Exhibit 10.15
*** TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED UNDER
17 C.F.R. SECTIONS 200.80(b)(4), 200.83 AND
230.406
EXCLUSIVE LICENSE AND BAILMENT AGREEMENT
BETWEEN
THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
AND
AMBRYX INC.
FOR
"NUCLEIC ACIDS ENCODING PROTEINS USED IN ASSAYS FOR
IDENTIFYING TASTE MODULATORS"
UC CASE NOS. 1998-122,1998-306,1999-0151
1999-029,11999-168, 1999-203, 1999-204, AND 2000-045
Table of Contents
Article No. Title Page
Recitals..........................................................................................................1
1. Definitions..............................................................................................4
2. Grant...................................................................................................14
3. Issue Fee...............................................................................................17
4. Royalties...............................................................................................20
5. Due Diligence...........................................................................................25
6. Progress and Royalty Reports............................................................................27
7. Books and Records.......................................................................................29
8. Life of the Agreement...................................................................................30
9. Termination by the Regents..............................................................................31
10. Termination by the Licensee.............................................................................32
11. Disposition of Products and Biological Materials on Hand Upon Termination...............................32
12. Supply of the Biological Material.......................................................................33
13. Maintenance of the Biological Material..................................................................33
14. Use of Names and Trademarks.............................................................................34
15. Limited Warranty........................................................................................35
16. Patent Prosecution and Maintenance......................................................................36
17. Patent Marking..........................................................................................39
18. Patent Infringement.....................................................................................39
19. Indemnification.........................................................................................41
20. Notices.................................................................................................42
21. Assignability...........................................................................................43
22. Late Payments...........................................................................................44
23. Waiver..................................................................................................45
24. Failure to Perform......................................................................................45
25. Governing Laws..........................................................................................45
26. Government Approval or Registration ....................................................................45
27. Export Control Laws.....................................................................................46
28. Force Majeure...........................................................................................46
29. Confidentiality.........................................................................................47
30. Miscellaneous...........................................................................................49
APPENDIX A - PAGE 1A.............................................................................................51
APPENDIX A - PAGE 2A.............................................................................................52
APPENDIX A - PAGE 3A.............................................................................................53
APPENDIX B - PAGE 1B.............................................................................................54
APPENDIX C - PAGE 1C.............................................................................................56
Exhibit A........................................................................................................57
UC Case Nos. 1998-122, 1998-306, 1999-015, 1999-029, 1999-168, 1999-203,
1999-204, and 2000-045.
Print date: March 10, 2000
Exclusive License and Bailment Agreement
for
Nucleic Acids Encoding Proteins Used in Assays for Identifying Taste Modulators
This license agreement (Agreement) is effective this 10TH day of MARCH,
2000 by and between The Regents of the University of California (The Regents), a
California corporation, having its statewide administrative offices at 0000
Xxxxxxxx Xxxxxx, 00xx xxxxx, Xxxxxxx, XX 00000-0000, and Ambryx Inc. (Licensee),
a Delaware corporation, having a principal place of business at 00000 Xxxxx
Xxxxxx Xxxxx Xxxx Xxxxx 000, Xx Xxxxx, XX 00000, herein referred to collectively
as the parties (Parties).
RECITALS
Whereas, certain inventions generally characterized as "Nucleic
Acids Encoding Proteins Used In Assays for Identifying Taste Modulators,"
that may be useful for detecting molecules or compounds that effect taste
(Invention), were made at the University of California, San Diego by Drs.
Xxxxxxx X. Xxxxx, [...***...] (Principal Investigators), and at the National
Institutes of Health (NIH) by Drs. [...***...] and Xxxx Xxxx and are claimed
in Patent Rights defined below;
*CONFIDENTIAL TREATMENT REQUESTED
Whereas, the Licensee and The Regents entered into a Secrecy Agreement
(Secrecy Agreement), having U.C. Agreement Control No 0000-00-0000, effective
October 1, 1998, for the purpose of evaluating the Invention;
Whereas, the Licensee and The Regents entered into a letter agreement
(Letter Agreement), having U.C. Agreement Control No. 0000-00-0000, effective
April 9, 1999, for the purpose of entering into good-faith negotiations for a
license to the Invention in accordance with the terms of the Letter Agreement;
Whereas, because the Invention was developed under funding provided in
part by NIH and in part by the Xxxxxx Xxxxxx Medical Institute (HHMI), this
Agreement, and any licenses covering such Invention, are subject to overriding
obligations to the federal government and HHMI;
Whereas, under 35 U.S.C. Sections 200-212, The Regents may elect to
retain title to any invention made by it under U.S. government funding;
Whereas, if The Regents elects to retain title to such an invention,
then The Regents is required by law to grant to the United States Government a
nontransferable, paid up, nonexclusive, irrevocable license to use the invention
by or on behalf of the United States Government throughout the world;
Whereas, in accordance with 35 U.S.C. Sections 200-212,'The Regents
elected to retain title to the Invention and granted the required licenses to
the United States Government on the following dates: November 13, 1998, (UC Case
Nos. 1998-122, 1998-306, 1999-015 and 1999-029); February 5, 1999, (UC Case No.
1999-168); July 7, 1999, (UC Case No. 1999-203); September 13, 1999, (UC Case
No. 1999-204) and December 28, 1999 (UC Case No. 2000-045);
2
Whereas, patent applications claiming the Invention have been filed by
the Principal Investigators who, in accordance with their employment agreements,
have assigned their rights in the patent applications to The Regents and HHMI;
Whereas, The Regents has acquired the right to grant this license from
HHMI under the terms of the interinstitutional agreement (HHMI
Interinstitutional Agreement), having UC Control No. 86-18-0017, which is
incorporated herein by reference;
Whereas, The Regents is required under the terms of the HHMI
Interinstitutional Agreement to grant to the HHMI a paid-up, non-exclusive,
irrevocable license to use the Invention for non-commercial purposes, without
any right to sublicense others;
Whereas, [...***...] and Xxxx Xxxx are employed at NIH, and in
accordance with their patent agreement with NIH, have assigned to NIH their
interest in any patent rights covering inventions made during the course of
their employment with NIH;
Whereas, under the terms of an interinstitutional agreement [...***...]
and contained in Patent Rights I, and Patent Rights II appended hereto as
Exhibit "A" and incorporated herein;
Whereas, due to the Parties' inability to appropriately value the
Biological Products and Covered Products with respect to the value of any
product identified therewith, the Parties agree that for their convenience, a
royalty should be paid to The Regents on Identified Products and Service
Products;
3 *CONFIDENTIAL TREATMENT REQUESTED
Whereas, the Licensee is a "small entity" as defined in 37 CFR Section
1.9 and a "small-business concern" defined in 15 U.S.C. Section 632;
Whereas, both Parties recognize that the royalties due under this
Agreement will be paid on pending patent applications and issued patents;
Whereas certain Biological Materials, defined below, relating to the
Invention were made during the course of research by the Principal Investigator;
Whereas, it is the intent of the Parties to this Agreement to create a
bailment, among other things, for the Biological Materials defined below;
Whereas, Licensee has requested rights to practice the Invention and
use the Biological Materials in order to develop and commercialize products;
Whereas, The Regents has responded to Licensee's request by granting
the following rights to the Licensee so that the products and other benefits
derived from the Invention can be enjoyed by the general public.
-----------------------
The Parties agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms will have the meaning
set forth below:
1.1 "Property Rights" means all the personal proprietary rights of
The Regents covering the tangible personal property in the Biological Materials;
4
1.2 "Biological material" means the following biological materials
using nomenclature of the Principal Investigator:
[...***...]
1.3 "Biological Product" means: (a) any product containing a
biological substance (e.g., nucleic acids, amino acids, carbohydrates, or
lipids) that is comprised of or derived from the Biological Material, including,
but not limited to, the following: a taste receptor, plasmid, CDNA clone, gene,
promoter, protein, peptide, antibody, glycoprotein, hormone, or fragments and
any sequences thereof, or (b) any product produced or encoded by the Biological
Materials; or (c) any product substantially similar or identical to a compound
in (a) or (b) that is produced by chemical synthesis or by any other method
where such product could not have been produced but for the use of the
Biological Materials. Biological Products may either be a Covered Product or
Non-Patent Product.
5 *CONFIDENTIAL TREATMENT REQUESTED
1.4 "Patent Rights I" means all U.S. patents and patent
applications and foreign patents and patent applications assigned to The
Regents, and in the case of foreign patents and patent applications, those
existing as of the effective date of this Agreement and those requested under
Article 16.3 herein, including any reissues, extensions, substitutions,
continuations, divisions, and continuations-in-part applications (only to the
extent, however, that claims in the continuations-in-part applications are
supported in the specification of the parent patent application) based on any
subject matter claimed in the following:
[...***...]
