Exclusive Patent License Agreement - Massachusetts Institute of Technology and Nanosys Inc.
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
EXCLUSIVE PATENT LICENSE AGREEMENT
WITH
NANOSYS, INC.
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TABLE OF CONTENTS
RECITALS .................................................................... 1
1. Definitions .............................................................. 2
2. Grant of Rights .......................................................... 6
3. COMPANY Diligence Obligations ............................................ 7
4. Royalties and Payment Terms .............................................. 9
5. Reports and Records ...................................................... 13
6. Patent Prosecution ....................................................... 15
7. Infringement ............................................................. 16
8. Indemnification and Insurance ............................................ 17
9. No Representations or Warranties ........................................ 19
10. Assignment .............................................................. 19
11. General Compliance with Laws ............................................ 20
12. Termination ............................................................. 21
13. Dispute Resolution ...................................................... 22
14. Miscellaneous ........................................................... 23
APPENDIX A .................................................................. 28
APPENDIX B .................................................................. 29
EXHIBIT A ................................................................... 31
EXHIBIT B ................................................................... 32
EXHIBIT C ................................................................... 33
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MASSACHUSETTS INSTITUTE OF TECHNOLOGY
EXCLUSIVE PATENT LICENSE AGREEMENT
This Agreement, effective as of the date set forth above the signatures
of the parties below (the "EFFECTIVE DATE"), is between the Massachusetts
Institute of Technology ("M.I.T."), a Massachusetts corporation, with a
principal office at 77 Massachusetts Avenue, Cambridge, MA 02139-4307 and
Nanosys, Inc. ("COMPANY"), a Delaware corporation, with a principal place of
business at 2625 Hanover Street, Palo Alto, CA 94304.
RECITALS
WHEREAS, M.I.T. is the owner of certain PATENT RIGHTS (as later defined
herein) and has the right to grant licenses under said PATENT RIGHTS;
WHEREAS, Moungi Bawendi, an inventor of the PATENT RIGHITS and current
employee of M.I.T., has or will shortly acquire equity in COMPANY, the Conflict
Avoidance Statement of Moungi Bawendi is attached as Exhibit A hereto;
WHEREAS, Moungi Bawendi, an inventor of the PATENT RIGHTS, has or will
shortly acquire equity in COMPANY not resulting from this Agreement, the
Inventor/Author Acknowledgment of No Equity Distribution in M.I.T.'s
institutional equity share is attached as Exhibit B hereto;
WHEREAS, M.I.T.'s Vice President for Research has approved that Moungi
Bawendi, an inventor of the PATENT RIGHTS, now holds or shall shortly acquire
equity in COMPANY and that M.I.T. is accepting equity as partial consideration
for the rights and licenses granted under this Agreement;
WHEREAS, M.I.T. desires to have the PATENT RIGHTS developed and
commercialized to benefit the public and is willing to grant a license
thereunder;
WHEREAS, COMPANY has represented to M.I.T., to induce M.I.T. to enter
into this Agreement, that COMPANY shall commit itself to a thorough, vigorous
and diligent program of exploiting the PATENT RIGHTS so that public utilization
shall result therefrom; and
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WHEREAS, COMPANY desires to obtain a license under the PATENT RIGHTS
upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, M.I.T. and COMPANY hereby agree as fellows:
1. DEFINITIONS.
1.1 "AFFILIATE" shall mean any legal entity (such as a corporation,
partnership, or limited liability company) that is controlled by COMPANY. For
the purposes of this definition, the term "control" means (i) beneficial
ownership of at least fifty percent (50%) of the voting securities of a
corporation or other business organization with voting securities or (ii) a
fifty percent (50%) or greater interest in the net assets or profits of a
partnership or other business organization without voting securities.
1.2 "COMBINATION PRODUCT" shall mean a LICENSED PRODUCT sold in
combination with one or more other components which are themselves not LICENSED
PRODUCTS and where such other components could reasonably be deemed to be
separate product(s).
1.3 "FIELDS" shall mean FIELD A and FIELD B.
1.4 "FIELD A" shall mean all fields.
1.5 "FIELD B" shall mean all fields excluding the field of
[*** Redacted] and the field of [*** Redacted].
1.6 "LICENSED PRODUCT" shall mean any product or part thereof that:
(a)absent the license granted hereunder, would infringe one or
more claims of the PATENT RIGHTS; or
(b) is manufactured by using a LICENSED PROCESS or that, when
used, practices a LICENSED PROCESS.
1.7 "LICENSED PROCESS" shall mean any process that, absent the license
granted hereunder, would infringe one or more claims of the PATENT RIGHTS or
which uses a LICENSED PRODUCT.
*** 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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1.8 "NET SALES" [*** Redacted]
*** 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]
1.9 "PATENT RIGHTS" shall mean PATENT RIGHTS A and PATENT RIGHTS B.
1.10 "PATENT RIGHTS A" shall mean:
(a) the United States and international patents listed on
Appendix A:
(b) the United States and international patent
applications and/or provisional applications listed on Appendix A and the
resulting patents;
(c) any patent applications resulting from the
provisional applications listed on Appendix A, and any divisionals,
continuations, continuation-in-part applications, and continued prosecution
applications (and their relevant international equivalents) of the patent
applications listed on Appendix A and of such patent applications that result
from the provisional applications listed on Appendix A, to the extent the claims
are directed to subject matter in or supported by the patent applications listed
on Appendix A, and the resulting patents;
(d) any patents resulting from reissues, reexaminations,
or extensions (and their relevant international equivalents) of the patents
described in (a), (b), and (c) above; and
(e) international (non-United States) patent applications
and provisional applications filed after the EFFECTIVE DATE and the relevant
international equivalents to divisionals, continuations, continuation-in-part
applications and continued prosecution applications of the patent applications
to the extent the claims are directed to subject matter in or supported by the
patents or patent applications referred to in (a), (b), (c), and (d) above, and
the resulting patents.
1.11 "PATENT RIGHTS B" shall mean:
(a) the United States and international patents listed on
Appendix B;
(b) the United States and international patent
applications and/or provisional applications listed on Appendix B and the
resulting patents;
(c) any patent applications resulting from the
provisional applications listed on Appendix B, and any divisional,
continuations, continuation-in-part applications, and continued prosecution
applications (and their relevant international equivalents) of the patent
applications listed on Appendix B and of such patent applications that result
from the provisional applications listed on Appendix B, to the extent the claims
are directed to subject matter in or supported by the patent applications listed
on Appendix B, and the resulting patents;
*** 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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(d) any patents resulting from reissues, reexaminations,
or extensions (and their relevant international equivalents) of the patents
described in (a), (b), and (c) above; and
(e) international (non-United States) patent applications
and provisional applications filed after the EFFECTIVE DATE and the relevant
International equivalents to divisisntinuations, continuation-in-part
applications and continued prosecution applications of the patent applications
to the extent the claims are directed to subject matter in or supported by the
patents or patent applications referred to in (a), (b), (c), and (d) above, and
the resulting parents.
1.12 "REPORTING PERIOD" shall begin on the first day of each calendar
[*** Redacted] and end on the last day of such calendar [*** Redacted].
1.13 "SUBLICENSE INCOME" shall mean any payments that COMPANY receives
from a SUBLICENSEE, including any sublicense entered into in settlement of any
claim of infringement in consideration of the sublicense of the rights granted
COMPANY under Section 2.1, including without limitation [*** Redacted] on NET
SALES, and other payments, but specifically excluding, [*** Redacted] or for
COMPANY associated with [*** Redacted] used in performance of research and
development; [*** Redacted] expenses; [*** Redacted] amounts received for
[*** Redacted]; and amounts in consideration of any other rights or licenses
under any [*** Redacted] the COMPANY other then the [*** Redacted].
