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Intellectual Property Miscellaneous Clauses

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1.         Alternative Dispute Resolution: Alternative Dispute Resolution (ADR) language is usually acceptable. If the Sponsor has included an arbitration clause, it would be helpful to insert language like, "appropriate method of alternative dispute resolution, including, without limitation, arbitration . . . " to expand the possibilities to include escalation within the internal hierarchies of the parties (elevating the dispute to less interested persons to resolve), mediation, etc. Alternatively, you may counter-offer with one of our standard clauses.

a.  General Clauses (Abbreviated; Detailed)
b.  Clauses Mandated by Chapter 2260, Texas Government Code (Abbreviated; Detailed)

2.         Conflicts

3.         Copyright Assignment

4.         Counterparts

5.         Debarment

6.         Electronic Copyright

7.         Employee Obligation to Perform Services

8.         Export Control

9.         Immunity from Suit

10.       Indemnification Survival Limitation

11.       Insurance

12.       Legislative Failure to Allot Funds

13.       Medical Malpractice

14.       Net Revenues

15.       Net Sales

16.       Non-Dilution of Equity Ownership

17.       Notification of Claims

18.       Software Indemnification (Claims of Infringement)

19.       Software Maintenance Definitions

20.       State Agency Language

21.       Waiver of Moral Rights

22.       Warrants

23.       Work for Hire

[General Clause - Abbreviated Version]
 

 1.         Alternative Dispute Resolution

The parties of this agreement will encourage the prompt and equitable settlement of all controversies or claims between the parties.  The parties agree to negotiate their differences directly and in good faith for a period of no less than thirty (30) days after receiving written notification of the existence of a dispute.

If the dispute is not resolved within thirty (30) days after written notification of   the existence of a dispute, the parties agree to submit their dispute to a licensed attorney that is an experienced mediator and is located in Travis County, Texas to work with them to resolve their differences utilizing non-binding mediation.  This mediation is a compromise negotiation for purposes of Rule 408 of the Federal Rules of Evidence and Texas Rules of Evidence and is an alternative dispute resolution procedure subject to Section 154.073 of the Texas Civil Practice & Remedies Code.

If after non-binding mediation occurs, the dispute is not resolved, the parties are free to exercise all other legal and equitable right.


[General Clause - Detailed Version]

 1.         Negotiation.

Each party agrees that any dispute between the parties relating to this Agreement will first be submitted in writing to a panel of two senior executives of ____ and ____, who shall promptly meet and confer in an effort to resolve such dispute through good faith consultation and negotiation. Each party’s executives shall be identified by notice to the other party, and may be changed at any time thereafter also by notice to the other. Any decisions of the executives will be final and binding on the parties. In the event the executives are unable to resolve any dispute within thirty (30) days after submission to them, either party may then refer such dispute to mediation, arbitration or other appropriate method of Alternative Dispute Resolution in accordance with this section.

2.         Mediation.

If the parties refer to mediation any controversy or claim arising out of or relating to this Agreement or the existence, validity, breach or termination thereof, whether during or after its term, they shall select a mutually acceptable mediator within forty-five (45) days thereafter. Neither party shall unreasonably withhold consent to the selection of a mediator. The parties shall share equally the costs of mediation. If the parties agree, they may substitute other forms of alternative dispute resolution, such as neutral opinion or mini trial.

3.         Arbitration.

3.1             General. Any controversy or claim arising out of or relating to this Agreement or the existence, validity, breach or termination thereof, whether during or after its term, if referred to arbitration, will be settled in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”), as modified or supplemented under this section. Specifically, the parties acknowledge that [University], as a Texas state agency, has no authority to enter into an agreement for binding arbitration, or to waive its sovereign immunity. Texas Government Code, Chapter 2009.

3.2       Proceeding. To initiate arbitration, either party will file the appropriate notice at the Regional Office of the AAA in [City, State, Country]. The arbitration proceeding will take place in [City, State, Country] and will be conducted in the English language. The arbitration panel will consist of three (3) arbitrators, one arbitrator appointed by the AAA. Any communication between a party and any arbitrator will be directed to the AAA for transmittal to the arbitrator. The parties expressly agree that the arbitrators will be empowered to, at either party’s request, (a) issue an interim order requiring one party to cease using the other’s [products] or [confidential information] pending the outcome of the arbitration, or (b) grant injunctive relief.

