OPTION AGREEMENT
This Agreement, made -----, [date], by and between ------------(hereinafter "OPTIONEE"), a ------Delaware corporation having its principal office at ----------- and Drexel University (hereinafter "DREXEL"), a Pennsylvania non-profit corporation, having its principal place of business at 3141 Chestnut Street, Philadelphia, PA 19104. This Agreement is effective as of -----, [date] (the “Effective Date”). RECITALS DREXEL, by virtue of its role as an educational institution, carries out scientific research through its faculty, staff, and students, and is committed to bringing the results of that research into widespread use. DREXEL is owner by assignment from -----------, PhD, and ----------, PhD of their entire right, title, and interest in United States Patent No. --------- entitled “---------”, and in the inventions described and claimed therein. OPTIONEE is desirous of obtaining an option to negotiate and acquire licenses under United States Patent No. ---------. OPTIONEE is funding further research by Dr.----, et al under a Sponsored Research Agreement between DREXEL and OPTIONEE as of -----, 200_ (the “Sponsored Research Agreement”) a copy of which is attached as Attachment __;
NOW, THEREFORE, in consideration of the premises and the mutual promises and covenants hereinafter set forth, the parties hereby agree as follows:
ARTICLE I DEFINITIONS
SECTION 1.1. UNIVERSITY PATENT RIGHTS. University Patent Rights means any U.S. patent application corresponding to United States Patent No. --------, the inventions described and claimed therein, and any divisions, continuations, continuations-in-part, or reissues thereof and any corresponding foreign patents or patent applications which may issue. SECTION 1.2. LICENSED APPLICATIONS. Licensed Applications means the use of University Patent Rights within the field of ------------ or in all fields of use-------. SECTION 1.3. LICENSED PRODUCTS. Licensed Products shall mean products claimed in University Patent Rights or products made in accordance with or by means of Licensed Processes. SECTION 1.4. LICENSED PROCESSES. Licensed Processes shall mean the processes claimed in University Patent Rights in all fields of use. SECTION 1.5. TECHNOLOGY. Technology shall mean any and all information or University Patent Rights supplied by DREXEL to OPTIONEE.
ARTICLE II SECTION 2.1. EVALUATION PROCEDURE. OPTIONEE shall have the right to evaluate University Patent Rights and their market potential for the Licensed Applications with the goal of finding a possible commercialization partner for the Licensed Applications. OPTIONEE shall within six (6)------- months from the Effective Date of this Agreement report to DREXEL the results of such evaluations. SECTION 2.2. PATENT PROSECUTION AND MAINTENANCE. OPTIONEE shall not be responsible for expenses incurred during the term of this Agreement for the preparation, filing, prosecution, and maintenance of University Patent Rights.
ARTICLE III SECTION 3.1. OPTION TO LICENSE. DREXEL, to the extent it is permitted to do so by its "Statement of Policy in Regard to Inventions, Patents and Copyrights", by its agreements with sponsors of research, and by the provisions of Public Laws 96-517 and 98-620, grants to 2
OPTIONEE an option to obtain an exclusive------- license for the Licensed Applications under University Patent Rights (the “Option”). SECTION 3.2. OPTION FEE. In consideration of University’s execution of this Option Agreement, Optionee shall pay to University, within ten (10) days of the effective date of this Option Agreement, a nonrefundable fee of $_______ (_____ dollars). All dollar amounts referred to in this Agreement are expressed in United States dollars and shall be made payable in United States dollars by check to “Drexel University.” SECTION 3.3. OPTION PERIOD. This option shall extend for a period of six (6) months from the Effective Date of this Agreement (the “Option Period”). During this period, the Licensee will have access to the patent and reasonable cooperation with Drexel. Until the end of this Option Period, DREXEL shall not offer University Patent Rights in the Licensed Applications, Licensed Products or Licensed Processes to any third party. OPTIONEE may exercise this Option by informing DREXEL in writing of the identity of at least one (1) product or process in the area of the Licensed Applications and by identifying to Drexel the possible commercialization partner who will have the funding necessary to pay for the license and for the technology development, and by providing a written statement, reasonably satisfactory to DREXEL, of its intention and ability to develop such product or process with the commercialization partner under such University Patent Rights for public use as soon as practicable, consistent with sound and reasonable business practices and judgment. Upon exercise of the Option and for a reasonable period not to exceed three (3) months, DREXEL agrees to negotiate in good faith to establish the terms of a license agreement granting OPTIONEE exclusive, world wide --------- rights to make, have made, use and sell the University Patent Rights in the area of the Licensed Applications, Licensed Products and Licensed Processes under terms customary in the trade. Such license agreement shall include at least the following provisions: license fees, royalty payments, licensee’s right to grant sublicenses, a commitment by OPTIONEE and any sublicensee to exert their best efforts to introduce the licensed material into public use as rapidly as practicable, the right of DREXEL to terminate the license should OPTIONEE not meet specified due-diligence milestones, and indemnity and insurance provisions satisfactory to DREXEL's insurance carrier. Before receiving such a license, OPTIONEE shall outline for DREXEL its and/or its sublicensees' capability and/or plans to introduce such licensed material into public use. The parties agree that any final license agreement shall contain, at a minimum, the terms set forth in Attachment 1.
