EXHIBIT 10.5.3
EXCLUSIVE LICENSE AGREEMENT
Between
President and Fellows of Harvard College
And
NanoSys, Inc.
Re: Harvard Case #1935
In consideration of the mutual promises and covenants set forth below,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1 ACADEMIC RESEARCH PURPOSES: use of PATENT RIGHTS solely for academic
non-commercial research or other not-for-profit scholarly purposes,
which use is undertaken at a non-profit or governmental institution.
ACADEMIC RESEARCH PURPOSES does not include selling products covered by
PATENT RIGHTS or using PATENT RIGHTS in researching, developing,
producing or manufacturing products for sale, or performance of
services for a fee or other financial consideration. It is understood
that using the PATENT RIGHTS to conduct normal research activities at
non-profit or governmental institution is within the defined term of
ACADEMIC RESEARCH PURPOSES.
1.2 AFFILIATE: any entity which controls, is controlled by, or is under
common control with a party. An entity shall be regarded as in control
of another entity for purposes of this definition if it owns or
controls at least fifty percent (50%) of the shares entitled to vote in
the election of directors (or in the case of an entity that is not a
corporation, for the election of the corresponding managing authority).
Unless otherwise specified, the term LICENSEE includes AFFILIATES.
1.3 FIELD: All fields of use.
1.4 HARVARD: President and Fellows of Harvard College, a nonprofit
Massachusetts educational corporation having offices at the Office for
Technology and Trademark
Licensing, Holyoke Center, Suite 727, 1350 Massachusetts Avenue,
Cambridge, Massachusetts 02138.
1.5 LICENSED PROCESSES: methods, processes or procedures covered by at
least one VALID CLAIM included within the PATENT RIGHTS.
1.6 LICENSED PRODUCTS: products covered by at least one VALID) CLAIM
included within the PATENT RIGHTS or products made in accordance with
LICENSED PROCESSES.
1.7 LICENSEE: Nanosys, Inc., a corporation organized under the laws of
Delaware having its principal offices at 2625 Hanover Street, Palo
Alto, CA 94304
1.8 NET SALES: the amounts actually received for sales, leases, or other
dispositions of LICENSED PRODUCTS to non-AFFILIATE third parties, less:
(a) customary [*** Redacted],
(b) amounts [*** Redacted] by reason of [*** Redacted],
(c) to the extent separately stated on purchase orders, invoices, or
other documents of sale: (i) [*** Redacted] levied on the
production, sale, transportation, delivery, importation,
exportation, or use of LICENSED PRODUCTS; (ii) charges for [***
Redacted] provided by third parties, including any [*** Redacted]
thereon.
NET SALES also includes the fair market value of any non-cash
consideration received for the sale, lease or other disposition of
LICENSED PRODUCTS to non-AFFILIATE third parties; provided NET SALES
shall not include any [*** Redacted] payments in consideration for the
[*** Redacted] to the intellectual property of LICENSEE or third
parties, including the [*** Redacted] hereunder, bona fide [***
Redacted] made in good faith and any payments for [*** Redacted].
In the event that a LICENSED PRODUCT is sold or leased as a combination
product containing the LICENSED PRODUCT and one or more other
components, NET SALES shall be calculated by multiplying the gross
amount invoiced for the sale of the combination product by the fraction
[*** Redacted] where A is the [*** Redacted] price of the LICENSED
PRODUCT sold separately by LICENSEE, and B is the [*** Redacted] of
such other components of the combination products sold separately by
LICENSEE during the relevant royalty payment period. In the event a
substantial number of such separate sales were not made during the
relevant royalty period, then NET SALES shall be reasonably allocated
by LICENSEE between such LICENSED PRODUCT and such other components of
the combination based on their relative importance or value; provided
that such LICENSED PRODUCT and such other components shall not be
considered a "combination product" unless such LICENSED PRODUCT and
such other components are offered for sale or marketed by LICENSEE
separately as well as together. If LICENSEE does so allocate, LICENSEE
shall promptly deliver to HARVARD a written report providing a detailed
explanation of how LICENSEE determined said relative importance or
value. All such reports shall be deemed Confidential Information of
LICENSEE subject to Section 11.1. In the event that HARVARD disagrees
with the determination made by LICENSEE in writing, and a
representative of LICENSEE and a representative of HARVARD shall meet
in order to discuss and resolve such disagreement. If such disagreement
cannot be resolved within sixty (60) days, such disagreement shall be
subject to resolution in accordance with Section 11.10.
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
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1.9 PATENT RIGHTS: PATENT RIGHTS shall include (i) the applications and
patents as listed in Appendix A of this Agreement, (ii) any foreign
counterparts to such patents and patent applications, (iii) the
inventions described and claimed in the foregoing, (iv) any divisions-
or continuations of the foregoing, and (v) specific claims of any
continuations-in-part of the foregoing to the extent the specific
claims are directed to subject matter described in the foregoing in a
manner sufficient to support such specific claims under 35 U.S.C. and
to the extent Licensable by HARVARD; claims in said
continuations-in-part covering minor improvements over the claims of
parent patent applications may, at HARVARD'S discretion, be included in
PATENT RIGHTS by amendment of this Agreement for no increase in the
royalties of Article IV, (vi) all patents issuing on any of the
foregoing, and (vii) registrations, renewals, reissues, reexaminations,
extensions or patents of addition of any kind with respect to any of
such patents. For purposes of this Agreement "Licensable" shall mean
those claims of continuations-in-part filed after the Effective Date
for which HARVARD has sole ownership (or has been granted the sole
right to license by a co-owner) and where there are no obligations to
grant licenses to a third party as the result of research support
provided to one or more of the inventors.
1.10 SERVICE INCOME: the financial consideration actually received for the
utilization of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE
which is contracted for by a non-AFFILIATE third party, less the
deductions stated in Sections 1.8(a), (b) and (c); provided, however,
that such amounts shall only be included in SERVICE INCOME if LICENSEE
does not [*** Redacted] with respect to the PATENT RIGHTS licensed in
this Agreement on the NET SALE of such LICENSED PRODUCTS or the NET
SALE of LICENSED PRODUCTS made in accordance with such use of the
LICENSED PROCESSES. SERVICE INCOME shall specifically exclude any [***
Redacted], payments in consideration for the [*** Redacted] of the
LICENSEE or third parties, including the [*** Redacted] hereunder, [***
Redacted] made in good faith and any [*** Redacted].
In the event that any service contemplated hereunder includes any
services other than the utilization of a [*** Redacted] or [***
Redacted], LICENSEE shall in good faith determine the portion of the
payments received for such service that are intended as consideration
for the utilization of [*** Redacted] or [*** Redacted] by LICENSEE,
and such portion shall be used to determine the SERVICE INCOME for such
service. In such event, LICENSEE shall promptly deliver to HARVARD a
written report detailing such calculation, together with a copy of the
applicable provisions of the agreements related to such service. All
such reports and provisions of agreements shall be deemed Confidential
Information of LICENSEE subject to Section 11.1. In the event that
HARVARD disagrees with the determination made by LICENSEE of SERVICE
INCOME for such service, HARVARD shall so notify LICENSEE in writing,
and a representative of LICENSEE and a representative of HARVARD shall
meet in order to discuss and resolve such disagreement. If such
disagreement cannot be resolved within sixty (60) days, such
disagreement shall be subject to resolution in accordance with
paragraph 11.10.
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
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1.11 SUBLICENSE INCOME: the amount paid to LICENSEE by a third party (other
than an AFFILIATE of LICENSEE) for the granting of a sublicense under
Section 3.1, including but not limited to (i) [*** Redacted] (ii) [***
Redacted] (iii) [*** Redacted] and (vi) the [*** Redacted] in cash of
any non-cash consideration for such sublicense, but specifically
excluding any [*** Redacted] payments in consideration for the [***
Redacted], [*** Redacted] and any payments for products purchased or
services performed. It is understood and agreed that sublicense income
received by LICENSEE shall be net of withholding taxes.
