EXHIBIT 10.23
SPONSORED RESEARCH AGREEMENT
RESEARCH AGREEMENT, effective 1 July, 1997, by and between The
University of North Carolina at Chapel Hill, having an address at 308 Bynum
Hall, Chapel Hill, North Carolina (the "University"), and Renaissance Cell
Technologies, Inc., a corporation existing under the laws of the State of
Delaware, and having an address P.O. Box 14287, Research Triangle Park, North
Carolina 27709 (the "Sponsor").
WITNESSETH:
WHEREAS, in pursuit of its educational purposes, which include research
and training, the University undertakes scholarly research and experimental
activities in a variety of academic disciplines; and
WHEREAS, the Sponsor wishes to fund, and desires that the University
undertake, a research program in accordance with said research and training
mission, which research program is described more fully in Exhibit A, attached
hereto and made a part hereof (hereinafter, the "Research"); and
WHEREAS, in furtherance of its scholarly research and instructional
interests, the University is willing to undertake the Research upon the terms
and conditions set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. Scope of Research
During the term of this Agreement, the University shall use its best
efforts to perform the Research, as described in Exhibit A, attached
hereto and made a part hereof and will furnish the equipment and
facilities necessary to carry out such Research. Notwithstanding the
foregoing, the University makes no warranties or representations
regarding its ability to achieve, nor shall it be bound hereby to
accomplish, any particular research objective or results.
2. Personnel
The research shall be performed by, and under the supervision and
direction of, Dr. Lola M. Reid, who shall be designated the Principal
Investigator, together with such additional personnel as may be
assigned by the University. The University covenants that all personnel
and entities (including any other universities or other organizations)
performing research hereunder have an, and shall be notified in writing
of their, obligation to assign all of their rights, title and interest
to and in any invention resulting from the Research to the University.
If for any reason the Principal Investigator is unable to continue to
serve as Principal Investigator, and a successor acceptable to both the
University and the Sponsor is not available, this agreement may be
terminated as provided in Article 10(b).
3. University Policies and Procedures
All research conducted hereunder shall be performed in accordance with
established University policies and procedures, including, but not
limited to, policies and procedures applicable to research involving
human subjects, laboratory animals, and hazardous agents and materials.
4. Reimbursement of Costs.
The Sponsor shall reimburse the University for all direct and indirect
costs incurred by the University in connection with the Research in an
amount not to exceed $450,000.00 per year for each of the first two (2)
years hereunder ($50,000 of which in each of the first two years shall
be for building upfit). After the first two years, the parties shall
agree to each following year's budget prior to commencement of such
year. Of such annual funding amount, excluding building upfit, not more
than twenty-five percent (25%) shall be applied to the University's
indirect costs. Provided, however, that the University may submit to
the Sponsor at any time, and the Sponsor may at its discretion approve
in writing, requests for additional funds. University shall keep
accurate financial records relating to the Research and shall make such
records reasonably available to Sponsor. However, the Sponsor is not
liable for any cost in excess of the amount specified herein, unless
this Agreement is modified to indicate such in writing by both parties.
All checks shall be made payable to The University of North Carolina at
Chapel Hill, shall include reference to the University Principal
Investigator and his department, and shall be sent to: S. Kent Walker,
440 W. Franklin St., CB#1350, UNC-CH, Chapel Hill, NC 27599-1350.
Payments shall be made in accordance with the following schedule:
one-quarter (1/4) of the annual budget on the date of signing of the
agreement, and equal quarterly payments thereafter for the term of the
agreement.
5. Research Reports
The University through the Principal Investigator shall prepare and
maintain records, including bound laboratory notebooks maintained in
accordance with generally accepted standard scientific procedures
containing all appropriate data reflecting results of the Research,
with each page containing at least two (2) signatures. The Principal
Investigator shall furnish to the Sponsor during the term of this
Agreement periodic informal written reports regarding the progress of
the Research. A final report setting forth the significant research
findings shall be prepared by the Principal Investigator and submitted
to the Sponsor within ninety (90) days following the expiration of the
term of this Agreement or the effective date of early termination, as
set forth in Article 10. In addition, the Principal Investigator will
make oral technical reports to Sponsor not less frequently than
quarterly relating to research activities conducted and results and
accomplishments achieved therefrom during the prior quarter in
connection with the Research. Sponsor will have the opportunity to
observe the work being carried on by the University in its laboratories
on a reasonable basis.
