Clean Tech Talk. Licensing University Technology Reference Packet

Transcription

1 Clean Tech Talk Licensing University Technology Reference Packet April 2015

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3 The information contained in this publication is provided with the understanding that the author(s) are not herein engaged in rendering legal or other professional advice and/or services. Accordingly, the information provided in this report is for educational purposes only and not for the purpose of providing legal advice. The opinions expressed in this report are the opinions of the authors and may not reflect the opinions of the law school or any other contributing author. Presenting this information does not establish any official or implied attorney-client relationship. Copyright 2015 Albany Law School

4 Technology Transfer Flowchart Provided by the University of Toledo Electrical Engineering and Computer Science Department

5 LICENSE THIS LICENSE AGREEMENT is entered into and made effective as of this day of, 201 (the Effective Date ), by and between RENSSELAER POLYTECHNIC INSTITUTE, a New York not-for-profit corporation located at 110 8th Street, Troy, New York ( Rensselaer ) and, a [corporation/limited liability company], with its principal place of business at ( License ). Rensselaer and Licensee are each sometimes referred to in this Agreement as a Party, and collectively, as the Parties. Rensselaer owns certain technology and desires to grant to Licensee, and Licensee wishes to acquire from Rensselaer, a right and license to such technology, subject to the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth in this Agreement, the Parties agree as follows: I. Table; Terms and Conditions. The following table ( Table ) is an essential part of this Agreement. Its provisions shall be interpreted in conjunction with any correspondingly-numbered sections of the Terms and Conditions. If there is a conflict between provisions of the Table and the Terms and Conditions, the provisions in the Table shall govern. Territory Field of Use USPTO Entity Status as of Effective Date Federally-Funded Patents Yes No BUSINESS TERMS United States All fields (for an exclusive license, Schedule 2 1 applies) OR Limited field. If this box is checked, complete below and Schedule 2 6 and 7 apply: Field(s): [or describe any fields excluded from the Limited Field Excluded Field: [Describe excluded field(s) of use] Check one box: Small Large Licensee to notify Rensselaer within ten (10) days of any change of this status. If Yes is checked, the provisions of the attached Schedule 1 are made a part of this Agreement. 2. Exclusivity Exclusive. (If Exclusive is checked, the provisions of the attached Schedule 2 apply to this Agreement.) OR Non-exclusive, without the right to grant sublicenses Equity in Licensee ( ) Shares of Licensee common stock, being five percent (5%) of all outstanding Shares. 3.2 Running Royalty rate (applies to Sales by Licensee and Sublicensees) 2% of Net Sales (check if Exclusive), or 1% of Net Sales (check if Non-exclusive) 1

6 3.3. Diligence Milestones and due dates 12.2 Patent Expenses Reimbursement Milestone Events (a) Receive more than One Million Dollars ($1,000,000) aggregate in cash investment from non-creator-founders by the third (3 rd ) anniversary of the Effective Date. (b) Receive more than One Million Dollars ($1,000,000) in cash in aggregate paid sales revenues by the fifth (5 th ) anniversary of the Effective Date. (c) Licensee may not reduce the number of its full time employees below two (2) persons or discontinue all product or service development, commercialization or sales activities for more than six (6) consecutive months during the Term. Type (a) $ in patent expenses incurred prior to the Effective Date. (b) Patent expenses incurred on or after the Effective Date. 14. Contact and Payment Information Licensee Contacts Notices contact: Attn: Phone: Due dates Due dates Within thirty (30) days following the Effective Date. Subject to Terms and Conditions 3.4 and 12.2(b). Rensselaer Contacts Notices contact: Office of Technology Commercialization th Street, 3210 J Building Troy, New York Attention: Director Accounting contact: Attn: Phone: Patent prosecution contact: Attn: Phone: payment/reporting contact (except development reports): Office of Technology Commercialization th Street, 3210 J Building Troy, New York Attention: Business Manager Phone: (518) development reports contact (per Section 4.2(b)): th Street, 3210 J Building Troy, New York Attn: Director spencj2@rpi.edu 2 Checks payable to: Wire transfers: For amounts owing to Rensselaer under Section 3, pay to Rensselaer s Direct Deposit Account No at the Bank of America (or such other account(s) as Rensselaer may specify). ABA Routing Numbers for U.S.: # ACH: # , or DDA Account for U.S

7 17. Other Agreements Check all that apply, or check None : SWIFT Code: BOFAUS3N (international wires). Facilities Use Agreement Conflict Management Plan Space Lease Agreement Other: N/A None 3

