defaults specified have been substantially cured within such sixty (60) day period.

 

8.3          In the event of any termination of this Agreement by UTIF pursuant to Paragraph 8.2 above, Seaphire shall continue to have a non-exclusive license to make, have made, use, and sell Licensed Products for a period of six (6) months thereafter, to permit Seaphire to complete any then-existing contracts for the manufacture of Licensed Products and disposal of any inventory of Licensed Products. Any such sale or other disposition of licensed Products will be subject to the payment provided for under this Agreement. Following such six (6) month period, Seaphire shall totally cease all further manufacture, use, having made and sale of Licensed Products.

 

8.4          This Agreement and the rights granted hereunder shall terminate immediately and revert automatically to UTIF in the event of any order made or effective resolution passed for the winding-up, liquidation or dissolution of Seaphire, or if Seaphire ceases or threatens to cease to carry out its business, or if Seaphire commits or threatens to commit an act of bankruptcy or becomes insolvent or makes a sale of the whole or part of its assets in bulk, or if bankruptcy or insolvency proceedings are instituted relating to Seaphire, or if a receiver or receiver/manager is appointed for Seaphire, or if an assignment is made for the benefit of Seaphire’s creditors. Such termination shall not impair or prejudice any other right or remedy that UTIF may otherwise have under this Agreement.

 

8.5          Termination or expiration of this Agreement for any reason shall not relieve Seaphire of any obligations to make payments under Section 6 that were payable as of the effective date of termination or expiration.

 

9.             Dispute Resolution and Arbitration.

 

9.1          The objectives of this Section 9 are to attempt to resolve all Disputes arising between the Parties as fairly, efficiently and cost effectively as possible. The Parties may agree to vary the provisions of this Section 9 as they consider appropriate in order to respond with flexibility to any unique aspects of a Dispute. Otherwise, the provisions of this Section 9 shall apply.

 

9.2          Notice of a Dispute by a Party must be delivered to the other Parties in accordance with the notice provisions of this Agreement. Within ten (10) days after delivery of the notice of Dispute, a senior representative of each of the Parties to the Dispute who has not been personally involved in discussions relating to the Dispute who have full authority to settle the Dispute, shall meet at mutually acceptable times and places as often as they consider necessary, to make efforts in good faith to resolve the dispute by amicable negotiations within a further fourteen (14) day period The negotiations shall be construed as settlement discussions and shall be conducted on a “without prejudice” basis. In the event that such discussions fail to resolve the Dispute, the Parties shall

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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jointly select a mediator who shall mediate the Dispute for a further sixty (60) days. In the event the Parties cannot mutually agree on a mediator within twenty (20) days or there is no resolution of the Dispute within sixty (60) days of selection of a mediator, any Party may refer the Dispute immediately to arbitration under Paragraph 9.4.

 

9.3          If one of the Parties refuses or neglects to participate in the amicable negotiations, any other party may refer the Dispute immediately to arbitration under Paragraph 9.4.

 

9.4          The arbitration shall be governed by the Rules of Procedure set out in Schedule 1. It shall be a condition precedent to the bringing of any legal proceedings that are contemplated by the Rules of Procedure that the Parties will have concluded the arbitration process as provided by the Rules of Procedure. The provisions of the Arbitration Act, 1991 (Ontario) shall apply to the extent mat they are not inconsistent with this Section 9 or with such Rules of Procedure.

 

9.5          If a Dispute is not resolved pursuant to Paragraph 9.2 within such fourteen (14) day period, such Dispute shall be submitted to arbitration in accordance with the provisions of this Paragraph 9.4 under the laws of Ontario.

 

9.6          The provisions of this Section 9 shall survive termination or expiration of this Agreement.

 

10.          Confidentiality.

 

10.1        Confidential Information is the property of the Party disclosing it, and the ownership of any and all right, title and interest therein, including all intellectual property rights, shall at all times remain exclusively vested in the disclosing party.

 

10.2        Throughout the term of this Agreement, each Party shall use reasonable and prudent precautions to prevent disclosure of the other Parties’ Confidential Information to unauthorized persons. A Party may disclose Confidential Information only to persons with a “need to know” who have written obligations of confidentiality under terms which are at least as stringent as ones agreed between the Parties, and the Confidential Information shall only be used to carry on or facilitate business as contemplated under this Agreement.

 

10.3        A Party may disclose another Parry’s Confidential Information pursuant to the requirements of a government agency or pursuant to a court order, provided that the Party shall take all reasonable steps, including, but not limited to, the seeking of an appropriate protective order, to preserve the confidentiality of the information provided.

