EXHIBIT 10.2
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisk denote omissions.
EXCLUSIVE LICENSE AGREEMENT
BETWEEN
ASPECT MEDICAL SYSTEMS, INC. AND
THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
UCLA CASE NOS. 91-527-1 AND 91-527-2 "BRAIN IMAGING WITH QEEG" AND
UCLA CASE NO. 91-536-1 "QUANTITATIVE NEURAL IMAGING."
1
LICENSE AGREEMENT
TABLE OF CONTENTS
ARTICLE PAGE NUMBER
------- -----------
RECITALS...................................................................... 3
1. Definitions............................................................ 3
2. Grant.................................................................. 4
3. SUBLICENSES............................................................ 5
4. FEES................................................................... 5
5. ROYALTIES.............................................................. 6
6. DILIGENCE.............................................................. 7
7. PATENT FILING, PROSECUTION AND MAINTENANCE............................. 7
8. PATENT INFRINGEMENT.................................................... 8
9. PROGRESS AND ROYALTY REPORTS........................................... 9
10. BOOKS AND RECORDS...................................................... 10
11. LIFE OF THE AGREEMENT.................................................. 10
12. TERMINATION BY THE REGENTS............................................. 10
13. TERMINATION BY LICENSEE................................................ 11
14. DISPOSITION OF LICENSED PRODUCTS ON HAND UPON TERMINATION.............. 11
15. PATENT MARKING......................................................... 11
16. USE OF NAMES AND TRADEMARKS............................................ 11
17. LIMITED WARRANTY....................................................... 12
18. INDEMNIFICATION........................................................ 13
19. NOTICES................................................................ 14
20. ASSIGNABILITY.......................................................... 14
21. LATE PAYMENTS.......................................................... 14
22. WAIVER................................................................. 14
23. FAILURE TO PERFORM..................................................... 14
24. GOVERNING LAWS......................................................... 14
25. GOVERNMENT APPROVAL OR REGISTRATION.................................... 15
26. EXPORT CONTROL LAWS.................................................... 15
27. PREFERENCE FOR UNITED STATES INDUSTRY.................................. 15
28. FORCE MAJEURE.......................................................... 15
29. CONFIDENTIALITY........................................................ 15
30. MISCELLANEOUS.......................................................... 16
Appendix A................................................................. 18
2
LICENSE AGREEMENT
This Agreement is made and is effective this 1st day of July, 2004, (the
"Effective Date") between THE REGENTS OF THE UNIVERSITY OF CALIFORNIA ("The
Regents"), a California corporation having its corporate offices located at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, acting through its offices
located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
and Aspect Medical Systems, Inc. ("Licensee"), a Delaware corporation having a
principal place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
RECITALS
WHEREAS, certain inventions (the "Inventions"), generally characterized as
"Brain Imaging with QEEG" UCLA Case Number 91-527-1 and 91-527-2 and
"Quantitative Neural Imaging" UCLA Case No. 91-536 were made in the course of
research at the University of California, Los Angeles by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and
▇▇▇ ▇. ▇▇▇▇ ("Inventors"), and are covered by Regents' Patent Rights as defined
below;
WHEREAS, The Inventors were employees of The Regents and as such were obligated
to assign their right, title and interest in and to the Inventions to The
Regents;
WHEREAS, the Inventions were developed with United States Government funds, and
The Regents has elected title thereto and granted a royalty-free nonexclusive
license to the United States Government on July 9, 1992 for 91-527-1 and
91-536-1 and on June 27, 1994 for 91-527-2, as required under 35 U.S.C.
ss.201-212;
WHEREAS, Licensee is a "small business concern" as defined in 15 U.S.C.ss.632;
and
WHEREAS, The Regents wishes that Regents' Patent Rights be developed and
utilized to the fullest extent so that the benefits can be enjoyed by the
general public.
The parties agree as follows:
1. DEFINITIONS
1.1 "Regents' Patent Rights" means The Regents interest in any of the patents
listed in Appendix A attached to this Agreement and assigned to The
Regents; including reissues and reexaminations all of which will be
automatically incorporated in and added to Appendix A and made a part of
this Agreement.
