Exhibit 10.16
PATENT AGREEMENT
This Patent Agreement is between XX. XXXXXXX XXXXXXXXX ("XXXXXXXXX"), and
AYURCORE, INC. ("AYURCORE"), and is made with reference to the following
recitals:
RECITALS
X. XXXXXXXXX is the owner of the U.S. Patent Application identified below, and
of the technology and materials described therein, along with rights in
related technology and materials.
B. AYURCORE desires to secure, and XXXXXXXXX is willing to grant, ownership of
such patent, in accordance with the terms and conditions of this Agreement.
AGREEMENTS
In consideration of the covenants and obligations set forth below, XXXXXXXXX and
AYURCORE agree as follows:
1. DEFINITIONS
1.1 Agreement. "Agreement" means this Patent Agreement.
1.2 Assigned Rights. "Assigned Rights" means the U.S. Patent Application
(a draft of which has been prepared) to be filed on the invention
entitled "COMPOSITIONS FOR MODULATING INTRACELLULAR INOSITOL
TRISPHOSPHATE CONCENTRATION AND USES THEREOF," and all foreign and
domestic patents or patent-like rights, continuation and
continuation-in-part applications, divisional applications, reissue
patents, extensions, and the like, having a priority date based on
such U.S. Patent Application.
1.3 AYURCORE. "AYURCORE" includes any corporation, partnership, or
organization, whether now existing or hereafter created, which
directly or indirectly controls, is controlled by, or is under common
control with, AYURCORE, INC. "Control" means (1) the legal power to
direct or cause the direction of the general management or partners of
such entity, whether through the ownership of voting securities or by
contract, or (2) ownership (directly or
indirectly) of more than 50% of the outstanding shares conferring a
right to vote at general meetings, or (3) the right to elect the
majority of the Board of Directors or its equivalent.
1.4 Improvement. "Improvement" means any alteration or modification of any
Invention, but such that the altered or modified version comes within
any issued claim of the Assigned Rights.
1.5 Invention. "Invention" means the structure, materials, design,
concepts, techniques, and processes embodied in the Assigned Rights.
1.6 Know-how. "Know-How" means the confidential technical information of
XXXXXXXXX relating to the Invention and Products and useful in the
manufacture, use, or sale of Products, and further includes all
samples, sources of supply, documentation, and other similar tangible
and intangible information and property relating to the Products and
in XXXXXXXXX'x possession or control as of the effective date of this
Agreement.
1.7 Legal Action. "Legal Action" means any legal or equitable suit,
proceeding, action, or arbitration.
1.8 Manufacture. "Manufacture" means make or have made.
1.9 Net Receipts. "Net Receipts" means the total amounts of money or other
consideration received or earned by AYURCORE from all Transfers of
Products, less any of the following amounts if itemized separately
from the Transfer price:
(1) shipping and insurance charges or allowances,
(2) customary trade discount allowed, or any commission paid in lieu
of a trade discount (other than commissions paid to employees of
AYURCORE);
(3) refunds, credits, or allowances given or made on account of the
return or rejection of any Products;
(4) tax, duty, tariff or other governmental charge on the making,
having made, use, transportation, or Transfer of the Products;
and
(5) reasonable compensation received by AYURCORE for delivery or
installation services, or as interest or finance charges.
1.10 Net Royalties. '`Net Royalties" means the gross amount of license fees
and royalties (or payments in lieu of license fees or royalties), net
of withholding taxes, received or earned from any sublicensee by
AYURCORE pursuant to a sublicense agreement between AYURCORE and such
sublicensee.
1.11 Parties, Party. "Parties" means XXXXXXXXX and AYURCORE, collectively.
"Party" means either R0SENBERG or AYURCORE.
1.12 Patent Jurisdiction. "Patent Jurisdiction" means any country or
territory where XXXXXXXXX owns or controls an issued, unexpired, and
enforceable patent coming under the Assigned Rights.
