[*] INDICATES
CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE
COMMISSION
TECHNOLOGY LICENSE AGREEMENT
between
THE RESEARCH FOUNDATION OF STATE UNIVERSITY OF NEW YORK
and
ChromaDex, Inc.
This Technology
License Agreement (“Agreement”) is effective as of
June 30, 2008 (“Effective Date”) by and between
The Research Foundation of State University of New York, on behalf
of University at Buffalo, a non-profit corporation organized and
existing under the laws of the State of New York
(“Foundation”) and ChromaDex Inc., a California
corporation, with an address at 10005 Muirlands Boulevard,
Suite G, Irvine, California 92618
(“Licensee”).
WHEREAS, Foundation and Licensee wish to enter
into an exclusive license agreement to facilitate the development
and commercialization of certain technology developed at the
University at Buffalo so that this technology may be utilized to
the fullest extent for the benefit of Licensee, Foundation, the
inventor(s) and the public;
NOW, THEREFORE, in consideration of the terms
and considerations hereinafter set forth, the parties agree as
follows:
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1.
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DEFINITIONS
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All capitalized terms used in this
Agreement will have the meanings stated below or defined elsewhere
in the Agreement.
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1.1.
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“ Affiliate ”
means every corporation or entity which, directly or indirectly, or
through one or more intermediaries, controls, is controlled by, or
is under common control with Licensee.
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1.2.
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“ Cosmetic Application
” means the applications where products incorporating
leucoanthocyanidins, anthocyanidins and anthocyanins are used for
cosmetic purposes, including but not limited to applications where
the product is rubbed, poured, sprinkled, or sprayed on, introduced
into, or otherwise applied to the human body for cleansing,
beautifying, promoting attractiveness, or altering the appearance
including, but not limited to, skin moisturizers, perfumes,
lipsticks, fingernail polishes, eye and facial makeup preparations,
shampoos, permanent waves, hair colors, toothpastes, and
deodorants. This application also includes the use of any
leucoanthocyanidins, anthocyanidins and anthocyanins intended for
use as a component of a cosmetic product.
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1.3.
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“ Field ” means
the field of microbial production of leucoanthocyanidins,
anthocyanidins and anthocyanins.
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1
[*] INDICATES
CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE
COMMISSION
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1.4.
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“ Fine Chemical Product
Application ” means applications, other than Cosmetic
Application, Food Additive Application, Nutraceutical Application,
Research Field Application or Pharmaceutical Application, that use
a purified leucoanthocyanidin, anthocyanidin or
anthocyanin.
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1.5.
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“ Food Additive
Application ” means applications where any
leucoanthocyanidins, anthocyanidins and anthocyanins are used, the
intended use of which results or may reasonably be expected to
result, directly or indirectly, in its becoming a component or
otherwise affecting the characteristics of any food, including but
not limited to colorants, flavors, and fragrances.
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1.6.
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“Inventors”
means Mattheos Koffas,
Effendi Leonard, Yajun Yan and Joseph Chemler.
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1.7.
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“Know-How and Material
Rights ” means confidential and/or
proprietary information or materials, whether or not patented or
patentable, in which Foundation has a legal interest and is free to
disclose to Licensee, as set forth in Exhibit B attached
hereto which is specific to the design, development, manufacture
and marketing of Technology and products, and which was developed
prior to the Effective Date by the Inventors at the University at
Buffalo.
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1.8.
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“ Licensed Product
” means all Patent Products and Technology Products as
defined herein.
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1.9.
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“ Licensed Service
” means all Patent Services and Technology Services as
defined herein.
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1.10.
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“ Net Sales of Licensed
Product or Licensed Service ” means the gross revenues
actually received by Licensee, Affiliates and Sublicensees from the
manufacture, use, sale, lease or other transfer of Licensed Product
or Licensed Service, less sales and/or use taxes actually paid,
import and/or export duties actually paid, outbound transportation
paid, prepaid or allowed, and amounts allowed or credited due to
returns (not to exceed the original billing or invoice amount). In
this context, gross revenues will also include the fair market
value of any non-cash consideration actually received by Licensee,
Affiliates and Sublicensees for the manufacture, use, sale, lease,
or other transfer of Licensed Product. Net Sales does not include
Sublicensing Revenue.
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1.11.