If LICENSEE sublicenses [*** Redacted] to a third party and at the same
time also grants such third party rights to [*** Redacted] or
LICENSEE's in-licensed non-HARVARD technologies, then all compensation
received from the third party for such rights shall be combined and
[*** Redacted] that would constitute SUBLICENSE INCOME under Section
1.11 and shall promptly deliver to HARVARD a written report detailing
such calculation, together with a copy of the applicable provisions of
the agreements with the third party. All such reports and provisions
of agreements shall be deemed Confidential Information of LICENSEE
subject to Section 11.1. In the event that HARVARD disagrees with the
determination made by LICENSEE of SUBLICENSE INCOME, HARVARD shall so
notify LICENSEE in writing, and a representative of LICENSEE and a
representative of HARVARD shall meet in order to discuss and resolve
such disagreement. If such disagreement cannot be resolved within sixty
(60) days, such disagreement shall be subject to resolution in
accordance with Section 11.10.
1.12 TERRITORY: Worldwide.
1.13 VALID CLAIM: either (i) a claim of an issued patent that has not
expired or been held unenforceable or invalid by an agency or a court
of competent jurisdiction, and which has not been admitted to be
invalid or unenforceable through reissue, disclaimer or otherwise;
provided, however, that if the holding of such court or agency is later
reversed by a court or agency with overriding authority, the claim
shall be reinstated as a Valid Claim with respect to Net Sales made
after the date of such reversal, or (ii) a claim of a pending patent
application that has not been abandoned or finally rejected without the
possibility of
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
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appeal or re-filing and that has been pending for less than seven (7)
years from its priority date, and is being actively prosecuted in good
faith.
1.14 The terms "Public Law 96-517" and "Public Law 98-620" include all
amendments to those statutes.
1.15 The terms "sold" and "sell" include, without limitation, leases and
other dispositions and similar transactions.
1.16 RELATED LICENSE AGREEMENTS: Other patent license agreements between
LICENSEE and HARVARD licensing patent rights known internally at
HARVARD as Case #1852, #1765, #1923, #1924, #1678, #1641, #1489, #1352,
#1243, #1137, #1816, #1685, #1935, #2058.
1.17 DEVELOPMENT PAYMENTS: DEVELOPMENT PAYMENTS shall mean (a) any
payments, in consideration for, or to support, research and/or
development efforts by LICENSEE to develop inventions claimed in PATENT
RIGHTS and (b) any reimbursement of LICENSEE'S patent expenses
concerning PATENT RIGHTS.
ARTICLE II
RECITALS
2.1 HARVARD is owner (or HARVARD will be owner) by assignment from
Hongkun Park, Jeffrey J. Urban, Qian Gu, Charles Lieber, and Wan S.
Yun of their entire right, title and interest in the United States
Provisional Application, 60/306,936, filed July 20, 2001, a PCT
International Patent Application, filed July 22, 2002 and the foreign
and US patent applications corresponding thereto, and in the inventions
described and claimed therein.
2.2 HARVARD has the authority to issue licenses under PATENT RIGHTS.
2.3 HARVARD is committed to the policy that ideas or creative works
produced at HARVARD should be used for the greatest possible public
benefit, and believes that every reasonable incentive should be
provided for the prompt introduction of such ideas into public use, all
in a manner consistent with the public interest.
2.4 LICENSEE intends to use commercially reasonable efforts to develop the
invention(s), and to bring to market at least one product falling
within the definition of LICENSED PRODUCT or otherwise embodying the
subject matter described or claimed in the patent rights licensed under
such agreements.
2.5 LICENSEE is desirous of obtaining an exclusive license in the TERRITORY
in order to practice the above-referenced invention covered by PATENT
RIGHTS in the United States and in certain foreign countries, and to
manufacture, use and sell in the commercial market the products made in
accordance therewith, and HARVARD is desirous of granting such a
license to LICENSEE in accordance with the terms of this Agreement.
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ARTICLE III
GRANT OF RIGHTS
3.1 HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the
terms and conditions hereof, an exclusive license (except as set forth
in Sections 3.2(a) and 3.2(b)) under PATENT RIGHTS in the TERRITORY and
in the FIELD (i) to make and have made, to use and have used, to sell
and have sold, to offer for sale, import, export, or otherwise
distribute the LICENSED PRODUCTS, (ii) to practice the LICENSED
PROCESSES, and (iii) to otherwise fully exploit the PATENT RIGHTS, and
(iv) to have the foregoing performed on behalf of LICENSEE by a third
party, in each case for the life of the PATENT RIGHTS. The foregoing
license under PATENT RIGHTS shall include the full right to grant
sublicenses, and LICENSEE shall promptly provide copies of any
sublicenses of PATENT RIGHTS to HARVARD for its review. Unless HARVARD
has rendered the license under PATENT RIGHTS non-exclusive under
Section 3.2(d), HARVARD agrees that it will not grant licenses under
PATENT RIGHTS to others, nor make, use, sell, offer for sale, import or
otherwise exploit PATENT RIGHTS itself except as required by HARVARD'S
obligations in Section 3.2(a) or as permitted in Section 3.2(b).
3.2 The granting and exercise of this license is subject to the following
conditions:
(a) HARVARD'S "Statement of Policy in Regard to Inventions,
Patents and Copyrights," dated August 10, 1998, Public Law
96-517 and Public Law 98-620, and HARVARD'S obligations under
prior or current agreements with other sponsors of research
and, with regard to continuations-in-part contained in the
PATENT RIGHTS, any future agreements with other sponsors of
research related to such continuations-in-part. Any right
granted in this Agreement greater than that permitted under
Public Law 96-517, or Public Law 98-620, shall be subject to
modification to the extent required to conform to the
provisions of those statutes.
(b) HARVARD reserves the right to make and use, and grant to other
non-profit or governmental institutions non-exclusive
licenses to make and use, in each case solely for ACADEMIC
RESEARCH PURPOSES the subject matter described and claimed in
PATENT RIGHTS. HARVARD shall promptly notify LICENSEE of any
rights granted to any third party (other than the U.S.
government) under Sections 3.2(a) and (b).
(c) LICENSEE shall use commercially reasonable efforts to effect
introduction into the commercial market at least one falling
within the definition of LICENSED PRODUCT or otherwise
embodying the subject matter described or claimed in PATENT
RIGHTS within six and one half (6.5) years of the effective
date of this Agreement; thereafter, until the expiration of
this Agreement, LICENSEE shall use commercially reasonable
efforts to endeavor to keep any such product reasonably
available to the public so long as it shall be a sound and
reasonable commercial practice to do so.
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(d) At any time after six and one half (6.5) years from the
effective date of this Agreement, HARVARD may render this
license non-exclusive if LICENSEE has not, either by itself or
through a sublicensee:
(i) introduced into commercial use at least
one product falling within the definition
of LICENSED PRODUCT or made by a LICENSED
PROCESS; and
(ii) used commercially reasonable efforts to put
the licensed subject matter into commercial
use as broadly as commercially reasonable in
one or more of the countries hereby
licensed, directly or through a sublicense,
as described in LICENSEE'S development plan
required by Paragraph 5.1 (b); and
(iii) used commercially reasonable efforts to keep
products falling within the definition of
LICENSED PRODUCT or otherwise embodying the
subject matter described or claimed in
PATENT RIGHTS reasonably available to the
public so long as it shall be a sound and
reasonable commercial practice to do so; and
(iv) engaged in research, development,
manufacturing, marketing or sublicensing
activity that is commercially reasonably
appropriate to achieving Section 3.2(d)(ii)
or 3.2(d)(iii).