1.13 Products. "Products" means any method, machine, manufacture, or
composition of matter (1) made or practiced in accordance with or
incorporating the teachings of any Invention and covered in whole or
in part by any of the now pending or issued claims of the Assigned
Rights, or (2) incorporating any Knowhow provided by XXXXXXXXX to
AYURCORE.
1.14 Territory. "Territory" means the entire world.
1.15 Transfer. "Transfer" means any sale, lease, rental, or other
commercial disposition, with or without consideration.
2. ASSIGNMENT
2.1 Grant. XXXXXXXXX hereby assigns to AYURCORE, and AYURCORE accepts,
all of XXXXXXXXX'x right, title, and interest in and to the Assigned
Rights and Know-how, subject to all of the rights and obligations set
forth in this Agreement.
2.2 Permits. AYURCORE shall be responsible for obtaining any permits,
licenses, authorizations, or approvals required or necessary by any
government or other entity to Manufacture, use, offer to sell, or
Transfer any Products.
2.3 Marking Requirement. AYURCORE agrees to xxxx Products made by or on
behalf of AYURCORE with the patent number or numbers of the Assigned
Rights. The notice shall be directly applied to the Products, or when,
from the character of the Products this cannot be done, by fixing to
the Products or their packaging a label containing a like notice.
2.4 Patent Filings & Maintenance. AYURCORE shall file and prosecute such
U. S. patent applications as are reasonably required to protect the
Assigned Rights. AYURCORE, in its discretion, may file and prosecute
related foreign patent applications as it deems appropriate. AYURCORE
shall use reasonable diligence, under the circumstances, to prosecute
and maintain in force any resulting patent rights.
2.5 Assistance by XXXXXXXXX. XXXXXXXXX agrees to assist AYURCORE with
respect to any Legal Action brought by AYURCORE relating to the
enforcement of the Assigned Rights. XXXXXXXXX shall be entitled to
receive reimbursement of any reasonable out-of-pocket expenses
incurred by it in rendering such assistance.
3. COMPENSATION AND ROYALTIES
3.1 Agreement for Royalties. AYURCORE agrees to pay XXXXXXXXX a royalty at
the following rates:
(1) A rate of [***] of all Net Receipts from Transfers of Products to
be used in, or which are imported into, any Patent Jurisdiction
by or on behalf of AYURCORE.
(2) A rate of [***] of all Net Royalties received or earned by
AYURCORE from sublicensees.
3.2 Payment. The royalty on the Transfer of each Product is earned on the
earlier of (l) the day on which the Product is shipped to a
distributor or customer, or (2) the day on which an invoice issues for
the Product. Each royalty payment to XXXXXXXXX must be paid within 30
days after the end of the calendar quarter in which the royalty is
earned. Royalties earned on Products for which refunds, credits, or
allowances are given or made by AYURCORE or its sublicensees shall be
credited against future royalties due to ROSENBERG, Royalties shall be
paid in U S dollars. For those Transfers of Products made by AYURCORE
in other currencies, the Net Receipts shall be converted to U.S.
dollars in accordance with the exchange rates published in the Wall
Street Journal at the end of the respective royalty period.
3.3 Statements. With each royalty payment, AYURCORE must submit to
XXXXXXXXX a statement of. (1) the number of Transfers of Products from
all sources during the applicable period, (2) the total of the Net
Receipts during the applicable period, and (3) a clear computation of
the royalty payment.
3.4 Inspection. AYURCORE agrees to keep or have kept separate and
adequately detailed accounting records of all Transfers of Products.
Such accounting records shall be kept for a minimum of 2 years. During
the term of this Agreement and for one year thereafter, XXXXXXXXX or
its agents have the right to inspect the relevant accounting records
of AYURCORE to verify the accuracy of the royalties paid or payable to
XXXXXXXXX. All inspected information shall be kept in confidence from
third parties. XXXXXXXXX must give at least 10 days' written notice to
AYURCORE before any inspection, and may not inspect more than once in
any 12 month period. All inspections must be during ordinary business
hours, and shall be conducted so as to not unreasonably interfere with
AYURCORE's normal business activities. If any inspection discloses
that the amount of royalties paid by AYURCORE is incorrect in either
XXXXXXXXX'x or AYURCORE's favor, then any amount due to either Party
must be paid within 30 days by the other Party. If XXXXXXXXX'x
inspection demonstrates that the royalties paid for the period in
question are less than 95% of the correct amount owing, AYURCORE shall
be liable for XXXXXXXXX'x cost of inspection. Otherwise, XXXXXXXXX
must pay all of XXXXXXXXX'x costs for any inspection.