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“ Net Sales of Technology
Product or Technology Service ” means the gross revenues
actually received by Licensee, Affiliates and Sublicensees from the
manufacture, use, sale, lease or other transfer of Technology
Product or Technology Service, less sales and/or use taxes actually
paid, import and/or export duties actually paid, outbound
transportation paid, prepaid or allowed, and amounts allowed or
credited due to returns (not to exceed the original billing or
invoice amount). In this context, gross revenues will also include
the fair market value of any non-cash consideration actually
received by Licensee, Affiliates and Sublicensees for the
manufacture, use, sale, lease, or other transfer of Technology
Product or Technology Service. Net Sales does not include
Sublicensing Revenue.
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2
[*] INDICATES
CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE
COMMISSION
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1.12.
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“ Nutraceutical
Application ” means applications using
leucoanthocyanidins, anthocyanidins and anthocyanins as dietary
supplements or food supplements thought to have a beneficial effect
on human or animal health.
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1.13.
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“ Patent Costs ”
means all reasonable costs incident to filing, prosecuting and
maintaining the patents associated with the Patent Rights in the
United States and elected foreign countries, and any and all
reasonable costs incurred in filing continuations, divisional
applications or related applications thereon and any
re-examinations or reissue proceedings thereof.
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1.14.
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“ Patent Product
” means any product that if made, used, offered for sale,
sold, imported, leased or otherwise transferred in the United
States or any other country would, but for the license granted
herein, infringe one or more Valid Claims.
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1.15.
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“Patent Rights
” means
Foundation’s patent rights to any subject matter claimed in
or covered by (a) any pending or issued United States or
foreign patent or any patent application listed in Exhibit A
attached hereto, including any reissues or reexaminations thereof;
(b) any continuation or divisional applications of the patents
and patent applications listed in Exhibit A; and (c) any
patents issued on continuation or divisional applications,
including reissues and reexaminations, of the patents and patent
applications listed in Exhibit A.
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1.16.
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“ Patent Service
” means any method, process, procedure or service that would,
but for the license granted herein, infringe one or more Valid
Claims.
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1.17.
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“Pharmaceutical
Application ” means applications where
devices, kits, or medications incorporating leucoanthocyanidins,
anthocyanidins and anthocyanins are used (a) in the diagnosis,
cure, mitigation, treatment, or prevention of disease (b) in
or as articles (other than food) intended to affect the structure
or any function of the body of man or other animals
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1.18.
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“ Research Field
Application ” means applications where devices, kits, or
leucoanthocyanidins, anthocyanidins and anthocyanins are used for
research purposes only.
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1.19.
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“ Sublicensing Revenue
” means any payments that Licensee or an Affiliate receives
from a Sublicensee in consideration of the sublicense of the rights
granted Licensee under this Agreement, including without
limitation, license fees, milestone payments, license maintenance
fees and other payments. Sublicensing Revenue does not include
royalties received by Licensee from Sublicensees.
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3
[*] INDICATES
CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE
COMMISSION
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1.20.
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“ Sublicensee ”
means any non-Affiliate third party to whom Licensee grants a
sublicense of any or all of the rights granted Licensee under this
Agreement.
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1.21.
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“ Technology”
means technology developed by Inventors at the University at
Buffalo on or before the Effective Date and which Foundation is
free to disclose to Licensee, including (a) confidential
and/or proprietary information and materials in which Foundation
has a legal interest and as described in Foundation Docket Nos. [*]
and [*] titled [*], (b) Know-How and Material
Rights.
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1.22.
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“ Technology Products
” means any products that incorporate, utilize, or are made
with the use of the Technology, or part thereof, but that are not
Patent Products.
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1.23.
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“ Technology Services
” means any method, process, procedure or service that
incorporates, utilizes, or make use of the Technology, or part
thereof, but that are not Patent Services.
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1.24.
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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 last to expire
Patent Right, or (ii) ten (10) years from the date of the
first sale of a Licensed Product.
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1.25. “
Territory ” means worldwide.
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1.26.
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“Valid
Claim” means an unexpired claim in an
issued unexpired patent or a claim of a pending patent application
or supplementary protection certificate within the Patent Rights
that has not been revoked, abandoned, disclaimed or withdrawn, or
held unenforceable, unpatentable or invalid by a court of competent
jurisdiction in a final judgment that has not been appealed within
the time allowed by law or from which there is no further
appeal.
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2.
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GRANT OF RIGHTS AND RETAINED
RIGHTS
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2.1.