(e) In all sublicenses granted by LICENSEE hereunder, LICENSEE
shall include a requirement that the sublicensee use
commercially reasonable efforts to put the subject matter of
the sublicense into commercial use, provided that such
sublicensee is authorized to develop and sell to the public a
new product covered by PATENT RIGHTS on its own behalf.
LICENSEE shall further provide that such sublicenses are
subject and subordinate to the terms and conditions of this
Agreement, except for the rate of royalty on NET SALES paid by
such sublicensee to the LICENSEE. Copies of all sublicense
agreements hereunder shall be provided promptly to HARVARD.
Such copies of sublicense agreements may be provided to
HARVARD in redacted form, provided that such copies contain
all relevant terms necessary for HARVARD to monitor LICENSEE'S
compliance with the terms of this Agreement. Unredacted copies
of said sublicense agreements shall be made available for
review by HARVARD or its representatives at LICENSEE'S
Medford, MA facility, or whichever facility is closest to
HARVARD, within one week of HARVARD'S request. All sublicense
agreements of LICENSEE provided to HARVARD shall be deemed
Confidential Information of LICENSEE subject to Section 11.1.
(f) At any time four (4) years after the effective date of
this Agreement, if LICENSEE is unable or unwilling to grant
sublicenses, either as suggested by HARVARD or by a potential
sublicensee or otherwise, then HARVARD may directly license
such potential sublicensee, but only if: (i) LICENSEE is not
currently pursuing development of LICENSED PRODUCTS for the
same application or an application that is reasonably
competitive with the application as contemplated by the
potential
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sublicensee as demonstrated by annual progress reports from
LICENSEE required by Paragraph 5.2, or the research and
development plan required by Paragraph 5.1(b) of this
agreement or within a one-year period LICENSEE makes a
commitment to do so, said commitment being satisfied by a
written research and development plan, acceptable to HARVARD
and said acceptance given within the one-year period, said
acceptance not to be unreasonably denied, any applications
which LICENSEE fails to develop according to the research and
development plan, as potentially amended according to
Paragraph 5.2, immediately becomes subject to this Paragraph.
(ii) the granting of such a license by HARVARD to the
potential sublicensee will increase the availability of useful
products to the public, and (iii) HARVARD notifies LICENSEE of
its intention to grant such license and permits LICENSEE a
reasonable period to negotiate a sublicense on its own.
(g) To the extent required by law, until this license is rendered
non-exclusive in the United States under Section 3.2(d),
LICENSEE shall cause any LICENSED PRODUCT produced for sale in
the United States to be manufactured substantially in the
United States.
(h) HARVARD recognizes that LICENSEE's success in meeting the
obligations set forth in this paragraph may be enhanced by
consultation with the inventor(s) of the PATENT RIGHTS.
Accordingly, Harvard will use reasonable efforts to make such
inventors reasonably available to LICENSEE for such
consultation.
3.3 All rights reserved to the United States Government and others under
Public Law 96-517, and Public Law 98-620, shall remain and shall in no
way be affected by this Agreement.
3.4 HARVARD shall promptly notify LICENSEE when any new patent or patent
application arises from (i) research conducted in the laboratory of
Dr. Lieber or Dr. Park, or (ii) improvements made by HARVARD under the
direction of Dr. Lieber or Dr. Park on the subject matter described in
PATENT RIGHTS. If LICENSEE so requests and the intellectual property is
available for licensing, HARVARD will evaluate in good faith LICENSEE's
proposal along with proposals received from any third parties. Any
decision to grant a license to LICENSEE shall be subject to approval by
HARVARD's Committee on Patents and Copyrights. In the event LICENSEE
and HARVARD cannot agree on terms for a license to any new intellectual
property which is dominated by PATENT RIGHTS, HARVARD shall not offer
any third party terms more favorable, in toto, than the terms offered
to LICENSEE.
ARTICLE IV
ROYALTIES
4.1 LICENSEE shall owe to HARVARD a non-refundable license royalty fee in
the sum of [*** Redacted] ($[*** Redacted]) dollars upon execution of
this Agreement, which shall be payable as follows: [*** Redacted]
($[*** Redacted]) dollars payable within thirty days of this Agreement
becoming effective, and another
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
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[*** Redacted] ($[*** Redacted]) dollars at the first anniversary of
this Agreement becoming effective..
4.2 As consideration for the rights granted hereunder, LICENSEE shall pay
to HARVARD a non-refundable fee in the form of stock of LICENSEE as
follows:
(i) LICENSEE shall issue to HARVARD twenty
thousand (20,000) fully vested shares, at a
price per share of $0.12 per share and an
aggregate value of $2,400.00 of LICENSEE's
common stock upon execution of this
Agreement, provided, however, that HARVARD
shall be subject to and enter into (1)
appropriate agreements and related documents
as required of other stockholders of
LICENSEE, including without limitation a
Common Stock Purchase Agreement, and (2) a
Voting Agreement by and among the LICENSEE,
HARVARD and certain other holders of common
stock of LICENSEE dated as of even date
hereof.
(ii) HARVARD's ownership rights to Shares shall
not be affected should the license pursuant
to this Agreement be terminated by LICENSEE
or HARVARD.
4.3 (a) LICENSEE shall pay to HARVARD during the term of this
Agreement a royalty on NET SALES by LICENSEE according to the
following schedule:
(i) [*** Redacted]% of NET SALES by LICENSEE in
[*** Redacted] applications;
(ii) [*** Redacted]% of NET SALES by LICENSEE in
[*** Redacted] applications; or
(iii) [*** Redacted]% of NET SALES by LICENSEE in
[*** Redacted] excluding [*** Redacted]
applications and [*** Redacted]
applications.
In the event, any NET SALES by LICENSEE reasonably falls
within more than one of categories (i) to (iii) above,
LICENSEE shall pay to HARVARD the lowest applicable royalty
set forth in such categories.
(b) For each LICENSED PRODUCT sold by LICENSEE, LICENSEE may
credit up to [*** Redacted] of royalties that LICENSEE is
paying to third parties (or HARVARD under agreements not
included within section 4.3(c)) on LICENSEE's sales of that
LICENSED PRODUCT, provided that the royalty paid to HARVARD
shall not be reduced below [*** Redacted] percent ([***
Redacted]%) of the NET SALES of that LICENSED PRODUCT for
which such third party royalties are being paid. LICENSEE may
only offset royalties owed under license agreements to third
parties where said license agreements provide for similar
offsets of comparable scale of third party royalties. Any such
offsets must be specifically and thoroughly reported in the
royalty reports required by Paragraph 5.4.
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
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(c) In the event that sales of a LICENSED PRODUCT are subject to
the payment of royalties under one or more of the RELATED
LICENSE AGREEMENTS or any license agreements with HARVARD with
the same effective date as this Agreement, then the total
royalty payment due HARVARD under all such agreements
including this Agreement shall be at most the royalty payment
due under this Section 4.3 on such NET SALE, no matter how
many license agreements from HARVARD are involved, and
notwithstanding the terms of any such agreement. LICENSEE
shall notify HARVARD of the identity of each license agreement
that includes patent rights covering the product or process,
and HARVARD shall distribute the royalties evenly among such
agreements, including this Agreement.