1.2 "Licensed Product" means any article, composition, apparatus, substance,
chemical, or any other material covered by Regents' Patent Rights or
whose manufacture, use or sale would constitute an infringement of any
claim within Regents' Patent Rights, or any service, article,
composition, apparatus, chemical, substance, or any other material made,
used, or sold by or utilizing or practicing a Licensed Method.
1.3 "Licensed Method" means any process or method which is covered by
Regents' Patent Rights or whose use or practice would constitute an
infringement of any claim within Regents' Patent Rights.
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1.4 The "Field" means diagnosis and management of neurological diseases and
conditions by measuring the effects of treatments and/or diseases on the
brain.
1.5 "Affiliate" means any corporation or other business entity in which
Licensee owns or controls, directly or indirectly, at least 50% of the
outstanding stock or other voting rights entitled to elect directors. In
any country where the local law does not permit foreign equity
participation of at least 50%, then "Affiliate" means any company in
which Licensee owns or controls, directly or indirectly, the maximum
percentage of outstanding stock or voting rights that is permitted by
local law. All references to Licensee herein shall be meant to include
Affiliates.
1.6 "First Commercial Sale" means the first sale of any Licensed Product by
Licensee or any Affiliate or Sublicensee, following approval of its
marketing by the appropriate governmental agency for the country in which
the sale is to be made. When governmental approval is not required,
"First Commercial Sale" means the first sale in that country.
1.7 "Net Sales" means the total amount received by Licensee or any Affiliate
from the sale or distribution of Licensed Products in countries where
Regents' Patent Rights exist less the sum of the following deductions
when applicable and separately invoiced: cash, trade, or quantity
discounts; sales, use, tariff, import/export duties or other excise taxes
imposed upon particular sales; transportation charges; and allowances or
credits to customers because of rejections or returns.
1.8 "Sublicensee" means any third party sublicensed by Licensee to make, have
made, any Licensed Product or to practice any Licensed Method. A
distributor of Licensee's Licensed Products shall not be considered a
Sublicensee.
1.9 "Sublicensing Income" means income received by Licensee under or on
account of Sublicenses granted to Sublicensees. Sublicensing Income
includes income received by way of license issue fees, and milestone
payments. Not included in the definition of Sublicensing Income is income
received by Licensee as payment or reimbursement for research costs
conducted by or for Licensee, including costs associated with materials,
equipment or clinical testing and reimbursement of cooperative marketing,
sales and distribution expenses paid to Optionee by a Sublicensee.
2. GRANT
2.1 Subject to the limitations set forth in this Agreement, The Regents
hereby grants to Licensee an exclusive license (the "License") under
Regents' Patent Rights, in jurisdictions where Regents' Patent Rights
exist, to make, have made, use, sell, offer for sale and import Licensed
Products and to practice Licensed Methods in the Field to the extent
permitted by law.
2.2 The License is subject to all the applicable provisions of any license to
the United States Government executed by The Regents and is subject to
any overriding obligations to the United States Federal Government under
35 U.S.C. ss.ss.201-212 and applicable governmental implementing
regulations.
2.2 The Regents expressly reserves the right to use Regents' Patent Rights
and associated technology for educational, research and non-commercial
clinical purposes including publication of research results and sharing
research results with other non-profit institutions, and allowing other
non-
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profit research institutions to use Regents' Patent Rights and associated
technology for the same purpose.
3. SUBLICENSES
3.1 The Regents also grants to Licensee the right to issue exclusive or
nonexclusive sublicenses ("Sublicenses") to third parties to make, have
made, use, sell, offer for sale or import Licensed Products and to
practice Licensed Methods in any jurisdiction in which Licensee has
exclusive rights under this Agreement. To the extent applicable,
sublicenses must include all of the rights of and obligations due to The
Regents (and, if applicable, the U.S. Government under 35 U.S. C.
ss.ss.201-212) contained in this Agreement.
3.2 Licensee must pay to The Regents [**]% of all Sublicensing Income ;
provided, however, that if the Sublicensing Income represents payment for
patent rights of third parties, then Licensee shall only be required to
pay The Regents [**]% of all Sublicensing Income.
3.3 On Net Sales of Licensed Products sold or disposed of by a Sublicensee,
Licensee must pay to the Regents an earned royalty in accordance with
Article 5 (Royalties) as if these were Licensee's Net Sales. Any
royalties received by Licensee in excess of royalties due to The Regents
under this Paragraph 3.3 belong to the Licensee.