8 TERMS AND CONDITIONS 1. Definitions. Certain capitalized terms used in this Agreement shall have the meanings given them in the attached Exhibit A. 2. License Grant. Contingent upon compliance with all the terms and conditions of this Agreement, Rensselaer hereby grants to Licensee, and Licensee hereby accepts, for the Term, the license for the Licensed Intellectual Property in the Field of Use in the Territory, to make, use and sell Licensed Products and provide or perform Licensed Services, to the extent provided in Section 2 of the Table, without the right to have made or import Licensed Products or Licensed Services. This license is subject to Rensselaer s reservation of any necessary rights for itself and its Affiliates to practice the Licensed Intellectual Property for non-commercial purposes, including, without limitation, the right to perform educational activities or research and development for itself and the right to allow other nonprofit institutions to use the Licensed Intellectual Property for any research and educational purposes, without Rensselaer or such other institutions being obligated to pay Licensee any royalties or other compensation. 3. Consideration. 3.1 Equity in Licensee. In lieu of an upfront cash license fee, Licensee shall deliver to Rensselaer the Shares specified in Section 3.1 of the Table within thirty (30) days from the Effective Date. (a) Pre-Emptive Rights. Prior to a Triggering Event, Rensselaer shall have preemptive rights with respect to additional issuances of Shares (or securities convertible or exchangeable into Shares), including, without limitation, issuances of Shares to Licensee employees in exchange for cash or services, the effect of which will be that Rensselaer shall have the right to subscribe for additional Shares so as to maintain its equity interest without dilution or diminution. If additional Shares are issued in conjunction with a Merger or acquisition, for Rensselaer to exercise its preemptive rights, the valuation of those securities will be made in accordance with Section 3.1(d). (b) Piggyback Registration Rights. In any public offering of securities conducted by Licensee that includes Shares held by Owners, Rensselaer shall be entitled to participate on a pro rata basis to the same extent as such selling Owners (or any permitted transferee of such selling Owners) on terms and conditions no less favorable to Rensselaer than those provided to such selling Owners (or such permitted transferee). (c) Co-Sale Rights. Licensee shall cause the Creator-Founders to enter into an agreement with Rensselaer granting Rensselaer the right of co-sale such that if a Creator-Founder desires to sell all or any part of his or its Shares now owned or later acquired, and Licensee does not exercise in full a right of first refusal to acquire such Shares, any such sale of Shares will be subject to the following rights: Rensselaer may sell to the purchaser of the Shares on the same terms and conditions an amount of Shares equal to the number of Shares (including Shares into which each of the Creator-Founders may convert any other Shares) then owned by Rensselaer that is (i) the percentage ownership of Rensselaer in the Shares of Licensee (including Shares into which each of the Creator-Founders may convert any other securities convertible into Shares) times the number of Shares to be sold, or (ii) at the option of Rensselaer, a lesser number of Shares ( Co-Sale Right ). The effect of this Co-Sale Right will be to equate, on a percentage ownership basis, the number of Shares sold by the selling Creator-Founder and each of the other Creator-Founders, which may prevent the selling Creator-Founder from selling the number of Shares the Creator-Founder originally intended to sell. This subsection shall not apply to any 4

9 sale by a Creator-Founder in an underwritten public offering under an effective registration statement under the Securities Act of 1933, as amended. (d) Valuation of Securities. The value of securities and other property shall be determined as follows, with an appropriate discount to represent fair market value when the securities or property are subject to restrictions on marketability (such as being subject to investment letters), and in order of precedence: (i) the value of the securities or property as set forth in the agreement governing a Liquidation Event; (ii) if the value in (i) is not readily determinable from such agreement, then the value shall be the average of the closing price of the securities on the stock (or other securities) exchange on which the securities are traded, if any, for the thirty (30) day period prior to the closing of the Liquidation Event; (iii) if (i) and (ii) are not sufficient to determine the value, and the securities or property are traded as unlisted stock, such as over-the-counter stock, the value shall be, for the thirty (30) day period ending three days prior to the closing of the Liquidation Event, the average closing bid prices; or (iv) if the value is not determinable from the agreement or a public market, then the value shall be determined, at Rensselaer s option, by Licensee s Board of Directors, in good faith, and approved by Rensselaer, which approval shall not be unreasonably withheld, or by an independent appraiser selected and paid for by Licensee. 3.2 Royalties Payable; Patent Challenges. Licensee shall pay Rensselaer a running royalty ( Running Royalty ) on Net Sales of all Licensed Products and Licensed Services at the rate set forth in Section 3.2 of the Table. The royalty rate and other amounts stated in this Agreement have been set and agreed with the understanding that no court has made any determination as to the validity or enforceability of any Licensed Patents, or whether any of Licensee s products or services infringes any claim of any Licensed Patents. Therefore, if Licensee, an Affiliate of Licensee or any third party acting on behalf of Licensee or one of its Affiliates brings an action seeking to invalidate any Licensed Intellectual Property or petitions for Inter Partes Review, Licensee shall pay royalties to Rensselaer at double the applicable Running Royalty rate for Licensed Products and Licensed Services sold during the pendency of such action. If the outcome of such action determines that any claim of a patent so challenged is both valid and infringed by a Licensed Product or Licensed Service, Licensee shall continue paying royalties to Rensselaer at such doubled rate for all sales thereafter, to take into account the additional certainty regarding Rensselaer s Licensed Patents and to compensate Rensselaer for the burden and expense of such challenge. Licensee shall pay directly to Rensselaer and not into any escrow or other account, all royalties due during the period of the challenge. Licensee shall have no right to recoup any royalties paid before or during the challenge period, even if Licensee s challenge is successful. 3.3 Milestones. Licensee shall use its reasonable best efforts to meet the milestone schedule set forth in Section 3.3 of the Table. If Licensee fails to meet any milestone, Rensselaer may require Licensee to meet to discuss the circumstances surrounding the missed milestone, including, without limitation, Licensee s needs with respect to commercializing the Licensed Patents. If Licensee fails to meet any milestone, Rensselaer, at its sole discretion, may adjust the milestone or terminate this Agreement in accordance with Section Payments. Licensee shall make all payments to Rensselaer in United States Dollars at its own expense in accordance with the wire transfer instructions set forth in Section 14 of the Table. Licensee shall make Running Royalty payments to Rensselaer by January 31, April 30, July 31 and October 31 of each year based upon the Net Sales of Licensed Products and Licensed Services during such preceding calendar quarter, commencing with the calendar quarter in which the first commercial sale of any Licensed Product or Licensed Service is made. Royalties that accrue in a foreign currency shall be converted to United States Dollars at the rate shown in the U.S. Federal Reserve Noon Valuation Value of Foreign Currencies on last business day of the accounting period for which payment is due. Licensee 5