(d) LICENSEE shall pay HARVARD [*** Redacted] percent ([***
Redacted]%) of SUBLICENSE INCOME received by LICENSEE for a
sublicense of PATENT RIGHTS. If compensation for such a
sublicense of PATENT RIGHTS is bundled with compensation
received for the sublicensing of the other HARVARD patents
rights or other HARVARD intellectual property licensed to
LICENSEE under the RELATED LICENSE AGREEMENTS or any
agreements with HARVARD having the same effective date as this
Agreement, then LICENSEE shall pay HARVARD at most the royalty
payment due under this Section 4.3(d) for such SUBLICENSE
INCOME no matter how many license agreements from HARVARD are
involved, and notwithstanding the terms of any such license
agreements. In such a case, LICENSEE shall notify HARVARD of
the identity of each license agreement involved and HARVARD
shall distribute the royalties equally among those license
agreements, including this Agreement.
(e) For provision of services under PATENT RIGHTS, LICENSEE shall
pay a royalty of [*** Redacted] percent ([*** Redacted]%) of
SERVICE INCOME received by LICENSEE from each and every third
party ("Third Party") to whom LICENSEE provides such services.
In the event any services from which SERVICE INCOME is derived
are subject to the payment of royalties under the RELATED
LICENSE AGREEMENTS or any agreement with HARVARD having the
same effective date as this Agreement, then the total royalty
due under all such agreements, including this Agreement, shall
be at most the royalty payment due under this Section 4.3 on
such services, no matter how many license agreements from
HARVARD are involved, and notwithstanding the terms of any
such license agreements. In such event, LICENSEE shall notify
HARVARD of the identity of each license agreement involved and
HARVARD shall distribute the royalties equally among those
license agreements, including this Agreement.
(f) If the license pursuant to this Agreement is converted to a
non-exclusive one under Section 3.2(d) and if another
non-exclusive license to any of PATENT RIGHTS is granted or
otherwise exists for any field or territory, then the royalty
rate of this Agreement shall be adjusted so as not to exceed
the royalty rate payable by such other non-exclusive licensee
under such PATENT RIGHTS in such field or territory, provided
that LICENSEE agrees to amend this Agreement to include terms
requested by HARVARD that have been accepted by such other
non-exclusive licensee.
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
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(g) On sales between LICENSEE and its AFFILIATES for resale, the
royalty shall be paid on the NET SALES of the AFFILIATE.
(h) In the event that more than one VALID CLAIM within PATENT
RIGHTS is applicable to any LICENSED PRODUCT subject to
royalties under this Section 4.3, then only one royalty shall
be paid to HARVARD in respect of such LICENSED PRODUCT. In no
event shall more than one royalty be due to HARVARD with
respect to any LICENSED PRODUCT unit; nor shall a royalty be
payable under this Section 4.3 with respect to sales of
LICENSED PRODUCTS for clinical trials nor the use of LICENSED
PRODUCTS or LICENSED PROCESSES by LICENSEE for such a purpose
whether or not in collaboration with a third party.
4.4 No later than January 1 of each calendar year after the effective date
of this Agreement, LICENSEE shall pay to HARVARD the following
non-refundable license maintenance royalty and/or advance on royalties.
Such payments may be credited against running royalties due for that
calendar year and Royalty Reports shall reflect such a credit. Such
payments shall not be credited against milestone payments (if any) nor
against royalties due for any subsequent calendar year.
January 1, 2003 $[*** Redacted]
January 1, 2004 $[*** Redacted]
January 1, 2005 $[*** Redacted]
January 1, 2006 $[*** Redacted]
January 1, 2007 $[*** Redacted]
January 1, 2008 $[*** Redacted]
January 1, 2009 $[*** Redacted]
January 1, 2010 $[*** Redacted]
each year thereafter $[*** Redacted]
ARTICLE V
REPORTING
5.1 a) In compliance of earlier RELATED LICENSE AGREEMENTS, LICENSEE has
provided to HARVARD a written research and development plan acceptable
to LICENSEE's investors under which LICENSEE intends to bring the
subject matter of the earlier RELATED LICENSE AGREEMENTS (though not
specifically of this Agreement) granted earlier into commercial use.
Such plan included projections of sales and proposed marketing efforts.
b) LICENSEE agrees to provide, no later than three (3) years after
the effective date of this Agreement, a written research and
development plan, requiring written approval by HARVARD, which shall
not unreasonably be denied, under which LICENSEE intends to bring the
subject matter of PATENT RIGHTS into commercial use. Such a plan shall
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
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include a description of each LICENSED PRODUCT to be developed, a
developmental timeline showing the technical, regulatory, business and
marketing steps (benchmarks) needed to bring the LICENSED PRODUCT into
commercial use and the resources in funds and personnel that LICENSEE
will bring to bear for the successful accomplishment of each such step,
and shall include projected sales and a proposed marketing effort
5.2 No later than sixty (60) days after June 30 of each calendar year,
LICENSEE shall provide to HARVARD a written annual Progress
Report describing progress on the commercialization of PATENT RIGHTS
during the most recent twelve (12) month period ending June 30, the
amount of LICENSEE's R&D spending relating to the subject matter
described or claimed in PATENT RIGHTS during such time, and plans for
the forthcoming year. If multiple technologies are covered by the
license granted hereunder, the Progress Report shall provide the
information set forth above for each technology. If progress differs
from that anticipated in the plan required under Section 5.1(b),
LICENSEE shall explain the reasons for the difference and, if
appropriate or necessary, provide a modified research and development
plan for HARVARD's review and approval, such approval not to be
unreasonably denied. It is understood that LICENSEE may provide one
Progress Report covering all RELATED LICENSE AGREEMENTS.
5.3 LICENSEE shall report to HARVARD the date of its first NET SALE of a
LICENSED PRODUCT (or the date of its first use of a LICENSED PROCESS
from which SERVICE INCOME is derived) in each country within [***
Redacted] days of occurrence. It is understood that LICENSEE shall be
obligated to report the date of first sale of LICENSED PRODUCTS (or the
first commercial use of LICENSED PROCESSES) under this Section 5.3 only
once for each country.
5.4 (a) LICENSEE shall submit to HARVARD within sixty (60) days after
each calendar half year ending June 30 and December 31, a Royalty
Report setting forth, for the most recent half year that ended on
June 30 or December 31, at least the following information:
(i) the number and identification of LICENSED PRODUCTS
sold by LICENSEE and its AFFILIATES that constitute a
NET SALE, in each country;
(ii) total amounts received for such LICENSED PRODUCTS
sold by LICENSEE and its AFFILIATES;
(iii) an accounting for all LICENSED PROCESSES used or sold
by LICENSEE and its AFFILIATES;
(iv) deductions applicable to determine the NET SALES
thereof;
(v) the amount of SUBLICENSE INCOME received by LICENSEE
from each sublicensee, and for each sublicensee the
categories of LICENSED PRODUCTS sold and gross sales
of each category;
(vi) the amount of SERVICE INCOME received by LICENSEE;
and
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
12
(vii) the amount of royalty due for such reporting period,
or, if no royalties are due to HARVARD for such
reporting period, the statement that no royalties are
due.
Such report shall be certified as correct by an officer of
LICENSEE and shall include a listing of all deductions from
royalties. It is understood that LICENSEE may submit one
Royalty Report covering all RELATED LICENSE AGREEMENTS.
However, the Royalty Report shall, for each type of income,
provide a detailed listing of the RELATED LICENSE AGREEMENTS
that are involved.
(b) LICENSEE shall pay to HARVARD with each such Royalty Report
the amount of royalty due with respect to such half year.
If multiple technologies are covered by the license granted
hereunder, LICENSEE shall specify which PATENT RIGHTS are
utilized for each category of LICENSED PRODUCTS and/or
LICENSED PROCESSES for which royalties are separately reported
in the Royalty Report.