3.3       Award. The arbitral award will be the exclusive remedy of the parties for all claims, counterclaims, issues or accounting presented or pled to the arbitrators. The award will (a) be granted and paid in U.S. dollars exclusive of any tax, deduction or offset, (b) include interest from the date of breach or other violation of the Agreement until the award is fully paid, computed at the then-prevailing domestic reference rate of the [Bank of XXXX, City, State, Country], and (c) will not include attorneys’ fees. Judgment upon the arbitral award may be entered in any court that has jurisdiction thereof. Any additional costs, fees or expenses incurred in enforcing the arbitral award will be charged against the party that resists its enforcement.

4.         Court Proceedings.

The use of any method of alternative dispute resolution will not be construed by either party in a manner that would adversely affect the other’s rights in court. Nothing in this section will prevent one party from resorting to judicial proceedings if good faith efforts to resolve a dispute have been unsuccessful or if injunctive relief is necessary to prevent serious and irreparable harm to one party or third parties.

[Dispute Resolution Clause Mandated by Chapter 2260, Texas Government Code - Abbreviated Version (updated: effective September 1, 2003)]

To the extent that Chapter 2260, Texas Government Code, is applicable to this [Agreement] and is not preempted by other applicable law, the dispute resolution process provided for in Chapter 2260 and the related rules adopted by the Texas Attorney General pursuant to Chapter 2260, shall be used by [UT] and [Contracting Party] to attempt to resolve any claim for breach of contract made by [Contracting Party] that cannot be resolved in the ordinary course of business. The Chief Business Officer of [UT] shall examine [Contracting Party’s] claim and any counterclaim and negotiate with [Contracting Party] in an effort to resolve such claims. The parties hereto specifically agree that (i) neither the execution of this [Agreement] by [UT] nor any other conduct, action or inaction of any representative of [UT] relating to this [Agreement] constitutes or is intended to constitute a waiver of [UT’s] or the state’s sovereign immunity to suit; and (ii) [UT] has not waived its right to seek redress in the courts.

[Dispute Resolution Clause Mandated by Chapter 2260, Texas Government Code - Detailed Version (updated: effective September 1, 2003)]

To the extent that Chapter 2260,Texas Government Code, as it may be amended from time to time (“Chapter 2260”), is applicable to this Agreement and is not preempted by other applicable law, the dispute resolution process provided for in Chapter 2260 shall be used, as further described herein, by University and Contractor to attempt to resolve any claim for breach of contract made by Contractor:

A. Contractor’s claims for breach of this Agreement that the parties cannot resolve pursuant to other provisions of this Agreement or in the ordinary course of business shall be submitted to the negotiation process provided in subchapter B of Chapter 2260. To initiate the process, Contractor shall submit written notice, as required by subchapter B of Chapter 2260, to University in accordance with the notice provisions in this Agreement. Contractor’s notice shall specifically state that the provisions of subchapter B of Chapter 2260 are being invoked, the date and nature of the event giving rise to the claim, the specific contract provision that University allegedly breached, the amount of damages Contractor seeks, and the method used to calculate the damages. Compliance by Contractor with subchapter B of Chapter 2260 is a required prerequisite to Contractor’s filing of a contested case proceeding under subchapter C of Chapter 2260. The Chief Business Officer of University, or such other officer of University as may be designated from time to time by University by written notice thereof to Contractor in accordance with the notice provisions in this Agreement, shall examine Contractor’s claim and any counterclaim and negotiate with Contractor in an effort to resolve such claims.

B. If the parties are unable to resolve their disputes under subparagraph (A) of this section, the contested case process provided in subchapter C of Chapter 2260 is Contractor’s sole and exclusive process for seeking a remedy for any and all of Contractor’s claims for breach of this Agreement by University.

C. Compliance with the contested case process provided in subchapter C of Chapter 2260 is a required prerequisite to seeking consent to sue from the Legislature under Chapter 107 of the Texas Civil Practices and Remedies Code. The parties hereto specifically agree that (i) neither the execution of this Agreement by University nor any other conduct, action or inaction of any representative of University relating to this Agreement constitutes or is intended to constitute a waiver of University’s or the state’s sovereign immunity to suit and (ii) University has not waived its right to seek redress in the courts.

The submission, processing and resolution of Contractor’s claim is governed by the published rules adopted by the Texas Attorney General pursuant to Chapter 2260, as currently effective, hereafter enacted or subsequently amended.

University and Contractor agree that any periods set forth in this Agreement for notice and cure of defaults are not waived.

 


 

2.         Conflicts

The PI will not enter into any agreement that would conflict with his or her obligations hereunder during the term of this Agreement.