1.5 "Patent Rights II" means all U.S. patents and patent
applications and foreign patents and potent applications assigned to The
Regents, and in the case of foreign patents and patent applications, those
existing as of the effective date of this Agreement and those requested under
Article 16.3 herein, including any reissues, extensions, substitutions,
continuations, divisions, and continuations-in-part applications (only to the
extent, however, that claims in the continuations-in-part applications are
6 *CONFIDENTIAL TREATMENT REQUESTED
supported in the specification of the parent patent application) based on any
subject matter claimed in the following:
[...***...]
7 *CONFIDENTIAL TREATMENT REQUESTED
[...***...]
1.6 "Patent Rights III" means all U.S. patents and patent
applications and foreign patents and patent applications assigned to The
Regents, and in the case of foreign patents and patent applications, those
existing as of the effective date of this Agreement and those requested under
Article 16.3 herein, including any reissues, extensions, substitutions,
continuations, divisions, and continuations-in-part applications (only to the
extent, however, that claims in the continuations-in-part applications are
supported in the specification of the parent patent application) based on any
subject matter claimed in the following:
[...***...]
8 *CONFIDENTIAL TREATMENT REQUESTED
[...***...]
9 *CONFIDENTIAL TREATMENT REQUESTED
1.7 "Patent Rights" means Patent Rights I, Patent Rights II, and
Patent Rights III.
1.8 "Patent Method" means any process or method claimed in Patent
Rights, the use of which, in a particular country, would infringe, but for the
license granted to the Licensee, an unexpired claim of a patent or pending claim
of a patent application were said claim issued in a patent under Patent Rights
in that country.
1.9 "Covered Products" means:
(a) any kit, composition of matter, material, product, or
Biological Product;
(b) any kit, composition of matter, material, product, or
Biological Product to be used in a manner requiring
the performance of the Patent Method; or
(c) any kit, composition of matter, material, product, or
Biological Product produced by the Patent Method;
to the extent that the manufacture, use, or sale of such kit, composition of
matter, material, product, or Biological Product, in a particular country, would
be covered by or infringe, but for the license granted to Licensee, an unexpired
claim of a patent or pending claim of a patent application were said claim
issued in a patent under Patent Rights in that country.
1.10 "Services" means a service provided by the Licensee, its
Affiliates, Joint Ventures, or sublicensees to a third party when such service
requires the making or using of the Biological Product, Covered Product or the
practicing of the Patent Rights.
1.11 "Non-Patent Products" means any kit, composition of matter,
material, product, comprising a Biological Product to the extent that the
manufacture, use, or sale
10
of which, in a particular country, does not infringe an unexpired claim of a
patent or pending claim of a patent application under Patent Rights.
1.12 "Identified Product" means any kit, product, compound,
biological agent, or other material the manufacture, use or sale of which is not
covered by Patent Rights and does not comprise a Biological Product, but which
is an agonist, an antagonist, or an inverse agonist that is identified through
the use of the Biological Product, Covered Product or the practice of the Patent
Rights and sold by Licensee, its Affiliates, Joint Ventures, or sublicensees.
1.13 "Service Product" means any kit, product, compound, biological
agent or other material, made, used, or sold by a third party, which is not
covered by Patent Rights and does not comprise a Biological Product, but which
is an agonist, an antagonist, or an inverse agonist that is identified by the
Licensee, its Affiliates, Joint Ventures, or sublicensees through the use of
Services provided to the third party by Licensee, its Affiliates, Joint
Ventures, or sublicensees.
1.14 "Products" means Covered Products, Non-Patent Products,
Identified Products, and Services.
1.15 "Service Revenues" means the total amount of gross
consideration collected from the sale of Services (1) less the cost of raw
materials, labor, direct and indirect cost (where such indirect and direct costs
do not exceed 125% of the cost for raw materials and labor) or (2) the standard
cost of Services as calculated in accordance with generally acceptable
accounting methods uniformly applied in all circumstances and approved in
writing by The Regents, provided, however, that such costs specified under (1)
or (2) above have not already been deducted from Research
11
Funding. Service Revenues does not include any consideration that Licensee
receives for Research Funding, reimbursement of patent filing, patent
prosecution, patent maintenance, royalties on Identified Products, royalties on
Covered Products, royalties on Profits, Sublicense Fees, or other expenses (as
agreed upon in writing by the Parties). [...***...] Moreover, if a Service is
provided that combines biologically or chemically active components provided by
third parties, then Licensee will be entitled to reduce the Profits paid to The
Regents by adjusting the Service Revenues on which the Profits are based. In
such event, the Service Revenues will be adjusted by the fraction (A/A+B) where
A is the number of biologically or chemically active components contained in
Services covered by Patent Rights or the use of the Biological Products and B is
the number of biologically or chemically active components provided by the third
party or Licensee that are not either Biological Products or covered by Patent
Rights.
1.16 "Affiliate" of the Licensee means any entity which, directly
or indirectly, controls the License, is controlled by the Licensee, or is under
common control with the Licensee. For these purposes, "control" is defined as
one person or entity having: the ownership or control of at least fifty percent
(50%) of the voting stock of the other
12 *CONFIDENTIAL TREATMENT REQUESTED
person or entity, or a lesser percentage of the voting stock if such a
percentage is the maximum allowed to be owned by a foreign entity in a
particular jurisdiction.
1.17 "Joint Venture" means any separate entity established by an
agreement between one or more third parties and Licensee, in which the separate
entity manufactures, uses, purchases, sells, or acquires Products from the
Licensee.
1.18 "Net Sales" means the gross invoice prices from the sale of
Products by the Licensee, its sublicensee, Affiliate, or Joint Venture to one or
more third parties for cash or other form of consideration in accordance with
generally accepted accounting principles, less only the following deductions (if
not already deducted from the gross invoice price and at rates customary within
the industry): (a) allowances (actually paid and limited to rejections, returns,
prompt payment discounts and volume discounts granted to customers of Products,
whether in cash or Products in lieu of cash); (b) freight, transport packing,
insurance charges and postage associated with transportation; and (c) taxes,
tariff, or import/export duties based on sales when included in gross sales, but
not value-added taxes or taxes assessed on income derived from such sales.
1.19 "Proprietary Information" will have the meaning set forth in
Paragraph 29.1.
1.20 "Research Funding" means the total payments received by
Licensee, its Affiliates, Joint Ventures, or sublicensees from a third party for
the conduct of scientific research, other than scientific research targeted to
the identification of Products or Service Products or a third party, under which
the Biological Product is used or the Patent Rights are practiced. Any
consideration received by Licensee, its Affiliates, Joint Ventures, or
sublicensees for the conduct of scientific research that does not use the
13
Biological Product or is not covered by the Patent Rights is outside the scope
of this Agreement, and The Regents is not entitled to share in such
consideration.
1.21 "Profits" means the sum total of Service Revenue and royalties
on Service Products.
2. GRANT
2.1 Subject to the limitations set forth in this Agreement and
subject to the licenses granted to the United States Government and HHMI as set
forth in the Recitals above, The Regents hereby grants to Licensee exclusive
licenses under Patent Rights in countries where Patent Rights exist for the
following: (i) to make, have made, use, sell, offer for sale, have sold, export,
and import the Covered Products; (ii) to provide Services to one or more third
parties; and (iii) to identify Identified Products and Service Products. For the
avoidance of doubt, for so long as The Regents has granted to Licensees the
above rights and licenses set forth in this Paragraph 2.1, Licensee, its
Affiliates, Joint Ventures, and sublicensees have the right to sell Identified
Products, and their third-party customers of Services have the right to sell
Service Products independent of The Regents.
2.2 Subject to the limitations set forth in this Agreement and
subject to the licenses granted to the United States Government and HHMI as set
forth in the Recitals above, The Regents hereby grants to Licensee exclusive
licenses under Property Rights in countries where Property Rights may be
lawfully granted for the following: (i) to possess, make (propagate), have made,
and use the Biological Materials; (ii) to make, have made, use, sell, offer for
sale, have sold, export, and import the Non-Patent
14
Products; (iii) to provide Services to one or more third parties; and (iv) to
identify Identified Products and Service Products. For the avoidance of doubt,
for so long as The Regents has granted to Licensee the above rights and licenses
set forth in this Paragraph 2.2, Licensee, its Affiliates, Joint Ventures, and
sublicensees have the right to sell Identified Products, their third-party
customers of Services have the right to sell Service Products independent of The
Regents.
