CERTAIN CONFIDENTIAL INFORMATION
CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAD BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE
406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
EXHIBIT 10.13
EXCLUSIVE LICENSE AGREEMENT
BETWEEN
THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
AND
SCIENTIFIC LEARNING PRINCIPLES CORPORATION
FOR
TRAINING AIDS FOR REMEDIATION OF LEARNING DISABILITIES
UC CASE NO. 94-069-1
TABLE OF CONTENTS
PAGE
BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. LIFE OF PATENT EXCLUSIVE GRANT . . . . . . . . . . . . . . . . . . . . 3
3. SUBLICENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. PAYMENT TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5. LICENSE-ISSUE FEE. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6. MILESTONE PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 7
7. EARNED ROYALTIES AND MINIMUM ANNUAL ROYALTIES. . . . . . . . . . . . . 7
8. DUE DILIGENCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
9. PROGRESS AND ROYALTY REPORTS . . . . . . . . . . . . . . . . . . . . . 9
10. BOOKS AND RECORDS. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
11. LIFE OF THE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . 10
12. TERMINATION BY THE REGENTS . . . . . . . . . . . . . . . . . . . . . . 11
13. TERMINATION BY THE LICENSEE. . . . . . . . . . . . . . . . . . . . . . 11
14. DISPOSITION OF LICENSED PRODUCTS ON HAND UPON TERMINATION. . . . . . . 12
15. USE OF NAMES AND TRADEMARKS. . . . . . . . . . . . . . . . . . . . . . 12
16. LIMITED WARRANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
17. PATENT PROSECUTION AND MAINTENANCE . . . . . . . . . . . . . . . . . . 14
18. PATENT MARKING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
19. PATENT INFRINGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . 16
20. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
21. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
22. ASSIGNABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
23. NO WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
24. FAILURE TO PERFORM . . . . . . . . . . . . . . . . . . . . . . . . . . 20
25. GOVERNING LAWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
26. GOVERNMENT APPROVAL OR REGISTRATION. . . . . . . . . . . . . . . . . . 20
27. EXPORT CONTROL LAWS. . . . . . . . . . . . . . . . . . . . . . . . . . 21
28. SECRECY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
29. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
i
EXCLUSIVE LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") is made effective this 27th day of
September, 1996 (the "Effective Date") between THE REGENTS OF THE UNIVERSITY OF
CALIFORNIA, a California corporation having its statewide administrative offices
at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, ("The
Regents"), and SCIENTIFIC LEARNING PRINCIPLES CORPORATION, a California
corporation having a principal place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (the "Licensee").
BACKGROUND
1. Certain inventions, generally characterized as "Training Aids for the
Remediation of Learning Disabilities" (collectively the "Invention"), were made
in the course of research at the University of California, San Francisco by Drs.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and by Drs. ▇▇▇▇▇ ▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇▇▇ at Rutgers-the State University of New Jersey ("Rutgers") and
are covered by Regents' Patent Rights as defined below;
2. The Regents and Rutgers have entered into an inter-institutional
agreement whereby The Regents is authorized to enter into this Agreement on
behalf of both The Regents and Rutgers;
3. The Licensee and The Regents have executed a Letter of Intent (U.C.
Control No. 96-30-0452) dated January 9, 1996;
4. The Licensee wishes to obtain rights from The Regents for the
commercial development, use, and sale of products from the Invention, and The
Regents is willing to grant
1.
those rights so that the invention may be developed to its fullest and the
benefits enjoyed by the general public; and
5. The Licensee is a "small business firm" as defined in 15 U.S.C.
Section 632;
6. Both parties recognize and agree that royalties due under this
Agreement will be paid on both pending patent applications and issued patents:
In view of the foregoing, the parties agree:
1. DEFINITIONS
1.1 "REGENTS' PATENT RIGHTS" means any subject matter claimed in or
covered by any of the following: Pending U.S. Patent Application Serial No.
08/351,803 entitled "Method and Device for Enhancing the Recognition of Speech
Among Speech-Impaired Individuals" filed December 8, 1994 by Drs. Merzenich,
Jenkins, Schreiner, Tallal, and ▇▇▇▇▇▇ and assigned to The Regents and to
Rutgers; and continuing applications thereof including divisions and
substitutions but excluding continuation-in-part applications except to the
extent that the claims are enabled by the parent case; any patents issuing on
said applications including reissues, reexaminations and extensions; and any
corresponding foreign applications or patents.
1.2 "LICENSED PRODUCT" means any material that is either covered by
Regents' Patent Rights, that is produced by the Licensed Method, or that the use
of which would constitute, but for the license granted to the Licensee under
this Agreement, an infringement of any pending or issued claim within Regents'
Patent Rights.
