LICENSE AGREEMENT
between
OcuSense Inc.
and
The Regents of the University of California
for
CASE NO. SD2002-180
"Volume Independent Tear Film Osmometer"
***The
following provisions of this Agreement have been omitted pursuant
to a request for confidential treatment and have been filed
separately with the U.S. Securities and Exchange Commission:
Article 3 in its entirety (consisting of four pages) and a portion
of Section 4.3.
TABLE OF CONTENTS
Article 1:
Definitions
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Page 4
Article 2:
Grants
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Article 3:
Considerations………………………………………………………………………………………………………………………………………………...………………….……
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Article 4:
Reports, Records and Payments
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Article 5:
Patent Matters
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Article 6:
Governmental Matters
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Page 15
Article 7:
Termination of Agreement
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Article 8:
Limited Warranty and Indemnification
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Article 9: Use
of Names and Trademarks
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Page 17
Article 10:
Miscellaneous Provisions
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Exhibit A:
Certificate of Incorporation
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A-l
LICENSE
AGREEMENT
THIS
AGREEMENT ("Agreement") is made by and between OcuSense
Inc., a Delaware corporation, having an address at 11959 Mayfield
Avenue, #4, Los Angeles, California 90049 ("LICENSEE") and The
Regents of The University of California, a California corporation
having its statewide administrative offices at 1111 Franklin
Street, Oakland, California 94607-5200 ("UNIVERSITY"), represented
by its San Diego campus having an address at University of
California, San Diego, Technology Transfer & Intellectual
Property Services, Mail-code 0910, 9500 Gilman Drive, La Jolla,
California 92093-0910 ("UCSD").
THIS
AGREEMENT is
effective on the date of the last signature ("Effective
Date").
WHEREAS, the inventions disclosed in UCSD Case Docket No.
SD2002-180 and titled "Volume Independent Tear Film Osmometer"
("Invention"), were made in the course of research at UCSD by
Benjamin D. Sullivan (hereinafter, the "Inventor") and are covered
by Patent Rights as defined below;
WHEREAS, the research was sponsored in part by the
Government of the United States of America and as a consequence
this license is subject to overriding obligations to the Federal
Government under 35 U.S.C. §§ 200-212 and applicable
regulations;
WHEREAS, the Inventor is an employee of UCSD, and is
obligated to assign all of his right, title and interest in the
Invention to UNIVERSITY;
WHEREAS, the founder of LICENSEE entered into a secrecy
agreement (UC Control No.2003-20-0193) with UNIVERSITY, effective
October 21, 2002 ("Secrecy Agreement"), for the purpose of
evaluating the Invention;
WHEREAS, the founder of LICENSEE entered into a Letter of
Intent (UC Control No.2003-30-0222) with UNIVERSITY, effective
November 12, 2002, ("Letter of Intent"), for the purpose of
negotiating this Agreement;
WHEREAS, UNIVERSITY is desirous that the Invention be
developed and utilized to the fullest possible extent so that its
benefits can be enjoyed by the general public;
WHEREAS, LICENSEE is desirous of obtaining certain rights
from UNIVERSITY to commercially develop, use, and sell the
Invention, and the UNIVERSITY is willing to grant such rights;
and
WHEREAS , LICENSEE understands that UNIVERSITY may
publish or otherwise disseminate information concerning the
Invention at any time and that LICENSEE is paying consideration
thereunder for its early access to the Invention, not continued
secrecy therein.
NOW,
THEREFORE , the
parties agree:
ARTICLE 1.
DEFINITIONS
The terms, as
defined herein, shall have the same meanings in both their singular
and plural forms.
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"Affiliate" means any corporation or other business entity
in which LICENSEE owns or controls, directly or indirectly, at
least fifty percent (50%) of the outstanding stock or other voting
rights entitled to elect directors, or in which LICENSEE is owned
or controlled directly or indirectly by at least fifty percent
(50%) of the outstanding stock or other voting rights entitled to
elect directors; but in any country where the local law does not
permit foreign equity participation of at least fifty percent
(50%), then an "Affiliate" includes any company in which LICENSEE
owns or controls or is owned or controlled by, directly or
indirectly, the maximum percentage of outstanding stock or voting
rights permitted by local law.