2.3 The rights granted to Licensee under Paragraphs 2.1 and 2.2
above are limited to the right to possess, make (propagate), have made, and use
the Biological Materials only for the purposes stated in this Agreement and for
no other purposes. Licensee acknowledges that title to the tangible material
comprising the Biological Materials is owned by The Regents and is not
transferred to Licensee under this Agreement except as necessary to permit the
sale of Products that is comprised of the Biological Material (e.g. Biological
Product). Licensee will not sell, donate, abandon, or otherwise transfer the
Biological Materials to any third party other than an Affiliate, Joint Venture,
or, sublicensee.
2.4 For any licenses granted to Licensee under Paragraphs 2.1 and
2.2 above, The Regents also grants to Licensee the right to issue sublicenses to
one or more third parties to make, have made, use, sell, offer for sale, have
sold, export, and import Products and practice the Patent Method, provided that
Licensee retains exclusive rights thereto under this Agreement. To the extent
that rights are granted to sublicensees under specific terms and covenants, such
terms and covenants will provide for the rights and obligations due The Regents,
HHMI, and United States Government, including royalties sufficient to provide
for payment to The Regents by
15
Licensee at the rates and bases set forth in Article 4 (Royalties) and
Sublicense Fees, if any, as set forth in Paragraph 3.2. For each sublicense
granted by Licensee, the Licensee will:
(a) notify The Regents of the sublicense granted and
provide the Regents with an unredacted copy of the
sublicense agreement, which will be subject to the
confidentiality provisions of this Agreement;
(b) [...***...]
(c) [...***...] The Parties recognize that a sublicensee
may request modifications or changes to these
reports, and that such modifications or changes will
be acceptable subject to receipt of The Regents'
consent.
2.5 Licensee may, at its sole discretion, reduce the exclusive
licenses granted under Paragraphs 2.1 and 2.2 to non-exclusive licenses, and
subject to Paragraph 2.6, all sublicenses granted by Licensee must be assigned
to The Regents.
2.6 Upon the earlier to occur, termination of this Agreement or
when licenses granted to License under Paragraphs 2.1 and 2.2 are reduced from
exclusive to nonexclusive licenses, Licensee will assign to The Regents any
sublicenses issued by Licensee, except that The Regents will not assume any
obligations of the sublicense that extend beyond the duties and obligations of
The Regents that are contained in this Agreement. If this Agreement is
terminated and Licensee has issued any contracts to a third party under which
Licensee receives a royalty based on a Service Product, then the third party
will pay directly to The Regents its share of the royalty based on Profits as
set forth in Paragraph 4.1 below.
16 *CONFIDENTIAL TREATMENT REQUESTED
2.7 The licenses granted hereunder will be subject to the
overriding obligations of the U.S. Government, including those set forth in 35
U.S.C. 200-212 and applicable governmental implementing regulations.
2.8 The manufacture of Covered Products and the practice of the
Patent Method will be subject to applicable government importation laws and
regulations of a particular country when Covered Products are made outside the
particular country in which such Covered Products are used or sold.
2.9 Nothing in this Agreement will limit the right of The Regents,
the U.S. government, and HHMI to do any of the following: (1) publish any and
all technical data resulting from any search performed by The Regents, the U.S.
government, and HHMI relating to the Invention, to the extent that such results
do not contain Licensee's Proprietary Information; or (2) make and use the
Invention, Biological Materials, Biological Products, Covered Products, Patent
Method, and associated technology and allow other educational and non-profit
institutions to do so only for educational and noncommercial research purposes.
3. ISSUE FEE
3.1 As partial consideration for all the rights and licenses
granted to the Licensee, the Licensee will pay to The Regents a license issue
fee of [...***...] to be paid according to the following schedule:
(a) [...***...] to be paid to The Regents on or before
[...***...] recited on page one of this Agreement.
This payment includes [...***...]
17 *CONFIDENTIAL TREATMENT REQUESTED
[...***...];
(b) [...***...] to be paid to The Regents on or before
[...***...]. This payment includes [...***...];
(c) [...***...] to be paid to The Regents on or before
[...***...]. This payment includes [...***...];
(d) [...***...] to be paid to The Regents on or before
[...***...]. This payment includes [...***...];
(e) [...***...] to be paid to The Regents on or before
[...***...]. This payment includes [...***...]; and
(f) [...***...] to be paid to The Regents on or before
[...***...]. This payment includes [...***...].
3.2 Beginning [...***...] and for each year thereafter through the
year [...***...], Licensee will pay to The Regents an annual maintenance fee of
[...***...]. This license maintenance fee will be paid to The Regents on or
before February 28 of each such year.
3.3 For each sublicense granted by Licensee to an Affiliate, Joint
Venture, or sublicensee to make and use the Biological Materials, Biological
Products, or Covered
18 *CONFIDENTIAL TREATMENT REQUESTED
Products or the practice of Patent Rights, Licensee will pay to The Regents
[...***...] of all consideration due under each sublicense agreement, which will
include the Premium as defined below, (Sublicense Fee). The Sublicense Fee does
not include any consideration received by Licensee for Research Funding,
investments in equity or debt financing, excluding the Premium, royalties on
Identified Products, royalties on Covered Products and Profits, minimum annual
royalties, and reimbursement of patent costs, as specified in this Agreement.
Licensee will pay each Sublicense Fee to The Regent quarterly on or before the
dates set forth in Paragraph 4.3 below for Sublicense Fees received in the prior
calendar quarter.
3.4 [...***...]
3.5 If a Sublicense Fee is collected that combines biologically or
chemically active components comprising either Biological Products or that are
covered by Patent Rights (The Regents' Products) and biologically or chemically
active components provided by third parties, then Licensee will be entitled to
reduce the portion of the Sublicense Fee paid to The Regents by adjusting the
total amount of the Sublicense
19 *CONFIDENTIAL TREATMENT REQUESTED
Fees on which The Regents' portion is based. In such event, the total amount of
the Sublicense Fees will be adjusted by the fraction (A/A+B) where A comprises
The Regents' Products and B is the number, of biologically or chemically active
components provided by Licensee or third parties that do not either comprise the
Biological Products or covered by Patent Rights.
3.6 The fees set forth in Paragraphs 3.1, 3.2 and 3.3 above will
not be refunded, credited, or considered an advance against royalties, fees, or
reimbursements for patent costs due and owing to The Regents under this
Agreement.
4. ROYALTIES
4.1 As further consideration for all the rights and licenses
granted to the Licensee, its Affiliates, Joint Ventures and sublicensees will
pay to The Regents a royalty according to the following:
(a) A royalty rate of [...***...] received by Licensee,
its Affiliates, Joint Ventures or sublicensees where
Covered Products are used or Patent Rights are
practiced;
(b) A royalty rate of [...***...] received by Licensee,
its Affiliates, Joint Ventures, or sublicensees where
a Biological Material or a Non-Patent Product is
used. If a Product falls within the provisions of
both 4.1a and 4.1b, then Licensee will pay only the
royalty rate specified in Paragraph 4.1a above (i.e.,
a royalty rate of [...***...] received by Licensee,
its Affiliates, Joint Ventures, and sublicenses);
(c) A royalty rate of [...***...] of each Identified
Product sold by Licensee, its Affiliates, Joint
Ventures, or sublicensees and identified through the
use of Covered Products or the practice of the Patent
Rights;
(d) A royalty rate of [...***...] of each Identified
Product sold by Licensee, its Affiliates, Joint
20 *CONFIDENTIAL TREATMENT REQUESTED
Ventures, or sublicensees and identified through the
use of Non-Patent Products or the Biological
Materials;
(e) A royalty rate of [...***...] of each Covered Product
sold by Licensee, its Affiliates, Joint Ventures or
sublicensees. In the event Licensee must pay to The
Regents and one ormore third parties a total royalty
rate that exceeds [...***...] for royalties paid on
Products covered by Patent Rights and the patent
rights of one or more third parties, Licensee may
reduce the royalty rate due The Regents by
[...***...] the royalty rate paid to a third party,
provided, however, that in no event will the royalty
rate paid to The Regents be less than [...***...].
In the event that Licensee is unable to negotiate a royalty based on the sales
of Service Products due to payments already received by Licensee for the sale of
Services, then no royalty will be due to The Regents.