 


 

3.         Copyright Assignment

Company does hereby sell, assign, and transfer to University, its successors and assigns, the entire right, title and interest in and to the copyright in the Work and any registrations and copyright applications relating thereto and any renewals and extensions thereof, and in and to all works based upon, derived from, or incorporating the Work, and in an to all income, royalties, damages, claims and payments now or hereafter due or payable with respect thereto, and in and to all causes of action, either in law or in equity for past, present, or future infringement based on the copyrights, and in and to all rights corresponding to the foregoing throughout the world.

Company agrees to execute all papers and to perform such other proper acts as University may deem necessary to secure for University or its designee the rights herein assigned.

 


 

4.         Counterparts

This agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 


 

[This Statement regarding debarment fulfills the regulatory requirements and is acceptable without further review by OGC.]

5.         Debarment

INSTITUTION represents that it has never been and, to the best of its knowledge after reasonable inquiry, its Principal Investigator or any other individual who will be rendering services under this Agreement has never been 1) debarred or 2) convicted of a crime for which a person can be debarred, under section 306(a) or 306(b) of the Generic Drug Enforcement Act of 1992 (“Section 306(a) or (b)”). INSTITUTION represents that it has never been and, to the best of its knowledge after reasonable inquiry, its Principal Investigator or any other individual who will be rendering services under this Agreement has never been 1) threatened to be debarred or 2) indicted for a crime or otherwise engaged in conduct for which a person can be debarred, under Section 306(a) or (b). INSTITUTION agrees that it will promptly notify SPONSOR in the event of any such debarment, conviction, threat, or indictment. The terms of the preceding sentence shall survive the termination or expiration of this Agreement for a period of three (3) years.

OR

INSTITUTION certifies and Principal Investigator certifies to INSTITUION that it has never been and, to the best of its knowledge after reasonable inquiry, its Principal Investigator or any other individual who will be rendering services under this Agreement has never been 1) debarred or 2) convicted of a crime for which a person can be debarred, under section 306(a) or 306(b) of the Generic Drug Enforcement Act of 1992 (“Section 306(a) or (b)”). INSTITUTION certifies and Principal Investigator certifies to INSTITUTION that it has never been and, to the best of its knowledge after reasonable inquiry, its Principal Investigator or any other individual who will be rendering services under this Agreement has never been 1) threatened to be debarred or 2) indicted for a crime or otherwise engaged in conduct for which a person can be debarred, under Section 306(a) or (b). INSTITUTION agrees that it will promptly notify SPONSOR in the event of any such debarment, conviction, threat, or indictment. The terms of the preceding sentence shall survive the termination or expiration of this Agreement for a period of three (3) years.

 


 

[The following is a statement that contributors to electronic bulletin boards, etc. may be asked to sign to give University
the rights it needs to safely utilize the materials.]

 6.         Electronic Copyright

I am the owner of the information and the intellectual property rights therein cited below and I hereby warrant that such information is public information, that its distribution will not infringe the proprietary or privacy rights of third parties and that I have obtained consents and releases where required to prevent liability for such infringement. I hereby grant [University] a limited license under my copyright(s) to copy, display, perform, distribute and publish these works in digital form over the Internet or any other network.

I will defend, indemnify and hold harmless the [University] and/or its licensees against all claims, suits, costs, damages, and expenses that the [University] and/or its licensees may sustain by reason of any libelous or unlawfully disclosed matter contained or alleged to be contained in the information or any infringement or violation by the information of any copyright or property right; and until such claim or suit has been settled or withdrawn, the [University] may withhold any sums due me under the terms of my submission of this information.

[The following are forms of copyright notice to apply to information to be posted
depending upon how explicit you wish to be in spelling out exactly what people should do and refrain from doing with your works.]

Presentation of this [document/material/image etc.] on the [Internet] by [University] was made possible by a limited license grant from the author or creator who has retained all copyrights in the work.

OR

All information contained at this site is the property of [Owner] unless otherwise noted. Duplication or further transmission of information contained at this site for reasons besides personal use requires the express prior written permission of [Owner].

OR

Copyright [date] [Owner]. Please feel free to utilize the information presented here for your personal use. Any commercial use requires the express prior written permission of [Owner].

OR

Copyright [date] [Owner]. All rights reserved. Reproduction is permitted so long as [list conditions such as no charge is made for copies, no copies are placed on any electronic online service or database for which there is a fee other than a flat access charge, there is no alteration and this copyright notice is included].