10 shall make patent expense reimbursement payments to Rensselaer in accordance with Section Foreign Taxes and Foreign Fees. Any taxes, registration fees and attorney fees due for each territory for which Sales are made, revenue is received, business is conducted, and/or required to be paid by Rensselaer and/or withheld by Licensee under the laws of any foreign country for the accounts of Rensselaer as a result of the Sales shall be the sole responsibility of Licensee. Licensee shall promptly pay such amounts on behalf of Rensselaer to the appropriate governmental authority. 3.6 Late Fees; Collection. Late payments on any royalties, fees, costs, or any obligation whatsoever owed to Rensselaer as a result of this Agreement shall be subject to a fee payable by Licensee calculated at one percent (1%) per month of the balance not paid in full by its due date and shall begin accruing on such due date. Licensee shall be deemed to have consented to the balance stated in any invoice unless it objects to the invoice in writing within thirty (30) days. If Rensselaer commences mediation, arbitration or litigation to collect any amounts past due hereunder, and if Licensee is required by settlement or any order of an arbitrator or court to pay Rensselaer any portion of the amount it claims due, then in addition to any amounts Licensee is required to pay Rensselaer in settlement of such claim, or amounts awarded to Rensselaer by an arbitrator or court, Licensee shall reimburse Rensselaer for all its reasonable attorney fees, and its costs and expenses of collection. Rensselaer may recover from Licensee all such attorney fees, costs and expenses in any arbitration or related legal proceedings, including any and all appeals of any arbitration award or court determination. 4. Reporting by Licensee. 4.1 Licensee shall prepare annual written royalty reports setting forth Sales of Licensed Products and Licensed Services during the applicable License Year by Licensee and its Sublicensees. Licensee shall deliver these reports to Rensselaer with any Running Royalty payments. Such report shall encompass at least the same information set forth in Exhibit C attached to, and made a part of this Agreement. Licensee shall report to Rensselaer the date of first Sale of a Licensed Product or a Licensed Service within sixty (60) days of occurrence in each country. If no Sales of Licensed Products or Licensed Services have been made by Licensee and/or its Sublicensees during any License Year, Licensee shall deliver to Rensselaer a written statement to that effect within thirty (30) days following the end of the License Year. On or before the date of execution of this Agreement, Licensee shall provide Rensselaer with a Development Plan encompassing at least the information set forth in Exhibit D attached to, and made a part of this Agreement, describing the steps necessary to allow the inventions of the Licensed Intellectual Property to be utilized to provide Licensed Products and/or Licensed Services for sale in the commercial market. 4.2 Within sixty (60) days after the end of each of Licensee s fiscal years, Licensee shall provide Rensselaer with: (a) Licensee s financial statements for the immediately preceding fiscal year (including, at a minimum, an income statement, a statement of cash flows, and a balance sheet) that have been certified as true and complete by Licensee s treasurer, chief financial officer, or an independent auditor; and (b) a written report on the progress of its efforts during the immediately preceding fiscal year to develop and commercialize Licensed Products substantially in the form of Exhibit E attached to, and made a part hereof. The report shall also contain a discussion of intended efforts and sales projections for the year in which the report is submitted. Rensselaer s review of Licensee s development plan is solely to verify the existence of Licensee s commitment to development activity and to assure compliance with Licensee s obligations to utilize the inventions of the Licensed Intellectual Property Rights to commercialize Licensed Products and/or Licensed Services for the marketplace. Rensselaer reserves the right to audit Licensee s records relating to development of Licensed Products and Licensed Services. 6