1.3 "LICENSED METHOD" means any method that is covered by Regents' Patent
Rights, the use of which would constitute, but for the license granted to the
Licensee under this Agreement, an infringement of any pending or issued claim
within Regents' Patent Rights.
2.
1.4 "NET SALES" means the total of the gross invoice prices of Licensed
Products sold or Licensed Methods performed by the Licensee, an Affiliate or a
sublicensee, less the sum of the following actual and customary deductions where
applicable: cash, trade, or quantity discounts; sales, use, tariff,
import/export duties or other excise taxes imposed on particular sales;
transportation charges and allowances; reserves for bad debts (not to exceed 3
%) or credits to customers because of rejections or returns. For purposes of
calculating Net Sales, transfers to an Affiliate or sublicensee for end use by
the Affiliate or sublicensee will be treated as sales at list price.
1.5 "AFFILIATE" means any corporation or other business entity in which
the Licensee owns or controls, directly or indirectly, at least fifty percent
(50%) of the outstanding stock or other voting rights entitled to elect
directors, or in which the Licensee is owned or controlled directly or
indirectly by at least fifty percent (50%) of the outstanding stock or other
voting rights entitled to elect directors; but in any country where the local
law does not permit foreign equity participation of at least fifty percent
(50%), then an "Affiliate" includes any company in which the Licensee owns or
controls or is owned or controlled by, directly or indirectly, the maximum
percentage of outstanding stock or voting rights permitted by local law.
2. LIFE OF PATENT EXCLUSIVE GRANT.
2.1 Subject to the limitations set forth in this Agreement, The Regents
grants to the Licensee a world-wide license under Regents' Patent Rights to
make, have made, use, sell, offer to sell and import Licensed Products and to
practice Licensed Methods.
2.2 Except as otherwise provided in this Agreement, the license granted in
Paragraph 2.1 is exclusive for the life of the Agreement.
2.3 The Regents and Rutgers reserves the right to use the Invention for
educational and research purposes.
3.
3. SUBLICENSES.
3.1 The Regents also grants to the Licensee the right to issue sublicenses
to third parties to make, have made, use, sell, offer to sell and import
Licensed Products and to practice Licensed Method, as long as the Licensee has
current exclusive rights thereto under this Agreement. Throughout the term of
each sublicense, the Licensee shall ensure compliance by sublicensee with, to
the extent applicable, all of the rights and obligations due to the Regents and
Rutgers contained in this Agreement.
3.2 The Licensee shall promptly provide The Regents with a copy of each
sublicense issued; collect and guarantee payment of all payments due The Regents
based on sublicensee's sales; and summarize and deliver all reports due The
Regents based on sublicensee's sales.
3.3 Upon termination of this Agreement for any reason, The Regents, at its
sole discretion, shall determine whether the Licensee shall cancel or assign to
The Regents any and all sublicenses.
3.4 Licensee shall pay to The Regents consideration from sublicensing or
transferring the rights licensed to Licensee as follows:
3.4.1 ROYALTIES - the greater of: (i) [ * ] of the royalty income
received by Licensee and/or its Affiliates from any sublicensee in
consideration of the sublicense grant or rights transfer; or (ii) the
royalty based on sublicensee's Net Sales in accordance with the royalty
schedule in Article 7 (EARNED ROYALTIES AND MINIMUM ANNUAL ROYALTIES).
3.4.2 NON-ROYALTY CONSIDERATION - [ * ] of all non-royalty
consideration, received by Licensee and its Affiliates in consideration of
the sublicense grant or rights transfer, except for the portion thereof
which is designated and demonstrably used by Licensee solely for its
development of Licensed Products and Licensed Methods, excluding equity
payments, bona fide loans and other payments not associated with the
sublicense.
[ * ]Confidential Treatment Requested
4.
4. PAYMENT TERMS.
4.1 Paragraphs 1.1, 1.2, and 1.3 define Regents' Patent Rights, Licensed
Products and Licensed Methods so that royalties are payable on products and
methods covered by both pending patent applications and issued patents.
Royalties will accrue in each country for the duration of Regents' Patent Rights
in that country and are payable to The Regents when Licensed Products are
invoiced. or if not invoiced, when delivered to a third party.
4.2 Licensee shall pay earned royalties quarterly on or before February
28, May 31, August 31 and November 30 of each calendar year. Each payment will
be for earned royalties accrued within the Licensee's most recently completed
calendar quarter.
4.3 All monies due The Regents are payable in United States dollars. When
Licensed Products are sold for monies other than United States dollars, the
Licensee shall first determine the earned royalty in the currency of the country
in which Licensed Products were sold and then convert the amount into equivalent
United States funds, using the exchange rate quoted in the Wall Street Journal
on the last business day of the reporting period.