3.5 Credit for Expenses. Any expenses incurred by AYURCORE to obtain
patent protection for the Assigned Rights, from preparation of an
application through response to the first substantive office action
(i.e., excluding a restriction
* Confidential provisions omitted and filed separately with the Commission.
requirement), shall be credited against future royalties owed by
AYURCORE to XXXXXXXXX. In addition, any expenses incurred by AYURCORE
to obtain regulatory approval of any Product shall be credited against
future royalties owed by AYURCORE to XXXXXXXXX.
4. TERM AND TERMINATION
4.1 Term. The term of this Agreement shall be from its effective date as
defined in PARA6.15 to the expiration of the last to expire patent in
the Assigned Rights (unless this Agreement is sooner terminated in
accordance with any of the provisions of this Agreement).
4.2 By Mutual Agreement. The Parties may mutually agree in writing to
terminate this Agreement, and all rights granted under this Agreement,
at any time.
4.3 Option by XXXXXXXXX. XXXXXXXXX, at its option, may immediately
terminate this Agreement and all rights granted under this Agreement
if AYURCORE defaults in the performance of any material obligation and
if the default has not been remedied within 30 days after written
notice to AYURCORE describing the default. The following events shall
constitute a default in the performance of a material obligation of
this Agreement.
(1) AYURCORE's failure to pay when due any amount payable under this
Agreement.
(2) The liquidation or dissolution of AYURCORE.
(3) If AYURCORE ceases to be actively engaged in business or
financially capable of fulfilling its obligations under this
Agreement.
4.4 Accrued Royalties Payable. Within 30 days after any termination of
this Agreement by XXXXXXXXX for cause, AYURCORE must pay all royalties
accrued up to the date of termination, and provide an accounting for
the final period.
4.5 Reversion of Rights. If AYURCORE has not cured a material default
under this Agreement after due notice and expiration of the remedy
period, all rights, title, and interest in and to the Assigned Rights
shall be promptly assigned by AYURCORE back to XXXXXXXXX.
4.6 Option by AYURCORE. AYURCORE, at its option, may immediately terminate
this Agreement and all of its obligations under this Agreement if
XXXXXXXXX defaults in the performance of any material obligation and
if the default has not been remedied within 30 days after written
notice to XXXXXXXXX describing the default.
4.7 Rights re Inventory. Notwithstanding any contrary provision of this
Agreement, AYURCORE shall have the right, for a period of one year or
until AYURCORE's inventory of PRODUCTS is exhausted (whichever comes
first), to dispose of any Products (including in-process Products) in
its possession or control at the date of termination by XXXXXXXXX.
However, AYURCORE must make all royalty payments relating to such
Products as are otherwise required by this Agreement. Within 30 days
after any termination, AYURCORE shall provide XXXXXXXXX with a report
of AYURCORE's current inventory of Products as of the date of
termination.
5. REPRESENTATIONS AND DISCLAIMER OF WARRANTIES
5.1 Representation re Ownership. XXXXXXXXX represents that it is the sole
owner of the Assigned Rights, that XXXXXXXXX has not granted any other
entity any right or license under the Assigned Rights, and that
XXXXXXXXX has the right to assign the rights granted to AYURCORE by
this Agreement.
5.2 No Warranty re Usefulness. XXXXXXXXX makes no warranty or
representation that AYURCORE can successfully use the Assigned Rights
to make Products.
