“Term Sheet” by RickiePBibey

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									Draft TERM SHEET for Discussion – Not an Offer
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Attachment E—Generic Term Sheet
Exclusive Commercial Patent License Term Sheet (cross references to license provisions in Bold) Outline of General Terms of a Proposed Exclusive Patent License Agreement between UT-Battelle, LLC (“Licensor”) and ____________________ (“Licensee”) for ____________________ Technology Patents Offered for Licensing UTBattelle ID Number

Title

Filing/Issue Status

Small/Large Entity Filing?

Licensed Patents Exhibit A

This license agreement will encompass UT-Battelle ____________________ technology embodied in the invention disclosure(s) [ID(s)], pending patent applications, and patents listed in the table shown above, and the ensuing patent(s) when issued (all IP resulting from patents pending). “Field of Use” means and is limited to __________________.

Field of Use Article 2 Effective Date of license Article 2 Nature of Rights Granted

Effective Date of the license agreement shall be the date of the signature of the last party to sign the agreement.

Article 3

Licensor will grant an exclusive commercial right and license to Licensee, subject to Government license rights, to utilize the Licensed Patents to make, have made, use, offer to sell, sell, Dispose of, and import (subject to U.S. manufacture requirements) the Licensed Products in the Field of Use. Licensee’s exclusive commercial license is subject to, and shall in no way restrict, the Government’s License Rights. Licensee’s exclusive license is subject to, and shall in no way restrict, the march-in rights of the Government pursuant to 35 USC 203.

Mark Reeves

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Sublicensing

This grant specifically excludes any right to sublicense to others.

Article 3.1
Net Sales Article 2 “Net Sales” means the Gross Sales from the manufacture, use, or Disposition of Licensed Products or Licensed Processes, less the total of all: (a) sales tariffs, duties and/or taxes imposed on the Licensed Products manufactured in the United States; (b) outbound transportation prepaid or allowed; and (c) amounts allowed or credited on returns. “Gross Sales” means the U.S. Dollar value of all consideration to which Licensee is entitled for the Disposition of Licensed Products. In the event Licensee does not ultimately Dispose of Licensed Products, the fair market value of such Licensed Products (as if there had been a Disposition to a third party) shall be included in Gross Sales.

Substantial U.S. Manufacture Requirement

Licensee agrees that any Licensed Products for use or sale in the United States shall be substantially manufactured in the United States.

Article 5.1
Indemnification Article 9.2 Licensee shall indemnify, defend and hold harmless Licensor, DOE, their respective members, officers, directors, agents, employees, and persons acting on their behalf, (“Indemnitees”) from liability involving the violation of such export regulations, either directly or indirectly, by Licensee.

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Breach and Termination Article 7

This Agreement may be terminated by either Party for any material breach of the Agreement by the other Party. Such termination shall be effective sixty (60) days after written notice specifying the breach to the other Party. If the specified breach is cured before the effective date of termination, the Agreement will not be terminated. In the event Licensee either (1) fails to make payment to Licensor of Royalties or other consideration in accordance with this Agreement or (2) fails to satisfy the requirements of the Commercialization Plan in Exhibit C, Licensor may, at its sole discretion, terminate this Agreement with respect to specified Licensed Patents. There shall be no reduction in any of the payments due from Licensee, including but not limited to Royalties. Licensee may terminate this Agreement for any reason if Licensee provides UT-Battelle with sixty (60) calendar days prior notice of its intent to terminate and pays UT-Battelle all patent reimbursement fees owed at the time or termination, if applicable, and all Royalties due or the pro rata portion of any Minimum Annual Royalties due in, or at the end of, the year of termination under Exhibit B, whichever is greater.

Term of License Article 1 Article 2 Patent Cost Reimbursement Article 4

Except as provided in Article 7, the license will run through the Term of this Agreement. “Term” means the period of time starting on the Effective Date and continuing until expiration of the last to expire of the Licensed Patents.

Licensee shall reimburse Licensor for all (1) verifiable costs related to the filing and prosecution of all Licensed Patents; and (2) maintenance fees or annuities for Licensed Patents. Licensee shall reimburse Licensor within thirty (30) days of receipt of invoices for patent costs incurred by Licensor. In accordance with Article 8, in addition to any other remedies available to Licensor, failure by Licensee to reimburse Licensor for said costs may result in Licensor’s termination of the license. Licensee shall pay to Licensor a fixed license fee in the amount specified in Exhibit B (Execution Fee), which will be nonrefundable and not creditable against any Royalties. Exhibit B specifies when the Execution Fee is due and payable. $Amount: ??? U.S. Dollars ($X) Equity in whole or in part. Due Date: On or before the Effective Date of this Agreement. This Agreement automatically terminates if Execution Fee is not received by Licensor on or before the Effective Date of this Agreement.

Execution Fee Article 4 Exhibit B

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Running Royalty Article 4 Exhibit B Minimum Annual Royalty Article 4 Exhibit B

Licensee shall pay to Licensor a Royalty of ___% on Net Sales as will be specified in Exhibit B of an eventual license agreement. Accounting periods and due dates for Royalties will be specified in Exhibit B of said license agreement. Licensee shall pay a minimum annual royalty, the amounts and due dates of which are specified in Exhibit B (Minimum Annual Royalty). The Royalties shall be credited against the Minimum Annual Royalty payable each year. If in calendar year __________, Royalties paid by Licensee to Licensor do not total $__________ per licensed field of use, Licensee will make up the difference by January 31 of the following year. If in calendar year __________, Royalties paid by Licensee to Licensor do not total $__________ per licensed field of use, Licensee will make up the difference by January 31 of the following year. If in calendar year __________, Royalties paid by Licensee to Licensor do not total $__________ per licensed field of use, Licensee will make up the difference by January 31 of the following year. If in calendar year __________, Royalties paid by Licensee to Licensor do not total $__________ per licensed field of use, Licensee will make up the difference by January 31 of the following year. If in calendar year __________, and each year thereafter, Royalties paid by Licensee to Licensor do not total $__________ per licensed field of use, Licensee will make up the difference by January 31 of the following year.

Diligence/ Commercialization Milestones Exhibit C

Licensee will be required to meet at least the minimum of the following: Milestone Completion of First Working Prototype First Commercial Sale Annual Gross Sales of $??? Annual Gross Sales of $??? Annual Gross Sales of $??? Annual Gross Sales of $??? Annual Gross Sales of $??? Due Date TBD TBD TBD TBD TBD TBD TBD

Licensee and Licensor will work together to further define commercialization activities and milestones Licensee will be required to undertake and meet in order to retain the rights prescribed in the license, and these commitments will be incorporated into the license.

Mark Reeves

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Sponsored Research

For any private sponsored research with the Oak Ridge National Laboratory within 60 months to further develop the technology towards commercialization, in a separate agreement, all Intellectual Property, applicable to ____________________ technology, will be added to the License Agreement, by amendment, as a no cost inclusion, except for Patent Reimbursement.

Mark Reeves

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