OR

Permission for electronic dissemination of [Documents] is granted. Reproduction in hardcopy/print format for educational purposes or by non-profit organizations such as libraries and schools is permitted. For all other uses of the [Documents], prior advance written notice is required. Send inquiries to [address or link to mail to].

[The following is a form of warranty disclaimer and limitation of liability.]

Accuracy Disclaimer

The information contained herein consists of [describe]. The information is based upon [explain]. The information should not be considered to be completely error-free or to include all relevant information; nor should it be used as an exclusive basis for [decision-making]. The user understands and accepts that if the [University] were to accept the risk of harm to the user from use of this information, it would not be able to make the information available because the cost to cover the risk of harms to all users would be too great. Thus, use of the information is strictly voluntary and at the user’s sole risk.

 


 

7.         Employee Obligations to Perform Services

INSTITUTION represents that the Principal Investigator and all other investigators that may perform services hereunder are its employees and shall abide by the terms and conditions of this Agreement as if each were a party hereto.

 


 

8.         Export Control

Software is subject to the United States Export Control Laws and may be subject to export or import regulations in other countries. Licensee agrees to comply strictly with all such laws and regulations and acknowledges that it has the responsibility to obtain such licenses to export, re-export, or import software as may be required.

OR

University and Sponsor agree to comply with all United States Export Control Laws, and exportation of unclassified technical data in the furtherance of a manufacturing license or technical assistance agreement must be approved in writing by the Office of Defense trade Controls.

OR

The Software, Derivative Products, Documentation and all related technical information or materials are subject to export controls and are licensable under the United States Government export regulations. Licensee will comply strictly with all legal requirements established under these controls and will not export, re-export, divert, transfer or disclose, directly or indirectly the Software, Derivative Products, Documentation and any related technical information or materials without the prior approval of the United States Department of Commerce.

OR

Each Party shall comply with United States laws and regulations controlling the export of technical data, computer software, laboratory prototypes, and all other export controlled commodities. Neither Party shall, directly or indirectly, re-export any controlled commodities, which are subject to this Agreement, unless the required authorization and/or license is obtained from the proper government agency(ies) prior to export.

OR

The Participant acknowledges that any Confidential Information obtained from the Discloser and its subsidiary companies pursuant to this Agreement may be subject to the export control laws and regulations of the United States and other governments. Participant agrees that it will not use such Confidential Information in the design, development, or production of nuclear, missile, chemical, or biological weapons, nor export, re-export, or transfer such Confidential Information to Albania, Armenia, Azerbaijan, Belarus, Bulgaria, Cambodia, the People’s Republic of China, Cuba, Estonia, Georgia, Iran, Iraq, Kazakhstan, Kyrgyzstan, Laos, Latvia, Libya, Lithuania, Moldova, Mongolia, North Korea, Romania, Russia, Syria, Sudan, Tajikistan, Turkmenistan, Ukraine, Uzbekistan, Vietnam, or other countries proscribed by the Regulations; or to nationals of proscribed countries wherever located, without prior authorization from the United States and other applicable governments. Participant further acknowledges that it will not transfer without appropriate authorization the direct product of such Confidential Information, if the direct product is subject to the export control laws and regulations of the United States and other governments. The Participant further agrees not to export or re-export the Confidential Information in violation of any other provision of the export laws of the United States or other relevant governments. This provision shall survive the expiration or earlier termination of this Agreement.

OR

Neither Party will export technology disclosed by the other under this Agreement in violation of the United States Export Laws or regulations, including the Export Administration Regulations (“EAR”). Specifically, University and its employees will not, without an appropriate United States export license or approval, release any technology or direct product of technology that is subject to the EAR to a national of any country in Country Groups D:1 or E:2 (defined by the EAR) or to Iran, Iraq, Sudan, or Syria. University agrees that its employees who receive Sponsor technology that is identified by Sponsor to be subject to the EAR will be: 1) nationals or legal permanent residents of the United States; 2) national of countries in Country Group B as defined by the EAR; or 3) authorized by the United States government to receive such technology. Each Party understands that disclosing technical data to a foreign national may be an “export” even if the disclosure takes place within the United States. The obligations set forth in this section are independent of and will survive the termination of this and any other agreements between University and Sponsor.