3.4 Licensee must provide to The Regents a copy of each Sublicense within 30
days of execution, and a copy of all information submitted to Licensee by
Sublicensees relevant to the computation of the payments due to The
Regents under this Article 3.
3.5 If this Agreement is terminated for any reason, all outstanding
Sublicenses will be assigned by Licensee to The Regents, at the option of
The Regents. The Sublicenses will remain in full force and effect with
The Regents as the licensor or sublicensor instead of Licensee, but the
duties of The Regents under the assigned Sublicenses will not be greater
than the duties of The Regents under this Agreement, and the rights of
The Regents under the assigned Sublicenses will not be less than the
rights of The Regents under this Agreement, including all financial
consideration and other rights of The Regents.
4. FEES
4.1 In partial consideration for the License, Licensee will pay to The
Regents a license issue fee of $[**] within 30 days of the Effective
Date. This fee is nonrefundable and is not an advance against royalties.
4.2 Licensee must pay to The Regents a license maintenance fee of $[**]
beginning on the one-year anniversary date of the Effective Date of this
Agreement and continuing annually on each anniversary date of the
Effective Date. The maintenance fee will not be due and payable on any
anniversary date of the Effective Date if on that date Licensee is
commercially selling a Licensed Product and paying an earned royalty to
The Regents on the sales of that Licensed Product. The license
maintenance fees are non-refundable and are not an advance against
royalties.
5
5. ROYALTIES
5.1 Licensee must pay to The Regents for sale of Licensed Products in the
Field by Licensee or its Affiliates an earned royalty of [**]% of Net
Sales.
5.2 Licensee must pay to The Regents a minimum annual royalty of $[**] for
the life of Regents' Patent Rights, beginning in the year of the First
Commercial Sale of Licensed Product. Licensee must pay the minimum annual
royalty to The Regents by February 28 of each year. The minimum annual
royalty will be credited against the earned royalty due and owing for the
calendar year in which the minimum payment was made.
5.3 Paragraphs 1.1, 1.2, 1.3 and 1.4 define Regents' Patent Rights, Licensed
Products, Licensed Methods and the Field of use so that royalties are
payable on products covered by issued patents in the country where such
Licensed Products are made, used, imported, offered for sale or sold.
Royalties accrue for the duration of this Agreement.
5.4 Licensee must pay royalties owed to The Regents on a [**] basis. Licensee
must pay the royalties within two months of the end of the [**] in which
the royalties accrued.
5.5 All monies due The Regents must be paid in United States funds. When
Licensed Products are sold for monies other than United States dollars,
the royalties will first be determined in the foreign currency of the
country in which those Licensed Products were sold and, second, converted
into equivalent United States funds. Licensee must use the exchange rate
established by the Bank of America in San Francisco, California on the
last day of the [**].
5.6 Any tax for the account of The Regents required to be withheld by
Licensee under the laws of any foreign country must be promptly paid by
Licensee for and on behalf of The Regents to the appropriate governmental
authority. Licensee will use its best efforts to furnish The Regents with
proof of payment of any tax. Licensee is responsible for all bank
transfer charges. All payments made by Licensee in fulfillment of The
Regents' tax liability in any particular country will be credited against
fees or royalties due The Regents for that country.
5.7 If at any time legal restrictions prevent the acquisition or prompt
remittance of United States Dollars by Licensee with respect to any
country where a Licensed Product is sold, the Licensee shall pay
royalties due to The Regents from Licensee's other sources of United
States Dollars.
5.8 If any patent or any claim included in Regents' Patent Rights is held
invalid or unenforceable in a final decision by a court of competent
jurisdiction from which no appeal has or can be taken, all obligation to
pay royalties based on that patent or claim or any claim patentably
indistinct from it will cease as of the date of that final decision.
Licensee will not, however, be relieved from paying any royalties that
accrued before that decision or that is based on another patent or claim
not involved in that decision.