4.2 If a Product is combined and sold in the form of a
multi-component product containing ingredients, which ingredients, themselves,
are not Products, then Licensee will be entitled to reduce the royalties paid to
The Regents by adjusting the Net Sales on which the royalties are based. In such
event, the Net Sales base will be adjusted to be the greater of the amounts
calculated using Methods A, B or C below, as follows:
(a) Method A: Net Sales equals ((cost of the Product used
in the subject multi-component product) divided by
(the total cost of such multi-component product)) and
multiplied by (the sales price of such
multi-component product);
(b) Method B: Net Sales equals (the sales price of the
subject multi-component product containing the
Product) minus (the sales price of a comparable
multi-component product not containing the Product);
provided that the components which are not the
Product are similar and comparable in each case; or
(c) Method C: Net Sales equals the sales price for the
Product (not combined with other components) as sold
to independent third parties purchasing similar
quantities of the Product.
21 *CONFIDENTIAL TREATMENT REQUESTED
4.3 Royalties will accrue in each country for [...***...] in that
country and will be payable to The Regents when: (1) the Profits are received by
the Licensee on Service Products, and (2) Products are invoiced, or if not
invoiced, when the Products are delivered to a third party or to the Licensee,
Affiliate, Joint Venture, or sublicensee for end use.
4.4 Royalties and Sublicense Fees accruing to The Regents will be
paid to The Regents quarterly on or before the following dates for the royalties
and Sublicensing Fees received in the prior calendar quarter:
- February 28 for the calendar quarter ending December
31;
- May 31 for the calendar quarter ending March 31;
- August 31 for the calendar quarter ending June 30;
and
- November 30 for the calendar quarter ending September
30.
4.5 Each such payment will be for royalties and Sublicense Fees
that have accrued up to Licensee's most recently completed quarter.
4.6 Beginning in the year [...***...] the Licensee will pay to The
Regents a minimum annual royalty in the amounts and at the times set forth
below:
Year Amount
[...***...]
[...***...]
[...***...]
[...***...]
[...***...]
22 *CONFIDENTIAL TREATMENT REQUESTED
4.7 In each succeeding calendar year after the year [...***...]
the Licensee will pay a minimum annual royalty of [...***...] and thereafter for
the life of this Agreement. This minimum annual royalty will be paid to The
Regents by February 28 of each year and will be credited against any royalties
due and owing for the calendar year in which the minimum payment was made
4.8 If the licenses granted to Licensee under Paragraphs 2.1 and
2.2 are reduced from exclusive to non-exclusive licenses, and The Regents grants
the same rights under a non-exclusive license to any third party at more
favorable financial terms than specified in Articles 3 (issue Fees) and 4
(Royalties), then The Regents will notify the Licensee in writing of the
financial terms contained in the other license agreement. Licensee will have
[...***...] days from the effective date of The Regents' written notice to elect
to amend this Agreement. Licensee may elect to amend this Agreement, upon
written notice to The Regents, by replacing in whole, but not in part, the
financial terms of this Agreement with the financial terms of the other license
agreement.
4.9 In the event reproducible data shows that functional
expression of human T1R1, T1R2 or an member of the T2R receptor family can be
used in a format suitable for identifying taste modulators consisting of a sweet
or salt antagonist, inverse agonist, or agonist, then the Parties will negotiate
in good faith to raise the minimum annual royalties to account for additional
amounts to be paid to The Regents for the increased value provided to Licensee
for the use of receptors in identifying the additional taste modulators.
4.10 All consideration due The Regents will be payable in United
States currency collectible at par in San Francisco, California. When Products
are sold or
23 *CONFIDENTIAL TREATMENT REQUESTED
Sublicense Fees are paid for consideration other than United States currency,
the royalties and Sublicense Fees will first be determined in the foreign
currency of the country in which such Products were sold and Sublicense Fees
were received and then converted into equivalent United States currency. The
exchange rate will be the rate that is quoted in the Wall Street Journal on the
last business day of the reporting period.
4.11 Royalties on sales of Products and Sublicense Fees received 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 except those taxes,
fees, and charges allowed under the provisions of Paragraph 1.18 (Net Sales).
[...***...].
4.12 Notwithstanding the provisions of Article 28 (Force Majeure)
below, if at any time Licensee is prevented from promptly paying part or all of
the royalties or Sublicense Fees owed to The Regents because of legal
restrictions encountered by Licensee in any country where a Product is sold or
distributed, or a sublicense is issued, the Licensee will convert the amount
owed to The Regents into United States currency and will pay The Regents
directly from another source of funds for the amount impounded.
4.13 In the event any patent or claim under Patent Rights is held
invalid in a final decision by a court of competent jurisdiction and last resort
and from which no appeal has or can be taken, Licensee, its Affiliates, Joint
Ventures, or sublicensees are not obligated to pay royalties based on such
patent or claim, or any claim patentably indistinct therefrom as of the date of
final decision. The Licensee, its Affiliates, Joint Ventures, or sublicensees
will not, however, be relieved from paying: (1) royalties that
24 *CONFIDENTIAL TREATMENT REQUESTED
accrued before the final decision; (2) royalties that are based on another
unexpired patent or claim; (3) royalties that are not involved in the final
decision; or (4) Profits due under Paragraph 4.1b, and royalties due on
Identified Products under Paragraph 4.1d.
4.14 No royalties will be collected or paid to the Regents on
Products and Service Products sold to the United States Government. The
Licensee, its Affiliates, Joint Ventures or sublicensees will reduce the amount
charged for Products and Service Products distributed to the United States
Government by an amount equal to the royalty otherwise due The Regents for such
Products and Service Products.
5. DUE DILIGENCE
5.1 The Licensee, upon execution of this Agreement, will
diligently proceed to develop, manufacture, market, and sell Identified Products
and to develop and to provide Services to its customers, in quantities
sufficient to meet market demand therefor.
5.2 The Licensee will be entitled to exercise prudent and
reasonable business judgment in the manner in which it meets its due diligence
obligations. In no case, however, will the Licensee be relieved of its
obligations to meet the due diligence provisions of this Article 5 (Due
Diligence).
5.3 The Licensee will obtain all necessary governmental approvals
in each country in which Licensee manufactures and sells Covered Products,
Non-Patent Products, and Identified Products and provides Services to its
customers.
25
5.4 Subject to Paragraph 5.6, The Regents will have the right to
[...***...] if the Licensee is unable to perform any of the following:
[...***...]
5.5 In the event reproducible data shows that functional
expression of human T1R1, T1R2, or any member of the T2R receptor family can be
used in a format suitable
26 *CONFIDENTIAL TREATMENT REQUESTED
for identifying taste modulators consisting of a sweet or salt antagonist,
inverse agonist, or agonist, then additional due diligence provisions, such as
milestone events and the corresponding dates in which such milestone events will
be met, will be added to this Agreement upon the good-faith negotiations of the
Parties.
5.6 To exercise the right to [...***...], The Regents will give
Licensee written notice of the deficiency. If Licensee does not cure the
deficiency within sixty (60) days after the written notice takes effect and does
not demonstrate to the Regents' satisfaction, by written, tangible evidence,
that such default has been cured, then The Regents may, at its option,
[...***...]. The exercise of this right and option by The Regents supersedes the
rights granted in Article 2 (Grant). Any notice given by either Party will be
subject to Article 20 (Notices).
6. PROGRESS AND ROYALTY REPORTS
6.1 Licensee will provide The Regents with a progress report every
six months beginning on August 31, 2000, and continuing until the first
commercial sale in the United States, Europe, and Japan for each of the
following Product categories: Covered Product, Identified Product, and Services.
6.2 The progress reports submitted under Paragraph 6.1 will cover
the development and testing of all Products, and the receipt of all governmental
approvals necessary for the marketing of these Products. In particular, the
progress reports will
27 *CONFIDENTIAL TREATMENT REQUESTED
include, but not be limited to, the following topics directly related to
Products so that The Regents may determine Licensee's progress in developing and
testing Products and whether Licensee has met its diligence obligations set
forth in Article 5 (Due Diligence) above:
- summary of work completed
- key scientific discoveries
- summary of work in progress
- current schedule of anticipates events or milestones
- anticipated date of first commercial sale, which date
shall not be required to be reported earlier than 6
months prior to such date, for Covered Products (if
applicable), Identified Products, and Services (if
applicable), in the United States, Europe and Japan
- activities of Affiliates, Joint Ventures and
sublicensees, if any.
6.3 The Licensee will report to The Regents the first date
Licensee receives Profits and the date of first commercial sale of each Product
in the United States, Europe and Japan by reporting these dates in its
subsequent progress and royalty reports.