11 Such record keeping and audit procedures shall be subject to the Audit procedures and restrictions set forth in Section Books and Records. Licensee shall maintain, and require its Sublicensees to maintain, full, true, and accurate books of accounts and other records containing all particulars that may be necessary to ascertain and verify Running Royalties. Licensee and its Sublicensees shall permit an independent certified public accountant selected and paid for by Rensselaer to perform an audit at reasonable times during regular business hours of such of their records as may be reasonably necessary to determine the accuracy of any report and/or payment made under this Agreement (the Audit ). If an Audit determines an underpayment in Running Royalties has occurred, Licensee shall pay Rensselaer within ten (10) days of Rensselaer s invoice the underpaid amount plus interest on such amount at the rate of one and one-half percent (1.5%) per month, accruing as of the original due date of such payment. If Rensselaer was underpaid with respect to any Licensed Product or Licensed Service at least five percent (5%) for any reporting period, then Licensee shall also reimburse Rensselaer in full for its Audit costs. Licensee and its Sublicensees shall preserve and maintain all such records required for audit for a period of seven (7) years after the calendar year to which the record applies. 6. Commercial Development. 6.1 Requirements; Government Approvals. All developmental activities and strategies and all aspects of product design and decisions to market and the like are entirely at the discretion of Licensee and Licensee shall rely entirely on its own expertise concerning such activities. Licensee represents and warrants that it has, or will obtain, the expertise necessary to independently evaluate the inventions of the Licensed Intellectual Property and to develop Licensed Products and/or Licensed Services for sale in the commercial market. Licensee shall keep Rensselaer fully informed as to Licensee s progress in such development and sale, including its efforts, if any, to sublicense Licensed Intellectual Property, if permitted by this Agreement. Licensee shall be responsible for obtaining all necessary governmental approvals for the development, production, distribution, sale and use of any Licensed Product or Licensed Service at Licensee s expense, including, without limitation, any safety studies. Licensee shall have sole responsibility for any warning labels, packaging and instructions as to Licensed Services and the use of Licensed Products and for the quality control of any Licensed Service or Licensed Product. 6.2 Patent Marking; Use of Name. To the extent required by applicable law, Licensee shall mark all Licensed Products or their containers in accordance with the applicable patent marking laws. Neither Party, absent written approval of the other, shall have the right to use the name, trade name or trademark of the other. 6.3 Improvements by Licensee. Any Improvements or Modifications Licensee makes to the Licensed Technology during the Term shall be the sole property of Licensee, subject to payment to Rensselaer of Running Royalties. Licensee hereby grants to Rensselaer a non-exclusive, royalty-free license to any Improvements and Modifications, and any invention disclosed and claimed in the Improvements and Modifications, to use for its own educational or research purposes or grant to other nonprofit institutions for their such purposes. All Developed Technology shall be the sole property of Licensee and not subject to royalties. 6.4 No Joint Research Agreement. This Agreement shall not be construed to be a joint research agreement as that term is used in Section 102 of the Patent Act (35 U.S.C. 102). Inventorship of intellectual property generated by access to Rensselaer s inventions will be determined according to U.S. patent laws. If Licensee invokes Section 102(b) or (c) of the U.S. Patent Act to overcome any prior art rejections, however, all patents obtained by Licensee by asserting that this Agreement is a joint 7

12 research agreement shall be owned by Rensselaer and become part of the Rensselaer Patent Rights, and Licensee hereby assigns all its right, title and interest in such patents to Rensselaer. 7. Confidentiality and Publication. 7.1 Treatment of Confidential Information. During the Term, and for a period of three (3) years after this Agreement terminates, a Party receiving Confidential Information of the other Party will (a) maintain in confidence such Confidential Information to the same extent such Party maintains its own proprietary industrial information, (b) not disclose such Confidential Information to any third party without prior written consent of the other Party and (c) not use such Confidential Information for any purpose except those permitted by this Agreement. This Section shall not apply to information that (i) is, or becomes part of the public domain through no fault of the receiving Party, (ii) was known to the receiving Party at the time of its receipt, (iii) becomes known to the receiving Party from a source other than disclosing Party without (A) breach of this Agreement by the receiving Party, (B) violation of law, or, (C) to the receiving Party s reasonable belief, no breach by the source of a duty of confidentiality to the disclosing Party, or (iv) the disclosure of which is required by law, regulation, or court order, provided that the receiving Party gives the disclosing Party notice in sufficient time to permit the disclosing Party, with Licensee s cooperation, to contest the law or order and obtain a suitable protective order, and failing to obtain a protective order, the receiving Party thereafter discloses no more of the Confidential Information than is required by law, regulation or court order. 7.2 Publications; Publicity. Notwithstanding Section 7.1, Rensselaer may publish in accordance with its general policies. Rensselaer shall furnish Licensee with a copy of any proposed publication concerning any of the Licensed Intellectual Property. Licensee shall have thirty (30) days after receipt of a copy of such proposed publication to request that Rensselaer make changes to such publication solely on the grounds that the proposed publication would disclose Licensee s Confidential Information. Except as otherwise provided in this Agreement or required by law, no Party shall originate any public announcement about this Agreement or any sublicense under this Agreement without the prior written approval of the other Party, which approval shall not be unreasonably withheld. A Party shall have thirty (30) days after receipt of a copy of such proposed announcement to object to it. 8. Term and Termination. 8.1 Term of Agreement. Unless sooner terminated, the term of this Agreement ( Term ) shall expire upon the first to occur of (a) the expiration of the last to expire Licensed Patents, or (b) Licensee s cessation of reasonable efforts and activities to develop, create, commercialize and/or sell Licensed Products or Licensed Services. If applicable government regulations require a shorter Term, then the Term shall be amended to comply with such regulations. 8.2 Rensselaer s Termination Right. Rensselaer may terminate this Agreement if Licensee files, or has filed against it, a petition or proceeding under any bankruptcy, insolvency or similar law, becomes insolvent, makes an assignment for the benefit of creditors, or appoints, or has appointed, a receiver or trustee over its property. 8.3 Licensee s Termination Right. Provided Licensee is not then in material breach of any of its obligations under this Agreement, Licensee may terminate this Agreement by giving Rensselaer thirty (30) days prior written notice. 8