 

10.4        If this Agreement is terminated for any reason, any Parry in receipt of another Party’s Confidential Information shall promptly deliver or destroy all Confidential Information of the disclosing Party without retaining copies thereof, except where such copies are required for audit inspection or legal proceeding arising from this Agreement. The provisions of this Section 10 shall survive termination or expiration of this Agreement for a period often (10) years.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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11.          Infringements.

 

11.1        Upon learning of any possible infringement by any third party of any claim involving the Licensed Patents, each party shall promptly notify the other, in writing, with details of the possible infringement. At its sole discretion, UTIF will take any steps necessary, at its expense, to eliminate such infringement, including the commencement of legal action, if necessary. UTIF may also, in its sole discretion, defend the Licensed Patents against any claims of invalidity.

 

11.2        In the event that UTIF fails to take action to eliminate infringement by any third party or is unable to enforce its rights against such a third party, Seaphire may elect to pay UTIF for the cost of taking such action to enforce its rights or Seaphire may take direct action to enforce the Licensed Patents. If Seaphire pays the costs for enforcing the Licensed Patents or elects to take direct action in enforcing the Licensed Patents, Seaphire may recover such costs by crediting them against any sublicense fees and royalties owed to UTIF without limitation. In the event Seaphire takes direct action to enforce the Licensed Patents and is awarded money damages, costs, and/or attorneys’ fees, Seaphire shall reimburse UTIF for all costs previously credited against sublicense fees and royalties, such reimbursement not to exceed the total amount of the monetary award. Seaphire shall be entitled to all money damages, costs, and/or attorneys’ fees awarded to it that exceed the total costs previously credited against sublicense fees and royalties.

 

11.3        The Parties agree that if a Party brings an infringement suit pursuant to this Section, the other Parties shall join as plaintiffs, if requested, and shall cooperate and assist in the preparation and prosecution of the suit.

 

12.          Indemnity.

 

12.1        Seaphire shall indemnify and hold harmless Owner(s) UTIF and the University and their servants, agents, officers, directors and stock-holders from and against any and all claims, threats, loss, liability, damage or expense, including reasonable attorneys’ fees, by reason or arising out of any acts or failure to act by or out of any use of Licensed Technology, Know-How, Technical Information, or Licensed Products by sublicensees or by Seaphire or its servants, agents, officers, directors, stockholders, employees, or customers. The Party seeking indemnification shall give Seaphire prompt notification of any such claim, threat, loss, liability, damage or expense. The indemnity provided herein shall survive any termination or assignment of this Agreement without time limit.

 

12.2        Each of the Owner(s), UTIF and the University (the “First Party”) shall, severally and not jointly, indemnify and hold harmless Seaphire and its servants, agents, officers, directors and stock-holders from and against any and all claims, threats, loss, liability, damage or expense, including reasonable attorneys’ fees, by reason or arising out of any acts or failure to act by or out of any use of Licensed Technology, Know-How, Technical Information, or Licensed Products by such First Party or its servants, agents, officers, directors, stockholders, employees, or customers. Seaphire shall give the First Party prompt notification of any such claim, threat, loss, liability, damage or expense. The indemnity provided herein shall survive any termination or assignment of this Agreement without time limit.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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13.          Insurance.

 

13.1        Seaphire, at its own expense and at all times during the term of this Agreement, shall carry and maintain in full force and effect comprehensive general liability insurance, including product liability provisions, in a form and with a carrier satisfactory to UTIF. The limits of such policy shall be One Million Dollars ($1,000,000) for each occurrence unless UTIF specifically agrees in writing to such lesser amount. Upon the reasonable request of UTIF, the amount of insurance coverage shall be increased. At its discretion, UTIF may defer this request for a maximum of sixty (60) days from the signing of this Agreement.

 

13.2        The coming into force of this Agreement is conditional upon UTIF having received a certificate of insurance from the insurance company, in a form acceptable to UTIF. The condition in the previous sentence is for the sole benefit of UTIF and UTIF may, in its sole discretion, waive the condition. Such policy shall contain an endorsement by the insurer providing that it shall not be cancelled or amended without thirty (30) days prior notice to UTIF. Licensee shall provide a certificate of such insurance to UTIF annually hereafter on the anniversary date of this Agreement.