5.9 If Licensee transfers Licensed Products for end-use to itself or an
Affiliate or Sublicensee for use in a country where Regents' Patent
Rights exist, that transfer is considered a sale at list price, and
Licensee must pay a royalty in accordance with this Article 5
(Royalties). If Licensee sells a Licensed Product to an Affiliate at a
price lower than that customarily charged to an unrelated third party,
the royalties paid to The Regents will be based on the Net Sales of
Licensed Products by the Affiliate to their customers.
6
5.10 No royalties will be collected or paid on Licensed Products sold to the
United States Federal Government, or any agency of the United States
Government or to a contractor of the United States Government purchasing
on behalf of the United States Government. The Licensee and its
Sublicensee will reduce the amount charged for Licensed Products
distributed to United States Government.
6. DILIGENCE
6.1 Upon the execution of this Agreement, Licensee must diligently proceed
with the development, manufacture and sale ("Commercialization") of
Licensed Products and must earnestly and diligently endeavor to market
them within a reasonable time after execution of this Agreement and in
quantities sufficient to meet the market demands for them.
6.2 Licensee must endeavor to obtain all necessary governmental approvals for
the Commercialization of Licensed Products.
6.3 The Regents has the right and option to either terminate this Agreement
or reduce Licensee's exclusive license to a nonexclusive license if
Licensee has not sold a Licensed Product and Licensee fails to perform
any of the terms in this Paragraph 6.3. This right, if exercised by The
Regents, supersedes the rights granted in Article 2 (Grant).
6.3a Prior to the [**] anniversary of this Agreement, Licensee shall
have conducted efficacy trials for at least one Licensed Product
and shall have built one prototype of a Licensed Product.
6.3b Prior to the [**] anniversary of this Agreement, Licensee shall
have conducted utility trials to establish commercial value to
patients. Licensee shall also have concluded product development
and submitted the necessary applications for FDA approval (if
required) of at least one Licensed Product.
6.3c Prior to the [**] anniversary of this Agreement, Licensee shall
have obtained FDA approval (if required) for at least one Licensed
Product and shall have made a first commercial sale of a Licensed
Product.
6.4 Licensee has the sole discretion for making all decisions as to how to
commercialize any Licensed Product.
7. PATENT FILING, PROSECUTION AND MAINTENANCE
7.1 The Regents will file, prosecute and maintain the patents and
applications comprising Regents' Patent Rights. These patents will be
held in the name of The Regents and will be obtained with counsel of The
Regents' choice. The Regents must provide Licensee with copies of each
patent application, office action, response to office action, request for
terminal disclaimer, and request for reissue or reexamination of any
patent or patent application under Regents' Patent Rights. The Regents
will consider any comments or suggestions by Licensee. The Regents is
entitled to take action to preserve rights and minimize costs whether or
not Licensee has commented.
7.2 Licensee will bear $[**] in costs incurred prior to the date of this
Agreement and for as long as Licensee's rights under this Agreement
remain exclusive, all costs incurred during the term of
7
this Agreement in the maintenance of patents in Regents' Patent Rights.
Prosecution includes interferences, oppositions and any other inter
parties proceeding originating in a patent office. Licensee must send
payment to The Regents within 30 days of Licensee's receipt of an
invoice. The $[**] for past costs shall be paid [**] commencing on the
[**] anniversary of this Agreement.
7.3 Licensee has the right to request patent protection on the Invention in
foreign countries if the rights are available. Licensee must notify The
Regents of its decision within eight months of the filing of the
corresponding United States patent application. This notice must be in
writing and must identify the countries desired. The absence of this
notice from Licensee to The Regents will be considered an election not to
secure foreign rights.
7.4 Eight months after the filing of the corresponding United States
application, but not sooner, The Regents will have the right to file
patent applications at its own expense in any country in which Licensee
has not identified in written notice provided by 7.3. These applications
and resulting patents will not be subject to this Agreement.
7.5 Licensee's obligation to underwrite and to pay all United States patent
costs incurred during the term of this Agreement will continue for as
long as this Agreement remains in effect. Licensee may terminate its
obligations with respect to any given patent application or patent upon
three months written notice to The Regents. The Regents will use its best
efforts to curtail patent costs chargeable to Licensee under this
Agreement after this notice is received from Licensee. The Regents may
continue prosecution or maintenance of these application(s) or patent(s)
at its sole discretion and expense, and Licensee will have no further
rights or licenses to them.