1.14 "SUBLICENSEE" shall mean any non-AFFILIATE sublicensee of the
rights granted COMPANY under Section 2.1.
1.15 "TERM" shall mean the term of this Agreement, which shall
commence on the EFFECTIVE DATE and shall remain in effect until the expiration,
abandonment, or written express disclaimer of the validity or enforceability by
M.I.T, of all issued patents and filed patent applications within the PATENT
RIGHTS, unless earlier terminated in accordance with the provisions of this
Agreement.
1.16 "TERRITORY" shall mean worldwide.
*** 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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2. GRANT OF RIGHTS.
2.1 License Grants.
(a) Subject to the terms of this Agreement, M.I.T. hereby
grants to COMPANY and its AFFILIATES for the TERM a royalty-bearing license
under the PATENT RIGHTS A to develop, make, have made, use, sell, offer to sell,
lease, or import LICENSED PRODUCTS in FIELD A in the TERRITORY and to develop
and perform LICENSED PROCESSES in FIELD A in the TERRITORY for the TERM.
(b) Subject to the terms of this Agreement, M.I.T. hereby
grants to COMPANY and its AFFILIATES for the TERM a royalty-bearing license
under the PATENT RIGHTS B to develop, make, have made, use, sell, offer to sell,
lease, or import LICENSED PRODUCTS in FIELD B in the TERRITORY and to develop
and perform LICENSED PROCESSES in FIELD B in the TERRITORY for the TERM.
2.2 Exclusivity.
(a) In order to establish exclusivity for COMPANY for
PATENT RIGHTS A, M.I.T. agrees that it shall not grant any other license to
develop, make, have made, use, sell, offer to sell, lease or import LICENSED
PRODUCTS in FIELD A in the TERRITORY or to perform LICENSED PROCESSES in FIELD A
in the TERRITORY for the TERM.
(b) In order to establish exclusivity for COMPANY for
PATENT RIGHTS B in FIELD B, M.I.T. agrees that it shall not grant any other
license to develop, make, have made, use, sell, offer to sell, lease or import
LICENSED PRODUCTS or to perform LICENSED PROCESSES in FIELD B in the TERRITORY
for the TERM, subject to a pre-existing nonexclusive license to [*** Redacted]
dated [*** Redacted] which grants rights to [*** Redacted] in the field of
[*** Redacted]
(c) M.I.T. hereby warrants that, to the best of its
knowledge without due inquiry, it has the right to grant the licenses and
establish exclusivity as set forth in Sections 2.1 and 2.2, subject to Article
9 of this Agreement.
2.3 Sublicenses. COMPANY shall have the right to grant sublicenses of
its rights under Section 2.1. COMPANY shall incorporate terms and conditions
into its sublicenses agreements sufficient to enable COMPANY to comply with this
Agreement. COMPANY shall promptly furnish M.I.T. with a fully, signed photocopy
of any sublicense agreement. Sublicense
*** 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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agreements provided to M.I.T. under this section may be provided in redacted
form, provided that such redacted sublicense agreements contain all terms
necessary for M.I.T. to determine COMPANY'S compliance with the obligations of
this Agreement; and provided further that upon request, M.I.T's representatives
can review the sublicenses in their entirety at COMPANY'S facility. Upon
termination of this Agreement for any reason, any SUBLICENSEE not then in
default shall maintain their license under the then existing terms and
conditions, provided that such terms and conditions are at least as favorable to
M.I.T. as the terms of this Agreement, and provided that such SUBLICENSEE assume
all unsatisfied and unwaived, past, current, and future obligations of COMPANY
under this Agreement.
2.4 U.S. Manufacturing. COMPANY agrees that any LICENSED PRODUCTS used
or sold in the United States will be manufactured substantially in the United
States, to the extent required by law.
2.5 Retained Rights.
(a) M.I.T. M.I.T. retains the right to practice under the
PATENT RIGHTS for research, teaching, and educational purposes.
(b) Federal Government. COMPANY acknowledges that the
U.S. federal government retains a royalty-free, non-exclusive, non-transferable
license to practice any government-funded invention claimed in any PATENT RIGHTS
as set forth in 35 U.S.C. Sections 201-211, and the regulations promulgated
thereunder, as amended, or any successor statutes or regulations.
2.6 No Additional Rights. Nothing in this Agreement shall be construed
to confer any rights upon COMPANY by implication, estoppel, or otherwise as to
any technology or patent rights of M.I.T. or any other entity other than the
PATENT RIGHTS, regardless of whether such technology or patent rights shall be
dominant or subordinate to any PATENT RIGHTS.
3. COMPANY DILIGENCE OBLIGATIONS.
3.1 Diligence Requirements. COMPANY shall use diligent efforts, or
shall cause its AFFILIATES and SUBLICENSEES to use diligent efforts, to develop
LICENSED PRODUCTS or LICENSED PROCESSES and to introduce LICENSED PRODUCTS or
LICENSED PROCESSES into the commercial market; thereafter, COMPANY or its
AFFILIATES or SUBLICENSEES shall make LICENSED PRODUCTS or LICENSED PROCESSES
reasonably
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available to the public. Specifically, COMPANY or AFFILIATE or SUBLICENSEE
shall fulfill the following obligations:
(a) Within [*** Redacted] after the EFFECTIVE DATE,
COMPANY shall furnish M.I.T. with a written research and development plan
describing the major tasks to be achieved in order to bring to market a LICENSED
PRODUCT or a LICENSED PROCESS, specifying the number of staff and other
resources to be devoted to such commercialization effort.
(b) Within [*** Redacted] after the end of each
[*** Redacted], COMPANY shall furnish M.I.T. with a written report (consistent
with Section 5.1 (a)) on the progress of its efforts during the immediately
preceding [*** Redacted] to develop and commercialize LICENSED PRODUCTS or
LICENSED PROCESSES. The report shall also contain a discussion of intended
efforts and sales projections for the year in which the report is submitted.
(c) COMPANY shall develop a working model on or before
the date [*** Redacted] from the EFFECTIVE DATE, and permit an in-plant
inspection by M.I.T. on or before the date [*** Redacted] months from the
EFFECTIVE DATE, and thereafter permit in-plant inspections by M.I.T. at regular
intervals with at least [*** Redacted] months between each such inspection.
(d) COMPANY, its AFFILIATES or SUBLICENSEES, shall fund
research toward the development of LICENSED PRODUCTS and/or LICENSED PROCESSES
in each calendar year (pro-rated for partial years) beginning in 2003, and as
provided below, and ending with the first commercial sale of a LICENSED PRODUCT
or a first commercial performance of a LICENSED PROCESS. Such funding shall
include funding of research and/or development of technology reasonably
necessary for commercial or technical viability of the LICENSED PRODUCTS.
<CAPTION>
Year Funding
2003 [*** Redacted]
2004 [*** Redacted]
2005 and thereafter [*** Redacted]
(e) COMPANY shall make a first commercial sale of a
LICENSED PRODUCT and/or a first commercial performance of a LICENSED PROCESS on
or before [*** Redacted].
*** 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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(f) COMPANY shall make annual NET SALES according to the
following schedule:
2009 [*** Redacted];
2010 [*** Redacted];
2011 and each year
through and including 2014 [*** Redacted];
2015, and each year thereafter [*** Redacted].