(c) All payments due hereunder shall be deemed received when funds
are credited to HARVARD's bank account and shall be payable by
check or wire transfer in United States dollars. Conversion of
foreign currency to U.S. dollars shall be made at the
conversion rate existing in the United States (as reported in
the New York Times or the Wall Street Journal) on the last
working day of each royalty period. No transfer, exchange,
collection or other charges shall be deducted from such
payments. If legal restrictions block the removal of local
currency from any country where a LICENSED PRODUCT is sold,
the royalties payable under this Agreement on NET SALES,
SERVICE INCOME and SUBLICENSING INCOME earned in such currency
in such country shall continue to be reported and accrued, but
will not be paid until such currency may be removed from such
country.
(d) All plans or reports received under Sections 5.1, 5.2, 5.3,
5.4 shall be deemed Confidential Information of LICENSEE
subject to Section 11.1; provided, however, that HARVARD may
disclose such information as required by law under Section
11.1(b), and may include in its usual reports the annual
amounts of royalties paid.
(e) Late payments shall be subject to a charge of one and one-half
percent (1.5%) per month, or $250, whichever is greater.
5.5 In the event of acquisition, merger, change of corporate name, or
change of make-up, organization, or identity, LICENSEE shall notify
HARVARD in writing within thirty (30) days of such event.
5.6 If LICENSEE or any of its sublicensees does not qualify as a "small
entity" as provided by the United States Patent and Trademark Office,
LICENSEE must notify HARVARD immediately.
13
ARTICLE VI
RECORD KEEPING
6.1 LICENSEE shall keep accurate records (together with supporting
documentation) of LICENSED PRODUCTS made, used or sold under this
Agreement, sufficient to determine the amount of royalties due to
HARVARD hereunder. Such records shall be retained for at least three
(3) years following the end of the reporting period to which they
relate. They shall be available during normal business hours for
examination, upon HARVARD's reasonable request, not more than once in
any twelve (12) month period and upon at least twenty (20) days
prior notice, by an independent accountant under a duty of
confidentiality, selected by HARVARD and reasonably acceptable to
LICENSEE, for the sole purpose of verifying reports and payments under
Section 5.4. In conducting examinations pursuant to this Section,
HARVARD's accountant shall have access to records materially relevant
to the calculation of royalties under Article IV.
6.2 HARVARD's accountant shall only disclose to HARVARD whether the reports
and payments of royalties hereunder are accurate, and the amount of the
underreporting or underpayment of royalties by LICENSEE, if any.
6.3 Such examination by HARVARD's accountant shall be at HARVARD's expense,
except that if such examination shows an underreporting or underpayment
in excess of five percent (5%) for any twelve (12) month period, then
LICENSEE shall pay the reasonable out-of-pocket cost of such
examination as well as any additional sum that would have been
payable to HARVARD had the LICENSEE reported correctly, plus interest
on said sum at the rate of one and one-half percent (1.5%) per month.
ARTICLE VII
DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE
7.1 Upon execution of this Agreement, LICENSEE shall reimburse HARVARD for
all reasonable expenses HARVARD has incurred for the preparation,
filing, prosecution and maintenance of PATENT RIGHTS. Thereafter,
LICENSEE shall reimburse HARVARD for all such future expenses within
thirty (30) days of receipt of invoices from HARVARD. Late payment
of these invoices shall be subject to interest charges of one and
one-half percent (1.5%) per month. HARVARD shall, in its sole
discretion, be responsible for the preparation, filing, prosecution and
maintenance of any and all patent applications and patents included in
PATENT RIGHTS. HARVARD shall consult with LICENSEE as to the
preparation, filing, prosecution and maintenance of such patent
applications and patents and shall furnish to LICENSEE copies of
documents relevant to any such preparation, filing, prosecution or
maintenance.
HARVARD shall be responsible for the preparation, filing, prosecution
and maintenance of any and all patent applications and patents included
in PATENT RIGHTS. HARVARD will instruct counsel to directly notify
HARVARD and LICENSEE and
14
provide them copies of any communications to and from the United States
and foreign patent offices relating to said prosecution, and drafts of
all communications to the various patent offices, and will instruct
counsel to consider any comments on such drafts, so that LICENSEE will
be informed and apprised of the continuing prosecution of patent
applications in PATENT RIGHTS. LICENSEE shall have reasonable
opportunity to participate in decision making on key decisions
affecting filing, prosecution and maintenance of patents and patent
applications in PATENT RIGHTS.
7.2 HARVARD and LICENSEE shall cooperate fully in the preparation, filing,
prosecution and maintenance of PATENT RIGHTS and of all patents and
patent applications licensed to LICENSEE hereunder, executing all
papers and instruments or requiring members of HARVARD to execute such
papers and instruments so as to enable HARVARD to apply for, to
prosecute and to maintain patent applications and patents in HARVARD's
name in any country. Each party shall provide to the other prompt
notice as to all matters which come to its attention and which may
affect the preparation, filing, prosecution or maintenance of any such
patent applications or patents. In particular, LICENSEE must
immediately notify HARVARD if LICENSEE does not qualify as a "small
entity" as provided by the United States Patent and Trademark Office.
7.3 LICENSEE may elect to surrender its rights to any patent or patent
application within PATENT RIGHTS in any country upon sixty (60)
days written notice to HARVARD. Such notice shall not relieve LICENSEE
from responsibility to reimburse HARVARD for expenses under Section 7.1
relating to the filing, prosecution or maintenance of such patent or
patent application incurred prior to the receipt of the written notice
by HARVARD (or a longer period if specified in LICENSEE's notice).
ARTICLE VIII
INFRINGEMENT
8.1 With respect to any PATENT RIGHTS that have not been rendered
non-exclusive under Section 3.2(d), LICENSEE shall have the right to
enforce in its own name and at its own expense any patents within such
PATENT RIGHTS. HARVARD agrees to notify LICENSEE promptly of each
infringement of such patents of which HARVARD is or becomes aware.
8.2 (a) If LICENSEE elects to commence an action as described
above, HARVARD may, to the extent permitted by law, elect to
join as a party in that action. Regardless of whether HARVARD
elects to join as a party, HARVARD shall cooperate fully with
LICENSEE in connection with any such action, including making
available relevant personnel, information, records, papers,
samples, specimens and other similar materials for the
purposes of such action as reasonably requested by LICENSEE
through the Office of Technology and Trademark Licensing at
HARVARD.
(b) If HARVARD elects to join as a party pursuant to Subsection
(a), HARVARD shall jointly control the action with LICENSEE.
15
(c) LICENSEE shall reimburse HARVARD for any out-of-pocket costs
HARVARD reasonably incurs, including reasonable attorneys'
fees, as part of an action brought by LICENSEE under Section
8.1, whether or not HARVARD becomes a co-plaintiff.
8.3 If LICENSEE elects to commence an action as described above and desires
that HARVARD be responsible for some of its expenses as described
immediately below, LICENSEE shall explain its strategy to HARVARD in
any detail requested by HARVARD. If HARVARD approves of said action in
writing, LICENSEE may deduct from its royalty payments to HARVARD with
respect to the patent(s) subject to suit an amount not exceeding fifty
percent (50%) of LICENSEE's expenses and costs of such action,
including reasonable attorneys' fees and reimbursement of amounts under
Section 8.2(c) above; provided, however, that such reduction shall not
exceed fifty percent (50%) of the total royalty due to HARVARD with
respect to the patent(s) subject to suit for each calendar year. If
such fifty percent (50%) of LICENSEE's expenses and costs exceeds the
amount of royalties deducted by LICENSEE for any calendar year,
LICENSEE may to that extent reduce the royalties due to HARVARD from
LICENSEE in succeeding calendar years, but never by more than fifty
percent (50%) of the total royalty due in any one year with
respect to the patent(s) subject to suit.
8.4 Neither party may enter into a settlement, consent judgment or other
voluntary final disposition of any suit under Section 8.1, 8.6, 8.7 and
8.8 without the prior written consent of the other party, which consent
shall not be unreasonably withheld.