6. Publication
The University reserves, on behalf of the Principal Investigator and
other University employees and/or students, the right to disseminate
information, or to publish any material resulting from the Research;
provided, however, the University shall make no such disclosure unless
the University shall have provided the Sponsor with a copy of any
proposed publication forty-five (45) days in advance of the submission
by the University or any University author to a third party of any
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written materials intended for publication. If the Sponsor notifies the
University that proposed disclosure contains Sponsor's Confidential
Information, the University shall remove or cause the author to remove
such Sponsor Confidential Information prior to submission for
publication or other public disclosure. The Sponsor may request, and
the University shall agree to, a delay of such proposed publication for
an additional period, not to exceed forty-five (45) days, in order to
protect the potential patentability of any invention described therein
by having the University prepare and file a patent application. The
Sponsor, at its election, shall be entitled to receive in any such
publication an acknowledgment of its sponsorship of the Research. It is
specifically agreed that nothing contained in this agreement will
interfere with the publication or oral defense of research theses and
dissertations of graduate students.
7. Proprietary Information
All confidential information of either party disclosed to the other
party in connection with the Research hereunder ("Confidential
Information") will be treated by the receiving party as confidential
and restricted in its use to only those uses contemplated by the terms
of this Agreement. Any information which is to be treated as
confidential must be clearly marked as confidential prior to
transmittal to the other party. If such Confidential Information is
disclosed orally, it shall be identified as being confidential at the
time of disclosure, and shall thereafter be reduced to writing within
30 days, marked as confidential, and transmitted to the receiving
party. The Sponsor may submit Confidential Information only to the
Principal Investigator, who shall be free to refuse to accept such
Confidential Information. The obligations of this paragraph shall
survive and continue for five (5) years after termination of this
Agreement. Specifically excluded from such confidential treatment shall
be information which: (a) is or becomes part of the public domain,
through no fault of the receiving party; (b) is lawfully disclosed to
the receiving party by a third party who is not obligated to retain
such information in confidence; (c) is independently developed at the
receiving party by someone not privy to the confidential information;
(d) is required to be disclosed to comply with applicable laws or
governmental regulations, provided that the disclosing party receives
prior notice of such disclosure and that the receiving party takes all
reasonable and lawful actions to minimize the extent of such
disclosure, and if possible to avoid such disclosure; or (e) as of the
date of its disclosure and/or delivery is already known to the party
receiving such information, except in the case of disclosures of
information between Sponsor and the Principal Investigator.
Each party shall retain full ownership of all its Confidential
Information in the possession of the other party. At the termination of
this Agreement, each party shall secure the return of, or destroy, any
Confidential Information that is in its possession and that is in its
possession and that is owned by the other party, except that each party
may retain one copy of such Confidential Information for archival
purposes.
8. Results of the Research
(a) All rights in any inventions or discoveries, whether or not
patentable, that are developed, conceived or reduced to practice in the
course of the Research solely by University employees shall be property
of the University ("University Inventions"). All rights in any
inventions or discoveries whether or not patentable, that are
developed, conceived or reduced to practice jointly by University
employees and Sponsor employees in the course of the Research shall be
jointly owned by the University and the Sponsor ("Joint Inventions").
All rights in any inventions or discoveries whether or not patentable,
that are developed, conceived or reduced to practice in the course of
the
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Research solely by Sponsor employees shall be property of the Sponsor.
The University shall promptly report to the Sponsor any University
Inventions or Joint Inventions by University employees.
(b) The University hereby grants the Sponsor a first option to obtain
an exclusive license under any University Inventions or Joint
Inventions that are developed, conceived during the term of this
Agreement, or reduced to practice during the term of this Agreement or
during the one-year period following termination of this Agreement. The
University agrees to notify the Sponsor of any such inventions promptly
and in writing. This option for University Inventions or Joint
Inventions shall become effective when the Sponsor receives notice from
the University and shall remain open for ninety (90) days. During this
ninety (90) day period, the University will make available to the
Sponsor information that the Sponsor reasonably requests which would be
useful and necessary in evaluating such University Invention or Joint
Invention, subject to reasonable confidentiality requirements that may
be imposed by the University. The Sponsor shall indicate the exercise
of its option by written notification to the University. Upon receipt
of such notice, the University and Sponsor shall negotiate an exclusive
license under such University Invention or Joint Invention under the
terms of the attached Principles of License Agreement.