5.3 No Warranty re Infringement. AYURCORE acknowledges that XXXXXXXXX
makes no representations that any Product will not infringe the
intellectual property rights of any third party. However, XXXXXXXXX
represents that, to the best of his knowledge, he is not aware of any
such infringement as of the execution date of this Agreement.
5.4 No Assistance to Competitors. During the term of this Agreement,
XXXXXXXXX shall not create and/or provide products directly
competitive with any of the Products to any other entity without
giving AYURCORE the right of first refusal to acquire or license such
competitive products. If XXXXXXXXX patents any Improvement to any
Invention within 10 years after the effective date of this Agreement,
XXXXXXXXX shall promptly disclose any issued patent covering the
Improvement to AYURCORE, and AYURCORE shall have the right of first
refusal to acquire or license such patent.
5.5 No Minimum Sales. AYURCORE makes no representations to XXXXXXXXX
regarding minimum sales and/or royalties relating to Products.
5.6 Exclusion and Limitation of Liability. In no event shall XXXXXXXXX be
liable to AYURCORE or any third party for direct, indirect,
consequential, incidental, or punitive damages, lost profits or lost
savings, resulting from any defect in or use of any Product. In no
event shall XXXXXXXXX be liable to AYURCORE for indirect,
consequential, incidental, or punitive damages, lost profits or lost
savings, for any breach of this Agreement.
5.7 Indemnification by AYURCORE. AYURCORE agrees to indemnify, defend, and
hold harmless XXXXXXXXX from and against any and all liabilities,
costs, expenses, damages, losses, actions, causes of action, and the
like arising from or relating to (directly or indirectly) any
determination that XXXXXXXXX is liable for any direct, indirect,
consequential, incidental, or punitive damages, or lost profits or
lost savings, resulting from any Manufacture, marketing, Transfers, or
use of, or defect in, any Products. The indemnification required by
this Paragraph shall include the payment of all attorneys' fees and
other expenses (not limited to taxable costs) incurred in settling or
defending any threatened or actual Legal Action.
6. GENERAL TERMS AND CONDITIONS
6.1 Arbitration. All disputes between the Parties concerning (l) the terms
and conditions of this Agreement and involving less than $50,000, or
(2) enforcement of the Assigned Rights against third parties (but
excluding any issue about the validity of the Assigned Rights), shall
be subject to expedited binding arbitration outside of the American
Arbitration Association ("AAA") before an attorney or expert who is
knowledgeable and experienced in the patent field, and who is selected
by mutual agreement of the Parties. A Party shall commence arbitration
by delivering written notice to the other Party. If the Parties fail
to agree on an arbitrator within 30 days after notice of a
commencement of arbitration is delivered, arbitration shall be by the
AAA, subject to the rules of the AAA then in effect, except that, in
any case, the arbitrator shall provide for discovery in accordance
with the Federal Rules of Civil Procedure and Federal Rules of
Evidence for a period of 120 days following the selection of the
arbitrator. Questions relating to such discovery shall be determined
by the arbitrator. Until a determination is made in the arbitration,
each Party shall share equally in the payment of the expenses of the
arbitrator, and AYURCORE shall continue to pay to XXXXXXXXX all
royalties required by this Agreement. Judgment upon the award rendered
in any arbitration may be entered in any court having jurisdiction of
the matter.
6.2 Attorneys' Fees. If any arbitration, litigation, or other legal
proceeding occurs between the Parties relating to this Agreement, the
prevailing Party shall be entitled to recover (in addition to any
other relief awarded or granted) its reasonable costs and expenses,
including attorneys' fees, incurred in the proceeding.
6.3 Relationship of the Parties. This Agreement does not constitute a
partnership agreement, nor does it create a joint venture or agency
relationship between the Parties. Neither Party shall hold itself out
contrary to the terms of this Paragraph. It is specifically understood
that each Party is an independent contractor and shall not be
considered an employee, agent, or consultant of the other Party.
Neither
Party shall be liable for the representations, acts, or omissions of
the other Party contrary to the terms of this Agreement.