8.5 Recoveries or reimbursements from actions commenced pursuant to this
Article shall first be applied to reimburse LICENSEE and HARVARD for
litigation costs not paid from royalties deducted by LICENSEE pursuant
to Section 8.3. Any remaining recoveries or reimbursements shall be
shared as follows: if HARVARD approved of said action(s) as described
in Paragraph 8.3, 80% to LICENSEE and 20% to HARVARD, if HARVARD did
not approve of said action(s) then any remaining royalties shall be
treated as NET SALES and LICENSEE shall pay an earned royalty of [***
Redacted]% to HARVARD.
8.6 If LICENSEE elects not to exercise its right to enforce the PATENT
RIGHTS against any infringement pursuant to this Article, HARVARD may
do so at its own expense, controlling such action and retaining all
recoveries therefrom. LICENSEE shall cooperate fully with HARVARD in
connection with any such action.
8.7 Without limiting the generality of Section 8.6, HARVARD may, at its
election and by notice to LICENSEE, establish a time limit of
one-hundred and eighty (180) days for LICENSEE to decide whether to
enforce the PATENT RIGHTS against any infringement of which HARVARD is
or becomes aware. If, by the end of such one-hundred and eighty (180)
day period, LICENSEE has not (a) commenced such an action; (b) taken
reasonable efforts to settle such infringement; or (c) provided HARVARD
with a written report that provides LICENSEE's plans to commence such
action or settle such infringement in the future and the reasons for
any proposed delay in commencing such action or settling such
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
16
infringment, which report must be approved by HARVARD, which approval
will not unreasonably be denied or delayed and which approval shall not
be construed as giving approval for Paragraph 8.3 purposes, HARVARD may
enforce the PATENT RIGHTS against such an infringement at its own
expense, controlling such action and retaining all recoveries
therefrom. Notwithstanding sections 8.6 and 8.7, HARVARD shall not
bring any action alleging the infringement of PATENT RIGHTS against any
sublicensee of LICENSEE under PATENT RIGHTS, without the consent of
LICENSEE.
8.8 If a declaratory judgment action is brought naming LICENSEE as a
defendant and alleging invalidity of any of the PATENT RIGHTS, if both
parties agree, HARVARD may take over the sole defense of the action at
its own expense. LICENSEE shall cooperate fully with HARVARD in
connection with any such action.
ARTICLE IX
TERMINATION OF AGREEMENT
9.1 The effective date of this Agreement shall be the date that both
parties have signed the Agreement. This Agreement, unless terminated as
provided herein, shall remain in effect until the last patent or patent
application in PATENT RIGHTS has expired or been abandoned.
9.2 HARVARD may terminate this Agreement as follows:
(a) If LICENSEE does not make a payment due hereunder and fails to
cure such non-payment (including the payment of interest in
accordance with Section 5.4(e)) within forty-five (45) days
after the date of notice in writing of such non-payment by
HARVARD. If LICENSEE disputes the amount of such non-payment
in writing within such forty-five (45) day period, HARVARD
shall not have the right to terminate this Agreement until it
has been determined in an arbitration proceeding under Section
11.10 below that LICENSEE has failed to pay amounts owed
hereunder, in which case LICENSEE shall pay HARVARD'S expenses
for the arbitration, and thereafter Licensee does not cure
such failure within sixty (60) days after such determination.
This Section 9.2(a) shall not, however, suspend any obligation
of LICENSEE to compensate HARVARD for any undisputed amounts,
as provided for under any term of this Agreement, during the
pendency of the foregoing arbitration and cure period.
(b) If LICENSEE defaults in its obligations under Sections 11.2(c)
and 11.2(d) to procure and maintain insurance, and fails to
cure such breach within sixty (60) days after notice in
writing of such breach by HARVARD.
(c) If LICENSEE shall make an assignment for the benefit of
creditors, or shall have a petition in bankruptcy filed for or
against it, provided that such bankruptcy petition is
17
not dismissed within sixty (60) days after its filing. Such
termination shall be effective immediately upon HARVARD giving
written notice to LICENSEE.
(d) If LICENSEE is convicted of a felony within the United States
relating to the manufacture, use, or sale of LICENSED
PRODUCTS.
(e) Except as provided in Subsections (a), (b), (c), (d) above, if
LICENSEE materially breaches any obligations under this
Agreement and the breach has not been cured within ninety (90)
days after the date of notice in writing of such
breach by HARVARD. If LICENSEE disputes in writing that it has
materially breached this Agreement within such ninety (90)
day period, HARVARD shall not have the right to terminate this
Agreement until it has been determined in an arbitration
proceeding under Section 11.10 below that LICENSEE has
materially breached this Agreement, in which case LICENSEE
shall pay HARVARD'S expenses for the arbitration, and
thereafter Licensee does not cure such breach within sixty
(60) days after such determination. This Section 9.2(e) shall
not, however, suspend any obligation of LICENSEE to compensate
HARVARD for any undisputed amounts, as provided for under any
term of this Agreement, during the pendency of the foregoing
arbitration and cure period.
9.3 All sublicenses granted by LICENSEE under this Agreement in compliance
with the terms and conditions hereof shall survive the termination of
this Agreement upon the request of the party to whom such sublicense is
granted, provided that such party agrees in writing that (i) it will
pay all royalties or other amounts that otherwise would have been due
thereafter under such sublicense directly to HARVARD rather than
LICENSEE, and (ii) HARVARD shall not be held liable for the breach or
the performance of any obligations stated in such sublicense unless
such obligations have been expressly assumed in writing by HARVARD.
9.4 LICENSEE may terminate this Agreement by giving ninety (90) days
advance written notice of termination to HARVARD. Upon termination,
LICENSEE shall promptly submit a Royalty Report to HARVARD for the
final reporting period and any royalty payments incurred during such
reporting period, and any unreimbursed patent expenses under Section 7
that have been invoiced by HARVARD, shall become immediately payable
with such Royalty Report.
9.5 Articles I, VI, IX, X and XI (except for Section 11.7) of this
Agreement shall survive termination. Article VIII shall survive with
respect to any infringement of third parties and/or any lawsuits filed
by or against LICENSEE, prior to the termination of this Agreement. In
the event this Agreement is terminated for any reason, LICENSEE may,
within six months after the effective date of such termination,
sell or otherwise dispose of all LICENSED PRODUCTS that LICENSEE may
have on hand on the effective date of such termination, and fulfill any
contracts requiring the use of LICENSED PRODUCTS and/or LICENSED
PROCESSES that LICENSEE may have entered into prior to the date of such
termination, subject to LICENSEE'S payment of amounts due to HARVARD
under Section 4.3 of this Agreement.
18
ARTICLE X
REPRESENTATIONS AND WARRANTIES
10.1 Except for the rights, if any, of the Government of the United States,
HARVARD represents and warrants that:
(a) HARVARD is the owner of the entire right, title and interest
in and to the PATENT RIGHTS as they exist on the Effective
Date;
(b) HARVARD has the right and authority to enter into this
Agreement and grant the rights and licenses set forth herein,
including without limitation under PATENT RIGHTS;
(c) HARVARD has not previously granted, and will not grant in the
future, any rights in the PATENT RIGHTS that are inconsistent
with the rights and licenses granted to LICENSEE herein;
(d) To the best knowledge of HARVARD without having made an
investigation, as of the Effective Date, practice of
inventions within the PATENT RIGHTS does not infringe any
patent rights, trade secrets or other proprietary rights of
any third party,
(e) To the best knowledge of HARVARD, as of the Effective Date,
HARVARD does not own any rights in any other patent or patent
application, the claims of which would dominate the claims of
a patent or patent application within the PATENT RIGHTS or any
practice of PATENT RIGHTS. If HARVARD owns, now or thereafter,
any such rights in such patents or patent applications on
which Dr. Lieber or Dr. Park is an inventor, HARVARD will
negotiate in good faith to the extent it has the legal right
to do so with LICENSEE to grant LICENSEE rights to the extent
sufficient to practice PATENT RIGHTS, and at commercially
reasonable royalties.