ARTICLE IV TERMINATION 3
SECTION 4.1. TERMINATION. This Agreement shall terminate at the end of the Option Period unless the Option is exercised, in which case this Agreement will terminate at the end of the stipulated negotiation period or upon execution of a license agreement, whichever occurs first. Failure of OPTIONEE to pay the amounts required under Sections 3.2 and 3.3 when due will be cause for DREXEL to terminate this Agreement early. The following provisions shall survive termination of the Agreement: Sections 5.1 and 6.2
ARTICLE V CONFIDENTIAL INFORMATION SECTION 5.1. CONFIDENTIAL INFORMATION. Both parties may make available to the other party certain confidential and proprietary information, including but not limited to TECHNOLOGY, business development plans, pricing strategies and marketing strategies, patient information or demographics (“Confidential Information”). Such information will be labeled or identified as “confidential” or “proprietary” at the time of disclosure or, if disclosed orally, confirmed in writing as Confidential Information within thirty (30) days from date of initial disclosure to either party. Both parties agree to treat the Confidential Information as strictly confidential and to take all necessary precautions to prevent the disclosure of such Confidential Information to third parties. Both parties agree not to use Confidential Information for any purpose except to perform this Agreement.
ARTICLE VI MISCELLANEOUS PROVISIONS SECTION 6.1. EFFECTIVE DATE OF AGREEMENT. effective on the date noted in the first paragraph of this Agreement. This Agreement shall become
SECTION 6.2. APPLICABLE LAW. This Agreement shall be construed and governed in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to conflict of law provisions. In the event that a party to this Agreement perceives the existence of a dispute with the other party concerning any right or duty provided for herein, the parties shall, as soon as practicable, confer in an attempt to resolve the dispute. If the parties are unable to resolve such dispute amicably, then the parties hereby submit to the exclusive jurisdiction of and venue in the courts located in the Eastern District of the Commonwealth of Pennsylvania with respect to any and all disputes concerning the subject of this Agreement. 4
SECTION 6.3. USE OF UNIVERSITY'S NAME. No use of the name of DREXEL in any form of promotion or in connection with the sale of products, processes, devices, or designs is permitted without prior written approval from the University. SECTION 6.4. NOTICES AND CORRESPONDENCE. All notices required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been sufficiently given for all purposes thereof when mailed by certified mail to the party to be notified. All notices shall be deemed to have been given when mailed as evidenced by the postmark at the point of mailing. All notices to DREXEL and any correspondence respecting this Agreement shall be addressed as follows: To DREXEL: Drexel University 3225 Arch Street, Ground Floor Philadelphia, PA 19104 Attention: Anil Rastogi Vice President for Special Projects With a required copy to: Drexel University 3201 Arch, Suite 300 Philadelphia, PA 19104 Attention: General Counsel To OPTIONEE:
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SECTION 6.5. WARRANTY. DREXEL EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR 5
PURPOSES OF THE UNIVERSITY PATENT RIGHTS OR TECHNOLOGY SUPPLIED BY DREXEL, OR THE LICENSED APPLICATIONS, LICENSED PROCESSES OR LICENSED PRODUCTS CONTEMPLATED BY THIS AGREEMENT. SECTION 6.6. INDEPENDENT CONTRACTORS. The relationship between DREXEL and OPTIONEE is that of independent contractors. DREXEL and OPTIONEE are not joint ventures, partners, principal and agent, master and servant, employer or employee, and have no other relationship other than independent contracting parties. DREXEL will have no power to bind or obligate OPTIONEE in any manner, other than as is expressly set forth in this Agreement. Likewise OPTIONEE will have no power to bind or obligate DREXEL in any manner, other than as is expressly set forth in this Agreement. SECTION 6.7. PROHIBITION ON ASSIGNMENTS. OPTIONEE is not permitted to assign this Agreement or any part of it, either directly or by merger or other operation of law, without the prior written consent of DREXEL. Any prohibited assignment of this Agreement or the rights hereunder shall be null and void. No assignment relieves OPTIONEE of responsibility for the performance of any accrued obligations which it has prior to such assignment. SECTION 6.8. NON-WAIVER. Any waiver by either party of a breach of any provision of this Agreement will not constitute a waiver of any subsequent breach of that provision or a waiver of any breach of any other provision of this Agreement. SECTION 6.9. MERGER AND MODIFICATION. This Agreement constitutes the entire and only agreement between the parties relating to an option to acquire a license, and all prior negotiations, representations, agreements and understandings are superseded hereby. No agreements altering or supplementing the terms hereof may be made except by written mutual agreement of the authorized representatives of the parties. SECTION 6.10. COMPLIANCE WITH LAWS AND REGULATIONS. The parties comply with all prevailing laws, rules and regulations that apply to their activities or obligations under this Agreement. Without limiting the foregoing, it is understood that this Agreement may be subject to United States laws and regulations controlling the export of technical data, computer software, laboratory prototypes and other commodities, articles and information, including the Arms Export Control Act as amended in the Export Administration Act of 1979, and that the parties’ obligations are contingent upon compliance with applicable United States export laws and regulations. The transfer of certain technical data and commodities may require a license from the cognizant agency of the United States Government and/or written assurances by OPTIONEE that OPTIONEE shall not export data or commodities to certain foreign countries without prior approval of such agency. DREXEL neither represents that a license is not required nor that, if required, it will issue.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed in duplicate by their duly authorized officers.
DREXEL UNIVERSITY
Name: Title: Date: __________
Licensee: ------Name: -----Title: Date:
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Attachment 1 Term Sheet for License Agreement
All past, current and future patent fees, expenses And charges to be assumed by licensee. Field Of Use Exclusivity Signing Fee
$
$___to be paid ten (10) days after license agreement is signed.
Equity Sponsored Research Annual license maintenance Royalty % Stacking Royalty Sublicense Fee Minimum royalty payment Year 1 Year 2 Year 3 Year 4 Year 5 Milestone 1: Milestone 2: $ $ __% of net sales __% of net sales 50%
$ $ $ $ $ $ $
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