4.4 Royalties earned on sales occurring in any country outside the
United States may not be reduced by any taxes, fees, or other charges imposed
by the government of such country on the payment of royalty income. The
Licensee is also responsible for all bank transfer charges. Notwithstanding
this, all payments made by the Licensee in fulfillment of The Regents' tax
liability in any particular country will be credited against earned royalties
or fees due The Regents for that country.
4.5 If at any time legal restrictions prevent the prompt remittance of
royalties by the Licensee from any country where a Licensed Product is sold, the
Licensee shall convert the amount owed to The Regents into United States funds
and shall pay The Regents directly from its U.S. source of funds for as long as
the legal restrictions apply.
4.6 If any patent or patent claim within Regents' Patent Rights is held
invalid in a final decision by a court of competent jurisdiction and last resort
and from which no appeal has or can be taken, all obligation to pay royalties
based on that patent or claim or any claim
5.
patentably indistinct therefrom will cease as of the date of final decision.
The Licensee will not, however, be relieved from paying any royalties that
accrued before the final decision or that are based on another patent or
claim not involved in the final decision. or that are based on The Regents'
property rights.
4.7 In the event payments, rebillings or fees are not received by The
Regents when due, the Licensee shall pay to The Regents interest charges at a
rate of [ * ] per annum. Interest is calculated from the date payment was due
until actually received by The Regents.
5. LICENSE-ISSUE FEE.
5.1 The Licensee shall pay to The Regents a LICENSE-ISSUE FEE of Two
Hundred Thousand dollars ($200,000) payable as follows: Fifty Thousand
dollars ($50,000) within seven days after the Effective Date; Fifty Thousand
dollars ($50,000) on August 31, 1997 and One Hundred Thousand dollars
($100,000) on February 28, 1998. This fee is non-refundable, non-cancelable,
and is not an advance against royalties.
5.2 The Licensee shall also grant to Rutgers three hundred ninety-three
thousand five hundred seventy-six (393,576) shares of series A preferred stock
within thirty (30) days of execution of this Agreement.
6. MILESTONE PAYMENTS.
6.1 The Licensee shall also pay to The Regents a royalty in the form of
a milestone payments of [ * ] Dollars [ * ] upon Licensee reaching [ * ]
Dollars [ * ] in cumulative Net Sales of Licensed Products or Licensed
Methods: [ * ] Dollars [ * ] upon Licensee reaching [ * ] Dollars [ * ] in
cumulative Net Sales of Licensed Products or Licensed Methods; and [ * ]
Dollars [ * ] upon Licensee reaching [ * ] Dollars
[ * ]Confidential Treatment Requested
6.
($[ * ]) in cumulative Net Sales of Licensed Products and Licensed Methods.
Milestone payments are non-refundable and not an advance against earned
Royalties.
7. EARNED ROYALTIES AND MINIMUM ANNUAL ROYALTIES.
7.1 The Licensee shall also pay to The Regents AN EARNED ROYALTY as
follows: [ * ] of the first [ * ] Dollars [ * ] of cumulative Net Sales of
Licensed Products or Licensed Methods; [ * ] thereafter until cumulative Net
Sales reaches [ * ] Dollars [ * ]; and [ * ] of the cumulative Net Sales of
Licensed Products and Licensed Methods in excess of [ * ] Dollars [ * ].
7.2 The Licensee shall pay to The Regents a MINIMUM ANNUAL ROYALTY of
[ * ] Dollars [ * ] beginning with the year of the first commercial sale of
Licensed Product; [ * ] dollar [ * ] in the second year of first commercial
sale and [ * ] Dollars [ * ] per year for the life of Regents Patent Rights.
For the first year of commercial sales, the Licensee's obligation to pay the
minimum annual royalty will be pro-rated for the number of months remaining
in that calendar year when commercial sales commence and will be due the
following February 28, to allow for crediting of the pro-rated year's earned
royalties. For subsequent years, the minimum annual royalty will be paid to
The Regents by February 28 of each year and will be credited against the
earned royalty due for the calendar year in which the minimum payment was
made.
8. DUE DILIGENCE.
8.1 The Licensee, on execution of this Agreement, shall diligently proceed
with the development, manufacture and sale of Licensed Products and shall
earnestly and diligently endeavor to market the same within a reasonable time
after execution of this Agreement and in quantities sufficient to meet market
demands.
[ * ]Confidential Treatment Requested
7.
8.2 The Licensee shall endeavor to obtain all necessary governmental
approvals for the manufacture, use and sale of Licensed Products.