7.6 The Regents will use its best efforts to not allow any Regents' Patent
Rights for which Licensee is licensed and is underwriting the costs of to
lapse or become abandoned without Licensee's authorization or reasonable
notice, except for the filing of continuations, divisionals, or the like
substitute for the lapsed application.
8. PATENT INFRINGEMENT
8.1 In the event that Licensee learns of the substantial infringement in the
Field of any patent in Regents' Patent Rights, Licensee will inform The
Regents in writing and will provide The Regents with reasonable evidence
of the infringement. During the term of this Agreement and in a
jurisdiction where Licensee has exclusive rights under this Agreement,
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 must not be unreasonably denied. Both parties will
use their best efforts to cooperate to terminate the infringement without
litigation.
8.2 Licensee may request that The Regents take legal action against the
infringement of Regents' Patent Rights in the Field. This request must be
in writing and must include reasonable evidence of the infringement and
the damages to Licensee. If the infringing activity has not been abated
within 90 days following the effective date of the request, The Regents
has the right to (a) commence suit on its own account or (b) refuse to
participate in a suit. The Regents must give notice of its election in
writing to Licensee by the end of the 100th day after receiving notice of
the request from Licensee. Licensee may thereafter bring suit for patent
infringement in its own name if and only if The Regents elected not to
commence suit and if the infringement occurred during the period and in a
jurisdiction where the third party had allegedly infringed Licensee's
exclusive rights under this Agreement.
8
However, in the event Licensee elects to bring suit in accordance with
this Paragraph 8.2, The Regents may thereafter join the suit at its own
expense.
8.3 Any legal action will be at the expense of the party that brings the suit
and, with the exception of Paragraph 8.5, all recoveries will belong to
that party. Legal action brought jointly by The Regents and/or the United
States Government and Licensee and fully participated in by both,
however, will be at the joint expense of the parties and all recoveries
will be shared jointly by them in proportion to the share of expense paid
by each party.
8.4 Each party must cooperate with the other in litigation proceedings
instituted under this Article but at the expense of the party who brings
the suit. The litigation will be controlled by the party bringing the
suit. Where The Regents do not join suit, The Regents may be represented
by counsel of its choice. Licensee shall reimburse the legal expenses
incurred by The Regents in good faith for such representation, for
activities requested by the Licensee and for activities legally required
of the Regents or its inventor in such suit.
8.5 If Licensee undertakes the enforcement or defense of any Regents' Patent
Rights by litigation, any recovery of damages by Licensee will be applied
first toward Licensee's unreimbursed expenses and legal fees relating to
the suit. Licensee will retain the balance of the recovery but will pay
The Regents a [**]% royalty on this balance.
9. PROGRESS AND ROYALTY REPORTS
9.1 Beginning January 31, 2005, Licensee must submit to The Regents
semiannual progress reports covering Licensee's activities related to the
development and testing of all Licensed Products and the obtaining of the
governmental approvals necessary for marketing. These progress reports
must be made for each Licensed Product until its First Commercial Sale.
9.2 The progress reports submitted under Paragraph 9.1 must include the
following topics:
9.2a Summary of work completed.
9.2b Summary of work in progress.
9.2c Current schedule of anticipated events or milestones.
9.2d Market plans for introduction of Licensed Products.
9.2e A summary of resources (dollar value) spent in the reporting
period.
9.3. Licensee must notify The Regents if Licensee or any of its Sublicensees
or Affiliates ceases to be a small entity (as defined by the United
States Patent and Trademark Office) under the provisions of 35
U.S.C.ss.41(h).
9.4 Licensee must report the date of the First Commercial Sale in the royalty
report immediately following that Sale.
9.5 After the First Commercial Sale of each Licensed Product, Licensee must
make [**] royalty reports to The Regents by [**] of each year (i.e.,
within [**] months from the end of [**]). Each royalty report must cover
Licensee's most recently completed [**] and must show:
9.5a Gross sales and Net Sales of any Licensed Product.
9.5b Number of each type of Licensed Product sold.
9.5c Royalties payable to The Regents.
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9.6 Licensee must state in its royalty report if it had no sales of any
Licensed Product.