OR

Sponsor acknowledges that this Agreement and the performance thereof are subject to compliance with any and all applicable United States laws, regulations, or orders, including those that may relate to the export of technical data, and Sponsor agrees to comply with all such laws, regulations and orders, including, if applicable, all requirements of the International Traffic in Arms Regulations and/or the Export Administration Act, as may be amended. Sponsor further agrees that if the export laws are applicable, it will not disclose or re-export any technical data received under this Agreement to any countries for which the United States government requires an export license or other supporting documentation at the time of export or transfer, unless Sponsor has obtained prior written authorization from the United States Office of Export Control or other authority responsible for such matters.

 


 

9.         Immunity From Suit

Sponsor is hereby granted an immunity from suit under any of Center’s Patents, Know-how or third party rights granted to Center, to the extent permitted under any agreement with third parties pertaining thereto, to the extent necessary for Sponsor to conduct the Research and carry out the development of Product.

 


 

10.       Indemnification Survival Limitation

The obligations of indemnification set out in this Paragraph __ shall survive for that period of time that is coincident with the duration of a viable cause of action which may be asserted against the party entitled to indemnification hereunder.

 


 

11.       Insurance

11.1      Beginning at the time when any Licensed Subject Matter is being distributed or sold (including for the purpose of obtaining regulatory approvals) by Licensee or by a Sublicensee, Licensee shall, at its sole cost and expense, procure and maintain commercial general liability insurance in amounts not less than $2,000,000 per incident and $2,000,000 annual aggregate, and Licensee shall use reasonable efforts to have the Board, System, University, its Regents, officers, employees and agents named as additional insureds. Such commercial general liability insurance shall provide (i) product liability coverage; (ii) broad form contractual liability coverage for Licensee’s indemnification under this Agreement; and (iii) coverage for litigation costs. The minimum amounts of insurance coverage required shall not be construed to create a limit of Licensee’s liability with respect to its indemnification under this Agreement.

11.2      Licensee shall provide Board with written evidence of such insurance upon Board’s request. Licensee shall provide Board with written notice of at least fifteen (15) days prior to the cancellation, non-renewal or material change in such insurance.

11.3      Licensee shall maintain such commercial general liability insurance beyond the expiration or termination of this Agreement during (i) the period that any Licensed Subject Matter developed pursuant to this Agreement is being commercial distributed or sold by Licensee or by a Sublicensee or agent of Licensee; and (ii) the five (5) year period immediately after such period.

 


 

12.       Legislative Failure to Allot Funds

UNIVERSITY shall have the right to cancel the [Agreement] at the end of it’s then-current fiscal period if funds are not allotted for the next fiscal year to fund any balance then due. In such event, UNIVERSITY may effect such cancellation by giving SPONSOR written notice of its intention to cancel not less than thirty (30) days prior to the end of the then-current fiscal period, but in any event no later than [eighteen (18) months] from the date of this Agreement. Upon cancellation as provided in this paragraph, UNIVERSITY shall not be responsible for the payment of the remaining monies due or, if such amount have been paid to SPONSOR, SPONSOR shall refund such payments to UNIVERSITY.

 



[The following may be used in contracts involving the delivery of heatlh care that
require University components to speak to our ability to meet our indemnification obligations.]
 

13.       Medical Malpractice

Each institution of the University of Texas System is self-insured pursuant to The University of Texas System Professional Medical Liability Benefit Plan, under the authority of Chapter 59, Texas Education Code. The University/Institution has and will maintain in force during the term of its agreements adequate insurance to cover its indemnification obligations.

 


 

14.       Net Revenues

“Net Revenues” means the gross amount of revenues from third parties actually recognized in accordance with GAAP from the licensing and/or sale (including any upgrade charges), maintenance and support of the Software, less all value-added, sales, use and similar taxes and also less all return credits, discounts and commissions granted or paid in the ordinary course of business; provided, however, with respect to Net Revenue-generating transactions of the Company and the [Company Entities] occurring outside of the United States, the gross revenue component of the Net Revenue figure resulting therefrom (i.e., before deduction of the items specified above) shall be calculated on the basis of the Company’s published U.S. commercial list price, as opposed to the actual local country list price or the actual foreign currency revenues recognized therefrom. Net Revenues recognized in a given financial period may be reduced by any application of bad debt reserves or other reversals of income taken by reason of nonpayment of Net Revenues recognized in a prior financial period. If the Software is licensed or sold “bundled” with other products for a single amount of consideration, then the amount of Net Revenues attributable to that transaction shall be the proportionate share of such consideration, allocated based on the respective published list prices of the bundled products (or, if there is no such list price for one or more of such products, then as allocated on a fair, equitable and reasonable basis).