6.4 After the first commercial sale of a Product, the Licensee
will provide The Regents with quarterly royalty reports on or before each
February 28, May 31, August 31, and November 30 of each year. Each royalty
report will cover the most recently completed quarter (October through December,
January through March, April through June, and July through September) and will
show:
28
(a) the Sublicense Fees, Service Revenues, gross sales
and Net Sales of Products sold by the Licensee and
its Affiliates, Joint Ventures, sublicensees, and the
Profits based on Service Products sold by a third
party during the most recently completed calendar
quarter;
(b) the number of Products; sold or distributed and the
Profits received by the Licensee, its Affiliates,
Joint Ventures, sublicensees, and the number of
Service Products; sold by a third party;
(c) the patent applications and patents contained in
Patent Rights that either claim the Products or were
used to identify the Identified Products and Service
Products. If neither Patent Rights claim the Products
nor were the Patent Rights used to identify
Identified Products and Service Products, then the
Biological Materials or Non-Patent Products used to
make or use the Products or identify the Identified
Products and Service Products;
(d) the royalties and Sublicense Fees paid in United
States currency;
(e) the exchange rates used, if any; and
(f) the method used to calculate the royalty, including
all deductions taken.
6.5 If no sales have been made on Products or no Profits have been
received by Licensee during any reporting period after the first commercial sale
of a Product or the first date Profit were received, then a statement to that
fact is required.
7. BOOKS AND RECORDS
7.1 The Licensee will keep accurate books and records showing all
Products manufactured, used, or sold and Profits received under the terms of
this Agreement. Such books and records will be held in safe keeping for at least
five years after the date of the royalty payment to which they pertain. The
Regents and its representatives and agents may inspect such books and records at
reasonable times, and not more than once per calendar year, as agreed to in
advance by Licensee, to determine the
29
accuracy of the books and records and to determine whether Licensee is in
compliance with the terms of this Agreement.
7.2 The Regents will pay the fees and expenses of its
representatives that perform the inspection as specified in Paragraph 7.1. If,
however, an error in royalties or Sublicense Fees is discovered that amounts to
more than five percent (5%) of the total royalties and Sublicense Fees due for
the first three years after the effective date of this agreement, or an error in
royalties or Sublicensee Fees that amounts to more than ten percent (10%) of the
total royalties and Sublicense Fees for any year after the third year past the
effective date of this Agreement, then the fees and expenses of these
representatives will be borne by the Licensee.
8. LIFE OF THE AGREEMENT
8.1 Unless otherwise terminated by operation of law or by acts of
the Parties in accordance with the terms of this Agreement, this Agreement will
be in force from the effective date recited on page one and will remain in
effect until [...***...].
8.2 Any termination of this Agreement will not affect the rights
and obligations set forth in the following Articles:
Article 7 Books and Records
30 *CONFIDENTIAL TREATMENT REQUESTED
Article 11 Disposition of Products and Biological
Materials on Hand Upon Termination
Article 14 Use of Names and Trademarks
Article 15 Limited Warranty
Paragraph 16.5 Patent Prosecution and Maintenance
Article 19 Indemnification
Article 24 Failure to Perform
Article 29 Confidentiality
8.3 Any termination of this Agreement will not relieve the
Licensee of its obligation to pay any monies due and owing at the time of, or
prior to, such termination. Licensee is not obligated to pay The Regents any
issue fees due under Paragraph 3.1 and any minimum annual royalties due under
Article 4, which fees and royalties are not due and owing at the effective date
of termination.
9. TERMINATION BY THE REGENTS
9.1 Subject to Paragraph 5.6, if Licensee violates or fails to
perform any term or covenant of this Agreement, then The Regents may give
written notice of default (Notice of Default) to the Licensee. If Licensee fails
to cure the default within sixty (60) days after such notice takes effect, then
The Regents will have the right to terminate this Agreement by giving 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 date
such notice takes effect. Termination of this Agreement will not relieve the
Licensee of its obligation to pay any royalty, minimum annual royalty,
reimbursement for patent costs, and Sublicense Fee owing at the time of, or
prior to, such termination and
31
will not impair any accrued right of The Regents. These notices will be subject
to Article 20 (Notices).
10. TERMINATION BY THE LICENSEE
10.1 The Licensee will have the right at any time to terminate this
Agreement in whole or with respect to any portion of Patent Rights or Property
Rights by giving to The Regents a written Notice of Termination. Subject to
Article 20 (Notices), if a Notice of Termination is sent to The Regents, this
Agreement, or that portion of the Patent Rights or Property Rights subject to
such Notice of Termination, will automatically terminate sixty (60) days after
such notice takes effect.
10.2 In the event of termination, Licensee is not relieved of any
obligation or liability that has accrued hereunder prior to or at the time of
termination, including any obligation to pay fees (e.g., Sublicense Fees),
royalties, minimum annual royalties, or reimbursements of patent costs. Any
performance(s) made by Licensee prior to the termination of this Agreement,
including any payment made by Licensee, is not rescinded by the event of
termination. Minimum annual royalties not already owed prior to or at the date
of such Notice of Termination will not be owed to The Regents. Any rights of The
Regents that arose under this Agreement prior to the termination will not be
affected by he event of termination.
11. DISPOSITION OF PRODUCTS AND BIOLOGICAL MATERIALS
ON HAND UPON TERMINATION.
11.1 In the event this Agreement terminates prior to the expiration
of its full term, Licensee may sell only previously made or partially made
Products for a period of
32
not more than [...***...] days following the effective date of termination. The
sale of such Products will be subject to the terms of this Agreement including,
but not limited to, the payment of Sublicense Fees and royalties at the rates,
bases, and times provided herein, and the rendering of reports in connection
therewith.
11.2 Upon termination of this Agreement, Licensee will destroy any
Biological Materials and Biological Products that Licensee has in its possession
within [...***...] after the effective date of termination. Within [...***...]
following the effective date of termination, Licensee will notify The Regents in
writing that such Biological Materials and Biological Products have been
destroyed.
12. SUPPLY OF THE BIOLOGICAL MATERIAL
12.1 The Principal Investigators will initially supply Licensee
with viable samples of the Biological Materials within sixty (60) days from the
effective date recited on page one of this Agreement. To the extent Licensee
requests and necessarily requires additional samples from the Principal
Investigators during the term hereof, and the Principal Investigators have such
additional samples in its possession and control, the Principal Investigators
will supply such additional samples to the Licensee. Licensee will pay the
actual handling and shipping costs for any samples provided.
13. MAINTENANCE OF THE BIOLOGICAL MATERIAL
13.1 The Regents and the NIH expressly reserves the right to
transfer the Biological Materials to one or more non-profit third parties for
educational and non-commercial research purposes only. The Regents will instruct
the Principal Investiga-
33 *CONFIDENTIAL TREATMENT REQUESTED
tors that they can transfer the Biological Materials to non-profit third parties
solely for educational and non-commercial research purposes under the terms and
conditions set forth in the biological material transmission letter attached
hereto as Appendix A. The NIH will instruct its inventors that they can transfer
the Biological Materials to non-profit third parties solely for educational and
non-commercial research purposes under the terms and conditions set forth in the
Uniform Biological Material Transfer Agreement issued by the NIH. The Licensee
understands that The Regents' and the NIH's right to transfer the Biological
Materials for educational and non-commercial research purposes could lead to the
inadvertent loss or diminution of proprietary and commercial value of the
Biological Materials. The Regents will use its best efforts to transfer the
Biological Material to non-profit third parties in the manner set forth above in
order to minimize the loss or diminution of value. If a loss does occur, The
Regents agrees to negotiate in good faith for a reduction in payments owed by
Licensee when such payments directly relate to the Biological Material.
14. USE OF NAMES AND TRADEMARKS
14.1 Nothing contained in this Agreement will be construed as
giving Licensee, the HHMI, or The Regents the right to use any name, trade name,
trademark, or other designation (including contractions, abbreviations or other
designations thereof) of any of the above-named entities for the purpose of
advertising, publicity, or other promotional activities. Unless required by law
or consented to in writing by the Executive Director, Research Administration
and Technology Transfer of The Regents, the Licensee is expressly prohibited
from using the name "The Regents of the University of
34
California," the name of any campus of the University of California, the
National Institutes of Health, or Xxxxxx Xxxxxx Medical Institute for the
purposes of advertising, publicity, or other promotional activities.
14.2 The Regents, the NIH, and HHMI will be free to release the
terms of this Agreement upon the request of, and only to the inventors and
senior administrative officials of The Regents, the NIH, and HHMI. If such
release is made, The Regents, the NIH, and HHMI will request that the terms of
this Agreement be kept in confidence pursuant to Article 29 (Confidentiality).
Should a third party inquire whether a license to Patent Rights is available,
The Regents, the NIH, and HHMI may disclose the existence of this Agreement and
the extent to which rights are granted under Article 2 (Grant). The Regents, the
NIH, and HHMI will not disclose the name of the Licensee, except when The
Regents, the NIH, or HHMI is required by law to release such information
pursuant to the California Public Records Act or other applicable law.