8.3 The Licensee shall:
8.3.1 complete a second round of financing by April 30, 1997;
8.3.2 commence beta-testing of Licensed Products by December 31,
1996:
8.3.3 make commercially reasonable efforts to market and sell
Licensed Products in the United States by November 30, 1997;
and
8.3.4 act in a commercially reasonable manner to fill the market
demand for Licensed Products following commencement of
marketing at any time during the exclusive period of this
Agreement.
8.4 If the Licensee is unable to perform any of the above provisions, then
The Regents has the right and option to either terminate this Agreement or
reduce the Licensee's exclusive license to a nonexclusive license. This right,
if exercised by The Regents, supersedes the rights granted in Article 2 (GRANT).
8.5 In addition to the obligations set forth above, the Licensee shall
spend an aggregate of not less than [ * ] Dollars [ * ] for the development
of Licensed Products during the first year of this Agreement.
9. PROGRESS AND ROYALTY REPORTS.
9.1 Beginning February 28, 1997 and semi-annually thereafter, the Licensee
shall submit to The Regents a progress report covering the Licensee's (and any
Affiliate or sublicensee's) activities related to the development and testing of
all Licensed Products and the obtaining of the governmental approvals necessary
for marketing. Progress reports are required for each Licensed Product until the
first commercial sale of that Licensed Product occurs in the United States and
shall be again required if commercial sales of such Licensed Product are
suspended or discontinued.
9.2 Progress reports submitted under Paragraph 9.1 shall include, but are
not limited to, the following topics:
[ * ]Confidential Treatment Requested
8.
* summary of work completed
* key scientific discoveries
* summary of work in progress
* current schedule of anticipated events or milestones
* market plans for introduction of Licensed Products, and
* a summary, of resources (dollar value) spent in the
reporting period.
9.3 The Licensee has a continuing responsibility to keep The Regents
informed of the large/small business entity status (as defined by the United
States Patent and Trademark Office) of itself and its sublicensees and
Affiliates.
9.4 The Licensee shall report to The Regents in its immediately subsequent
progress and royalty report the date of first commercial sale of a Licensed
Product in each country.
9.5 After the first commercial sale of a Licensed Product anywhere in the
world, the Licensee shall make quarterly royalty reports to The Regents on or
before each February 28, May 31, August 31, and November 30 of each year. Each
royalty report will cover the Licensee's most recently completed calendar
quarter and will show (a) the gross sales and Net Sales of Licensed Products
sold during the most recently completed calendar quarter; (b) the number of each
type of Licensed Product sold; (c) the royalties, in U.S. dollars, payable with
respect to sales of Licensed Products; (d) the method used to calculate the
royalty; and (e) the exchange rates used.
9.6 If no sales of Licensed Products have been made during any reporting
period, a statement to this effect is required.
10. BOOKS AND RECORDS.
10.1 The Licensee shall keep accurate books and records showing all
Licensed Products manufactured, used, and/or sold under the terms of this
Agreement. Books and records must be preserved for at least five (5) years from
the date of the royalty payment to which they pertain.
9.
10.2 Books and records must be open to inspection by representatives or
agents of The Regents at reasonable times. The Regents shall bear the fees and
expenses of examination but if an error in royalties of more than five percent
(5 %) underpayment of the total royalties due for any year is discovered in any
examination then the Licensee shall bear the fees and expenses of that
examination.
11. LIFE OF THE AGREEMENT.
11.1 Unless otherwise terminated by operation of law or by acts of the
parties in accordance with the terms of this Agreement, this Agreement will be
in force from the Effective
Date until the last-to-expire patent licensed under this Agreement; or until the
last patent application licensed under this Agreement is abandoned and no patent
in Regents' Patent Rights ever issues.
11.2 Any termination of this Agreement will not affect the rights and
obligations set forth in the following Articles:
Article 10 Books and Records
Article 14 Disposition of Licensed Products on Hand on
Termination
Article 15 Use of Names and Trademarks
Article 20 Indemnification
Article 24 Failure to Perform
Article 28 Secrecy
12. TERMINATION BY THE REGENTS.
12.1 If the Licensee fails to perform or violates any term of this
Agreement, then The Regents may give written notice of default (Notice of
Default) to the Licensee. If the Licensee fails to repair the default within
sixty (60) days of the effective date of Notice of Default, The Regents may
terminate this Agreement and its licenses by a second written notice (Notice of
Termination). If a Notice of Termination is sent to the Licensee, this Agreement
will automatically terminate on the effective date of that notice. Termination
will not relieve the Licensee of its obligation to pay any fees owing at the
time of termination and will not impair any accrued right of The Regents. These
notices are subject to Article 21 (Notices).