(c) If the Sponsor fails to exercise its exclusive license option to
any University Invention or Joint Invention within the applicable
option period, or if the Sponsor notifies the University in writing
that it will not exercise such option, then the University shall be
free to offer its rights in such University Invention to any third
party or to offer its rights in such Joint Invention to any third
parties, subject, for one year after Sponsor's failure to exercise its
exclusive option, to the requirement that the University not offer such
rights to any other party on terms and conditions more favorable to
such third party than those offered to Sponsor. The foregoing
notwithstanding, the Sponsor retains its rights in any Joint Invention.
(d) During any option period applicable to a University Invention, the
University agrees, if requested by the Sponsor, to cause U.S. or
foreign patent applications to be filed and prosecuted in its name at
the Sponsor's expense, using patent counsel reasonably acceptable to
the Sponsor. The University shall consult with the Sponsor regarding
the preparation, filing, prosecution, and maintenance or such patent
applications and shall furnish to the Sponsor copies of documents
relating thereto in sufficient time to enable the Sponsor to comment on
them prior to filing. If the Sponsor declines to license such
University Invention, then the University shall have no further
obligation to obtain patent protection for such University Invention
and the Sponsor shall have no further obligation to reimburse the
University for its expenses. If the Sponsor elects to license such
University Invention, then the responsibility for patenting such
University Invention and any associated expenses shall be governed by
the terms of the resulting license agreement. In the event that the
University desires to file a patent application with respect to a
University Invention, and the Sponsor does not agree to reimburse the
University's expenses by written confirmation made within sixty (60)
days after the receipt of written notification from the University of
its intent to file such patent application, the University may file and
prosecute such patent at its own expense and the Sponsor shall have no
further rights under this Agreement with respect to such University
Invention and University shall be free to license to third parties.
(e) During any option period applicable to a Joint Invention, the
Sponsor shall have the first right to cause patent applications to be
filed and prosecuted in the names of both parties at the Sponsor's
expense using patent counsel reasonably acceptable to the University.
The Sponsor shall consult with the University regarding preparation,
filing, prosecution, and maintenance of such
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patent applications and shall furnish to the University copies of
documents relating thereto in sufficient time to enable the University
to comment on them prior to filing. If the Sponsor elects to license
such Joint Invention pursuant to Section 8(b) hereof, then the
responsibility for patenting such Joint Invention and any associated
expenses shall be governed by the terms of the License Agreement. If
the Sponsor elects not to license such Joint Invention or not to seek
patent protection for such Joint Invention, then the University shall
be free to cause patent applications to be filed and prosecuted in the
names of both parties at the University's expense using patent counsel
reasonably acceptable to the Sponsor. The University shall consult with
the Sponsor regarding the preparation, filing, prosecution, maintenance
of such patent applications and shall furnish to the Sponsor copies of
documents relating thereto in sufficient time to enable the sponsor to
comment on them prior to filing.
9. Ownership Of Property
Title to any equipment purchased or manufactured by the University in
the performance of the work funded under this Agreement shall vest in
the University; provided, however, the Principal Investigator shall be
entitled at all times to designate the placement of and access to such
equipment in the Principal Investigator's laboratory or such other
location at the University as designated by the Principal Investigator
and approved by the Principal Investigator's Department Chair.
10. Term and Termination
(a) This Agreement shall commence on the date hereof and remain in
effect until terminated by mutual consent. In addition, either party
may terminate this Agreement upon twelve (12) months' prior written
notice to the other; provided, however, that no such notice may be
given prior to the first anniversary of the date hereof.
(b) Upon receipt of notice of termination, the University shall use its
best efforts promptly to limit or terminate any outstanding commitments
and to conclude the work. All costs associated with such termination
shall be reimbursable, including, without limitation, all
non-reimbursed costs and non-cancelable commitments incurred prior to
the receipt of the notice of termination, such reimbursement together
with other payments not to exceed the total estimated project cost
specified in Article 4.
(c) The provisions of paragraphs 5, 6, 7, 8, 9, 12, 14, 15 and 20 shall
survive such termination of this Agreement.
11. Notices
Any notices given under this Agreement shall be in writing and shall be
deemed delivered when sent by first-class mail, postage paid, addressed
to the parties as follows (or at such other addresses as the parties
may notify each other of in writing) :
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The University of North Carolina at Chapel Hill:
Dr. Robert P. Lowman
Associate Vice Provost for Research
Office of Research Services
The University of North Carolina at Chapel Hill
CB #4100, Bynum Hall
Chapel Hill, North Carolina 27599-4100
Sponsor:
Renaissance Cell Technologies, Inc.