13 8.4 Termination for Breach. (a) Except as provided in subsection (b) of this Section, if either Party fails to fulfill any material obligation under this Agreement or materially breaches any representation, warranty or covenant in this Agreement, the non-breaching Party may terminate this Agreement upon written notice to the breaching Party as provided below. Such notice must contain a full description of the event or occurrence alleged to constitute a breach of the Agreement. The Party receiving notice of the breach shall have the opportunity to cure that breach within thirty (30) days of receipt of notice (twenty (20) days to cure a Financial Breach (defined below)); provided, however, that a Party s failure to cure a non-financial Breach shall not be a default under this Agreement if the breach is of a type that cannot reasonably be cured within thirty (30) days, the Party commences reasonable activities to cure the breach promptly upon receipt of the notice of breach and gives the other Party notice thereof, the details of its cure efforts and the reasons for its inability to cure within the applicable cure period, and thereafter the breaching Party diligently works to cure the breach until completion. No cure period shall extend beyond sixty (60) days of the breaching Party s receipt of notice of the breach. If the breach is not cured within the applicable period, the termination will be effective immediately upon the end of such cure period, or at such later date as the non-breaching Party may specify in such notice. As used in this provision, the term Financial Breach means a failure by Licensee to make any payment by the date such payment is due. (b) Rensselaer may not terminate this Agreement if Licensee s sole breach is the failure to timely pay any patent expense in accordance with Section 12.2; provided, however, that Rensselaer may exercise its termination right, and/or any other remedies available to it, if: (i) (ii) Licensee fails to pay the balance of all past due patent expenses immediately upon and in connection with the first to occur of the closing of (A) its receipt of at least One Million Dollars ($1,000,000) aggregate in investment capital from any sources, or (B) a Triggering Event; or Following an event described in clauses (A) or (B) of subsection (b)(i) of this Section, Licensee fails to pay all patent expenses in accordance with Section Effect of Termination. Upon the expiration or termination of this Agreement, Licensee and its Sublicensees shall cease using all Licensed Intellectual Property and, at Rensselaer s request, return all Licensed Technology to Rensselaer. Termination of this Agreement by either Party for any reason shall not affect the rights and obligations of the Parties arising prior to the effective date of termination. 8.6 Survival of Obligations. Articles 5, 7, 8, 10, 11, 12, 13, 14 and 16, and Licensee s obligation to pay Running Royalties for Sales made during the term of any Licensed Patent shall survive expiration or termination of this Agreement. 9

14 9. Representations and Warranties. 9.1 Rensselaer hereby represents and warrants to Licensee that it has the necessary power and authority to enter into this Agreement. 9.2 Licensee hereby represents and warrants to Rensselaer: (a) that the execution, and performance of this Agreement by Licensee and the consummation of the transactions contemplated by this Agreement do not and will not conflict with, or result in a breach of, or default with respect to the provisions of any agreements to which Licensee is subject and will not (i) violate any provision of any law or regulation applicable to Licensee, or any other judgment or decree of any court or other agency of any government binding on Licensee, or (ii) require any approval by, consent of, or filing with, any person, entity, or agency of any government; (b) that it is an entity of the type, and organized under the laws of the state described in the Table and has the necessary power and authority to enter into this Agreement; and (c) that (i) the Shares, when issued, sold and delivered in accordance with the terms, and for the consideration set forth in this Agreement, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer set forth in any shareholders agreement to which Rensselaer is a Party and applicable state and federal securities laws, and (ii) the Shares will be issued in compliance with all applicable federal and state securities laws. 10. Disclaimer of Warranties. THE LICENSED INTELLECTUAL PROPERTY IS PROVIDED ON AN AS IS BASIS. RENSSELAER MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, CONCERNING THE LICENSED INTELLECTUAL PROPERTY AND HEREBY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AS TO THE LICENSED INTELLECTUAL PROPERTY OR ANY LICENSED PRODUCT OR LICENSED SERVICES. RENSSELAER MAKES NO REPRESENTATION OR WARRANTY AS TO THE VALIDITY OR SCOPE OF LICENSED PATENTS, THAT ANY LICENSED PRODUCT OR LICENSED SERVICES WILL BE FREE FROM AN INFRINGEMENT ON PATENTS OR OTHER INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR THAT NO THIRD PARTIES ARE IN ANY WAY INFRINGING LICENSED INTELLECTUAL PROPERTY. 11. Limitation of Liability. RENSSELAER S ENTIRE LIABILITY AND LICENSEE S EXCLUSIVE REMEDY FOR ANY CLAIMS, COSTS, LOSSES, DAMAGES OF ANY KIND OR ANY OTHER CAUSE, REGARDLESS OF THE FORM OF ACTION, SHALL NOT EXCEED ONE THOUSAND DOLLARS U.S. ($1,000). 12. Patent Filing and Maintenance Patent Prosecution and Maintenance. Rensselaer shall retain responsibility for and control the preparation, filing, prosecution and maintenance of the Licensed Patents. Rensselaer shall notify Licensee of actions taken in connection with the Licensed Patents. Licensee shall reasonably cooperate with Rensselaer in the preparation, filing, prosecution, and maintenance of Licensed Patents and shall have reasonable opportunities to advise Rensselaer and review and comment on the breadth and coverage of the Licensed Patents. Rensselaer will endeavor to accommodate Licensee s reasonable concerns and suggestions to address Licensee s commercial and business needs. As long as this license remains exclusive, Licensee shall have the right to identify additional jurisdictions where patent filings 10