10.
13. TERMINATION BY THE LICENSEE.
13.1 The Licensee has the right at any time to terminate this Agreement in
whole or as to any portion of Regents' Patent Rights by giving notice in writing
to The Regents. Notice of termination will be subject to Article 21 (Notices)
and termination of this Agreement will be effective sixty (60) days from the
effective date of notice.
13.2 Any termination under the above paragraph does not relieve the
Licensee of any obligation or liability accrued under this Agreement prior to
termination or rescind any payment made to The Regents or anything done by
Licensee prior to the time termination becomes effective. Termination does not
affect in any manner any rights of The Regents arising under this Agreement
prior to termination.
14. DISPOSITION OF LICENSED PRODUCTS ON HAND UPON TERMINATION.
14.1 Upon termination of this Agreement the Licensee is entitled to dispose
of all previously made or partially made Licensed Products, but no more, within
a period of one hundred and twenty (120) days provided that the sale of those
Licensed Products is subject to the terms of this Agreement, including but not
limited to the rendering of reports and payment of royalties required under this
Agreement.
15. USE OF NAMES AND TRADEMARKS.
15.1 Nothing contained in this Agreement confers any right to use in
advertising, publicity, or other promotional activities any name, trade name,
trademark, or other designation of either party hereto (including contraction,
abbreviation or simulation of any of the foregoing). Unless required by law, the
use by the Licensee of the name "The Regents of
11.
the University of California" or the name of any campus of the University of
California is prohibited.
16. LIMITED WARRANTY.
16.1 The Regents warrants to the Licensee that it has the lawful right to
grant this license.
16.2 This license and the associated Invention are provided WITHOUT
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER
WARRANTY, EXPRESS OR IMPLIED. THE REGENTS AND RUTGERS MAKE NO
REPRESENTATION OR WARRANTY THAT THE LICENSED PRODUCTS OR LICENSED METHODS WILL
NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT.
16.3 IN NO EVENT MAY THE REGENTS OR RUTGERS BE LIABLE FOR ANY INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR THE
USE OF THE INVENTION OR LICENSED PRODUCTS.
16.4 This Agreement does not:
16.4.1 express or imply a warranty or representation as to the
validity or scope of any of Regents' Patent Rights;
16.4.2 express or imply a warranty or representation that anything
made, used, sold, offered for sale or imported or otherwise
disposed of under any license granted in this Agreement is
or will be free from infringement of patents of third
parties;
16.4.3 obligate The Regents or Rutgers to' bring or prosecute
actions or suits against third parties for patent
infringement except as provided in Article 19;
12.
16.4.4 confer by implication, estoppel or otherwise any license or
rights under any patents of The Regents other than Regents'
Patent Rights as defined in this Agreement, regardless of
whether those patents are dominant or subordinate to
Regent's Patent Rights: or
16.4.5 obligate The Regents to furnish any know-how not provided in
Regents' Patent Rights.
17. PATENT PROSECUTION AND MAINTENANCE.
17.1 As long as the Licensee has paid patent costs as provided for in this
Article, The Regents shall diligently endeavor to prosecute and maintain the
United States and foreign patents comprising Regents' Patent Rights using
counsel of its choice, and The Regents shall provide the Licensee with copies of
all relevant documentation so that the Licensee may be informed of the
continuing prosecution and the Licensee agrees to keep this documentation
confidential. The Regent' counsel will take instructions only from The Regents,
and all patents and patent applications under this Agreement will be assigned
solely to The Regents.
17.2 The Regents shall use all reasonable efforts to amend any patent
application to include claims reasonably requested by the Licensee to protect
the products contemplated to be sold under this Agreement.
17.3 The Licensee shall apply for an extension of the term of any patent
included within Regents' Patent Rights if appropriate under the Drug Price
Competition and Patent Term Restoration Act of 1984 and/or European, Japanese
and other foreign counterparts of this Law. The Licensee shall prepare all
documents, and The Regents agrees to execute the documents and to take
additional action as the Licensee reasonably requests in connection therewith.
17.4 If either party receives notice pertaining to infringement or
potential infringement of any issued patent included within Regents' Patent
Rights under the Drug Price Competition and Patent Term Restoration Act of 1984
(and/or foreign counterparts of this Law), that party shall notify the other
party within ten (10) days after receipt of notice of infringement.
13.
17.5 The Licensee shall bear the costs of preparing, filing, prosecuting
and maintaining all United States and foreign patent applications
contemplated by this Agreement. Costs billed by The Regents' counsel will be
rebilled to the Licensee and are due within thirty (30) days of rebilling by
The Regents. These costs include patent prosecution costs for the Invention
incurred by The Regents prior to the execution of this Agreement and any
patent prosecution costs that may be incurred for patentability opinions,
re-examination, re-issue, interferences, or inventorship determinations.