P.O. Box 14287
Research Triangle Park, North Carolina 27709
Attention: W. Bennett Love
12. Use of University Name
Sponsor shall not employ or use the name of the University in any
promotional materials, advertising, or in any other manner without the
prior express written permission of the University, except that Sponsor
and its majority shareholder each may, during the term of this
Agreement, state that it is sponsoring the Research at the University
and to disclose the terms of this Agreement to prospective investors,
sublicensees, investment bankers, regulatory authorities, in connection
with its financing, regulatory, development and stockholder relations
activities or that it may deem to be required in any prospectus,
offering memorandum, or other document or filing prepared in connection
with Sponsor's compliance obligations under applicable securities laws
or other applicable law or regulation; provided, that Sponsor uses the
following language, or a reasonably approximation thereof: (1)
"...based upon inventions licensed from the University of North
Carolina at Chapel Hill;" or (2) "...based upon research conducted at
the University of North Carolina at Chapel Hill." Otherwise Sponsor
shall have given University at least five (5) days prior written notice
of the proposed text of any such identification or disclosure for the
purpose of giving University the opportunity to comment on such
proposed text. In no event shall the sponsoring of the Research be
considered to be an endorsement by the University of any commercial
product which may result, indirectly or directly, from the Research.
13. Relationship of the Parties
The University, for all purposes related to this Agreement, shall be
deemed an independent contractor of the Sponsor, and nothing in this
Agreement shall be deemed to create a relationship of employment or
agency or to constitute the parties as partners or joint venturers.
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14. Indemnification
Each of the parties hereby agrees to indemnify, defend and hold
harmless the other, its directors, employees, students and agents from
and against any loss, claim, damage or liability of any kind arising
out of or in connection with the act(s) or failure(s) to act of the
indemnifying party's directors, employees, students or agents in
connection with the performance of this Agreement, and/or involving the
indemnifying party's use and/or possession of the results of the
Research and/or biological samples or other materials provided by the
indemnified party to the indemnifying party pursuant to the Research.
Notwithstanding any other provision of this section, University's
obligations hereunder shall be subject to the provisions of the North
Carolina Tort Claims Act, NCGS 143-291, et seq.
15. No Warranties
The University makes no warranties, either express or implied, as to
any matter, including, without limitation, the results of the research
or any inventions or product, tangible or intangible, conceived,
discovered or developed under this Agreement; or the merchantability or
fitness for a particular purpose of the research results of any such
invention or product. The University shall not be liable for any
direct, consequential or other damages suffered by the use of the
research results or any such invention or product. The University
represents that it has all requisite power and authority to enter into
this Agreement. Each party represents that this Agreement constitutes
the legal, valid and binding obligation of it enforceable against it in
accordance with its terms.
16. Force Majeure
The University shall not be liable for any failure to perform as
required by this Agreement, to the extent such failure to perform is
caused by any reason beyond the University's control, or by reason of
any of the following: labor disturbances or disputes of any kind,
accidents, failure of any required governmental approval, civil
disorders, acts of aggression, acts of God, energy or other
conservation measures, failure of utilities, mechanical breakdowns,
material shortage, disease, or similar occurrences.
17. Severability
In the event that a court of competent jurisdiction holds any provision
of this Agreement to be invalid, such holding shall have no effect on
the remaining provisions of this Agreement, and they shall continue in
full force and effect.
18. Entire Agreement; Amendments
This Agreement and the Exhibits hereto contain the entire agreement
between the parties. No amendments or modifications to this Agreement
shall be effective unless make in writing and signed by authorized
representatives of both parties.
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19. Similar Research
Nothing in this Agreement shall be construed to limit the freedom of
the University or of its researchers who are participants under this
Agreement, from engaging in similar research made under other grants,
contracts or agreements with parties other than the Sponsor; provided,
that before such similar research is conducted by the Principal
Investigator or by investigators under the supervision of the Principal
Investigator, the University will offer to Sponsor the opportunity to
fund such research at the funding level and on similar terms proposed
by the University to the other party.
20. Governing Law
This Agreement shall be governed by and construed in accordance with
the law of North Carolina.