 

14.          Assignment.

 

14.1        On prior written notice to the other Parties, Seaphire may transfer all rights and duties under this Agreement to any third party assignee (the “Assignee”), provided that the Assignee shall expressly assume all of the obligations and liabilities of Seaphire under this Agreement, including, without limitation, the obligation to make any payments arising under Section 6 of this Agreement.

 

15.          Patent Applications.

 

15.1        Seaphire shall have the right to inspect, review and revise all patent applications filed on the Invention and Improvements licensed hereunder. UTIF agrees to share all information regarding its patent strategy with Seaphire and to solicit input from Seaphire regarding the same.

 

15.2        Where UTIF has the right to do so, UTIF shall pursue expanding its patent rights and will file new PCT patent application(s) to include additional international coverage.

 

15.3        The fees and costs associated with any new application(s) filed by UTIF within one (1) year of the date of this Agreement shall be paid by UTIF. After one year from the date of this Agreement, all costs and fees associated with all patents and patent applications, except those patent applications having Serial Nos. 09/271,584 and PCT/CA99/00219, shall be paid by Seaphire, but will be credited against future sublicense fees and royalties owed to UTIF pursuant to Section 6 at a rate not to exceed [...*...]%) of the total fees and royalties owed to UTIF by Seaphire in any one year. Any credits exceeding the [...*...] limitation in any given year will carry forward to subsequent years.

 

15.4        With respect to any Improvement(s) licensed hereunder, if UTIF declines to file and prosecute an application to obtain a patent on such Improvements), then Seaphire may file or take over the prosecution of any such patent application(s) and the reasonable costs and fees associated with such patent application(s) will be credited against future sublicense fees and royalties owed to UTIF pursuant to Section 6 at a rate not to exceed [...*...]%) of the total fees and royalties

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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owed to UTIF by Seaphire in any one year. Any credits exceeding the [...*...] percent [...*...] limitation in any given year will carry forward to subsequent years.

 

15.5        With respect to improvements developed by or acquired by Seaphire, Seaphire shall be the sole owner of such improvements and any patents on such improvements. Further, any such patents will not be considered to be Licensed Technology and/or Licensed Products which are licensed under this Agreement.

 

16.          Limitation of Liability.

 

16.1        UNDER NO CIRCUMSTANCE WILL ANY PARTY BE LIABLE TO ANY OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES (EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES) ARISING FROM BREACH OF THIS AGREEMENT, THE USE OR INABILITY TO USE THE INVENTION OR ARISING FROM ANY OTHER PROVISION OF THIS AGREEMENT, SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS (COLLECTIVELY “DISCLAIMED DAMAGES”), PROVIDED THAT EACH PARTY WILL REMAIN LIABLE TO THE OTHER PARTY TO THE EXTENT ANY DISCLAIMED DAMAGES ARE CLAIMED BY A THIRD PARTY AND ARE SUBJECT TO INDEMNIFICATION PURSUANT TO SECTION 12.

 

16.2        EXCEPT AS PROVIDED IN SECTION 12, NO PARTY WILL BE LIABLE TO THE OTHER PARTY FOR MORE THAN THE GREATER OF (i) TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00), OR (ii) AN AMOUNT EQUAL TO THE AMOUNTS PAID BY SEAPHIRE TO UTIF PURSUANT TO THIS AGREEMENT IN THE TWELVE (12) MONTHS PRECEDING THE CLAIM OR CLAIMS.

 

17.          Miscellaneous.

 

17.1        This Agreement constitutes the entire understanding and Agreement of and between the Parties with respect to the subject matter hereof and supersedes all prior representations and agreements.

 

17.2        This Agreement cannot be modified or varied by any oral agreement or representation or otherwise than in a writing executed by both Parties.

 

17.3        Any payment, demand, notice, or other communication to be given in connection with this Agreement will be giving in writing and will indicate to the recipient that it is a payment, demand, notice, or other communication under this Agreement and will be given by personal delivery, by registered mail, and/or by fax addressed to the recipient as follows:

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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If to UTIF:
    	
C.E.O.
    
	
 
    	
University of Toronto
    
	
 
    	
Innovations Foundation
    
	
 
    	
243 College Street,   Suite 200
    
	
 
    	
Toronto, Ontario
    
	
 
    	
Canada
    
	
 
    	
M5T 1R5
    
	
 
    	
 
    
	
If to Seaphire:
    	
Mr. Eric Rey
    
	
 
    	
Seaphire International
    
	
 
    	
4455 East Camelback Road,   Suite B-200
    
	
 
    	
Phoenix, Arizona 85018
    
	
 
    	
 
    
	
If to Owner(s):
    	
 
    
	
 
    	
Dr. Eduardo Blumwald
    
	
 
    	
[...*...]
    