15 are advisable, and Rensselaer will, at Licensee s sole expense, file such patents and pursue patent protection and maintenance in such countries. Any such patents and patent applications shall be Licensed Patents Payment for Patent Expenses. Licensee shall pay for all patent expenses incurred by Rensselaer under Section 12.1, as follows: (a) Licensee shall reimburse Rensselaer for all patent expenses Rensselaer paid or incurred prior to the Effective Date as provided in Section 12.2(a) of the Table; and (b) Licensee shall reimburse Rensselaer for all future patent expenses within thirty (30) days after it receives Rensselaer s itemized invoice. Any patent expenses not paid when due shall accrue charges for late fees as set forth in Section Licensee s Election to Discontinue Payments. Licensee shall give Rensselaer at least thirty (30) days prior written notice of its election to discontinue paying for any Licensed Patents. Any such patents shall be excluded from the definition of Licensed Patents. All rights to such patents shall revert to Rensselaer and may be freely licensed by Rensselaer. No such notice shall have any effect on Licensee s obligations to pay expenses incurred up to the effective date of such election Effect of Non-payment of Patent Costs. Rensselaer may discontinue the prosecution and/or maintenance of any Licensed Patents for which Licensee has not timely paid all patent costs in accordance with Section 12.2 if such payments with all applicable late fees are not made in full within thirty (30) days of Rensselaer s notice to Licensee of its election to exercise its rights under this Section. Any such patents shall thereafter be excluded from the definition of Licensed Patents. All rights to such patents shall revert to Rensselaer and may be freely licensed by Rensselaer. No such notice shall have any effect on Licensee s obligations to pay expenses incurred up to the effective date of such election. 13. Indemnification; Insurance. Licensee hereby agrees to indemnify, defend and hold harmless Rensselaer and any Affiliate, and their respective current or former trustees, directors, officers, employees, faculty, students, scientists and agents, and their respective successors, heirs and assigns (collectively Indemnitees ) from and against any claim, liability, costs, expense, damage, deficiency, loss or obligation of any kind or nature (including, without limitation, reasonable attorney fees and other costs and expense of litigation) based upon, arising out of, or otherwise relating to this Agreement, including, without limitation, any cause of action related to product liability concerning any product, process or service made, used or sold pursuant to any right or license granted under this Agreement. Licensee shall, at its sole cost and expense, establish and maintain during the Term commercial general liability insurance from a company reasonably acceptable to Rensselaer, which shall include product liability coverage encompassing such product, process or service, in the minimum amount of five million dollars ($5,000,000) per occurrence. In addition, Indemnitees shall be named as Additional Insureds on such coverage. Licensee shall furnish Rensselaer with appropriate certificates and such other evidence demonstrating that such coverage is in force as Rensselaer shall reasonably require upon execution of this License Agreement and on or before January 15 of each year that this License Agreement is in force. 14. Notices. All notices required under this Agreement shall be in writing, effective upon receipt, and sent by electronic mail with confirmation received, by postage prepaid mail, or by courier that requires acknowledgment of receipt, to the applicable Party or entity at the address for such Party set forth in Section 14 of the Table (or to such other address as may be designated by a Party by notice to the other given in accordance with this Section). 11