(f) To the best knowledge of HARVARD, all prior and current
agreements between HARVARD and other sponsors of research
under which HARVARD has obligations relating to PATENT RIGHTS
are listed on Appendix C.
10.2 Except as set forth in this Agreement, HARVARD does not warrant the
validity of the PATENT RIGHTS licensed hereunder and makes no
representations whatsoever with regard to the scope of the licensed
PATENT RIGHTS or that such PATENT RIGHTS may be exploited by LICENSEE,
an AFFILIATE, or sublicensee without infringing other patents.
10.3 EXCEPT FOR THE WARRANTIES STATED IN THIS AGREEMENT, HARVARD EXPRESSLY
DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND MAKES NO
EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OF THE PATENT RIGHTS OR
19
INFORMATION SUPPLIED BY HARVARD, LICENSED PROCESSES OR LICENSED
PRODUCTS CONTEMPLATED BY THIS AGREEMENT.
ARTICLE XI
GENERAL
11.1 (a) The parties may, from time to time, in connection with
this Agreement disclose to each other Confidential
Information. Any Confidential Information shall be in writing
and marked "confidential" and disclosed only to the Office of
Technology and Trademark Licensing. As used in this Agreement,
"Confidential Information" of a party shall mean (i) any
information disclosed in writing by such party to the other
party, which is marked by such party with the legend
"CONFIDENTIAL" or other similar legend sufficient to identify
the information as its confidential information, (ii) any
information disclosed orally by such party to the other party
which is identified as confidential at the time of disclosure
and is confirmed as confidential in writing within thirty (30)
days after such time of disclosure, or (iii) any information
deemed Confidential Information under the terms of this
Agreement. With respect to categories (i) and (ii) above,
"Confidential Information" shall not include any information
that is: (1) already known to the receiving party at the time
of disclosure hereunder, or (2) now or hereafter becomes
publicly known other than through acts or omissions of the
receiving party, or (3) is disclosed to the receiving party by
a third party under no obligation of confidentiality to the
disclosing party or (4) is independently developed by the
receiving party without use of the Confidential Information of
the disclosing party.
(b) Each party shall maintain in confidence, and shall not use
for any purpose or disclose to any third party, the
Confidential Information of the other party. Notwithstanding
the foregoing, the receiving party may use or disclose the
Confidential Information of the disclosing party (i) to the
extent necessary to exercise its rights or fulfill its
obligations and/or duties under this Agreement, and (ii) to
comply with applicable law or governmental regulations or
court order, provided that the receiving party will give
reasonable advance notice to the disclosing party, and will
use its reasonable efforts to minimize the disclosure of
Confidential Information and to secure confidential treatment
of any Confidential Information disclosed.
(c) The royalty terms of this Agreement shall be deemed
"Confidential Information" of both parties. In addition to the
permissible disclosures set forth in subsection (b) above,
LICENSEE may disclose such terms in confidence to its
financial and legal advisors, consultants, potential or actual
investors, potential or actual merger or acquisition partners,
and others on a need-to-know basis.
11.2 (a) LICENSEE shall indemnify, defend and hold harmless HARVARD
and its current or former and future directors, governing
board members, trustees, officers, faculty and employees
(collectively, the "INDEMNITEES"), from and against any claim,
lawsuit, cause of action , liability, cost, expense, damage,
deficiency, loss or obligation of any kind or nature
(including, without limitation, reasonable attorney's fees and
other costs and expenses of litigation) (collectively,
"Claims"), based upon,
20
arising out of, or otherwise relating to: LICENSEE'S or any
sublicensee's performance of (or failure to perform) any of
its obligations under this Agreement or any sublicense
agreement, or the practice by LICENSEE or any sublicensee of
any right or license granted under this Agreement or any
sublicense agreement, or any product, process, or service
made, used or sold pursuant to any right or license granted
under this Agreement or any sublicense agreement, including
without limitation any Claim relating to product liability
(whether based on negligence or other tort, warranty, strict
liability, or any other theory), except to the extent such
Claims are directly attributable to intentional misconduct of
any INDEMNITEES. It shall be a condition of the foregoing
obligation that (i) LICENSEE receives prompt notice of any
such Claims; (ii) LICENSEE is given the exclusive right to
control the defense and settlement of such Claims, provided
that LICENSEE shall not settle any such Claim without the
prior written consent of HARVARD, which consent shall not be
unreasonably withheld; and (iii) LICENSEE shall not be
obligated to indemnify any INDEMNITEE in connection with any
settlement for any Claim unless LICENSEE consents in writing
to such settlement.
(b) LICENSEE shall, at its own expense, defend against any actions
brought or filed against any INDEMNITEE hereunder with respect
to the subject of indemnity contained herein, whether or not
such actions are rightfully brought.
(c) Beginning at the time any such product, process or service is
being commercially distributed or sold (other than for the
purpose of obtaining regulatory approvals) by LICENSEE or by a
SUBLICENSEE, AFFILIATE or agent of LICENSEE, LICENSEE shall,
at its sole cost and expense, procure and maintain commercial
general liability insurance in amounts not less than $[***
Redacted] per incident and $[*** Redacted] annual aggregate
and naming the Indemnitees as additional insureds. During
clinical trials of any such product, process or service,
LICENSEE shall, at its sole cost and expense, procure and
maintain commercial general liability insurance in such equal
or lesser amount as HARVARD shall require, naming the
Indemnitees as additional insureds. Such commercial general
liability insurance shall provide: (i) product liability
coverage; and (ii) broad form contractual liability coverage
for LICENSEE'S indemnification under this Agreement. If
LICENSEE elects to self-insure all or part of the limits
described above (including deductibles or retentions which are
in excess of $[*** Redacted] annual aggregate) such
self-insurance program must be acceptable to HARVARD and the
Risk Management Foundation of the Harvard Medical
Institutions, Inc. in their sole discretion. The minimum
amounts of insurance coverage required shall not be construed
to create a limit of LICENSEE'S liability with respect to its
indemnification under this Agreement.
(d) LICENSEE shall provide HARVARD with written evidence of such
insurance upon request of HARVARD. LICENSEE shall provide
HARVARD with written notice at least fifteen (15) days prior
to the cancellation, non-renewal or material change in such
insurance; if LICENSEE does not obtain replacement insurance
providing comparable coverage within such fifteen (15) day
period, HARVARD shall have the right to terminate this
Agreement in accordance with Section 9.2(b).
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
21
(e) LICENSEE shall maintain such commercial general liability
insurance beyond the expiration or termination of this
Agreement during: (i) the period that any product, process, or
service, relating to, or developed pursuant to, this Agreement
is being commercially distributed or sold by LICENSEE or by a
sublicensee, AFFILIATE or agent of LICENSEE; and (ii) a
reasonable period after the period referred to in Subsection
(e)(i) above which in no event shall be less than fifteen
(15) years.
11.3 Nothing in this Agreement shall be construed as conferring any right to
use HARVARD's name or insignia, or any adaptation of them, or the name
of any of HARVARD's inventors in any advertising, promotional or sales
literature without the prior written approval of HARVARD, or the
inventor in the case of the use of the name of an inventor.