In the event that M.I.T. determines that COMPANY (or an AFFILIATE or
SUBLICENSEE) has failed to fulfill any of its obligations under this Section
3.1, then M.I.T. may treat such failure as a material breach in accordance
with Section 12.3(b). To the extent that COMPANY has made commercially
reasonable efforts to meet its obligations, then M.I.T. may, in its discretion,
amend or extend the schedule of such obligations.
4. ROYALTIES AND PAYMENT TERMS.
4.1 Consideration for Grant of Rights. In consideration for the rights
granted herein, COMPANY agrees to the following:
(a) License Issue Fee and Patent Cost Reimbursement.
COMPANY shall pay to M.I.T. within [*** Redacted] days of the EFFECTIVE DATE a
license issue fee of [*** Redacted], and, in accordance with Section 6.3, shall
reimburse M.I.T. for its actual expenses incurred as of the EFFECTIVE DATE in
connection with obtaining the PATENT RIGHTS, less any expenses that have already
been reimbursed by another party or for which another party is obligated to
reimburse M.I.T. These payments are nonrefundable.
(b) License Maintenance Fees. COMPANY shall pay to M.I.T.
the following license maintenance fees on the dates set forth below:
June 1, 2004 [*** Redacted]
June 1, 2005 [*** Redacted]
June 1, 2006 [*** Redacted]
June 1, 2007 [*** Redacted]
June 1, 2008 and every
June 1 thereafter [*** Redacted]
*** 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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This annual license maintenance fee is nonrefundable,
however, the license maintenance fee may be credited to running royalties
subsequently due on NET SALES earned during the same calendar year, if any.
License maintenance fees paid in excess of running royalties due in such
calendar year shall not be creditable to amounts due for future years.
(c) Running Royalties. COMPANY shall pay to M.I.T. a
running royalty of [*** Redacted] of NET SALES by COMPANY and AFFILIATES.
Running royalties shall be payable for each REPORTING PERIOD and shall be due to
M.I.T. within [*** Redacted] days of the end of each REPORTING PERIOD.
(d) Sharing of SUBLICENSE INCOME. COMPANY shall pay
M.I.T. a total of [*** Redacted] of all SUBLICENSE INCOME received by COMPANY.
Such amount shall be payable for each REPORTING PERIOD and shall be due to
M.I.T. within [*** Redacted] days of the end of each REPORTING PERIOD. This
[*** Redacted] may be reduced by one percentage point per each [*** Redacted] of
research directed by COMPANY specifically toward the development of LICENSED
PRODUCTS and/or LICENSED PROCESSES, with the percentage of shared SUBLICENSE
INCOME to be no less than [*** Redacted] of SUBLICENSE INCOME or [*** Redacted]
of NET SALES by SUBLICENSEE, whichever is greater.
(e) No Multiple Royalties. If the manufacture, use,
lease, or sale of any LICENSED PRODUCT or the performance of any LICENSED
PROCESS is covered by more than one of the PATENT RIGHTS, multiple royalties
shall not be due.
(f) Equity.
(i) Initial Grant. Within thirty (30) days of
the EFFECTIVE DATE, COMPANY shall sell and issue a total of Fifty Thousand
(50,000) shares of Common Stock of COMPANY, $.001 par value per share, (the
"Shares") to M.I.T. at a price of $0.12 per share for a total of $6,000.00.
M.I.T. shall have the right to assign and transfer such shares to such persons
as M.I.T. shall direct ("M.I.T. Holder"), and each M.I.T. Holder shall receive
such a number of shares as M.I.T. shall direct provided that such M.I.T. Holder
is an accredited investor as defined by Rule 50l(a) of Regulation D under the
Securities Act of 1933, or provides COMPANY with an executed Investor
Representation Statement in substantially the form attached hereto as Exhibit C.
Upon issuance of shares hereunder, M.I.T. will, at COMPANY'S direction, execute
a shareholder agreement, co-sale agreement and voting agreement in a mutually
agreeable form.
(ii) Participation in Future Private Equity
Offerings. M.I.T. (specifically not including M.I.T. Holders) shall have the
right of first offer to purchase an
*** 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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amount of securities of COMPANY of any class or kind which COMPANY proposes to
sell in a non-registered private placement ("Preemptive Securities") sufficient
to maintain M.I.T.'s proportionate beneficial ownership interest in COMPANY (on
an as-converted, fully diluted basis) (M.I.T's "Pro Rata Portion" as defined
below). Notwithstanding the foregoing, Preemptive Securities will not include
and, M.I.T. will not have a right of first offer as provided in this Agreement
to purchase (i) securities issued upon the closing of a public offering of
COMPANY's common stock resulting in gross proceeds to COMPANY of at least $10
million (a "Qualified Public Offering"), (ii) securities issued upon conversion
of Preferred Stock or other warrants or other convertible or exercisable
securities of COMPANY outstanding as of the date hereof, (iii) securities issued
in connection with any stock split or stock dividend of COMPANY,
recapitalizations or the like, (iv) Common Stock issued to employees, officers,
or directors of, or contractors, consultants or advisors to, COMPANY pursuant to
stock purchase or stock option plans, stock bonuses or awards, contracts or
other arrangements approved by COMPANY's Board of Directors, (v) shares of
capital stock issued to a financial institution which has loaned funds to
COMPANY, the terms of which are approved by COMPANY's Board of Directors, (vi)
shares of capital stock issued to equipment or real property lessors, the terms
of which are approved by COMPANY's Board of Directors, (vii) shares of capital
stock issued in connection with the acquisition of technology or licenses, the
terms of which are approved by COMPANY's Board of Directors, or (viii)
securities issued to non-financial corporations in connection with a license,
distribution, development, foundry or similar "corporate partner" agreement, the
terms of which are approved by COMPANY's Board of Directors. If COMPANY wishes
to make any such sale of Preemptive Securities, it shall give M.I.T. prior
written notice ("Prior Written Notice") of the proposed sale. The notice shall
set forth (i) COMPANY's bona fide intention to offer Preemptive Securities and
(ii) the material terms and conditions of the proposed sale (including the
number of shares to be offered and the price, if any, for which COMPANY proposes
to offer such share), and the date by which the Acceptance Notice (as defined
below) is due, and shall constitute an offer to sell Preemptive Securities to
M.I.T. on such terms and conditions. M.I.T. may accept such offer by delivering
a written notice of acceptance (an "Acceptance Notice") to COMPANY within
fifteen (15) days after receipt of the Prior Written Notice. Notwithstanding the
foregoing, COMPANY shall provide M.I.T. with up to thirty (30) days after
M.I.T.'s receipt of the Prior Written Notice before M.I.T.'s required delivery
of the Acceptance Notice, if such additional time will not unduly delay or
jeopardize the closing of the COMPANY's proposed sale of such Preemptive
Securities. M.I.T. in exercising their rights of first offer shall be entitled
at their option to participate in the purchase of Preemptive Securities on a pro
rata basis to the extent necessary to maintain M.I.T.'s proportionate beneficial
ownership interest in COMPANY (M.I.T.'s "Pro Rata Portion") (for purposes of
determining M.I.T.'s Pro Rata Portion with respect to any issuance of Preemptive
Securities, other security holders shall be
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treated as owning that number of shares of Common Stock into which any
outstanding Preferred Stock may be converted, while the total COMPANY interest
will be calculated on an as-converted to Common Stock basis, assuming full
conversion and exercise of all outstanding convertible or exercisable
securities). If M.I.T. elects to exercise its right of first offer and does not
complete the purchase of such Preemptive Securities within ten (10] days after
delivery of its Acceptance Notice to COMPANY, COMPANY may complete the sale of
Preemptive Securities on the terms and conditions specified in COMPANY's notice
within the one hundred and twenty (120) day period following the expiration of
such ten (10) day period. If COMPANY does not enter into an agreement for the
sale of Preemptive Securities to M.I.T. pursuant to a delivered Acceptance
Notice within such ten (10) day period, or if COMPANY does not otherwise
consummate an agreement for the sale of Preemptive Securities within such one
hundred and twenty (120) day period, the right provided hereunder shall be
deemed to be revived and all future shares of Preemptive Securities shall not be
offered unless first re-offered to M.I.T. in accordance with this Agreement.