10. BOOKS AND RECORDS
10.1 Licensee must keep accurate books and records of all Licensed Products
manufactured, used or sold. Licensee must preserve these books and
records for at least five years from the date of the royalty payment to
which they pertain.
10.2 The Regents' are entitled to engage an independent certified public
accountant to inspect these books and records at reasonable times. The
Regents will pay the fees and expenses of these inspections. If an
error-favoring Licensee of more than 5% of the total annual royalties is
discovered, then Licensee will pay the fees and expenses of these
inspections.
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 is in
force from the Effective Date and remains in effect for the life of the
last-to-expire patent in Regents' Patent Rights.
11.2 Upon termination of this Agreement, Licensee will have no further right
to make, have made, use or sell any Licensed Product except as provided
in Article 14 (Disposition of Licensed Products on Hand Upon
Termination).
11.3 Any expiration or 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 upon Termination.
Article 16 Use of Names and Trademarks.
Article 17 Warranties
Article 18 Indemnification.
Article 23 Failure to Perform.
12. TERMINATION BY THE REGENTS
12.1 If Licensee violates or fails to perform any material term or covenant of
this Agreement, then The Regents may give written notice of the default
("Notice of Default") to Licensee. If Licensee does not repair the
default within 60 days after the effective date of the Notice of Default,
then The Regents has the right to terminate this Agreement and the
License by a second written notice ("Notice of Termination") to Licensee.
If The Regents sends a Notice of Termination to Licensee, then this
Agreement automatically terminates on the effective date of this notice.
Termination does not relieve Licensee of its obligation to pay any
royalty or fees owing at the time of termination and does not impair any
accrued right of The Regents.
10
13. TERMINATION BY LICENSEE
13.1 Licensee has the right at any time to terminate this Agreement in whole
or with respect to any portion of Regents' Patent Rights by giving
written notice to The Regents. This notice of termination will be subject
to Article 19 (Notices) and will be effective 90 days after the effective
date of the notice.
13.2 Any termination in accordance with Paragraph 13.1 does not relieve
Licensee of any obligation or liability accrued prior to termination. Nor
does termination rescind anything done by Licensee or any payments made
to The Regents prior to the effective date of termination. 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, Licensee will have the right to
dispose of all previously made or partially made Licensed Products, but
no more, within a period of six months. Licensee must submit royalty
reports on the sale of these Licensed Products and must pay royalties at
the rate and at the time provided in this Agreement.
15. PATENT MARKING
15.1 Licensee must ▇▇▇▇ all Licensed Products made, used or sold under the
terms of this Agreement, or their containers, in accordance with the
applicable patent marking laws.
16. USE OF NAMES AND TRADEMARKS
16.1 Neither party is permitted to use any name, trade name, trademark or
other designation of the other party or its employees (including
contraction, abbreviation or simulation of any of the foregoing) in
advertising, publicity or other promotional activity. Unless required by
law, Licensee is expressly prohibited from using the name "The Regents of
the University of California" or the name of any campus of the University
of California.
16.2 The Regents is free to release to the inventors and senior administrators
employed by The Regents the terms and conditions of this Agreement. If
such release is made, then The Regents shall give notice of the
confidential nature and shall request that the recipient not disclose
such terms and conditions to others. If a third party inquires whether a
license to Regents' Patent Rights is available, then The Regents may
disclose the existence of this Agreement and the extent of the grant in
Article 2 (Grant) to such third party, but will not disclose the name of
Licensee or any other terms or conditions of this Agreement, except where
The Regents is required to release information under the California
Public Records Act, Freedom of Information Act, a governmental audit
requirement, or other applicable law.
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17. LIMITED WARRANTY
17.1 The Regents represents and warrants that:
(i) it has the lawful right to grant this license to Licensee; and
(ii) to the actual knowledge of the licensing officer currently
responsible for the case at the Regents, there are no written
claims of third parties that would call into question the right of
The Regents to grant to Licensee the rights granted hereunder, or
the validity or enforceability of Regents' Patent Rights.
17.2 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 MAKE NO REPRESENTATION OR
WARRANTY THAT ANY LICENSED PRODUCT WILL NOT INFRINGE ANY PATENT OR OTHER
PROPRIETARY RIGHT.