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(a) diagnostic use and products that incorporate
osmolarity analysis in ophthalmology and optometry;
(b) osmolarity analysis in the beverage
industry;
(c) emergency medicine osmolarity analysis for
the following applications: alcohol intoxication, drug intoxication
screening; head injury, coma, burns; quality control of
pharmaceutical formulations, hospital admixtures, and nutritional
support formulary;
(d) obstetrics/gynecology osmolarity analysis
for the following applications: pre-eclamptic patients, in-vitro
fertilization/intracytoplasmic sperm injection;
(e) internal medicine/endocrinology osmolarity
analysis for the following applications: inappropriate adh
syndrome, hyper/hyponatremia, diabetes insipidus, insulin therapy,
differential diagnosis of polyuria;
(f) pharmacy/quality control osmolarity
analysis for the following applications: quality control of
pharmaceutical preparations, including infant formulas, electrolyte
solutions and other parenterals; cardioplegic fluids; contrast
agents; parenteral preparation; wash solution;
(g) surgery/critical care osmolarity analysis
for the following applications: hypovolemic/hypervolemic shock
prevention; electrolyte/metabolyte imbalance; iv therapy; liver
transplant; glycine uptake;
(h) urology/renal function osmolarity analysis
for the following applications: renal malfunction differential
diagnosis, uremia, osmolal & free water clearance, renal
dialysis;
(i) sports medicine osmolarity analysis for the
following applications: athlete hydration;
(j) consumer products osmolarity analysis for
the following applications: car windshield wash;
(k) pharmaceutical/biotechnology osmolarity
analysis for the following applications: quality control of cell
lines, tissue cultures, and media manufacture; and
(1) agriculture osmolarity analysis for the
following applications: plant hydration. Fields for which first
commercial sale has not initiated within 7 years will be
excluded.
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"Territory" means worldwide where Patent Rights exist,
except for counties where LICENSEE declines to reimburse UCSD
patent costs under Paragraph 5.1 (d).
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"Term" means the period of time beginning on the
Effective Date and ending on the later of (i) the expiration date
of the longest-lived Patent Rights; or (ii) the twenty-first (21st)
anniversary of Effective Date.
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"Patent
Rights" means any of
the following: the US patent application (Serial No. 60/401,432
titled "Volume Independent Tear Film Osmometer") disclosing and
claiming the Invention, filed by Inventor on or about August 6,
2002 and assigned to UNIVERSITY; and continuing applications
thereof including divisions, substitutions, and
continuations-in-part (but only to extent the claims thereof are
enabled by disclosure of the parent application); any patents
issuing on said applications including reissues, reexaminations and
extensions; and any corresponding foreign applications or
patents.
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"Sponsor Rights" means all the applicable provisions of any
license to the United States Government executed by UNIVERSITY and
the overriding obligations to the Federal Government under 35
U.S.C. §§ 200-212 and applicable governmental
implementing regulations.
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"Licensed Method" means any method that is covered by Patent
Rights the use of which would constitute, but for the license
granted to LICENSEE under this Agreement, an infringement of any
pending or issued and unexpired claim within Patent
Rights.
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"Licensed Product" means any services, composition or product that
is covered by the claims of Patent Rights, or that uses or is
produced by the Licensed Method, or the manufacture, use, sale,
offer for sale, or importation of which would constitute, but for
the license granted to LICENSEE by UNIVERSITY herein, an
infringement of any pending or issued and unexpired claim within
the Patent Rights.
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1.9
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"Sublicensee" means a third party to whom LICENSEE grants a
sublicense of certain rights granted to LICENSEE under this
Agreement.
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"Net
Sales" means the
total of the gross invoice prices of Licensed Products sold by
LICENSEE, an Affiliate, or any combination thereof, less the sum of
the following actual and customary deductions where applicable and
separately listed: cash, trade, or quantity discounts; sales, use,
tariff, import/export duties or other excise taxes imposed on
particular sales (except for value-added and income taxes imposed
on the sales of Licensed Products in foreign countries);
transportation charges; or credits to customers because of
rejections or returns. For purposes of calculating Net Sales,
transfers to an Affiliate of Licensed Product under this Agreement
for (i) end use (but not resale) by the Affiliate shall be treated
as sales by LICENSEE at list price of LICENSEE, or (ii) resale by
an Affiliate shall be treated as sales at the list price of the
Affiliate.