(iii) Waiver and Expiration of Right of First
Offer. The right of first offer granted under this Agreement shall terminate
upon the closing of a firm commitment for a Qualified Public Offering. The right
of first offer granted to M.I.T. under this Agreement may not be waived (either
generally or in a particular instance, either retroactively or prospectively,
and either for a specified period of time or indefinitely) by written consent
from a majority of COMPANY'S Preferred Stock having a right of first offer to
purchase COMPANY securities, unless M.I.T. also consents in writing to such
waiver of the right granted to M.I.T. hereunder, which consent shall not be
unreasonably withheld.
4.2 Payments.
(a) Method of Payment. All payments under this Agreement
should be made payable to "Massachusetts Institute of Technology" and sent to
the address identified in Section 14.1. Each payment should reference this
Agreement and identify the obligation under this Agreement that the payment
satisfies.
(b) Payments in U.S. Dollars. All payments due under
this Agreement shall be drawn on a United States bank and shall be payable 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
Wall Street Journal) on the last working day of the calendar quarter of the
applicable REPORTING PERIOD. Such payments shall be without deduction of
exchange, collection, or other charges, and, specifically, without deduction of
withholding or similar taxes or other government imposed fees or taxes, except
as permitted in the definition of NET SALES.
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(c) Late Payments. Any payments by COMPANY that are not
paid on or before the date such payments are due under this Agreement shall bear
interest, to the extent permitted by law, at [*** Redacted] the Prime Rate of
interest as reported in the Wall Street Journal on the date payment is due.
5. REPORTS AND RECORDS.
5.1 Frequency of Reports-
(a) Before First Commercial Sale. Prior to the first
commercial sale of any LICENSED PRODUCT or first commercial performance of any
LICENSED PROCESS, COMPANY shall deliver reports to M.I.T. annually, within
[*** Redacted] days of the end of each calendar year, containing information
concerning the immediately preceding calendar year, as further described in
Section 5.2.
(b) Upon First Commercial Sale of a LICENSED PRODUCT or
Commercial Performance of a LICENSED PROCESS. COMPANY shall report to M.I.T. the
date of first commercial sale of a LICENSED PRODUCT and the date of first
commercial performance of a LICENSED PROCESS within [*** Redacted] days of
occurrence in each country.
(c) After First Commercial Sale. After the first
commercial sale of a LICENSED PRODUCT or first commercial performance of a
LICENSED PROCESS, COMPANY shall deliver reports to M.I.T. within [*** Redacted]
days of the end of each REPORTING PERIOD, containing information concerning the
immediately preceding REPORTING PERIOD, as further described in Section 5.2.
5.2 Content of Reports and Payments. Each report delivered by COMPANY
to M.I.T. shall contain at least the following information for the immediately
preceding REPORTING PERIOD:
(a) the number of LICENSED PRODUCTS sold, leased or
distributed by COMPANY, its AFFILIATES and SUBLICENSEES to independent third
parties in each country, and, if applicable, the number of LICENSED PRODUCTS
used by COMPANY, its AFFILIATES and SUBLICENSEES in the provision of services in
each country;
*** 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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(b) a description of LICENSED PROCESSES performed by COMPANY
its AFFILIATES and SUBLICENSEES in each country as may be pertinent to a royalty
accounting hereunder;
(c) the gross price charged by COMPANY, its AFFILIATES and
SUBLICENSEES for each LICENSED PRODUCT and, if applicable, the gross price
charged for each LICENSED PRODUCT used to provide services in each country; and
the gross price charged for each LICENSED PROCESS performed by COMPANY, its
AFFILIATES and SUBLICENSEES in each country;
(d) calculation of NET SALES for the applicable REPORTING
PERIOD in each country, including a listing of applicable deductions;
(e) total royalty payable on NET SALES in U.S. dollars,
together with the exchange rates used for conversion;
(f) the amount of SUBLICENSE INCOME received by COMPANY from
each SUBLICENSEE and the amount due to M.I.T. from such SUBLICENSE INCOME,
including an itemized breakdown of the sources of income comprising the
SUBLICENSE INCOME; and
(g) the number of sublicenses entered into for the PATENT
RIGHTS, LICENSED PRODUCTS and/or LICENSED PROCESSES.
(h) the dollar amount funded by COMPANY, AFFILIATES and
SUBLICENSEES toward research and development pursuant to Section 4.1 (d) of this
Agreement.
If no amounts are due to M.I.T. for any REPORTING PERIOD, the report
shall so state.
5.3 Financial Statements. On or before the [*** Redacted] day following
the close of COMPANY'S fiscal year, COMPANY shall provide M.I.T. with COMPANY'S
financial statements for the preceding fiscal year including, at a minimum, a
balance sheet and an income statement, certified by COMPANY's treasurer, chief
financial officer, or vice president of finance, or by an independent auditor.
All financial statements provided by COMPANY shall be treated as confidential in
accordance with the requirements of Section 14.1.
*** 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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5.4 Records. COMPANY shall maintain, and shall cause its AFFILIATES and
SUBLICENSEES to maintain, complete and accurate records relating to the rights
and obligations under this Agreement and any amounts payable to M.I.T. in
relation to this Agreement, which records shall contain sufficient information
to permit M.I.T. to confirm the accuracy of any reports delivered to M.I.T. and
compliance in other respects with this Agreement. The relevant party shall
retain such records for at least [*** Redacted] years following the end of the
calendar year to which they pertain, during which time M.I.T., or M.I.T.'s
appointed agents, shall have the right, at M.I.T.'s expense, to inspect such
records during normal business hours to verify any reports and payments made or
compliance in other respects under this Agreement. In the event that any audit
performed under this Section reveals an underpayment in excess of [***
Redacted], COMPANY shall bear the full cost of such audit and shall remit any
amounts due to M.I.T. within [*** Redacted] days of receiving notice thereof
from M.I.T.
6. PATENT PROSECUTION.
6.1 Responsibility for PATENT RIGHTS. M.I.T. shall prepare, file,
prosecute, and maintain all of the PATENT RIGHTS. COMPANY shall have reasonable
opportunities to advise M.I.T. and shall cooperate with M.I.T. in such filing,
prosecution and maintenance. While both Parties accept the current counsel for
the preparation, maintenance and prosecution of PATENT RIGHTS (PATENT COUNSEL),
M.I.T. and COMPANY shall each have the right to notify the other Party of a
desire to designate new or different PATENT COUNSEL. In the event of such
notification, M.I.T. and COMPANY shall meet and mutually agree upon new or
different PATENT COUNSEL. In the event the parties fail to agree, M.I.T., shall
choose a new PATENT COUNSEL.
6.2 International (non-United States) Filings. Appendix A and Appendix
B include a list of countries in which patent applications corresponding to the
United States patent applications have been filed, prosecuted, and maintained.