Prior costs will be due on execution of this Agreement and billing by The
Regents and are at least approximately $7,798.00.
17.6 The Licensee may request The Regents to obtain patent protection on
the Invention in foreign countries if available and if it so desires. The
Licensee shall notify The Regents of its decision to obtain or maintain foreign
patents not less than sixty (60) days prior to the deadline for any payment,
filing, or action to be taken in connection therewith. This notice concerning
foreign filing must be in writing, must identify the countries desired, and must
reaffirm the Licensee's-obligation to underwrite the costs thereof. The absence
of such a notice from the Licensee to The Regents will be considered an election
not to obtain or maintain foreign rights.
17.7 The Licensee's obligation to underwrite and to pay patent prosecution
costs will continue for so long as this Agreement remains in effect, but the
Licensee may terminate its obligations with respect to any given patent
application or patent upon three (3) months written notice to The Regents. The
Regents will use its best efforts to curtail patent costs when a notice of
termination is received from the Licensee. The Regents may prosecute and
maintain such application(s) or patent(s) at its sole discretion and expense,
but the Licensee will have no further right or licenses thereunder. Non-payment
of patent costs may be deemed by The Regents as an election by the Licensee not
to maintain application(s) or patent(s).
17.8 The Regents may file, prosecute or maintain patent applications at
its own expense in any country in which the Licensee has not elected to file,
prosecute, or maintain patent applications in accordance with this Article,
and those applications and resultant patents will not be subject to this
Agreement.
14.
18. PATENT MARKING.
18.1 The Licensee shall ▇▇▇▇ all Licensed Products made, used or sold under
the terms of this Agreement, or their containers, in accordance with the
applicable patent marking laws.
19. PATENT INFRINGEMENT.
19.1 If the Licensee or The Regents learns of the substantial infringement
of any patent licensed under this Agreement, that party shall call the other
party's attention thereto in writing and provide them with reasonable evidence
of infringement. Neither party will notify a third party of the infringement of
any of Regents' Patent Rights without first obtaining consent of the other
party, which consent will not be unreasonably denied. Both parties shall use
their best efforts in cooperation with each other to terminate infringement
without litigation.
19.2 The Licensee may request that The Regents take legal action against
the infringement of Regents' Patent Rights. Request must be in writing and must
include reasonable evidence of infringement and damages to the Licensee. If the
infringing activity has not abated within ninety (90) days following the
effective date of request, The Regents then has the right to:
19.2.1 commence suit on its own account; or
19.2.2 refuse to participate in the suit,
and The Regents shall give notice of its election in writing to the Licensee by
the end of the one-hundredth (100th) day after receiving notice of written
request from the Licensee. The Licensee may thereafter bring suit for patent
infringement, at its own expense, if and only if The Regents
15.
elects not to commence suit and if the infringement occurred during the
period and in a jurisdiction where the Licensee had exclusive rights under
this Agreement. Licensee may join The Regents' suit unless The Regents
determine that there are conflict of interest or other institutional issues
involved in the suit. If, however, the Licensee elects to bring suit in
accordance with this paragraph, The Regents may thereafter join that suit at
its own expense. If Licensee elects to bring suit, it may defer payment of up
to fifty percent (50%) of the earned royalties, due under this Agreement from
Net Sales in the county in which the suit is brought, to fund the suit.
Licensee shall promptly remit payment to The Regents of any such deferred
royalties no later than sixty (60) days after settlement; dismissal; or other
termination of the trial court action.
19.3 Legal action as is decided on will be at the expense of the party
bringing suit and all damages recovered thereby will belong to the party
bringing suit, but legal action brought jointly by The Regents and the Licensee
and fully participated in by both will be at the joint expense of the parties
and all recoveries will be allocated in the following order: (I) to each party
reimbursement in equal amounts of the attorney's costs, fees, and other related
expenses to the extent each party paid for such costs, fees and expenses until
all such costs, fees, and expenses are consumed for each party; and (ii) any
remaining amount will be shared as follows: of any recoveries recovered for
direct damages, twenty-five percent (25%) shall be paid to the Regents and
seventy-five percent (75%) shall be paid to the Licensee; of any recoveries
recovered for enhanced damages, one-half shall be paid to the Regents and
one-half shall be retained by the Licensee.
19.4 Each party shall cooperate with the other in litigation proceedings
instituted hereunder, but at the expense of the party bringing suit except
for suits brought jointly. Litigation will be controlled by the party
bringing the suit except for suits brought jointly, except that The Regents
may be represented by counsel of its choice in any suit brought by the
Licensee.