6.4 Notices. Unless otherwise provided for in this Agreement, all notices
or other communications required or permitted under this Agreement
must be in writing and either personally delivered or sent in any
fashion that provides written proof of actual delivery by a third
party. The effective date of delivery shall be considered to be the
next business day after actual delivery. Until written notice to the
contrary is given, the addresses of the Parties are as shown on the
signature page of this Agreement.
6.5 Waiver and Amendment. No waiver, amendment, or modification of any
provision of this Agreement shall be effective unless in writing and
signed by the Party against whom the waiver, amendment, or
modification is sought to be enforced. No failure or delay by either
Party in exercising any right, power, or remedy under this Agreement
shall operate as a waiver of the right, power, or remedy. No waiver of
any provision, condition, or breach of this Agreement shall be
construed as a waiver of any other provision, condition, or breach.
6.6 Assignment. This Agreement is binding upon and inures to the benefit
of the successors and assigns of the Parties. However, no right or
interest in this Agreement shall be assigned by either Party without
the written permission of the other Party, except that either Party
may assign its rights in this Agreement without the permission of the
other Party to any majority owned subsidiary, or in the event of a
merger, consolidation, or sale of substantially all of the assets of
the assigning Party.
6.7 No Third Party Rights. This Agreement is not for the benefit of any
third party, and shall not be deemed to grant any right or remedy to
any third party, whether or not referred to in this Agreement.
6.8 Interpretation. The section and paragraph headings of this Agreement
are intended as a convenience only, and shall not be used to interpret
its provisions. Where the context of this Agreement requires, singular
terms shall be considered plural, and plural terms shall be considered
singular.
6.9 Ambiguities. The Parties have reviewed this Agreement, and have either
had this Agreement reviewed by legal counsel or declined to do so.
Accordingly, no rule of preferential interpretation for the
non-drafting party shall be applied to this Agreement.
6.10 Severability. If any provision of this Agreement is finally held by a
court or arbitration panel of competent jurisdiction to be unlawful,
the remaining provisions
of this Agreement shall remain in full force and effect to the extent
that the intent of the Parties can be enforced.
6.11 Governing Law and Forum. The validity, construction, and performance
of this Agreement is governed by the laws of California. Suit or
arbitration with respect to this Agreement may be brought only in
California. The Parties agree to submit to personal jurisdiction in
California.
6.12 Further Assurances. The Parties agree to execute any and all
agreements and documents in connection with this Agreement in order to
complete and fulfill the terms of this Agreement. Where this Agreement
provides that documents are to be signed and/or filed, such shall be
done within a reasonable time after the signing of this Agreement.
6.13 Signature Authority. The persons executing this Agreement warrant that
they have the right, power, legal capacity, and appropriate authority
to enter into this Agreement on behalf of the Party for which they
have signed below.
6.14 Publicity. The Parties shall be free to publicize the existence of
this Agreement after the effective date. However, each Party shall use
its best efforts not to disclose specific clauses (particularly those
clauses relating to payment of fees or royalties) to any third party
during the term of this Agreement, except as required by law, or by
governmental regulation, requirement or order, or as may be required
to establish its rights under this Agreement.
6.15 Counterparts. This Agreement may be executed in counterparts. Each
executed counterpart shall be considered an original of one and the
same document if each Party has executed at least one counterpart.
Each Party's signature to a counterpart may be appended to any other
Counterpart. Each Party shall deliver to every other Party a duplicate
original of the counterpart executed by such Party. This Agreement
shall be effective on the date that all Parties have signed at least
one counterpart.
6.16 Entire Agreement. This Agreement constitutes the complete and final
agreement etween the Parties, and supersedes all prior negotiations,
agreements, and understandings between the Parties concerning its
subject matter.
AGREED:
XXXXXXX XXXXXXXXX AYURCORE, INC.
By: s/Xxxxxxx Xxxxxxxxx By: s/Xxxxx Xxxx
Date: 12/9/95 Name: Xxxxx Xxxx
Title: President
Date: 12/15/95