Each Appendix may be amended by mutual agreement of COMPANY and M.I.T. to add
additional countries in which foreign applications shall be filed after the
EFFECTIVE DATE. Notwithstanding the foregoing, failure to amend the Appendices
to reflect international or foreign filings that are otherwise subject to this
Agreement shall not limit the PATENT RIGHTS hereunder.
6.3 Payment of Expenses. Payment of all fees and costs, including
attorneys fees, relating to the filing, prosecution and maintenance of the
PATENT RIGHTS not reimbursed by other licensees shall be the responsibility of
COMPANY, whether such amount were incurred before or after the EFFECTIVE DATE.
As of [*** Redacted], M.I.T. has incurred
*** 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.
15
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approximately [*** Redacted] for such patent-related fees and costs in FIELD A.
As of [*** Redacted], COMPANY'S portion of patent related fees and costs in
FIELD B equals approximately [*** Redacted]. COMPANY shall reimburse all amounts
due pursuant to this Section within [*** Redacted] days of invoicing, which
invoicing shall include reasonable documentation of amounts due, including
copies of relevant portions of invoices to M.I.T.; late payments shall accrue
interest pursuant to Section 4.2(c). In all instances, M.I.T. shall pay the fees
prescribed for large entities to the United States Patent and Trademark Office.
7. INFRINGEMENT.
7.1 Notification of Infringement. Each party agrees to provide written
notice to the other party promptly after becoming aware of any infringement of
the PATENT RIGHTS.
7.2 Right to Prosecute Infringements.
(a) COMPANY Right to Prosecute. So long as COMPANY
remains the exclusive licensee of the PATENT RIGHTS in the relevant FIELD in the
TERRITORY, COMPANY, to the extent permitted by law, shall have the right, under
its own control and at its own expense, to prosecute any third party
infringement of the PATENT RIGHTS in such FIELD in the TERRITORY, subject to
Sections 7.4 and 7.5. If required by law, M.I.T. shall permit any action under
this Section to be brought in its name, including being joined as a
party-plaintiff, provided that COMPANY shall hold M.I.T. harmless from, and
indemnify M.I.T. against, any costs, expenses, or liability that M.I.T. incurs
in connection with such action.
Prior to commencing any such action, COMPANY shall
consult with M.I.T. and shall consider the views of M.I.T. regarding the
advisability of the proposed action and its effect on the public interest.
COMPANY shall not enter into any settlement, consent judgment, or other
voluntary final disposition of any infringement action under this Section
without the prior written consent of M.I.T. which consent shall not be
unreasonably withheld.
(b) M.I.T. Right to Prosecute. In the event that COMPANY
is unsuccessful in persuading the alleged infringer to desist or fails to have
initiated an infringement action within a reasonable time after COMPANY first
becomes aware of the basis for such action, M.I.T. shall have the right, at its
sole discretion, to prosecute such infringement under its sole control and at
its sole expense, and any recovery obtained shall belong to M.I.T.
7.3 Declaratory Judgment Actions. In the event that a declaratory
judgment action is brought against M.I.T. or COMPANY by a third party alleging
invalidity, unenforceability, or
*** 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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non-infringement of the PATENT RIGHTS, M.I.T., at its option, shall have the
right within [*** Redacted] after commencement of such action to take over the
sole defense of the action at its own expense. If M.I.T. does not exercise this
right, COMPANY may take over the sole defense of the action at COMPANY's sole
expense, subject to Sections 7.4 and 7.5.
7.4 Offsets. COMPANY may offset a total of [*** Redacted] of any
expenses incurred under Sections 7.2 and 7.3 against any payments due to M.I.T.
under Article 4, provided that in no event shall such payments under Article 4,
when aggregated with any other offsets and credits allowed under this Agreement,
be reduced by more than [*** Redacted] in any REPORTING PERIOD.
7.5 Recovery. Any recovery obtained in an action brought by COMPANY
under Sections 7.2 or 7.3 shall be distributed as follows: (i) each party shall
be reimbursed for any expenses incurred in the action (including the amount of
any royalty or other payments withheld from M.I.T. as described in Section 7.4),
(ii) as to ordinary damages, COMPANY shall receive an amount equal to [***
Redacted], or whichever measure of damages the court shall have applied, and
COMPANY shall pay to M.I.T. based upon such amount a [*** Redacted] that COMPANY
[*** Redacted], and (iii) as to special or punitive damages, the COMPANY shall
pay M.I.T. [*** Redacted] of any such award.
7.6 Cooperation. Each party agrees to cooperate in any action under
this Article which is controlled by the other party, provided that the
controlling party reimburses the cooperating party promptly for any costs and
expenses incurred by the cooperating party in connection with providing such
assistance.
8. INDEMNIFICATION AND INSURANCE
8.1 Indemnification.
(a) Indemnity. Except in the case of a final
determination of M.I.T.'s gross negligence, COMPANY shall indemnify, defend, and
hold harmless M.I.T. and its trustees, officers, faculty, students, employees,
and agents and their respective successors, heirs and assigns (the
"Indemnitees"), against any liability, damage, loss, or expense (including
reasonable attorneys fees and expenses) incurred by or imposed upon any of the
Indemnitees in connection with any claims, suits, actions, demands or judgments
arising out of any theory of liability
*** 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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(including without limitation actions in the form of tort, warranty, or strict
liability and regardless of whether such action has any factual basis)
concerning any product, process, or service that is made, used, sold, imported,
or performed pursuant to any right or license granted to COMPANY or AFFILIATES
under this Agreement.
(b) Procedures. The Indemnitees agree to provide COMPANY
with [*** Redacted] written notice of any claim, suit, action, demand, or
judgment for which indemnification is sought under this Agreement. COMPANY
agrees, at its own expense, to provide attorneys reasonably acceptable to M.I.T.
to defend against any such claim. The Indemnitees shall cooperate fully with
COMPANY in such defense and will permit COMPANY to conduct and control such
defense and the disposition of such claim, suit, or action (including all
decisions relative to litigation, appeal, and settlement); provided, however,
that any Indemnitee shall have the right to retain its own counsel, at the
expense of COMPANY, if representation of such Indemnitee by the counsel retained
by COMPANY would be inappropriate because of actual or potential differences in
the interests of such Indemnitee and any other party represented by such
counsel. COMPANY agrees to keep M.I.T. informed of the progress in the defense
and disposition of such claim and to consult with M.I.T. with regard to any
proposed settlement.
8.2 Insurance. Prior to the first commercial sale of a LICENSED PRODUCT
or LICENSED PROCESS, and thereafter, COMPANY shall obtain and carry in full
force and effect commercial general liability insurance, including product
liability and errors and omissions insurance which shall protect COMPANY and
Indemnitees with respect to events covered by Section 8.1 (a) above. Such
insurance (i) shall be issued by an insurer licensed to practice in the
Commonwealth of Massachusetts or an insurer pre-approved by M.I.T., such
approval not to be unreasonably withheld, (ii) shall list M.I.T. as an
additional insured thereunder, (iii) shall be endorsed to include product
liability coverage, and (iv) shall require [*** Redacted] written notice to be
given to M.I.T. prior to any cancellation or material change thereof. The limits
of such insurance shall not be less than [*** Redacted] per occurrence with an
aggregate of [*** Redacted] for bodily injury including death; [*** Redacted]
per occurrence with an aggregate of [*** Redacted] for property damage; and [***
Redacted] per occurrence with an aggregate of [*** Redacted] for errors and
omissions. In the alternative, COMPANY may self-insure subject to prior approval
of M.I.T. COMPANY shall provide M.I.T. with Certificates of Insurance evidencing
compliance with this Section. COMPANY shall continue to maintain such insurance
or self-insurance after the expiration or termination of this Agreement during
any period in which COMPANY or any AFFILIATE or SUBLICENSEE continues (i) to
make, use, or sell a product that was a LICENSED PRODUCT under this Agreement or
(ii) to
*** 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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perform a service that was a LICENSED PROCESS under this Agreement, and
thereafter for a period of [*** Redacted] years.