21. Counterparts
This Agreement may be executed in several counterparts, and each such
counterpart shall be deemed an original and all such counterparts,
taken together, shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers or representatives.
THE UNIVERSITY OF NORTH CAROLINA SPONSOR
AT CHAPEL HILL
By /s/ ROBERT P. LOWMAN By: /s/ RICHARD W. REICHOW
----------------------- ----------------------
Robert P. Lowman, Ph.D. Name: Richard W. Reichow
Associate Vice Provost, ------------------
Office of Research Services Title: Chief Financial Officer
-----------------------
Date 8/19/97 Date: September 4, 1997
-------------- -----------------------
Consented to by Principal Investigator:
By /s/ LOLA M. REID
-----------------
Title Professor
-----------------
Date July 1, 1997
-----------------
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PRINCIPLES OF LICENSE AGREEMENT
between
THE UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL
and
RENAISSANCE CELL TECHNOLOGIES, INC.
The following are the basic terms under which the University and Sponsor agree
that University shall license to Sponsor all University rights to and in any
University Inventions and Joint Inventions (hereinafter, "Inventions") which are
subject to Article 8 of the foregoing Sponsored Research Agreement:
1. The University shall retain its ownership of any Inventions.
2. As to each Invention, University will grant an exclusive license
(except for any rights which may be held by the United States
Government resulting from any sponsorship by the Government of research
leading to an Invention) to practice the Invention(s). Each such
license will be world-wide and for a term expiring upon expiration of
the patent(s) covering the Invention(s).
3. There will be an issue fee (not to exceed $50,000 and, with respect to
the first license hereunder, 12,500 shares of Sponsor Common Stock) for
any license negotiated hereunder and such license will be
royalty-bearing. The royalty rate for such license will be 1% of the
first $50 million of annual net sales of a product or service; 1-1/2%
of annual net sales between $50 million and $100 million; and 2% of
annual net sales in excess of $100 million. In the event the Sponsor
sublicenses the Invention to a third party, the royalty paid to the
University will not exceed 25% of the royalty received by Sponsor;
subject to a minimum royalty paid to the University of 1% of annual net
sales.
4. Any such license will contain at least the following diligence requirements:
(a) Minimum annual royalties, which shall begin upon first
commercial sale; and
(b) Mutually acceptable milestones or minimum funding of research
according to which reasonable levels of commercialization of
the Invention(s) will be required. Such milestones or minimums
shall be usual and customary for the life sciences industry.
Payments to University upon achievement of such milestones or
minimums shall not exceed $50,000.00 ($100,000.00 in the event
that University is not issued Common Stock pursuant to Section
3 above). Sponsor's failure to achieve negotiated milestones
will result in termination of the license or its conversion to
a non-exclusive license, at University's sole option.
5. Sub-licensing will be permitted, subject to University approval, which
shall not be unreasonably withheld. University shall receive royalties
on sub-license net sales of licensed product as if those net sales were
made by Sponsor, subject to Section 3 above. University shall receive a
percentage of non-royalty consideration received by Sponsor from any
sub-licensee that is commensurate to University's appropriate royalty
set forth above. All sub-licenses will be assigned to University in the
event the Sponsor's license is terminated or converted to a
non-exclusive license.
6. Sponsor will reimburse University for all reasonable out-of-pocket
expenses necessary to prosecute and maintain patents on the Invention
in the United States and in all mutually agreed-upon foreign countries.
In the event the University wishes to file patent applications in
non-U.S. countries for which the Sponsor is not willing to pay, the
University shall be free to proceed with such filing at its own expense
and the Sponsor shall have no license to the Invention in such
country(ies). Patent counsel shall be chosen by the University, subject
to the reasonable approval of Sponsor where Sponsor is reimbursing
patent expenses.
7. University will not warrant the validity of any patents included in the
license, or the usefulness, accuracy, or safety of Invention(s) and/or
associated know-how.
8. Each of the parties shall indemnify and hold harmless the other, its
directors, employees and students from loss and/or damages arising from
its use and/or possession of the Inventions or from the practice of any
license entered into hereunder. University's obligations hereunder
shall be subject to the North Carolina Tort Claims Act, NCGS 143-291,
et seq.
9. University will reserve the right to use any licensed technology for
its own research, educational and teaching purposes.
10. Additional conventional provisions concerning such things as
record-keeping, assignability, publicity, marking, construction, and
choice of laws will also be negotiated.
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