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Exclusive License.
Subject to the terms of
this Agreement, Foundation grants to Licensee an exclusive license
under the Patent Rights and Know-How and Material Rights to make,
have made, use, sell and offer for sale Licensed Products and
Licensed Services in the Field for Nutraceutical Application, Food
Additive Application, Fine Chemical Product Application, Research
Field Application and Cosmetic Application and Territory and during
the Term. The license granted is subject to the overriding
obligations to the U.S. Government set forth in 35 USC 200-212 and
applicable governmental implementing regulations. The license
granted is subject to the provisions of Article 4 entitled
“DUE DILIGENCE AND MARKETING OBLIGATIONS”.
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4
[*] INDICATES
CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE
COMMISSION
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2.2.
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Non-Exclusive License.
Subject to the terms of
this Agreement, Foundation grants to Licensee a non-exclusive
license under the Patent Rights and Know-How and Material Rights to
make, have made, use, sell and offer for sale Licensed Products and
Licensed Services in the Field for Pharmaceutical Application and
Territory and during the Term. The license granted is subject to
the overriding obligations to the U.S. Government set forth in 35
USC 200-212 and applicable governmental implementing regulations.
The license granted is subject to the provisions of Article 4
entitled “DUE DILIGENCE AND MARKETING
OBLIGATIONS”.
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2.3.
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First Look Right.
Subject to any existing
or hereafter incurred obligations to the United States government
or agency thereof arising out of the use of government funds or to
any third party arising out of the use of third party’s
sponsored research funds, Foundation grants Licensee an exclusive
right (“First Look Right”) to negotiate in good faith a
definitive license agreement for an exclusive (or non-exclusive, at
Licensee’s option), royalty bearing, worldwide license with
right to sublicense to use and otherwise exploit each improvement
to the Technology, Licensed Products and Licensed Services within
the Field developed by the Inventors while employed at the
University at Buffalo during the Term and owned or controlled by
Foundation (“Improvements”).
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The First Look Right will commence
on the date that Foundation discloses the Improvement to Licensee
(“Improvement Disclosure”). Foundation’s
Improvement Disclosure will include sufficient information to allow
the Licensee to evaluate such Improvement and its potential for
development as or in connection with a Licensed Product or Licensed
Service. Licensee will have [*] days (“Notice Period”)
from the date of receipt of Foundation’s disclosure to
(a) evaluate the Improvement and (b) provide written
notice (“First Look Notice”) to Foundation of its
interest in entering into negotiations for a license under the
Improvement to make, have made, use, sublicense, sell, offer for
sale, have sold, import and export products or services that
incorporate, utilize or are made with the use of such Improvements.
If and when Foundation receives the First Look Notice, the parties
will promptly and in good faith commence license negotiations.
Licensee will provide a commercialization plan for the Improvement
at the onset of license negotiations.
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The First Look Right will terminate
(i) at the end of the Notice Period if Licensee fails to
provide First Look Notice, (ii) immediately upon notice that
Licensee is not interested in entering into negotiations for a
license to such Improvement, or (iii) one hundred eighty
(180) days after Foundation receives the First Look Notice if
the parties have not yet finalized a definitive license agreement.
Upon termination or expiration of the First Look Right, Foundation
will be free to present and license such Improvement to third
parties without restriction.
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2.4.
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Retained Rights.
Foundation retains the
right to use the Technology, Know-How and Material Rights and
Patent Rights for educational purposes and internal research and
development.
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5
[*] INDICATES
CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE
COMMISSION
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3.
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COMPENSATION AND PAYMENT
TERMS
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3.1.
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Research Funding.
Licensee will provide
Foundation with unrestricted research funds, within thirty
(30) days of the Effective Date, of [*]. The research funded
by these funds does not need to relate to the Technology Rights,
and may be used by the Inventors for the research projects of their
choosing.
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3.2.
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Royalties on Net Sales.
Licensee will pay to
Foundation an earned royalty of [*] of Net Sales of Patent Product
or Patent Service. Licensee will pay to Foundation an earned
royalty of [*] of Net Sales of Technology Product and [*] of Net
Sales of Technology Services.
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3.3.
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Annual Minimum Royalties on Net
Sales. Licensee will pay Foundation Annual
Minimum Royalty payments of $5,000 on or before the first day of
the calendar year 2010 and each following year for the Term of the
Agreement.