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"Patent
Costs" means all
out-of-pocket expenses for the preparation, filing, prosecution,
and maintenance of all United States and foreign patents included
in Patent Rights. Patent Costs shall also include reasonable
out-of-pocket expenses for patentability opinions, inventorship
determination, preparation and prosecution of patent application,
re-examination, re-issue, interference, and opposition activities
related to patents or applications in Patent Rights.
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ARTICLE 2.
GRANTS
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License. Subject to the limitations set forth in this
Agreement, UNIVERSITY hereby grants to LICENSEE, and LICENSEE
hereby accepts, an exclusive license under Patent Rights to make,
use, sell, offer for sale, and import Licensed Products and to
practice the Licensed Method in the Field within the Territory and
during the Term.
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(a) Subject to the limitations set forth in this
Agreement, UNIVERSITY hereby grants to LICENSEE, and LICENSEE
hereby accepts, the right to sublicense the Patent Rights to
Sublicensees but only for so long as LICENSEE'S license under the
Patent Rights is exclusive.
(b) Notwithstanding any other terms in this
Agreement, LICENSEE shall not sublicense the Patent Rights to any
Affiliate of LICENSEE or to any Affiliate of LICENSEE'S
Affiliates.
(c) With respect to sublicense granted pursuant
to Paragraph 2.2(a), LICENSEE shall:
(1) not receive, or agree to receive, anything
of value in lieu of cash as considerations from a third party under
a sublicense granted pursuant to Paragraph 2.2(a) without the
express written consent of UNIVERSITY;
(2) to the extent applicable, include all of the
rights of and obligations due to UNIVERSITY (and, if applicable,
Sponsor Rights) contained in this Agreement;
(3) promptly provide UNIVERSITY with a copy of
each sublicense issued; and
(4) collect and guarantee payment of all
payments due, directly or indirectly, to UNIVERSITY from
Sublicensees and summarize and deliver all reports due, directly or
indirectly, to UNIVERSITY from Sublicensees.
(d)
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LICENSEE shall
notify UNIVERSITY of any proposed grant of a sublicense and the
terms thereof. UNIVERSITY shall then have ten (10) business days to
notify LICENSEE that the terms of such proposed sublicense is
acceptable or not acceptable, provided, however, that if UNIVERSITY
does not notify LICENSEE that the terms are either acceptable or
not acceptable, then UNIVERSITY shall be deemed to accept the
proposed terms of such proposed sublicense.
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If a sublicense
has been preapproved according to subparagraph 2.2 (d)(1), upon
termination of this Agreement for any reason, such sublicense shall
continue in full force and effect. If a sublicense has been
preapproved according to subparagraph 2.2 (d)(1), upon the license
grant in Paragraph 2.1 becoming nonexclusive such sublicense shall
continue in full force and effect and all of the payments received
thereafter by LICENSEE from such Sublicensee, if any, shall be paid
and/or forwarded to UNIVERSITY.
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Unless
sublicense has been preapproved according to subparagraph 2.2
(d)(1), upon termination of this Agreement for any reason, or upon
the license grant in Paragraph 2.1 becoming nonexclusive,
UNIVERSITY, at its sole discretion, shall determine whether
LICENSEE shall cancel or assign to UNIVERSITY any and all
sublicenses.
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2.3
Reservation of
Rights . UNIVERSITY
reserves the right to:
(a) use the Invention and Patent Rights for
educational and research purposes;
(b) publish or otherwise disseminate any
information about the Invention at any time; and
(c) allow other nonprofit institutions to use
Invention, and Patent Rights for educational and
research purposes in their
facilities.
ARTICLE 3.
CONSIDERATIONS
***Article 3 in its entirety, which consists of
four pages, has been omitted pursuant to a request for confidential
treatment and has been filed separately with the U.S. Securities
and Exchange Commission.
ARTICLE 4. REPORTS, RECORDS
AND PAYMENTS
4.1
Reports.
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Beginning July
1, 2003 and ending on the date of first commercial sale of a
Licensed Product, LICE
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