16 15. Assignment; Successors. This Agreement shall be assignable by Licensee, in whole, but not in part, as long as the assignee or successor agrees with Rensselaer in writing to assume and be responsible for the obligations of Licensee under this Agreement. Any assignment that does not comply with the previous sentence shall be void. Rensselaer may assign its rights under this Agreement. This Agreement shall be binding upon and inure to the benefit of any permitted successors and assigns of Rensselaer and Licensee. 16. General Provisions Independent Contractors. The Parties are independent contractors. Neither Party shall have the power to bind or obligate the other in any manner, other than as is expressly set forth in this Agreement Governing Law; Dispute Resolution. This Agreement shall be interpreted, construed and enforced exclusively in accordance with the laws of the State of New York without regard to its conflict of laws principles. The Parties shall attempt to resolve any dispute, claim, question or disagreement arising from, or relating to this Agreement first by mediation administered by the American Arbitration Association ( AAA ) under its Commercial Mediation Procedures before resorting to binding arbitration in accordance with the AAA Commercial Arbitration Rules. The location of all mediation and arbitration proceedings shall be in the County of Rensselaer, State of New York, U.S.A. Judgment upon the award rendered by the arbitrators may be enforced in any court having jurisdiction over it Modification; Waiver. There shall be no amendments or modifications to this Agreement, except by a written document that expressly refers to this Agreement and is signed by both Parties. Any delay in enforcing a Party s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such Party s rights to the future enforcement of its rights under this Agreement, excepting only as to an express written and signed waiver as to a particular matter for a particular period of time Headings. The headings in this Agreement are for convenience only and shall not be used in the interpretation of the particular article or section Severability. If any one or more of the provisions of this Agreement is held invalid or unenforceable by a court of competent jurisdiction, it shall be considered severed from this Agreement and shall not serve to invalidate its remaining provisions. The Parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by them when entering this Agreement may be realized Compliance with Laws; Export Controls. Licensee shall ensure that all United States and foreign laws affecting this Agreement or the sale of Licensed Products or Licensed Services are fully satisfied. Licensee shall register this Agreement with any foreign governmental agency that requires such registration at its own expense. Nothing contained in this Agreement shall require or permit Rensselaer or Licensee to do any act inconsistent with the requirements of any United States or other applicable law, regulation or executive order as the same may be in effect from time to time. In particular, but without limitation, Licensee agrees and gives written assurance that it will comply with all applicable United States and foreign laws and regulations controlling the export or re-export of commodities and technical data, that it will be solely responsible for any violation of such by Licensee, its Affiliates and Sublicensees, and that it will defend, indemnify and hold Rensselaer harmless in the event of any legal action of any nature occasioned by such violation. 12

17 17. Other Agreements Facilities Use Agreements. In addition to this Agreement, if Licensee will use any Rensselaer facilities or equipment for any purpose, Licensee may also be required to enter into one or more facilities use agreements and/or leases with Rensselaer governing such use, for which Licensee will be required to compensate Rensselaer in addition to any compensation for this License, on such terms and conditions as the Parties may agree. Such compensation may include payment of cash or grant of additional equity rights to Rensselaer Conflict Management Plan. Owners, officers, directors or employees of Licensee, or persons otherwise affiliated with Licensee, who are also employed by Rensselaer, may be required to enter into a conflict management plan with Rensselaer, in accordance with Rensselaer s policies. 18. No Other Promises or Agreements; Representation by Counsel. In entering into this Agreement, Licensee is not relying on any statement or representation of Rensselaer or its representatives or employees that is not plainly stated in this Agreement. Licensee is relying on its own judgment in entering into this Agreement and has had the opportunity to be represented by legal counsel prior to signing this Agreement. IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly authorized representatives as of the Effective Date. RENSSELAER POLYTECHNIC INSTITUTE [INSERT LICENSEE NAME] By: James A. Spencer, Executive Director Office of Intellectual Property, Technology Transfer and New Ventures By: Name: Title: 13

18 SCHEDULE 2 ADDITIONAL EXCLUSIVE LICENSE TERMS 1. Conversion to Non-Exclusive License. If this Agreement covers all Fields of Use, then Rensselaer may convert the exclusive license referred to in Section 2 to a non-exclusive license on thirty (30) days prior notice to Licensee if Sales of Licensed Products and Licensed Services for each of two (2) consecutive License Years after the third (3 rd ) License Year would produce a royalty less than the amounts set forth below: $ for License Year(s) ending ; $ for License Year(s) ending ; and $ for each License Year thereafter. If Rensselaer exercises this right, then Licensee shall pay Rensselaer Running Royalties on Sales occurring after such exercise at the rate applicable to non-exclusive licenses. All other terms of this Agreement shall remain in full force and effect, except that Licensee shall have no further rights to grant sublicenses to any Licensed Intellectual Property and any Sublicensees shall become a direct licensee of Rensselaer. Rensselaer s obligations to Sublicensees shall be no greater than Rensselaer s obligations to Licensee under this Agreement. Licensee shall provide written notice to each Sublicensee with a copy of such notice provided to Rensselaer that Licensee s interest in the sublicense has been assigned to Rensselaer. 2. Sublicense Requirements. Licensee may grant sublicenses under the rights licensed to it in Section 2 of the Agreement, subject to the following conditions: a. In each sublicense, which shall be in writing, the Sublicensee shall be subject to the terms and conditions of the license granted to Licensee hereunder, including, but not limited to, the provisions contained in Articles 4 (Reporting by Licensee), 5 (Books and Records), 7 (Confidentiality and Publication), 10 (Disclaimer of Warranties), 11 (Limitation of Liability), 13 (Indemnification; Insurance), 16.2 (Governing Law; Dispute Resolution), and 16.6 (Compliance with Laws). b. Each sublicense shall expressly provide that Rensselaer makes no warranties or representations regarding the Licensed Intellectual Property, and shall provide that Rensselaer has no liability to the Sublicensee with regard to the Licensed Intellectual Property. c. Licensee shall forward to Rensselaer, within thirty (30) days of execution, the name and address of each Sublicensee and the identity of any designated representative of the Sublicensee (name, title, location) to receive communications relative to the sublicense and copies of each sublicense agreement upon written request of Rensselaer. d. In addition to Running Royalties on Sales made by Sublicensees, Licensee shall pay as a royalty to Rensselaer fifteen percent (15%) of all non-royalty income it receives through any transaction that includes the grant of a sublicense under this Agreement. e. With respect to sublicenses granted pursuant to Section 2, Licensee shall: i. Not receive or agree to receive anything of value in lieu of cash as consideration from a Sublicensee without the express written consent of Rensselaer; ii. To the extent applicable, include all of the rights of, and obligations due to Rensselaer and contained in this Agreement; and 14

