Term Sheet to Transfer a Technology - PDF by rvd20586

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									                                                              TERM SHEET
                                                            [GENERIC FORM]



RE:                   [TECHNOLOGY LICENSE]
DATE:                 ________________



       This Term Sheet (“Term Sheet”) sets forth the principal terms and conditions of the
proposed license arrangement between Cedars-Sinai Medical Center (“CSMC”), as licensor,
and _________________, Inc. (“NEWCO”), as licensee, in connection with certain patent rights
owned by CSMC and developed by Dr.___________ of CSMC.

         This Term Sheet is for discussion purposes only, is not a commitment on the part of CSMC
and should not be construed as a commitment. Such a commitment may only be made after
further review of definitive documents and approval by senior management and/or the Board
of Directors of CSMC.

Grant

License                                                            An [exclusive/non-exclusive] license, with a limited
                                                                   right to grant sublicenses, during the Term, to use,
                                                                   make, have made, practice, import, carry out,
                                                                   manufacture, have manufactured, offer for sale,
                                                                   sell, offer for sale and/or have sold Products in the
                                                                   Field of Use in the Territory.

Product                                                            Any device, apparatus or method covered in
                                                                   whole or in part by a Valid Claim useful to [describe
                                                                   technology’s use].

Valid Claim                                                        A claim of (a) a Licensed Patent, which has not
                                                                   been pending for longer than ten years after the
                                                                   first commercial sale of a Product; or (b) an issued
                                                                   patent included within the Licensed Patents, which
                                                                   claim has not (i) lapsed, been canceled or
                                                                   become abandoned, (ii) been declared invalid or
                                                                   unenforceable by a non-appealable decision or
                                                                   judgment of a court or other appropriate body or
                                                                   authority of competent jurisdiction, or (iii) been
                                                                   admitted to be invalid or unenforceable through
                                                                   reissue, disclaimer or otherwise.

Licensed Patent                                                    The patent application entitled
                                                                   “__________________________________” and patents
                                                                   issuing therefrom.




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Field of Use                                                       The diagnosis of diseases and disorders with respect
                                                                   to [describe] and therapeutic treatment thereof in
                                                                   patients.

Territory                                                          The entire world.

Term                                                               On a country-by-country basis, until the expiration
                                                                   of the last to expire Valid Claim in the Territory.

Sublicenses                                                        NEWCO will have the ability to grant sublicenses
                                                                   subject to the prior written approval of CSMC,
                                                                   which approval will not be unreasonably withheld.
                                                                   NEWCO will be responsible for each sublicensee’s
                                                                   performance of all obligations under sublicenses
                                                                   (and, in particular, royalty payment obligations due
                                                                   on such sublicensee’s sales of Products) and none
                                                                   of NEWCO’s sublicenses will reduce in any way any
                                                                   of NEWCO’s obligations under the License
                                                                   Agreement.

Consideration

Option A                                                           Licensor – Licensee Relationship

License Fee                                                        NEWCO to pay CSMC a license fee of $X

Reimbursement of Costs                                             NEWCO to reimburse CSMC for all reasonable and
                                                                   necessary expenses incurred by CSMC incident to
                                                                   the preparation, filing, prosecution, maintenance
                                                                   and licensing of the Licensed Patents.

Sublicense Fees                                                    X% of all Sublicensing Income received by NEWCO
                                                                   from any third party.

Sublicensing Income                                                Any consideration of any kind received from any
                                                                   third party in connection with any grant of a
                                                                   sublicense to use, make, have made, practice,
                                                                   import, carry out, manufacture, have
                                                                   manufactured, offer for sale, sell, offer for sale
                                                                   and/or have sold Products.

Royalties                                                          X% of Gross Sales of Products, including minimum
                                                                   Royalties.

Option B                                                           Equity + Exclusive License

License Fee                                                        NEWCO to transfer to CSMC X shares of
                                                                   common/preferred stock, which shares will
                                                                   represent [Z%] interest in NEWCO, the value of
                                                                   which will not be diluted prior to IPO.




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Reimbursement of Costs                                             NEWCO to reimburse CSMC for all reasonable and
                                                                   necessary expenses incurred by CSMC incident to
                                                                   the preparation, filing, prosecution, maintenance
                                                                   and licensing of the Licensed Patents.

Royalties                                                          Y% (Y<X) of Gross Sales of Products, including
                                                                   minimum Royalties.


Additional Terms in Either Option [not an exhaustive list]

Diligence                                                          NEWCO will (a) use commercially reasonable efforts
                                                                   (e.g., will expend a minimum of $x per annum) to
                                                                   develop and commercialize Products as soon as
                                                                   practicable, consistent with sound business
                                                                   practices and judgment; (b) be responsible for
                                                                   obtaining all requisite regulatory approvals needed
                                                                   to use or sell Products in the Field of Use in the
                                                                   Territory on a mutually acceptable timetable; and
                                                                   (c) make the first commercial sale of a Product by
                                                                   a specified date.

Sponsored Research                                                 Pursuant to a separate Research Agreement,
                                                                   NEWCO will fund specific, mutually agreed upon
                                                                   research projects at CSMC in an annual amount of
                                                                   not less than $x. NEWCO will have a first right to
                                                                   negotiate a license to any inventions that are a
                                                                   direct result of Sponsored Research.




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