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Each Annual Minimum Royalty payment
will be credited against any earned royalties due for the
applicable calendar year.
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3.4.
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Sublicensing Fees.
Licensee will pay
Foundation [*] of Sublicensing Revenue.
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3.5.
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Milestone Payments.
Licensee will pay
Foundation milestone payments according to the following schedule
of events:
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MILESTONE
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MILESTONE PAYMENT
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Sale of first Licensed Product, Licensed Service
or Sublicense Fee payment received.
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[*]
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3.6.
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Payment Terms:
All dollar amounts
referenced herein will refer to U.S. Dollars. Payments with
designated payment dates are due and payable on or before those
dates. Earned royalty payments will be made within [*] days after
the end of each calendar quarter for the calendar quarter. All
invoiced payments will be paid within [*] days of Licensee’s
receipt of invoice. When Licensed Products or Licensed Services are
sold for currencies other than U.S. Dollars, earned royalties will
first be determined in the foreign currency of the country in which
the Licensed Products or Licensed Services were sold and then
converted into equivalent U.S. Dollars. The exchange rate is that
rate quoted in the Wall Street Journal on the last business day of
the reporting period and is quoted as local currency per U.S.
Dollar.
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[*] INDICATES
CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE
COMMISSION
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3.7.
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Payment Address.
All payments will be
made payable to “The Research Foundation of State University
of New York” and will be sent to the below
address:
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UB Office of
Science, Technology Transfer & Economic Outreach
UB Technology Incubator
Baird Research Park
Suite 111
1576 Sweet Home Road
Amherst, NY 14228
Attn: Licensing Specialist
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3.8.
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Late Payment.
In the event that
payments are not received by Foundation when due, Licensee will pay
to Foundation interest charges at a rate of [*] per annum. Interest
will be calculated from the date payment was due until actually
received by Foundation.
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3.9.
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Foreign Charges
. Royalties due on
sales that occur in any country outside the United States may not
be reduced by any deduction of withholding, value-added taxes,
fees, or other charges imposed by the government of such country,
except as permitted in the definition of Net Sales. Licensee is
responsible for all bank transfer charges.
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4.
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DUE DILIGENCE AND MARKETING
OBLIGATIONS
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4.1.
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Licensee will use commercially
reasonable efforts to commercialize and market Licensed Products
and Licensed Services as soon as practicable and in accordance with
the milestone events set forth herein.
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4.2.
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Licensee will complete the
following milestones by the timeframes set forth below:
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MILESTONE
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COMPLETION DATE
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Commercialization development plan submitted to
Foundation.
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[*]
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Commercial availability of a Licensed Product or
Licensed Service.
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[*]
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Annual sales revenues of [*].
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[*]
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Annual sales revenues of [*].
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[*]
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4.3.
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In the event that Licensee fails to
meet either the third or fourth milestone set forth in
Section 4.2 above by the date set forth therein
notwithstanding Licensee’s reasonable efforts to meet same,
then Foundation’s sole remedy for same will be to render the
exclusive licenses set forth in Section 2.1 of this Agreement
as nonexclusive, upon written notice from Foundation to
Licensee.
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7
[*] INDICATES
CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE
COMMISSION
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4.4.
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Notwithstanding the above, in the
event that prior to the milestone dates set forth in
Section 4.2 above, there is a Change in Law that materially
and adversely impacts Licensee’s ability to achieve the
milestone by the applicable milestone date, Foundation and Licensee
agree to meet and negotiate in good faith reasonable extensions to
the milestone dates given the impact of the Change in Law.
“Change in Law” means amendments, modifications or
changes in existing Applicable Law, including changes in the
enforcement or application of Applicable Law, or the enactment of
any new Applicable Law. “Applicable Law” means any
federal, state or local law, ordinance, rule, regulation, permit
and order of any governmental authority, including the judicial or
administrative interpretation thereof, which is applicable to
Licensee’s use of the Patent Rights and Know How and Material
Rights to make, have made, use sell and offer for sale the Licensed
Products and Licensed Services as permitted under this
Agreement.
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5.1.
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The license granted in this
Agreement includes the right of Licensee to grant sublicenses to
third parties during the Term. With respect to sublicense granted
pursuant to Article 5, Licensee will:
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(a)
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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 Article 5 without
the express written consent of Foundation;
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(b)
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to the extent applicable, include
all of the rights of and obligations due to Foundation
and
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