15. LIMITED WARRANTY
15.1 The Regents, the U.S. government, and HHMI warrant to the
Licensee that they have the lawful right to grant this license.
15.2 The Invention, Biological Material, Products, Patent Rights,
Property Rights and Patent Methods are provided WITHOUT WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY,
EXPRESS OR IMPLIED. THE REGENTS, THE U.S. GOVERNMENT, AND HHMI MAKE NO
REPRESENTATION OR WARRANTY THAT THE INVENTION, BIOLOGICAL MATERIAL, PRODUCTS,
PATENT RIGHTS, PROPERTY RIGHTS OR
35
PATENT METHOD WILL NOT INFRINGE ANY OTHER PATENT OR OTHER PROPRIETARY RIGHT.
15.3 IN NO EVENT WILL THE REGENTS, THE U.S. GOVERNMENT, OR HHMI BE
LIABLE FOR ANY INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES RESULTING FROM
EXERCISE OF THIS LICENSE OR THE USE OF THE INVENTION, BIOLOGICAL MATERIAL,
PRODUCTS, PATENT RIGHTS, PROPERTY RIGHTS OR PATENT METHOD.
15.4 Nothing in this Agreement will be construed as:
(a) A warranty or representation by The Regents, the U.S.
government, or HHMI as to the validity,
enforceability, or scope of any Patent Rights; or
(b) a warranty or representation that anything made,
used, sold, or otherwise disposed of 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 18. (Patent Infringement); or
(d) conferring by implication, estoppel, or otherwise,
any license or rights under any patents of The
Regents, the U.S. government, and HHMI other than
Patent Rights as defined herein, regardless of
whether such patents are dominant or subordinate to
Patent Rights; or
(e) an obligation to furnish any know-how not provided in
Patent Rights or Biological Materials.
16. PATENT PROSECUTION AND MAINTENANCE
16.1 The Regents will diligently prosecute and maintain the patent
applications and patents under Patent Rights. The Regents will promptly provide
the Licensee with copies of all relevant documentation so that Licensee may
continually be informed on
36
the status of the prosecution. Licensee may comment upon such documentation one
month in advance of any initial deadline for filing a response to the U.S. or
foreign patent office. If, however, Licensee has not commented sufficiently in
advance of the initial deadline for filing a response with the appropriate
government patent office, The Regents will be free to respond without
considering Licensee's comments, if any. Both Parties will keep all prosecution
related documents in confidence pursuant to the provisions of Article 29
(Confidentiality) herein. Counsel for The Regents will take instructions only
from The Regents.
16.2 The Regents will use all reasonable efforts to amend any
patent application, including claims requested by Licensee, to protect the
Covered Products, Services, and Patent Methods that are contemplated to be sold
or practiced under this Agreement.
16.3 The Regents will, at the request of the Licensee, file,
prosecute, and maintain patent applications and patents under Patent Rights in
foreign countries if such rights are available. The Licensee must notify The
Regents within seven months of filing a corresponding United States patent
application of its decision to file a counterpart foreign patent application.
This notice concerning foreign filing must be in writing and must identify the
countries desired. If The Regents does not receive written notice within the
seven-month period, then the absence of such notice will be considered an
election by License not to secure foreign patent rights on its behalf. The
Regents will have the right to file patent applications at its own expense in
any country not designated by Licensee, and such patent applications and
resulting patents, if any, will not be included in the licenses granted under
this Agreement.
37
16.4 Licensee will [...***...].
16.5 Licensee's [...***...]. The Licensee may, with respect to any
particular patent application or patent, terminate its obligations to the patent
application or patent in any or all designated countries upon giving The Regents
advance written notice of three months. The Regents may continue prosecution or
maintenance of such application(s) or patent(s) [...***...] provided, however,
that the Licensee will have no further rights or licenses thereunder.
38 *CONFIDENTIAL TREATMENT REQUESTED
16.6 The Licensee will notify The Regents of any change of status
as a small entity (as defined by the United States Patent and Trademark Office),
which includes notifying The Regents of its first sublicensee that does not
qualify as a small entity.
17. PATENT MARKING
17.1 The Licensee will xxxx all Products, or containers thereof,
made, used, or sold under the terms of this Agreement in accordance with the
applicable patent marking laws.
18. PATENT INFRINGEMENT
18.1 In the event Licensee knows that one or more third parties are
substantially infringing the Patent Rights under this Agreement, the Licensee
will promptly notify The Regents in writing and provide The Regents with
reasonable evidence of such infringement.
18.2 Both Parties to this Agreement acknowledge that during the
period and in a jurisdiction where the Licensee has exclusive rights under this
Agreement, neither Party will notify a third party other than NIH and HHMI that
an infringement of Patent Rights occurred without first obtaining consent of the
other Party. Both Parties will use their best efforts in cooperation with each
other to terminate the infringement without litigation.
18.3 If the Licensee desires that Patent Rights be enforced against
infringers, and the Licensee has exclusive rights under Patent Rights, the
Licensee either may request The Regents to take legal action against the patent
infringer or may request
39
permission from The Regents to file suit against the patent infringer.
Licensee's request must be made in writing and must include reasonable evidence
of the infringement and resulting damages to the Licensee. If the infringing
activity has not been abated within 90 days following the effective date of
Licensee's request, then The Regents and The NIH will have the right to elect
one of the following:
(a) commence suit on their own account; or
(b) refuse to participate in suit against the patent
infringer.
The Regents and NIH will give written notice of their election to the Licensee
within 100 days following the effective date of Licensee's written request. The
Licensee, thereafter, may bring suit for patent infringement if and only if The
Regents and the NIH elects not to commence suit and if the infringement occurred
during the period and in a jurisdiction where the Licensee had exclusive rights
under this Agreement. In the event Licensee elects to bring suit in accordance
with this Paragraph, The Regents and NIH may thereafter join such suit at their
own expense.
18.4 The Party who brought the suit will pay for all legal costs
and will recover any and all recoveries; provided, however, that if The Regents
and/or the NIH brought suit on their own account, then the Parties and the NIH
may share in the expense and the recoveries will be allocated in the following
order: (a) each party will be reimbursed in equal amounts for attorney's costs,
fees, and other related expenses (to the extent that each party paid for such
costs, fees, and expenses) until all such costs, fees, and expenses are
reimbursed; and (b) each party will share equally in any remaining amount in
proportion to the share of expenses paid by each party.
40
18.5 Each party will cooperate with the others during litigation
proceedings instituted hereunder but at the expense of the party who brought the
suit. The party bringing suit will control such litigation, except that The
Regents may be represented by counsel of its choice in any suit brought by the
Licensee.
19. INDEMNIFICATION
19.1 The Licensee will (and require its Affiliates, Joint Ventures
and sublicensees to) indemnify, hold harmless, and defend The Regents, NIH, and
HHMI, its officers, employees, agents, and the sponsors of the research (e.g.
NIH and HHMI) that led to the Biological Materials and Invention; the inventors
of any invention covered by patents or patent applications in Patent Rights
(including Products and Patent Method contemplated thereunder) and their
employers against any and all claims, suits, losses, damage, costs, fees, and
expenses resulting from or arising out of exercise of this license or any
sublicense. This indemnification will include, but will not be limited to, any
product liability.
19.2 The Licensee, at its sole cost and expense, will insure its
activities in connection with the work or activities under this Agreement and
obtain prior to initiating such work or activity, and keep in force, and
maintain insurance as follows (or an equivalent program of self insurance):
(a) Comprehensive or Commercial Form General Liability
Insurance (contractual liability included) with
limits as follows:
Each Occurrence .........................................................$1,000,000
Products/Completed Operations Aggregate..................................$5,000,000
41
Personal and Advertising Injury .........................................$1,000,000
General Aggregate (commercial form only) ................................$5,000,000
(b) The above referenced coverages and limits will not
limit in any way the liability of the Licensee. The
Licensee will furnish The Regents with certificates
of insurance evidencing compliance with all
requirements. Such certificates will:
(i) provide The Regents with advance written
notice of 30 days to any modification;
(ii) indicate that The Regents NIH, and HHMI have
been insured under the above coverages; and
(iii) provide that coverages will be primary and
will not participate with nor will be excess
over any valid and collectable insurance or
program of self-insurance carried or
maintained by The Regents, NIH, and HHMI.
19.3 The Regents will promptly notify the Licensee in writing of
any claim or suit that has been brought against The Regents for which The
Regents, NIH, or HHMI intends to invoke the provisions of this Article 19
(Indemnification). The Licensee also will keep The Regents informed on a current
basis of its defense of any claims pursuant to this Article 19
(Indemnification).