9. NO REPRESENTATIONS OR WARRANTIES
EXCEPT AS MAY OTHERWISE BE EXPRESSLY SET FORTH IN THIS AGREEMENT,
M.I.T. MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND CONCERNING THE PATENT
RIGHTS, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, VALIDITY OF
PATENT RIGHTS CLAIMS, WHETHER ISSUED OR PENDING, AND THE ABSENCE OF LATENT OR
OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. Specifically, and not to limit the
foregoing, M.I.T. makes no warranty or representation (i) regarding the validity
or scope of the PATENT RIGHTS, and (ii) that the exploitation of the PATENT
RIGHTS or any LICENSED PRODUCT or LICENSED PROCESS will not infringe any patents
or other intellectual property rights of M.I.T. or of a third party.
In no event shall M.I.T.'s liability for breaching any representation
or warranty set forth herein exceed the cash amount actually received by M.I.T.
from COMPANY under Article 4.
IN NO EVENT SHALL M.I.T., ITS TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES
AND AFFILIATES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND,
INCLUDING ECONOMIC DAMAGES OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF
WHETHER M.I.T. SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT
SHALL KNOW OF THE POSSIBILITY OF THE FOREGOING.
10. ASSIGNMENT.
This Agreement is personal to COMPANY and no rights or obligations may
be assigned by COMPANY without the prior written consent of M.I.T., except in
conjunction with a sale of all or substantially all of the assets of the
COMPANY, provided that the Assignee agree in writing to accept all obligations
of the COMPANY under this Agreement.
*** 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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11. GENERAL COMPLIANCE WITH LAWS
11.1 Compliance with Laws. COMPANY shall use reasonable commercial
efforts to comply with all commercially material local, state, federal, and
international laws and regulations relating to the development, manufacture,
use, and sale of LICENSED PRODUCT and LICENSED PROCESSES.
11.2 Export Control. COMPANY and its AFFILIATES and SUBLICENSEES shall
comply with all United States laws and regulations controlling the export of
certain commodities and technical data, including without limitation all Export
Administration Regulations of the United States Department of Commerce. Among
other things, these laws and regulations prohibit or require a license for the
export of certain types of commodities and technical data to specified
countries. COMPANY hereby gives written assurance that it will comply with, and
will cause its AFFILIATES and SUBLICENSEES to comply with, all United States
export control laws and regulations, that it bears sole responsibility for any
violation of such laws and regulations by itself or its AFFILIATES or
SUBLICENSEES, and that it will indemnify, defend, and hold M.I.T. harmless (in
accordance with Section 8.1) for the consequences of any such violation.
11.3 Non-Use of M.I.T. Name. COMPANY and its AFFILIATES and
SUBLICENSEES shall not use the name of "Massachusetts Institute of Technology,"
[*** Redacted] or any variation, adaptation, or abbreviation thereof, or
of any of its trustees, officers, faculty, students, employees, or agents, or
any trademark owned by M.I.T., or any terms of this Agreement in any promotional
material or other public announcement or disclosure without the prior written
consent of M.I.T. The foregoing notwithstanding, without the consent of M.I.T.,
COMPANY may state that it is licensed by M.I.T. under one or more of the patents
and/or patent applications comprising the PATENT RIGHTS.
11.4 Marking of LICENSED PRODUCTS. To the extent commercially feasible
and consistent with prevailing business practices, COMPANY shall mark, and shall
cause its AFFILIATES and SUBLICENSEES to mark, all LICENSED PRODUCTS that are
manufactured or sold under this Agreement with the number of each issued patent
under the PATENT RIGHTS that applies to such LICENSED PRODUCT.
*** 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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12. TERMINATION
12.1 Voluntary Termination by COMPANY. COMPANY shall have the right to
terminate this Agreement, for any reason, (i) upon at least [*** Redacted] prior
written notice to M.I.T., such notice to state the date at least [*** Redacted]
in the future upon which termination is to be effective, and (ii) upon payment
of all amounts due to M.I.T. through such termination effective date.
12.2 Cessation of Business. If COMPANY ceases to carry on its business
related to this Agreement as indicated by, inter alia, the COMPANY's failure to
meet its diligence obligations as set forth in Article 3 of this Agreement, as
originally executed, M.I.T. shall have the right to terminate this Agreement
[*** Redacted] upon written notice to COMPANY. Notwithstanding the foregoing, it
is agreed that COMPANY'S failure to meet the diligence obligations set forth in
Article 3 of this Agreement alone, either as originally executed or as amended
from time to time, shall not be a cessation of business related to this
Agreement, as contemplated by this section.
12.3 Termination for Default.
(a) Nonpayment. In the event COMPANY fails to pay any
amounts due and payable to M.I.T. hereunder, and fails to make such payments
within [*** Redacted] days after receiving written notice of such failure,
M.I.T. may terminate this Agreement [*** Redacted] upon written notice to
COMPANY.
(b) Material Breach. In the event COMPANY commits a
material breach of its obligations under this Agreement, except for breach as
described in Section 12.3(a), and fails to cure that breach within
[*** Redacted] after receiving written notice thereof, M.I.T. may terminate this
Agreement [*** Redacted] upon written notice to COMPANY. If COMPANY objects to
the basis for such termination in writing within [*** Redacted] days of such
written notice, then any such termination shall be stayed pending final
resolution as provided under Section 13 of this Agreement.
12.4 Effect of Termination.
(a) Survival. The following provisions shall survive the
expiration or termination of this Agreement: Articles 1, 8, 9, 13 and 14, and
Sections 4.1 (f), 5.2 (obligation to provide final report and payment), 5.4,
11.1, 11.2, 12.4 and 14.1 (Confidentiality).
*** 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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(b) Inventory. Upon the early termination of this
Agreement. COMPANY and its AFFILIATES and SUBLICENSEES may complete and sell any
work-in-progress and inventory of LICENSED PRODUCTS that exist as of the
effective date of termination, provided that (j) COMPANY pays M.I.T. the
applicable running royalty or other amounts due on such sales of LICENSED
PRODUCTS in accordance with the terms and conditions of this Agreement, and (ii)
COMPANY and its AFFILIATES and SUBLICENSEES shall complete and sell all
work-in-progress and inventory of LICENSED PRODUCTS within [*** Redacted] after
the effective date of termination.
(c) Pre-termination Obligations. In no event shall
termination of this Agreement release COMPANY, AFFILIATES, or SUBLICENSEES from
the obligation to pay any amounts that became due on or before the effective
date of termination.
13. DISPUTE RESOLUTION.
13.1 Mandatory Procedures. The parties agree that any dispute arising
out of or relating to this Agreement shall be resolved solely by means of the
procedures set forth in this Article, and that such procedures constitute
legally binding obligations that are an essential provision of this Agreement.
If either party fails to observe the procedures of this Article, as may be
modified by their written agreement, the other party may bring an action for
specific performance of these procedures in any court of competent jurisdiction.
13.2 Equitable Remedies. Although the procedures specified in his
Article are the sole and exclusive procedures for the resolution of disputes
arising out of or relating to this Agreement, either party may seek a
preliminary injunction or other provisional equitable relief if, in its
reasonable judgment, such action is necessary to avoid irreparable harm to
itself or to preserve its rights under this Agreement.