	
 
    	
 
    
	
 
    	
Dr. Maris P. Apse
    
	
 
    	
[...*...]
    
	
 
    	
 
    
	
 
    	
Dr. Gilad S. Aharon
    
	
 
    	
[...*...]
    
	
 
    	
 
    
	
 
    	
Dr. Wayne Snedden
    
	
 
    	
[...*...]
    
	
 
    	
 
    
	
If to the University:
    	
Assistant Vice President of Research-Technology Transfer
    
	
 
    	
27 King’s College Circle
    
	
 
    	
Simcoe Hall,   Room 133S
    
	
 
    	
Toronto, Ontario
    
	
 
    	
Canada
    
	
 
    	
M5S 1A1
    

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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Or to any such address, individual, or fax number as may be designated by notice given by any Party to the other Parties. Any demand, notice, or other communication given by personal delivery will be conclusively deemed to have been given on the day of actual delivery thereof and, if given by registered mail, on the fifth business day following the deposit thereof in the mail, and if given by fax, on the day of transmittal thereof if given during the normal business hours of the recipient on a business day and on the business day during which such normal business hours next occur if not given during such hours on any day. If the Party giving any demand, notice, or other communication knows or ought reasonably to know of any difficulties with the postal system that might affect the delivery of mail, any such demand, notice or other communication may not be mailed but must be given by personal delivery or by fax.

 

17.4                        Failure of any Party to insist upon strict performance of any of the covenants, terms, or conditions of this Agreement shall not be deemed to be a waiver of any other breach or default in the performance of the same or any other covenant, term or condition contained in this Agreement.

 

17.5                        This Agreement is governed by and will be construed in accordance with the laws of the province of Ontario and the laws of Canada applicable therein, except the laws enacting the United Nations Convention on Contracts for the International Sale of Goods, 1988. The Parties attorn to the exclusive venue and jurisdiction of the Courts of Ontario, and waive any arguments under the conflict of laws removing such exclusive venue, jurisdiction or governing law.

 

17.6                        The waiver of any breach of this Agreement by any Party will in no event constitute a waiver of any future breach, whether similar or dissimilar in nature.

 

17.7                        The headings of the clauses in this Agreement are inserted for convenience only and are not intended to affect the meaning or interpretation of this Agreement.

 

17.8                        If performance of this Agreement is hindered or prevented by an act of God, action of the elements, fire, labor disturbances, failure or lack of transportation and/or facility, shortage or labor, material, or supplies, interruption of power or water, war, invasion, civil unrest, enactment of legislation or issuance of governmental orders or regulations, or other casualty or cause, whether similar or dissimilar, beyond either Party’s control, performance by either Party to the extent so hindered or prevented will be excused.

 

17.9                        This Agreement is the result of negotiations by and between the Parties, with each Party being represented by legal counsel. It is agreed that in the event any dispute arises under this Agreement, strict construction of the terms of this Agreement shall not be adopted against any Party by reason of that Party having drafted or prepared this Agreement, it being acknowledged that all Parties participated in the preparation of this Agreement.

 

17.10                 Time shall be of the essence in all aspects of this Agreement.

 

17.11                 UTIF and Seaphire shall jointly agree on any press release disclosing any aspect of this Agreement or any of its details.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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17.12                 The following provisions shall survive any termination of this Agreement: Section 1; Paragraphs 3.1, 5.3, and 7.1; Sections 9, 10, 12, and 16.

 

17.13                 In the event that any clause of this Agreement is deemed unenforceable, the remaining clauses of the Agreement shall remain in full force and effect and the Parties shall negotiate in good faith to replace the unenforceable clause with a clause having substantially the same economic effect for the Parties.

 

17.14                 Words importing the singular number only shall include the plural and vice versa, and words importing the masculine gender shall include the feminine and neuter genders and vice versa.

 

17.15                 This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument. For the purposes of this Agreement and all other documents and agreements contemplated by this Agreement, the signature of any Party hereto or thereto evidenced by a telecopy showing such signature shall constitute conclusive proof for all purposes of the signature of such Party to this Agreement or those other documents and agreements, as the case may be.

 

IN WITNESS WHEREOF, the Parties hereto have caused the execution of this Agreement at the date first above written.