19 iii. Collect and guarantee payment of all payments due, directly or indirectly, to Rensselaer from Sublicensees and summarize and deliver all reports due, directly or indirectly, to Rensselaer from Sublicensees. f. If Licensee is unable or unwilling to serve or develop a potential market or market territory for which there is a third party willing to sublicense any Licensed Intellectual Property exclusively licensed to Licensee under this Agreement, Licensee shall, at Rensselaer s request, negotiate in good faith a sublicense with any such third party. g. Upon termination of this Agreement for any reason, other than Rensselaer s breach of a material Term, Rensselaer, at its sole discretion, shall determine whether Licensee shall cancel or assign to Rensselaer any and all sublicenses. 3. Infringement. a. Licensee s Right to Prosecute. With respect to any Licensed Patents that are exclusively licensed to Licensee pursuant to this Agreement, Licensee shall have the right to prosecute in its own name and at its own expense any infringement of such Licensed Patents, so long as such license is exclusive at the time of the commencement of such action, and to the extent such license remains exclusive throughout the action. Each Party agrees to notify the other promptly and in no event later than ten (10) days after becoming aware of any discovered or suspected infringement of the Licensed Patents. Before Licensee commences an action with respect to any infringement of such Licensed Patents, or notifies an alleged infringer of any alleged infringement, Licensee shall give careful consideration to the views of Rensselaer and to potential effects on the public interest. b. Participation, Costs, Recoveries and Reimbursements. i. If Licensee elects to commence an action as described above, Rensselaer may, to the extent permitted by law and at its sole cost and expense, elect to join as a party in that action. Regardless of whether Rensselaer elects to join as a party, or if Rensselaer is required as a necessary party to any such action, Rensselaer shall cooperate with Licensee in connection with any such action, at Licensee s sole cost and expense. ii. If Rensselaer elects to join as a party pursuant to subsection (b)(i) Licensee shall remain in control of the action. iii. Recoveries or reimbursements from actions commenced pursuant to this subsection (b) shall first be applied to reimburse Licensee and Rensselaer for litigation costs in proportion to their respective costs and expenses incurred in connection with the action. Any remaining recoveries or reimbursements shall be retained by Licensee; provided, however, that such amount, minus the costs and expenses to Licensee of such action, shall be deemed to constitute Net Sales for purposes of this Agreement and be subject to Running Royalties. c. Rensselaer s Right to Prosecute. If Licensee elects not to exercise its right to prosecute an infringement of the Licensed Patents, Rensselaer may do so at its own expense. Rensselaer shall control such action and retain all recoveries from the action. Licensee shall reasonably cooperate with Rensselaer, at Rensselaer s sole expense, including the reasonable costs of counsel of Licensee, in connection with any such action. 15

20 d. Right to Defend. With respect to any Licensed Patent exclusively licensed to Licensee, if a declaratory judgment action is brought by a non-affiliated third party naming Licensee as a defendant and alleging invalidity of any Licensed Patent, or any suit is brought by a third party naming Licensee as a defendant alleging patent infringement involving the sale, manufacture, distribution or marketing of a Licensed Product or Licensed Service, and alleging invalidity of such a Licensed Patent as a counterclaim, Licensee shall have the right to defend such action and maintain the control of the defense of the action at its own expense. Rensselaer shall cooperate fully with Licensee, at Licensee s sole expense (including the reasonable costs of Rensselaer s legal counsel) in connection with any such action. If Licensee ultimately prevails and receives an award from such nonaffiliated third party as a result of such action (whether by way of judgment, award, decree, settlement or otherwise), such award shall be retained by Licensee; provided, however, that such amount, minus the costs and expenses to Licensee of such action, shall be deemed to constitute Net Sales for purposes of this Agreement. If Licensee fails to defend such declaratory judgment action or counterclaim, Rensselaer may elect to take over the sole defense of the action at its own expense, in which case Rensselaer shall have the option to convert Licensee s license of Section 2. as to the Licensed Patent(s) forming the subject of the action, to a non-exclusive license and the remainder of this Agreement, including the obligation to pay Running Royalties at the exclusive license rate, shall remain in full force and effect. Licensee shall cooperate fully with Rensselaer in connection with Rensselaer s defense of any such action. 4. Termination Fee. If Licensee terminates the Agreement for its convenience before the third (3rd) anniversary of the Effective Date, Licensee shall pay to Rensselaer with its termination notice a termination fee of Ten Thousand Dollars ($10,000); provided, however, that if Licensee terminates the Agreement because all claims in all patent applications covering the Licensed Patents are rejected in final office actions, then Licensee shall not be liable to pay such termination fee. 5. Mandatory Conversion to Non-Exclusive License. If applicable government regulations require a shorter term of exclusivity than provided for in the Agreement, then this Agreement shall be amended to provide for a non-exclusive license, and thereafter, Licensee shall pay Rensselaer Running Royalties at the rate applicable to non-exclusive licenses. 16