17.3 IN NO EVENT WILL EITHER PARTY BE LIABLE UNDER THIS AGREEMENT FOR ANY
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF
THIS LICENSE OR THE USE OF THE INVENTION OR LICENSED PRODUCTS OR THE USE
OR THE PRACTICE OF LICENSED METHODS.
17.4 Nothing in this Agreement will be construed as:
17.4a Except as provided above, awarranty or representation by The
Regents as to the validity or scope of any Regents' Patent Rights.
17.4b A warranty or representation that anything made, used, sold or
otherwise disposed of under any license granted in this Agreement
is or will be free from infringement of patents of third parties.
17.4c Obligate The Regents to bring or prosecute actions or suits
against third parties for patent infringement except as provided
in Article 8 (Patent Infringement).
17.4d Conferring by implication, estoppel or otherwise any license or
rights under any patents of The Regents other than Regents' Patent
Rights as defined herein, regardless of whether such patents are
dominant or subordinate to Regents' Patent Rights.
17.4e Obligate The Regents to furnish any know-how not provided in
Regents' Patent Rights.
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18. INDEMNIFICATION
18.1 Licensee must indemnify, hold harmless and defend The Regents, its
officers, employees, and agents, the sponsors of the research that led to
the invention, the inventors of the patents and patent applications in
Regents' Patent Rights and their respective employers from and against
any and all liability, claims, suits, losses, damages, costs, fees and
expenses resulting from or arising out of exercise of this license or any
sublicense. Indemnification includes but is not limited to products
liability.
18.2 Licensee, at its sole cost and expense, must insure its activities in
connection with the work under this Agreement and obtain, keep in force
and maintain Comprehensive or Commercial Form General Liability Insurance
(contractual liability included) with limits as follows:
18.2a Each occurrence $1,000,000.
18.2b Products/completed operations aggregate $2,000,000.
18.2c Personal and advertising injury $1,000,000.
18.2d General aggregate (commercial form only) $2,000,000.
18.3 Licensee expressly understands, however, that the coverages and limits in
Paragraph 18.2 do not in any way limit the Licensee's liability. Licensee
must furnish The Regents with certificates of insurance evidencing
compliance with all requirements. Licensee is not required to insure its
activities pertaining to the products' liability risks until it begins to
use Licensed Products in human subjects. Licensee's insurance must:
18.3a Provide for 30-day advance written notice to The Regents of any
modification.
18.3b Indicate that The Regents of the University of California is
endorsed as an Insured under the coverages listed in Paragraph
18.2 solely as the coverages pertain to liability resulting from
bodily injury or property damage arising from Licensed Products.
18.3c Include a provision that the coverages will be primary and will
not participate with nor will be excess over any valid and
collective insurance or program of self-insurance carried or
maintained by The Regents.
18.4 The Regents shall notify Licensee in writing of any claim or suit brought
against The Regents in respect of which The Regents intends to invoke the
provisions of this Article 18 (Indemnification). Licensee shall keep The
Regents informed on a current basis of its defense of any claims under
this Article 18 (Indemnification).
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19. NOTICES
19.1 Any notice or payment required to be given to either party must be sent
to the respective address given below and is effective: (a) on the date
of delivery if delivered in person, (b) five days after mailing if mailed
by first-class certified mail, postage paid, or (c) on the next business
day if sent by overnight delivery. Either party may change its designated
address by written notice.
For Licensee: Aspect Medical Systems, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
For The Regents: The Regents of the University of California
University of California, Los Angeles
Office of Intellectual Property Administration
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Director
20. ASSIGNABILITY
20.1 This Agreement is binding upon and inures to the benefit of The Regents,
its successors and assigns, but it is personal to Licensee and assignable
by Licensee only with the written consent of The Regents. The consent of
The Regents will not be required if the assignment is in conjunction with
the transfer of all or substantially all of the business of Licensee to
which this license relates.
21. LATE PAYMENTS
21.1 For each royalty payment or fee not received by The Regents when due,
Licensee must pay to The Regents a simple interest charge of 10% per
annum to be calculated from the date payment was due until it was
actually received by The Regents.
22. WAIVER
22.1 The waiver of any breach of any term of this Agreement does not waive any
other breach of that or any other term.
23. FAILURE TO PERFORM
23.1 If either party takes legal action against the other because of a 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.