20. NOTICES
20.1 Any notice or payment required to be given to either Party
will be deemed to have been properly given and to be effective:
42
(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
(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 of payment; and
when sent to the respective addresses given below, or to another address as
designated in writing by the Party changing its address.
In the case of the Licensee: Ambryx Inc.
00000 Xxxxx Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention:
Xxxxx X. Xxxxxx
Executive Director, Corporate Development
Telephone: (000) 000-0000
In the case of The Regents: THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA
Office of the President
Office of Technology Transfer
0000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention:
Executive Director
Research Administration and Technology
Transfer
Referring to: U.C. Case No. 1998-122
21. ASSIGNABILITY
21.1 This Agreement is binding upon and will inure to the benefit
of The
43
Regents, its successors and assigns, but will be personal to the Licensee. This
Agreement will not be assigned by the Licensee to any third party without the
prior written consent of The Regents, except that Licensee can assign this
Agreement to its successor without prior written consent of The Regents provided
that Licensee has sold all or substantially all of its business assets or in
connection with the acquisition of Licensee. Any other attempt by Licensee to
assign this Agreement is void unless Licensee obtains the prior written consent
of The Regents.
22. LATE PAYMENTS
22.1 In the event royalty payments, fees, or reimbursements for
patent prosecution costs are not received by The Regents when due, the Licensee
will pay to The Regents interest charges at a rate of ten percent (10%) simple
interest per annum. Such interest will be calculated from the date payment was
due until actually received by The Regents. The Regents' acceptance of any late
payment interest from the Licensee under Article 22 will in no way affect the
provision of Article 23 (Waiver) herein.
44
23. WAIVER
23.1 If either Party waives any breach committed by the other Party
of any term or covenant, such a waiver will not be deemed a waiver of any
subsequent or similar breach.
24. FAILURE TO PERFORM
24.1 In the event either Party fails to perform under the terms and
covenants of this Agreement, and the other Party undertakes legal action in
response to such failure, then any legal proceedings that arise from the action
will be conducted in San Francisco, California, and the prevailing Party will be
entitled to reasonable attorney's fees in addition to costs and necessary
disbursements.
25. GOVERNING LAWS
25.1 THIS AGREEMENT WILL BE INTERPRETED AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA, excluding any choice of law rules that
would direct the application of the laws of another jurisdiction, but the scope
and validity of any patent or patent application will be governed by the
applicable laws of the country of such patent or patent application.
26. GOVERNMENT APPROVAL OR REGISTRATION
26.1 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, the
45
Licensee will assume all legal obligations to do so. The 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. The 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.
27. EXPORT CONTROL LAWS
27.1 The Licensee will observe all applicable United States and
foreign laws with respect to the transfer of Products and related technical data
to foreign countries, including, without limitation, the International Traffic
in Arms Regulations (ITAR) and the Export Administration Regulations.
28. FORCE MAJEURE
28.1 The Parties to this Agreement will be excused from any
performance required hereunder if such performance is rendered impossible or
unfeasible due to any acts of God, catastrophes, or other major events beyond
their reasonable control, including, without limitation, war, riot, and
insurrection, laws, proclamations, edicts, ordinances, regulations, strikes,
lock-outs, or other serious labor disputes, floods, fires, explosions, or other
natural disasters. Either Party to this Agreement, however, will have the right
to terminate this Agreement upon thirty (30) days prior written notice if either
Party is unable to fulfill its obligations under this Agreement due to any of
the causes mentioned above and such inability to perform continues for a period
of one
46
year. Notices given under this paragraph will be subject to Article 20
(Notices). When such events have abated, the Parties' respective obligations
hereunder shall resume.
29. CONFIDENTIALITY
29.1 The Licensee and The Regents respectively will treat and
maintain the proprietary business, patent prosecution and technical information,
and other proprietary information, (collectively referred to as "Proprietary
Information"), of the other Party in confidence using at least the same degree
of care as that Party uses to protect its own proprietary information of a like
nature for a period of time beginning on the date of disclosure of such
Proprietary Information and until [...***...] after the date of termination of
this Agreement. This confidentiality obligation will also apply to the
information defined as "Data" under the Secrecy Agreement, and such Data will be
treated as Proprietary Information hereunder.
29.2 All Proprietary Information will be labeled or marked
confidential or as otherwise marked appropriately by the disclosing Party. In
the event Proprietary Information is orally disclosed, it will be reduced to
writing or to some other tangible form, marked and labeled as set forth above by
the disclosing Party, and delivered to the receiving Party within thirty (30)
days after the oral disclosure as a record of the disclosure and its
confidential nature thereof. Notwithstanding the foregoing, the Licensee and The
Regents may use and disclose Proprietary Information to HHMI, its employees,
agents, consultants, contractors, the NIH, and in the case of the Licensee, its
sublicensees, provided that any such parties are bound by a like duty of
confidentiality.
47 *CONFIDENTIAL TREATMENT REQUESTED
29.3 Nothing contained in this Agreement will in any way restrict
or impair the right of the Licensee or The Regents to use, disclose, or
otherwise deal with any Proprietary Information:
(a) that recipient can demonstrate by written records was
previously known to it;
(b) that is now, or becomes in the future, public
knowledge other than through the acts or omissions of
recipient;
(c) that is lawfully obtained without restrictions by
recipient from sources independent of the disclosing
Party;
(d) that is required to be disclosed to a governmental
entity or agency in connection with seeking any
governmental or regulatory approval, or pursuant to
the lawful requirement or request of a governmental
entity or agency under which the governmental entity
or agency would not hold the Proprietary Information
in confidence;
(e) that is furnished to a third party by the recipient
with similar confidentiality restrictions imposed on
such third party, as evidenced in writing; or
(f) that The Regents is required to disclose pursuant to
the California Public Records Act or other applicable
law.
29.4 Upon termination of this Agreement, the Licensee and The
Regents will 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. The Licensee and The Regents will provide each
other, within thirty (30) days following termination, a written notice that
Proprietary Information has been returned or destroyed. Each Party may, however,
retain one copy of Proprietary Information for archival purposes in non-working
files.
48
30. MISCELLANEOUS
30.1 The headings of the several Articles are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
30.2 This Agreement will not be binding upon the Parties until it
has been signed below on behalf of each Party, in which event, it will be
effective as of the date recited on page one.
30.3 No amendment or modification hereof will be valid or binding
upon the Parties unless made in writing and signed on behalf of each Party.
30.4 This Agreement embodies the entire understanding of the
Parties and will supersede all previous communications, representations or
understandings, either oral or written, between the Parties relating to the
subject matter hereof. The Secrecy Agreement and Letter Agreement specified in
the Recitals above are hereby terminated.
30.5 If any of the provisions contained in this Agreement are held
to be invalid, illegal, or unenforceable in any respect, such provisions will
not affect any other provisions of this Agreement, and this Agreement will be
construed as if such invalid, illegal or unenforceable provisions had never been
contained herein.
30.6 This Agreement has been negotiated and prepared jointly by
both Parties and will not be construed for or against any Party, but will be
given a fair and reasonable construction in accordance with the intention of the
Parties.
49
30.7 This Agreement contains Appendix A, Appendix B, Appendix C,
and Exhibit A which are attached and incorporated herein.
Both The Regents and the Licensee have executed this Agreement, in
duplicate originals, by their duty authorized officers on the date and year
hereinafter written.
THE REGENTS OF THE UNIVERSITY
AMBRYX INC. OF CALIFORNIA
By /s/ Xxxx Xxxxxxx By /s/ Xxxxxxxx X. Xxxxxxxxx
------------------------------- -----------------------------------
(Signature) (Signature)
for
Name Xxxx Xxxxxxx Name: Xxxxxxxx X. Xxxxxxxxx
-----------------------------
(Please Print)
Title President & CEO Title: Executive Director,
----------------------------
Research Administration and
Technology Transfer
Date 3/10/00 Date 3/10/00
----------------------------- -----------------------------------
50
Appendix A- Page 1a
University of California
Instructions for Standard Letter Transmitting
Biological Materials to Universities and
Nonprofit Institutions
The attached letter is authorized for use by University of California
Inventors and administrators ONLY with scientists at other UNIVERSITIES AND
NONPROFIT RESEARCH INSTITUTIONS when transmitting cell lines, plasmids and the
like for non-commercial research purposes.
1. Choose the appropriate form of university or nonprofit
research institution in Paragraph 2.
2. Choose whether or not to include the phrase "our cooperative"
in Paragraph 2.
3. Insert in Paragraph 4 the amount of processing charge. If the
material is to be shipped at no charge, insert the words "no
charge."