 

UTIF

 

	
By George Adams
    	
/s/ George Adams
    	
 
    	
Date
    	
Feb 15, 2002
    
	
 
    	
 
    	
 
    
	
Title
    	
CEO
    	
 
    	
 
    
	
 
    	
{I have authority to bind the corporation}
    	
 
    	
 
    
						

 

SEAPHIRE INTERNATIONAL

 

	
By Roy Hodges 
    	
/s/ Roy Hodges
    	
 
    	
Date
    	
2/14/02
    
	
 
    	
 
    	
 
    
	
Title
    	
President and CEO
    	
 
    	
 
    
	
 
    	
{I have authority to bind the corporation}
    	
 
    	
 
    
						

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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OWNERS

 

	
By Eduardo Blumwald
    	
/s/ Eduardo Blumwald
    	
 
    	
Date
    	
Feb/19/02
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By Maria Apse
    	
/s/ Maria Apse
    	
 
    	
Date
    	
Feb 19/2002
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By Gil Aheron
    	
/s/ Gil Aheron
    	
 
    	
Date
    	
Feb. 20/2002
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By Wayne Snedden 
    	
/s/ Wayne Snedden
    	
 
    	
Date 
    	
February 19, 2002
    
								

 

THE GOVERNING COUNCIL OF THE UNIVERSITY OF TORONTO

 

	
By 
    	
/s/
    	
 
    	
Date
    	
Feb. 19, 2002
    
	
 
    	
 
    	
 
    
	
Title
    	
Ass’t Vice President
    	
 
    	
 
    
	
 
    	
{I have authority to bind the corporation}
    	
 
    	
 
    
						

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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Schedule 1

 

Rules of Procedure for Arbitration

 

The following rules and procedures shall apply with respect to any matter to be arbitrated between Parties under the terms of the Agreement.

 

1.                                      INITIATION OF ARBITRATION PROCEEDINGS

 

(a)                                 If any Party to this Agreement wishes to have any matter under the Agreement arbitrated in accordance with the provisions of this Agreement, it shall give notice (an “Arbitration Notice”) to each other Party specifying particulars of the matter or matters in dispute and proposing the name of the person it wishes to be the single arbitrator. If a Party has no financial or other interest in a dispute, it may so notify the first Party and thereafter it shall not participate in the arbitration of the dispute and shall not be a “Respondent” as defined below and actions may be taken with respect to such dispute, without notice to or the consent of such non-interested Party. Within fifteen (15) days after receipt of the Arbitration Notice, the other Parties shall give notice to the first Patty advising whether such other Parties accept the arbitrator proposed by the first Party. If such notice is not given by all other Parties within such fifteen (15) day period, the other Parties shall be deemed to have accepted the arbitrator proposed by the first Party. If the Parties do not agree upon a single arbitrator within such fifteen (15) day period, any Party may apply to a judge of the Ontario Court, General Division under the Arbitration Act, 1991, S.O.1991, chap. 17, (the “Arbitration Act”) for the appointment of a single arbitrator (the “Arbitrator”).

 

(b)                                 The individual selected as Arbitrator shall be qualified by education and experience to decide the matter in dispute. The Arbitrator shall be at arm’s length from all of the Parties and shall not be a member of the audit or legal firm or firms who advise any Party, nor shall the Arbitrator be an individual who is, or is a member of a firm, otherwise regularly retained by any of the Parties.

 

2.                                      SUBMISSION OF WRITTEN STATEMENTS

 

(a)                                 Within twenty (20) days of the appointment of the Arbitrator, the Party initiating the arbitration (the “Claimant”) shall send the other Parties (the “Respondents”) a Statement of Claim setting out in sufficient detail the facts and any contentions of law on which it relies, and the relief that it claims.

 

(b)                                 Within, twenty (20) days of the receipt of the Statement of Claim, the Respondents shall send the Claimant a Statement of Defense stating in sufficient detail which of the facts and contentions of law in the Statement of Claim which the Respondents admit or deny, on what grounds, and on what other facts and contentions of law the

 

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Respondents rely.

 

(c)                                  Within twenty (20) days of receipt of the Statement of Defense, the Claimant may send the Respondents a Statement of Reply.

 

(d)                                 All Statements of Claim, Defense and Reply shall be accompanied by copies (or, if they are especially voluminous, lists) of all essential documents on which the Party concerned relies and which have not previously been submitted by any Party, and (where practicable) by any relevant samples.