13.3 Dispute Resolution Procedures.
(a) Mediation. In the event any dispute arising out of or
relating to this Agreement remains unresolved within [*** Redacted] from the
date the affected party informed the other party of such dispute, either party
may initiate mediation upon written notice to the other party ("Notice Date"),
whereupon both parties shall be obligated to engage in a mediation proceeding
under the then current Center for Public Resources ("CPR") Model Procedure for
Mediation of Business Disputes (http://www.cpradr.org), except that specific
provisions of this Article shall override inconsistent provisions of the CPR
Model Procedure, The mediator will be
*** 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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selected from the CPR Panels of Neutrals. If the parties cannot agree upon the
selection of a mediator within [*** Redacted] after the Notice Date, then upon
the request of either party, the CPR shall appoint the mediator. The parties
shall attempt to resolve the dispute through mediation until the first of the
following occurs: (i) the parties reach a written settlement; (ii) the mediator
notifies the parties in writing that they have reached an impasse; (iii) the
parties agree in writing that they have reached an impasse; or (iv) the parties
have not reached a settlement within [*** Redacted] after the Notice Date.
(b) Trial Without Jury. If the parties fail to resolve
the dispute through mediation, or if neither party ejects to initiate mediation,
each party shall have the right to pursue any other remedies legally available
to resolve the dispute, provided, however, that the parties expressly waive any
right to a jury trial in any legal proceeding under this Article.
13.4 Performance to Continue. Each party shall continue to perform its
undisputed obligations under this Agreement pending final resolution of any
dispute arising out of or relating to this Agreement; provided, however, that a
party may suspend performance of its undisputed obligations during any period in
which the other party fails or refuses to perform its undisputed obligations.
Nothing in this Article is intended to relieve COMPANY from its obligation to
make undisputed payments pursuant to Articles 4 and 6 of this Agreement, not to
permit M.I.T. to bring suit against COMPANY, its AFFILIATES and/or SUBLICENSEES
for infringement of any of the PATENT RIGHTS, pending final resolution.
13.5 Statute of Limitations. The parties agree that all applicable
statutes of limitation and time-based defenses (such as estoppel and laches)
shall be tolled while the procedures set forth in Sections 13.3(a) are pending.
The parties shall cooperate in taking any actions necessary to achieve this
result.
14. MISCELLANEOUS.
14.1 Confidentiality. All information provided to M.I.T. by COMPANY
under this agreement, including but not limited to relevant portions of
sublicense agreements, technical reports, development plans, marketing
evaluations and reports, information obtained from plant inspections, and
royalty reports, shall be deemed to be Confidential Information if such
information is marked "Confidential."
(a) M.I.T. will maintain the confidentiality of the
Confidential Information and will not disclose the Confidential Information to
any third party, and will not use the Confidential Information for any purpose
other than as necessary to administer this Agreement.
*** 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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In maintaining the confidentiality of the Confidential Information, M.I.T. will
use the same degree of care it uses in protecting its own information of like
import, and in no event, less than reasonable care.
(b) The obligations of M.I.T. with respect to
Confidential Information will not apply to information disclosed under this
agreement to the extent such information:
(i) is generally known to the public at the time
of disclosure or becomes generally known through no
wrongful act on the part of M.I.T;
(ii) is in M.I.T.'s possession at the time of
disclosure other than as a result of prior disclosure
by COMPANY or a breach of any legal obligation by
M.I.T. or a third party;
(iii) becomes known to M.I.T. through disclosure
by sources other than COMPANY having no duty of
confidentiality to COMPANY, whether direct or
indirect, with respect to such information and having
the legal right to disclose such information;
(iv) is independently developed by M.I.T. without
reference to or reliance upon the Confidential
Information; or
(v) is required to be disclosed by M.I.T. to
comply with applicable laws or governmental
regulations, provided that the M.I.T. provides prior
written notice of such disclosure to the COMPANY and
takes reasonable and lawful actions to avoid and/or
minimize the extent of such disclosure.
(c) The provisions of this section relating to
Confidentiality of research and development reports provided pursuant to Article
3 and Sections 5.1 and 5.2 shall be in force and effect until [*** Redacted]
following the termination of this Agreement. The provisions of this section
relating to other disclosures of Confidential Information shall be in force and
effect for [*** Redacted], as to each specific disclosure, from the date of each
such disclosure.
14.2 Notice. Any notices required or permitted under this Agreement
shall be in writing, shall specifically refer to this Agreement, and shall be
sent by hand, recognized national overnight courier, confirmed facsimile
transmission, confirmed electronic mail, or registered or certified mail,
postage prepaid, return receipt requested, to the following addresses or
facsimile numbers of the parties:
*** 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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If to M.I.T., all matters relating to the license:
Technology Licensing Office, Room NE25-230
Massachusetts Institute of Technology
77 Massachusetts Avenue
Cambridge, MA 02139-4307
Attention: Director
Tel: 617-253-6966
Fax: 617-258-6790
If to M.I.T., relating to any equity action after the initial issuance
of shares:
Massachusetts Institute of Technology
Treasurer's Office
238 Main Street
Cambridge, MA 02142
Attention: Phillips B. Moore
Tel: 617-253-5422
Fax: 617-258-6676
If to COMPANY: Nanosys, Inc.
2625 Hanover Street
Palo Alto, CA 94304
Attention: Vice President, Intellectual Property
Tel: (650) 846-2500
Fax: (650) 846-2501
All notices under this Agreement shall be deemed effective
upon receipt. A party may change its contact information immediately upon
written notice to the other party in the manner provided in this Section.
14.3 Governing Law. This Agreement and all disputes arising out of or
related to this Agreement, of the performance, enforcement, breach or
termination hereof, and any remedies relating thereto, shall be construed,
governed, interpreted and applied in accordance with the laws of the
Commonwealth of Massachusetts, U.S.A., without regard to conflict of laws
principles, except that questions affecting the construction and effect of any
patent shall be determined by the law of the country in which the patent shall
have been granted.
14.4 Force Majeure. Neither party will be responsible for delays
resulting from causes beyond the reasonable control of such party, including
without limitation fire, explosion, flood, war, strike, or not, provided that
the nonperforming party uses commercially reasonable efforts to avoid or remove
such causes of nonperformance and continues performance under this Agreement
with reasonable dispatch whenever such causes are removed.
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14.5 Amendment and Waiver. This Agreement may be amended, supplemented,
or otherwise modified only by means of a written instrument signed by both
parties. Any waiver of any rights or failure to act in a specific instance shall
relate only to such instance and shall not be construed as an agreement to waive
any rights or fail to act in any other instance, whether or not similar.
14.6 Severability. In the event that any provision of this Agreement
shall be held invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect any other provision of this Agreement, and the
parties shall negotiate in good faith to modify the Agreement to preserve (to
the extent possible) their original intent. If the parties fail to reach a
modified agreement within [*** Redacted] days after the relevant provision is
held invalid or unenforceable, then the dispute shall be resolved in accordance
with the procedures set forth in Article 13. While the dispute is pending
resolution, this Agreement shall be construed as if such provision we re deleted
by agreement of the parties.
14.7 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective permitted successors and
assigns.
14.8 Headings. All headings are for convenience only and shall not
affect the meaning of any provision of this Agreement.
14.9 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to its subject matter and supersedes all prior
agreements or understandings between the parties relating to its subject matter.
*** 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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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives.