4. Send the letter IN DUPLICATE to the other scientists.
5. Do not send biological materials until you receive the
duplicate copy executed by both the scientist and the other
institution.
6. Send a copy of the fully executed letter agreement to:
Xxxxxxx X. Xxxxxxxxx
Executive Director,
Research Administration and Technology Transfer
0000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000-0000
7. Any changes in the wording of this standard letter must be
reviewed by the Director of the Research Administration and
Technology Transfer before acceptance.
51
Appendix A- Page 2a
SAMPLE LETTER FOR USE PRIOR TO TRANSMISSION OF BIOLOGICAL
MATERIALS TO INVESTIGATORS AT UNIVERSITIES OR NON-PROFIT
RESEARCH INSTITUTIONS
(date)
IN DUPLICATE
To:
-----------------------------------------
This is to (acknowledge receipt of your letter) (confirm our telephone
conversation) in which you requested certain research materials developed in
this laboratory be sent to you for scientific research purposes. The materials
concerned, which belong to The Regents of the University of California are:
---------------------------------------.
While I cannot transfer ownership of these materials to you, I will be
pleased to permit your use of these materials within your (university)
(Non-Profit Research Institution) laboratory for (our cooperative) scientific
research. However, before forwarding them to you, I require your agreement that
the materials will be received by you only for use in (our cooperative work)
(scientific research), that you will bear all risk to you or any others
resulting from your use, and that you will not pass these materials, their
progeny or derivatives, on to any other party or use them for commercial
purposes without the express written consent of The Regents of the University of
California. You understand that no other right or license to these materials,
their progeny or derivatives, is granted or implied as a result of our
transmission of these materials to you.
These materials are to be used with caution and prudence in any
experimental work, since all of their characteristics are not known.
As you recognize, there is a processing cost to us involved in
providing these materials to you. We will xxxx you for our processing costs,
which will amount to $______________.
If you agree to accept these materials under the above conditions,
please sign the enclosed duplicate copy of this letter, then have it signed by
an authorized representative of your institution, and return it to me. Upon
receipt of that confirmation I will forward the material(s) to you.
52
Appendix A- Page 3a
(Note: other Paragraphs discussing the relevant literature, the nature of the
work, hazards relating to materials to be sent etc. may be appropriate. These
will vary depending on the individual circumstances and the relationship between
the two parties previously established. Be sure to retain a signed copy when
received and send a photocopy of the completed agreement to the University of
California, Office of Technology Transfer, 0000 Xxxxxxxx Xxxxxx, 0xx Xxxxx,
Xxxxxxx, XX 94607-5200)
Sincerely yours,
ACCEPTED:
RESEARCH INVESTIGATOR
----------------------------------------
Printed Name
----------------------------------------
(Signature)
----------------------------------------
Date
RESEARCH UNIVERSITY OR
NON-PROFIT INSTITUTION
----------------------------------------
Printed Name
----------------------------------------
(Signature)
----------------------------------------
Date
00
Xxxxxxxx X - Page 1b
The INVENTOR listed below understand and agree to abide by the terms and
conditions of Articles 12 and 13 of the Exclusive License and Bailment Agreement
between The Regents of the University of California and Ambryx, Inc. effective
3/23/00 and to instruct all relevant personnel working within their laboratory
to act accordingly. Said Paragraphs read, in part, as follows:
12.1 The Principal Investigators will initially supply Licensee
with viable samples of the Biological Materials within sixty
(60) days from the effective date recited on page one of this
Agreement. To the extent Licensee requests and necessarily
requires additional samples from the Principal Investigators
during the term hereof, and the Principal Investigators have
such additional samples in its possession and control, the
Principal Investigators will supply such additional samples to
the Licensee. Licensee will pay the actual handling and
shipping costs for any samples provided.
13.1 Th Regents expressly reserves the right to transfer the
Biological Materials to one or more non-profit third parties
for educational and non-commercial research purposes only. The
Regents will instruct the Principal Investigators that they
can transfer the Biological Materials to non-profit third
parties solely for educational and non-commercial research
purposes under the terms and conditions set forth in the
biological material transmission letter attached hereto as
Appendix A. The Licensee understands that The Regents' right
to transfer the Biological Materials for educational and
non-commercial research purposes could lead to the inadvertent
loss or diminution of proprietary and commercial value of the
Biological Materials.
The Biological Material is defined in said Agreement as follows:
1.2 "Biological Material" means the following:
(a) [...***...];
(b) [...***...];
54 *CONFIDENTIAL TREATMENT REQUESTED
Appendix B - Page 2b
[...***...]
By:
/s/ Xxxxxxx X. Xxxxx 3/23/00
------------------------------------- -----------------------------------
Xxxxxxx X. Xxxxx Date
55 *CONFIDENTIAL TREATMENT REQUESTED
Appendix C - Page 1c
CHANCELLOR APPROVAL OF COMMERCIAL RESTRICTIONS OF TANGIBLE
RESEARCH PRODUCTS
In May 1989, the University of California issued the GUIDELINES on
UNIVERSITY-INDUSTRY RELATIONS ("Guidelines"). Guideline 10 entitled "Tangible
Research Products" requires that when the commercial availability of tangible
research products resulting from the conduct of research is restricted by a
license, approval must be obtained from the Chancellor of the campus where the
research took place.
The Exclusive License and Bailment Agreement ("Agreement") between THE
REGENTS OF THE UNIVERSITY OF CALIFORNIA ("The Regents") and Ambryx Inc.
("Licensee") entitled "Nucleic Acids Encoding G-Protein Coupled Receptors and
Assays for Identifying Taste Modulators" contains provisions that restrict the
transfer of certain tangible research products to the commercial competitors of
the Licensee. The provisions of the Agreement require that The Regents will
convey tangible research products to others for educational and research
purposes under a biological material transfer agreement. In accordance with the
Guidelines, this Agreement permits the University to retain the discretion to
publish any results of research at any time and to disseminate the tangible
materials for educational and research purposes.
Chancellor Xxxxxx X. Xxxxx of the University of California, San Diego,
approves the provisions of the attached Agreement that restrict the commercial
availability of tangible research products.
Approval:
/s/ Xxxxxx X. Xxxxx 3/7/00
------------------------------------- -----------------------------------
Xxxxxx X. Xxxxx, Chancellor Date
University of California Letterhead
March 10, 2000
Mr. Xxxx Xxxxxxx
President and CEO
Ambryx, Inc.
00000 Xxxxx Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xx Xxxxx, XX 00000
Re: Side Letter Agreement
Exclusive License and Bailment Agreement between The Regents of the
University of California and Ambryx, In.
Dear Xx. Xxxxxxx:
Reference is made to that certain Exclusive License and Bailment Agreement (the
"Agreement") dated as of the date hereof between The Regents of the University
of California ("The Regents") and Ambryx Inc. ("Licensee"). Capitalized terms
used but not defined herein shall have the meanings assigned to them in the
Agreement.
Notwithstanding any other provisions of the Agreement, the following shall
apply:
1. Licensee acknowledges that the grant by The Regents to Licensee
pursuant to the Agreement of any interest of the NIH in the Patent
Rights shall be subject to the review and approval thereof by the NIH
("NIH Approval").
2. If NIH Approval shall not have been obtained by the date that is thirty
(30) days from the date hereof, then in lieu of any provisions of the
Agreement requiring payments by Licensee, Licensee shall [...***...].
In such event, at such time thereafter as NIH Approval is obtained,
Licensee shall pay to The Regents, within ten (10) days of written
certification to Licensee thereof by The Regents, all payments that
would have been payable by Licensee following the date hereof but which
were deferred by the provisions of this paragraph.
*CONFIDENTIAL TREATMENT REQUESTED
3. If NIH Approval is obtained and Licensee has received written
certification hereof by The Regents on or prior to the date that is
thirty (30) days from the date hereof, then paragraphs 1 and 2 above
shall not apply and Licensee shall make all payments required to be
made by Licensee in accordance with the terms of the Agreement.
4. Licensee further acknowledges that the grant by The Regents to Licensee
pursuant to the Agreement of any interest of The Regents in the Patent
Rights shall be subject to the execution by the Chancellor of Appendix
C to the Agreement ("The Regents Approval").
5. The Regents will proceed to obtain NIH Approval and The Regents
Approval as soon as possible.
The foregoing is agreed to as of the date set forth above.
Ambryx Inc. The Regents of the University of California
By /s/ Xxxx Xxxxxxx By /s/
------------------------------- ----------------------------------------
Title 3/10/00 President & CEO Title 3/10/00 Associate Director
---------------------------- --------------------------------------
Sincerely,
/s/ Xxxx X. Xxxx
Xxxx X. Xxxx
Senior Licensing Officer