 

(e)                                  After submission of all the Statements, the Arbitrator will give directions for the further conduct of the arbitration.

 

3.                                      MEETINGS AND HEARINGS

 

(a)                                 The arbitration shall take place in the Municipality of Metropolitan Toronto, Ontario or in such other place as the Claimant and the Respondents shall agree upon in writing. The arbitration shall be conducted in English unless otherwise agreed by such Parties and the Arbitrator. Subject to any adjournments which the Arbitrator allows, the final hearing will be continued on successive working days until it is concluded.

 

(b)                                 All meetings and hearings will be in private unless the Parties otherwise agree.

 

(c)                                  Any Party may be represented at any meetings or hearings by legal counsel.

 

(d)                                 Each Party may examine, cross-examine and re-examine all witnesses at the arbitration.

 

4.                                      THE DECISION

 

(a)                                 The Arbitrator will make a decision in writing and, unless the Patties otherwise agree, will set out reasons for decision in the decision.

 

(b)                                 The Arbitrator will send the decision to the Parties as soon as practicable after the conclusion of the final hearing, but in any event no later than sixty (60) days thereafter, unless that time period is extended for a fixed period by the Arbitrator on written notice to each Party because of illness or other cause beyond the Arbitrator’s control.

 

(c)                                  The provisions of this Agreement and this Schedule requiring the determination of certain disputes of arbitration shall not operate to prevent recourse to the court by any Party as permitted by the Arbitration Act (Ontario) with respect to injunctions, receiving orders and orders regarding the detention, preservation and inspection of property, or whenever enforcement of an award by the sole arbitrator reasonably

 

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requires access to any remedy which an arbitrator has no power to award or enforce. In all other respects an award by the sole arbitrator or arbitrators, as the case may be shall be final and binding upon the Parties and there shall be no appeal from the award of the arbitrator or arbitrators as the case may be on a questions of law or any other questions provided that the Arbitrator has followed the rules provided herein in good faith and has proceeded in accordance with the principles of natural justice.

 

5.                                      JURISDICTION AND POWERS OF THE ARBITRATOR

 

(a)                                 By submitting to arbitration under these Rules, the Parties shall be taken to have conferred on the Arbitrator the following jurisdiction and powers, to be exercised at the Arbitrator’s discretion subject only to these Rules and the relevant law with the object of ensuring the just, expeditious, economical and final determination of the dispute referred to arbitration.

 

(b)                                 Without limiting the jurisdiction of the Arbitrator at law, the Parties agree that the Arbitrator shall have jurisdiction to:

 

(i)                                     determine any question of law arising in the arbitration;

 

(ii)                                  determine any question as to the Arbitrator’s jurisdiction;

 

(iii)                               determine any question of good faith, dishonesty or fraud arising in the dispute;

 

(iv)                              order any Party to furnish further details of that Party’s case, in fact or in law,

 

(v)                                 proceed in the arbitration notwithstanding the failure or refusal of any Party to comply with these Rules or with the Arbitrator’s orders or directions, or to attend any meeting or hearing, but only after giving that Party written notice that the Arbitrator intends to do so;

 

(vi)                              receive and take into account such written or oral evidence tendered by the Parties as the Arbitrator determines is relevant, whether or not strictly admissible in law;

 

(vii)                           make one or more interim awards;

 

(viii)                        hold meetings and hearings, and make a decision (including a final decision) in Ontario or elsewhere with the concurrence of the Parties thereto;

 

(ix)                              order the Parties to produce to the Arbitrator, and to each other for inspection, and to supply copies of, any documents or classes of documents in their possession or power which the Arbitrator determines to be relevant;

 

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(x)                                 order the preservation, storage, sale or other disposal of any property or thing under the control of any of the Parties;

 

(xi)                              to make an award of interest in respect of any amount determined to be owing;

 

(xii)                           make an award as to costs of the arbitration; and

 

(xiii)                        make interim orders to secure all or part of any amount in dispute in the arbitration.

 

6.                                      COSTS OF ARBITRATION

 

The Parties to the Dispute shall jointly pay and be responsible for the costs of the arbitration. However the Arbitrator may make an award of costs upon the conclusion of the arbitration making one or more Parties to the Dispute liable to pay the costs of another Party to the Dispute.

 

7.                                      ARBITRATION ACT, 1991

 

The rules and procedures of the Arbitration Act shall apply to any arbitration conducted hereunder except to the extent that they are modified by the express provisions of these Rules of Arbitration.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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