11.4 Except as stated in this Section 11.4, without the prior written
approval of HARVARD in each instance, neither this Agreement nor the
rights granted hereunder shall be transferred or assigned in whole or
in part by LICENSEE to any person whether voluntarily or involuntarily,
by operation of law or otherwise. LICENSEE may transfer or assign this
Agreement and all rights hereunder, upon notice to HARVARD but without
its consent, to any entity that succeeds to all or substantially all of
the business of LICENSEE to which this Agreements pertains, whether by
merger, operation of law, purchase or sale of all or substantially all
of LICENSEE'S stock or assets or otherwise; provided that such assignee
or transferee promptly agrees in writing to be bound by the terms and
conditions of this Agreement. Subject to the foregoing, this Agreement
shall be binding upon the respective successors, legal representatives
and assignees of HARVARD and LICENSEE.
11.5 The interpretation and application of the provisions of this Agreement
shall be governed by the laws of the Commonwealth of Massachusetts.
11.6 LICENSEE shall comply with all applicable laws and regulations. In
particular, it is understood and acknowledged that the transfer of
certain commodities and technical data is subject to United States laws
and regulations controlling the export of such commodities and
technical data, including all Export Administration Regulations of the
United States Department of Commerce. These laws and regulations among
other things, prohibit or require a license for the export of certain
types of technical data to certain specified countries. LICENSEE hereby
agrees and gives written assurance that it will comply with all United
States laws and regulations controlling the export of commodities and
technical data, that it will be solely responsible for any violation of
such by LICENSEE or its AFFILIATES or sublicensees, and that it will
defend and hold HARVARD harmless in the event of any legal action of
any nature occasioned by such violation with respect to LICENSED
PRODUCTS.
11.7 LICENSEE agrees: (i) to obtain all regulatory approvals required for
the manufacture and sale of LICENSED PRODUCTS and LICENSED PROCESSES;
and (ii) to mark LICENSED PRODUCTS with the numbers of the applicable
patents within PATENT RIGHTS, to the extent required by law. LICENSEE
also agrees to register or record this Agreement as is required by law
or regulation in any country where the license is in effect,
22
and HARVARD shall cooperate fully with LICENSEE in connection with any
such registration or recordation.
11.8 Any notices to be given hereunder shall be sufficient if signed by the
party (or party's attorney) giving same and either: (i) delivered in
person; (ii) mailed certified mail return receipt requested; or (iii)
faxed to other party if the sender has evidence of successful
transmission and if the sender promptly sends the original by ordinary
mail, in any event to the following addresses:
If to LICENSEE:
NanoSys, Inc.
2625 Hanover Street
Palo Alto, CA 94304
Attn: Lawrence A. Bock
Fax: 650-745-1273
cc: Wilson, Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304
Attn: Michael J. O'Donnell, Esq.
Fax: 650/493-6811
If to HARVARD:
Office for Technology and Trademark Licensing
Harvard University
Holyoke Center, Suite 727
1350 Massachusetts Avenue
Cambridge, MA 02138
Fax: (617) 495-9568
By such notice either party may change their address for future
notices.
Notices delivered in person shall be deemed given on the date
delivered. Notices sent by fax shall be deemed given on the date faxed.
Notices mailed shall be deemed given on the date postmarked on the
envelope.
11.9 Should a court of competent jurisdiction later hold any provision of
this Agreement to be invalid, illegal, or unenforceable, and such
holding is not reversed on appeal, it shall be considered severed from
this Agreement. All other provisions, rights and obligations shall
continue without regard to the severed provision, provided that the
remaining provisions of this Agreement are in accordance with the
intention of the parties.
11.10 In the event of any controversy or claim arising out of or relating to
any provision of this Agreement or the breach thereof, the parties
shall try to settle such conflict amicably between themselves. Subject
to the limitation stated in the final sentence of this Section, any
such conflict which the parties are unable to resolve promptly shall be
settled through
23
arbitration conducted in accordance with the rules of the American
Arbitration Association. The demand for arbitration shall be filed
within a reasonable time after the controversy or claim has arisen, and
in no event after the date upon which institution of legal proceedings
based on such controversy or claim would be barred by the applicable
statute of limitation. Such arbitration shall be held in Boston,
Massachusetts. The award through arbitration shall be final and
binding. Either party may enter any such award in a court having
jurisdiction or may make application to such court for judicial
acceptance of the award and an order of enforcement, as the case may
be. Notwithstanding the foregoing, either party may, without recourse
to arbitration, assert against the other party a third-party claim or
cross-claim in any action brought by a third party, to which the
subject matter of this Agreement may be relevant.
11.11 This Agreement constitutes the entire understanding between the parties
and neither party shall be obligated by any condition or representation
other than those expressly stated herein or as may be subsequently
agreed to by the parties hereto in writing.
11.12 Nothing in this Agreement shall be deemed to prevent LICENSEE from
commercializing products similar to or competitive with a LICENSED
PRODUCT, so long as LICENSEE complies with its obligations under this
Agreement.
11.13 The relationship between HARVARD and LICENSEE established by this
Agreement is that of independent contractors. Nothing in this Agreement
shall be construed to create any other relationship between HARVARD and
LICENSEE. Neither party shall have any right, power or authority to
assume, create or incur any expense, liability or obligation, express
or implied, on behalf of the other.
11.14 In the event either party hereto is prevented from or delayed in the
performance of any of its obligations hereunder by reason of acts of
God, war, strikes, riots, storms, fires or any other cause whatsoever
beyond the reasonable control of the party, the party so prevented or
delayed shall be excused from the performance of any such obligation to
the extent and during the period of such prevention or delay.
11.15 NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY
FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES
(INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE
SAME), ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH
CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE,
EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE
POSSIBILITY OR LIKELIHOOD OF SAME. For the avoidance of doubt, the
parties acknowledge that the foregoing limitation of liability is not
intended to apply to any of the following damages of HARVARD (and
accordingly such damages shall be recoverable by HARVARD to the same
extent they would be in the absence of that limitation): (i) amounts
owed to HARVARD pursuant to the terms of this Agreement; (ii) amounts
covered by LICENSEE'S indemnity of Section 11.2; (iii) damages for
infringement or violation of any patent, copyright, trademark, or other
intellectual
24
property right of HARVARD; and (iv) damages arising from the willful
misconduct of LICENSEE.
11.16 HARVARD'S AGGREGATE LIABILITY FOR ALL DAMAGES OF ANY KIND RELATING TO
THIS AGREEMENT OR ITS SUBJECT MATTER (WHETHER SUCH DAMAGES ARE BASED ON
CONTRACT, TORT, INCLUDING NEGLIGENCE, OR OTHERWISE) SHALL NOT EXCEED
THE AMOUNT PAID BY LICENSEE TO HARVARD UNDER THIS AGREEMENT.
11.17 This Agreement may be executed in counterparts, each of which shall be
deemed an original, but both of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives.
PRESIDENT AND FELLOWS NANOSYS, INC
OF HARVARD COLLEGE
/s/ JOYCE BRINTON /s/ LAWRENCE A. BOCK
----------------- --------------------
Joyce Brinton, Director Signature
Office for Technology and Trademark Licensing
LAWRENCE A. BOCK
----------------
Name
PRESIDENT & CEO
9/23/02 ---------------
------- Title
Date
10/2/02
-------
Date
25
APPENDIX A
The following comprise PATENT RIGHTS:
US Provisional Application 60/306,936, filed 7/20/01, a PCT application
claiming priority to 60/306,936, filed 7/22/01, Harvard Case #1935.
26
APPENDIX B
CASE LEAD INVENTOR REPORT DATE TITLE AGENCY GRANT NUMBERS
- ---- ------------- ----------- ----- ------ -------------
1935 Lieber, Charles 12/07/01 Nanowire Based memory and Office of Naval Research N00014-01-1-0651
Switching Elements
1935 Lieber, Charles 12/07/01 Nanowire Based memory and Office of Naval Research N00014-00-1-0476
Switching Elements
[*** Redacted]
27