24. GOVERNING LAWS
24.1 THIS AGREEMENT IS TO BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF CALIFORNIA, but the scope and validity of any patent
14
or patent application will be governed by the applicable laws of the
country of the patent or patent application.
25. GOVERNMENT APPROVAL OR REGISTRATION
25.1 If this Agreement or any associated transaction is required by the law of
any nation to be either approved or registered with any governmental
agency, Licensee will assume all legal obligations to do so. Licensee
will notify The Regents if it becomes aware that this Agreement is
subject to a United States or foreign government reporting or approval
requirement. Licensee will 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.
26. EXPORT CONTROL LAWS
26.1 Licensee must observe all applicable United States and foreign laws with
respect to the transfer of Licensed Products and related technical data
to foreign countries, including the International Traffic in Arms
Regulations (ITAR) and the Export Administration Regulations.
27. PREFERENCE FOR UNITED STATES INDUSTRY
27.1 Because this Agreement grants an exclusive right to a particular use of
the Invention, Licensee must manufacture in the United States any
products embodying this Invention or produced through the Invention's use
to the extent required by 35 U.S.C. ss.201-212.
28. FORCE MAJEURE
28.1 The parties will be excused from any performance required under this
Agreement if performance is impossible or unfeasible due to any
catastrophe or other major event beyond their reasonable control,
including war, riot, or insurrection; lockouts or other serious labor
disputes; and floods, fires, explosions, or other natural disasters. When
such events ▇▇▇▇▇, and in any event within one year, the parties'
respective obligations will resume.
29. CONFIDENTIALITY
29.1 If either party discloses confidential information to the other party,
the disclosing party will designate this information as confidential by
appropriate legend or instruction, and the receiving party will:
29.1a Use the same degree of care to maintain the secrecy of the
confidential information as it uses to maintain the secrecy of its
own information of like kind.
29.1b Use the confidential information only to accomplish the purposes
of this Agreement.
29.2 Neither party will disclose confidential information received from
the other party except to its employees, customers, distributors
and other agents who are bound to it by similar obligations of
confidence and only as required to accomplish the purposes of this
Agreement.
15
29.3 Neither party will have any confidentiality obligation with respect to
the confidential information belonging to or disclosed by the other party
that:
29.3a The receiving party can demonstrate by written records was
previously known to it.
29.3b The receiving party lawfully obtained from sources under no
obligation of confidentiality.
29.3c Is or becomes publicly available other than through an act or
omission of the receiving party or any of its employees.
29.3d Is required to be disclosed under the California Public Records
Act or other requirement of law.
29.3e Is independently developed by the receiving party.
29.4 The provisions of this Article 29 will continue in effect for five years
after expiration or termination of this Agreement.
30. MISCELLANEOUS
30.1 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.
30.2 This Agreement is not binding upon the parties until it has been signed
below on behalf of each party, in which event it becomes Effective Date.
30.3 No amendment or modification of this Agreement will be valid or binding
upon the parties unless made in writing and signed by each party.
30.4 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.
30.5 If any part of this Agreement is for any reason found to be
unenforceable, all other parts nevertheless remain enforceable as long as
a party's rights under this Agreement are not materially affected. In
lieu of the unenforceable provision, the parties will substitute or add
as part of this Agreement a provision that will be as similar as possible
in economic and business objectives as was intended by the unenforceable
provision.
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Both The Regents and Licensee have executed this Agreement in duplicate
originals by their authorized officers on the dates written below:
ASPECT MEDICAL SYSTEMS, INC. THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ Claire Wake
------------------------------- -------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: Claire Wake, PhD
Title: Vice President and Title: Sr. Technology Transfer
General Manager Officer
Date: July 1, 2004 Date: July 2, 2004
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APPENDIX A
UCLA Case No. 91-536-1 U.S. Patent No. 5,230,346 Diagnosing Brain
Conditions by Quantitative Electroencephalography
UCLA Case No. LA91-527-1 U.S. Patent No. 5,269,315 Determining the
Nature of BrainLesions by Electroencephalography
UCLA Case No. LA91-527-2 U.S. Patent No. 5,309,923 Method and
Apparatus for Determining Brain Activity,
Including the Nature of Brain Lesions by
Electroencephalography
18