16.
20. INDEMNIFICATION.
20.1 The Licensee shall indemnify, hold harmless and defend The Regents and
Rutgers, their respective officers, employees, and agents; the sponsors of the
research that led to the Invention; and the inventors of the patents and patent
applications in Regents' Patent Rights and their employers against any and all
claims, suits, losses, liabilities, damages, costs. fees, and expenses resulting
from or arising out of exercise of this license or any sublicense. This
indemnification includes, but is not limited to, any product liability.
20.2 The Licensee, at its sole cost and expense, shall insure its
activities in connection with the work under this Agreement and obtain, keep in
force and maintain insurance as follows, or an equivalent program of self
insurance:
20.3 Comprehensive or commercial form general liability insurance
(contractual liability included) with limits as follows:
* Each Occurrence $1,000,000
* Products/Completed Operations Aggregate $2,000,000
* Personal and Advertising Injury $1,000,000
* General Aggregate (commercial form only) $3,000,000
Licensee agrees to review whether these limits should be increased in accordance
with the level of sales of Licensed Product; such review to be conducted every,
five (5) years from the effective date of this Agreement in coordination with
The Regents. The coverage and limits referred to under the above do not in any
way limit the liability of the Licensee. The Licensee shall furnish The Regents
with certificates of insurance showing compliance with all requirements.
Certificates must:
* Provide for thirty (30) days' advance written notice to The
Regents and Rutgers of any modification.
* Indicate that The Regents and Rutgers has been endorsed as
an additional Insured under the coverage referred to under
the above.
* Include a provision that the coverage will be primary. and
will not participate with nor will be excess over any valid
and collectable insurance
17.
or program of self-insurance carried or maintained by The
Regents or by Rutgers.
20.4 The Regents shall notify the Licensee in writing of any claim or suit
brought against The Regents or Rutgers in respect of which The Regents or
Rutgers intends to invoke the provisions of this Article. The Licensee shall
keep The Regents and Rutgers informed on a current basis of its defense of any
claims under this Article. There shall be no settlement of a claim for which
indemnification is sought under this Article 20 without the consent of the
indemnifying party, such consent not to be unreasonably withheld.
21. NOTICES.
21.1 Any notice or payment required to be given to either party is properly
given and effective (a) on the date of delivery if delivered in person or (b)
five (5) days after mailing if mailed by first-class certified mail, postage
paid, to the respective addresses given below, or to another address as is
designated by written notice given to the other party.
In the case of the Licensee: SCIENTIFIC LEARNING PRINCIPLES CORPORATION
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Controller
In the case of The Regents: THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
Office of Technology Transfer
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Executive Director
Research Administration and
Technology Transfer
Referring to: UC Case No. 94-069
18.
22. ASSIGNABILITY.
22.1 The payments under this Agreement may be assigned by The Regents. This
Agreement is personal to the Licensee and assignable by the Licensee only with
the written consent of The Regents, which consent will not be unreasonably
withheld. This Agreement is assignable by the Licensee to the surviving entity
of a merger.
23. NO WAIVER.
23.1 No waiver by either party of any default of this Agreement may be
deemed a waiver of any subsequent or similar default.
24. FAILURE TO PERFORM.
24.1 If either party finds it necessary to undertake legal action against
the other on account of failure of performance due under this Agreement, then
the prevailing party is entitled to reasonable attorney's fees in addition to
costs and necessary disbursements.
25. GOVERNING LAWS.
25.1 THIS AGREEMENT WILL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA, but the scope and validity of any patent or
patent application will be governed by the applicable laws of the country of the
patent or patent application.
26. GOVERNMENT APPROVAL OR REGISTRATION.
26.1 Licensee shall notify The Regents if it becomes aware that this
Agreement is subject to any U.S. or foreign government reporting or approval
requirement. Licensee shall
19.
make all necessary filings and pay all costs including fees, penalties, and
all other out-of-pocket costs associated with such reporting or approval
process.
27. EXPORT CONTROL LAWS.
27.1 The Licensee shall observe all applicable United States and foreign
laws with respect to the transfer of Licensed Products and related technical
data to foreign countries, including, without limitation, the International
Traffic in Arms Regulations (ITAR) and the Export Administration Regulations.