THE EFFECTIVE DATE OF THIS AGREEMENT IS Sept 5, 2002.
MASSACHUSETTS INSTITUTE OF
TECHNOLOGY NANOSYS, INC.
By: /s/ Lita L. Nelsen By: /s/ Lawrence A. Bock
--------------------------------- ---------------------------------
Name: LITA L. NELSEN, DIRECTOR Name: LAWRENCE BOCK
TECHNOLOGY LICENSING OFFICE Title: President
Title:
MASSACHUSETTS INSTITUTE OF
TECHNOLOGY
By: /s/ Alice P. Gast
----------------------------------
Name: Alice P. Gast, Ph.D.
Title: Robert T. Haslam Professor,
Vice President for Research, and
Associate Provost
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APPENDIX A
List of Patent Applications and Patents
I. United States Patents and Applications
[*** Redacted]
II. International (non-U.S.) Patents and Applications
[*** Redacted]
*** 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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APPENDIX B
List of Patent Applications and Patents
I. United States Patents and Applications
[*** Redacted]
*** 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.
29
<PAGE>
[*** Redacted]
II. International (non-US.) Patents and Europe Applications
[*** Redacted]
*** 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.
30
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EXHIBIT A
CONFLICT AVOIDANCE STATEMENT
Name: Moungi Bawendi
Dept. or Lab.: Chemistry
Company: Nanosys
Address: _________________________________
__________________________________________
Licensed Technology: _____________________
__________________________________________
__________________________________________
Because of the M.I.T. license granted to the above company and my equity*
position and continuing relationship with this company, I acknowledge the
potential for a possible conflict of interest between the performance of
research at M.I.T. and my contractual or other obligations to this company.
Therefore, I will not:
1) use students at M.I.T. for research and development projects
for the company;
2) restrict or delay access to information from my M.I.T.
research;
3) take direct or indirect research support from the company in
order to support my activities at M.I.T.; or
4) employ students at the company, except in accordance with
Section 4.5.2, "Faculty and Students," in the Policies and
Procedures Guide.
In addition, in order to avoid the appearance of a conflict, I will attempt to
differentiate clearly between the intellectual directions of my M.I.T. research
and my contributions to the company. To that end, I will expressly inform my
department head/laboratory director annually of the general nature of my
activities on behalf of the company.
Signed: Moungi Bawendi
----------------------
Date: 8/12/02
Approved by: /s/ Stephen J. Lippard
Name (print): STEPHEN J. LIPPARD
(Dept. Head or Lab Dir)
* "Equity" includes stock, options, warrants or other financial instruments
convertible into stock, which are directly or indirectly controlled by the
inventor.
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EXHIBIT B
INVENTOR/AUTHOR ACKNOWLEDGMENT
OF NO EQUITY DISTRIBUTION
FORM VERSION 8/22/01
In partial reliance on the undersigned's execution of this
Acknowledgment, M.I.T. has entered into the license agreement to which this
Acknowledgment is attached (the "LICENSE") in which COMPANY received certain
licenses to the technology listed below, on some or all of which the undersigned
is a listed inventor or author. The undersigned, independently of the LICENSE,
has received or will soon acquire equity in Nanosys ("COMPANY"), and, in
accordance with M.I.T.'s licensing policies contained in M.I.T.'s Guide to the
Ownership, Distribution and Commercial Development of M.I.T. Technology as that
policy may be amended from time to time (specifically Section 4.2.5 as of this
Form Version date), the undersigned, on his/her own behalf and on behalf of
his/her heirs and assigns, acknowledges and agrees that he/she has no right to
receive any share of equity income received by M.I.T. in consideration for the
LICENSE.
Technology Licensed as of the EFFECTIVE DATE of the LICENSE:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
Witness: /s/(ILLEGIBLE) Signed: /s/ Moungi Bawendi
------------------------- --------------------------
Print Name: Moungi Bawendi
Date: 8/12/02
32
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EXHIBIT C
INVESTOR REPRESENTATION STATEMENT
(attached)
33
<PAGE>
INVESTOR REPRESENTATION STATEMENT
_______________, 2002
In connection with the purchase of _______________shares of Common
Stock (the "SHARES")of Nanosys, Inc. (the "COMPANY"), the undersigned M.I.T.
Holder, as defined in the [AGREEMENT] dated as_______, does hereby represent to
the Company as follows:
(a) Preexisting Relationship with Company; Business and Financial
Experience; Accredited Investor. I either (i) have a preexisting business
and/or personal relationship with the Company and/or its officers, directors or
controlling persons, or (ii) by reason of my business or financial experience or
the business or financial experience of my professional advisors who are
unaffiliated with the Company and who are not compensated by the Company, have
the capacity to protect my own interests in connection with the receipt of the
Shares.
(b) Investment Intent; Blue Sky. I am acquiring the Shares for
investment for my own account, not as a nominee or agent, and not with a view
to, or for resale in connection with, any distribution thereof. I understand
that the issuance of the Shares has not been, and will not be, registered under
the Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act, the availability of which depends upon, among
other things, the bona fide nature of my investment intent and the accuracy of
my representations as expressed herein. My address set forth below represents my
true and correct state of domicile, upon which the Company may rely for the
purpose of complying with applicable "Blue Sky" laws.
(c) Rule 144. I acknowledge that the Shares must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from such registration is available. I am aware of the provisions
of Rule 144 promulgated under the Securities Act which permit limited resale of
shares received in a private placement subject to the satisfaction of certain
conditions, including, among other things, the existence of a public market for
the shares, the availability of certain current public information about the
Company, the resale occurring not less than one year after a party has purchased
and paid for the security to be sold, the sale being effected through a
"broker's transaction" or in a transaction directly with a "market maker" and
the number of shares being sold during any three-month period not exceeding
specified limitations.
(d) No Public Market. I understand that no public market now
exists for any of the securities issued by the Company and that the Company has
made no assurances that a public market will ever exist for the Company's
securities.
(e) Restrictions on Transfer; Restrictive Legends. I understand
that the transfer of the Shares is restricted by applicable state and Federal
securities laws, and that the certificates representing the Shares will be
imprinted with legends restricting transfer except in compliance therewith.
(f) Access to Data. I have had an opportunity to discuss the
Company's business, management and financial affairs with the Company's
management. I have also had an opportunity to ask questions of officers of the
Company. I understand that such discussions, as well as any written information
issued by the Company, are intended to describe certain aspects of the Company's
business and prospects but are not a thorough or exhaustive description.
<PAGE>
(g) Tax Liability. I have reviewed with my own tax advisors the
tax consequences of the transactions contemplated by this Agreement. I will rely
solely on such advisors and not on any statements or representations of the
Company or any of the Company's agents with respect to such tax consequences. I
understand that I, and not the Company, shall be responsible for my own tax
liability that may arise as a result of my receipt of the Shares.
(h) Limited Operating History. I acknowledge that the Company was
incorporated on July 12, 2001 as a new business and has a limited operating
history.
(i) Risks. I am aware that the Securities are highly speculative
and that there can be no assurance as to what return, if any, there may be. I am
aware that the Company may issue additional securities in the future which could
result in the dilution of my ownership interest in the Company.
(j) Additional Undertaking. I hereby agree to take whatever
additional action and execute whatever additional documents the Company may in
its judgment deem necessary or advisable in order to carry out or effect one or
more of the obligations or restrictions imposed on either myself or the Shares
pursuant to the express provisions described herein.
M.I.T. HOLDER
_______________________________
SIGNATURE
_______________________________
PRINT NAME
ADDRESS:
_______________________________
_______________________________
_______________________________
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