28. SECRECY.
28.1 With regard to confidential information ("Data"), which can be oral or
written or both, received from The Regents regarding this Invention, the
Licensee agrees:
28.1.1 not to use the Data except for the sole purpose of
performing under the terms of this Agreement;
28.1.2 to safeguard Data against disclosure to others with the same
degree of care as it exercises with its own data of a
similar nature;
28.1.3 not to disclose Data to others (except to its employees,
agents or consultants who are bound to the Licensee by a
like obligation of confidentiality) without the express
written permission of The Regents, except that the Licensee
is not prevented from using or disclosing any of the Data
that:
28.1.3.1 the Licensee can demonstrate by written records
was previously known to it;
28.1.3.2 is now, or becomes in the future, public knowledge
other than through acts or omissions of the
Licensee; or
28.1.3.3 is lawfully obtained by the Licensee from sources
independent of The Regents; and
20.
28.1.4 that the secrecy obligations of the Licensee with
respect to Data will continue for a period ending
five (5) years from the termination date of this
Agreement.
29. MISCELLANEOUS.
29.1 The headings of the several sections are inserted for convenience of
reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
29.2 This Agreement is not binding on the parties until it has been signed
below on behalf of each party. It is then effective as of the Effective Date.
29.3 No amendment or modification of this Agreement is valid or binding on
the parties unless made in writing and signed on behalf of each party.
29.4 This Agreement embodies the entire understanding of the parties and
supersedes all previous Communications, representations or understandings,
either oral or written, between the parties relating to the subject matter
hereof.
29.5 In case any of the provisions contained in this Agreement is held to
be invalid, illegal, or unenforceable in any respect, that invalidity,
illegality or unenforceability will not affect any other provisions of this
Agreement, and this Agreement will be construed as if the invalid, illegal, or
unenforceable provisions had never been contained in it.
29.6 This Agreement will be governed by the laws of the State of California
and the United States of America.
21.
IN WITNESS WHEREOF, both The Regents and the Licensee have executed this
Agreement, in duplicate originals, by their respective and duly authorized
officers on the day and year written.
SCIENTIFIC LEARNING PRINCIPLES THE REGENTS OF THE UNIVERSITY OF
CORPORATION: CALIFORNIA:
By:/s/ [signature] By:/s/ [signature]
---------------------------- -----------------------------
(Signature) (Signature)
Name:▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: Director, OTM
-------------------------- University of California,
(Please Print) San Francisco
Title:Vice President Date: September 27, 1996
------------------------- ---------------------------
Date:September 27, 1996
---------------------------
22.
AMENDMENT NO. 1
TO LICENSE AGREEMENT OF SEPTEMBER 27, 1996 BETWEEN THE REGENTS AND
SCIENTIFIC LEARNING CORPORATION COVERING TRAINING AIDS FOR THE
REMEDIATION OF LEARNING DISABILITIES
Effective January 1, 1999, The Regents of the University of California, a
California corporation having its statewide administrative offices at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("The Regents"), and acting
through its Office of Technology Management, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and Scientific Learning Corporation, a
California corporation having a principal place of business at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("SLC"), agree
to this license amendment as follows:
AMENDMENT
1.1 The Regents and SLC agree to amend Article 1.4 of the License as follows:
"1.4 "Net Sales" means the total of the gross invoice prices of Licensed
Products sold or Licensed Methods performed by the Licensee, an Affiliate, or
a sublicensee, less the sum of the following actual and customary deductions
where applicable: cash, trade, or quantity discounts; sales, use, tariff,
import/export duties or other excise taxes imposed on particular sales;
transportation charges and allowances; reserves for bad debts (not to exceed
3%) or credits to customers because of rejections or returns; and reasonable
fees for training and supporting users of Licensed Products. As of the
effective date of this Amendment, [ * ] of the current $850 gross invoice
price of Licensed Product and Licensed Methods is attributed to such
training and support services. Should the proportion of the training and
support services relative to such price increase or decrease, the increased
or decreased proportion shall be promptly reported by licensee to The
Regents. Any decrease shall be immediately applied. However, any increased
proportion shall not be deducted until approved in writing by the Regents,
which approval will not be unreasonably withheld upon receipt by the Regents of
supporting data requested by the Regents. For purposes of calculating Net
Sales, transfers to an Affiliate or sublicensee for end use by the Affiliate
or sublicensee will be treated as sales at list price."
1.2 The Regents and SLC furthermore agree that this Amendment is not
retroactive and applies to the calculation of Net Sales made after January 1,
1999.
IN WITNESS WHEREOF, the parties hereto have executed this agreement in
duplicate originals by their duly authorized officers or representatives.
SCIENTIFIC LEARNING THE REGENTS OF THE
CORPORATION UNIVERSITY OF CALIFORNIA
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------- ------------------------------
(Signature) (Signature)
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------- ---------------------------
(Please Print) (Please Print)
Title: CFO Title: Interim Director
------------------------ ---------------------------
Date: 3/15/99 Date: 3/18/99
------------------------- ----------------------------
[ * ]Confidential Treatment Requested