 


 

15.       Net Sales

“Net Sales” shall mean the gross invoice price of Products, less the sum of the following deductions where applicable: cash, trade or quantity discounts, if any; sales, use, value added, tariff, import/export duties or other excise taxes imposed upon particular sales; foreign government withholding, transportation charges and allowances or credits to customers because of rejections or returns. For purposes of determining Net Sales, a sale shall be deemed to have occurred when payment is received for the sale.

In the event that a Licensed Product is sold in combination with another product, Net Sales, for purposes of royalty payments on the combination product, shall be calculated by multiplying the Net Sales on sale of that combination by the fraction A/B, where A is the gross selling price of the Licensed Product sold separately and B is the gross selling price of the combination product. In the event that no such separate sales are made by the Company, Net Sales for royalty determination shall be calculated by multiplying Net Sales of the combination by the fraction C/(C+D) where C is the fully allocated cost of the Licensed Product and D is the fully allocated cost of other components, such standard costs being determined using the Company’s standard accounting procedures.

OR

“Net Sales” shall be defined as follows:

(i)         In the case of sales of the Products by [ ], “Net Sales” shall mean the gross sales price of the Products, less trade or quantity discounts (but not cash discounts), rebates and credits allowed for returned goods, exclusive of any sales, use or similar taxes, and delivery and insurance charges to customers, if any. For purposes of the foregoing, a “sale” of the Solution shall be deemed to occur at the time an invoice for such sale is rendered to the customer. There shall be deducted from Net Sales the amount of any account receivable which has been included in the calculation of Net Sales and which is deemed by [ ] to be uncollectible in accordance with its usual accounting procedures, but if such receivable is subsequently collected, the amount so collected shall be added back to Net Sales.

(ii)        In the case of sub-licenses (and similar commercial arrangements) relating to the Solution, “Net Sales” shall mean all royalties, license fees and other amounts received by [ ] from or in connection with such sub-license or other arrangement.

(iii)       In the case of sales to Affiliates, “Net Sales” shall be calculated on the basis of the selling price of the Solution at the time of such sales; provided, however, that if resales of the Solution are to be made by Affiliates and royalties, fees or other amounts will be paid to [ ] pursuant to sublicense or other commercial arrangement, Net Sales shall be calculated as in (ii) above.

In the event that LICENSED PRODUCTS are sold in the form of a combination product containing one or more active ingredients other than LICENSED PRODUCTS, NET SALES for such combination products shall be calculated by multiplying actual NET SALES of the combination product by the fraction A/(A+B) where A is the invoice price of the LICENSED PRODUCT if sold separately and B is the total invoice price of any other active component or components in the combination if sold separately by LICENSEE or sublicensee; provided, however that the resulting value of such NET SALES of combination products shall not be less than fifty percent (50%) of the value of the NET SALES of the LICENSED PRODUCTS had they been sold separately. If, on a country-by-country basis, the LICENSED PRODUCT and other active component or components in the combination are not sold separately in any country by LICENSEE or sublicensee, NET SALES for purposes of determining royalties on the combination product shall be calculated by multiplying actual NET SALES of such combination product by the fraction C/(C+D) where C is LICENSEE’S or sublicensee’s total actual cost of the LICENSED PRODUCT and D is the total actual cost of the other active ingredient(s) included in the combination product at such point; provided, however that the resulting value of such NET SALES of combination products shall not be less than fifty percent (50%) of the value of the actual cost of the LICENSED PRODUCTS.

 


 

16.       Non-Dilution of Equity Ownership

In consideration of the rights granted to Licensee by Board in this Agreement, Licensee agrees that upon execution of this Agreement it shall issue Board ten thousand (10,000) fully paid, non-assessable shares of its common stock, $0.01 par value, which shares of stock shall equal one ______th (approximately _____%) of all shares of its then issued common stock. This interest shall be non-transferable and non-assignable.

In case of any change in the amount of common stock issued and outstanding, which causes the amount of common stock to increase either through merger, consolidation, reclassification, reorganization, partial or complete liquidation, purchase of substantially all of the assets of the Licensee, or other change in the capital structure of the Licensee, then, as a condition of such change, lawful and adequate provision will be made so that the Board will automatically be issued additional shares of stock to maintain the same equity position (approximately ______) in Licensee that it held prior to the change in common stock. This provision will remain in effect until the first IPO, at such time Licensee may purchase up to _________ (________) of Board’s common stock for either the sum of _____________ ($______) or the fair market price for the common stock, whichever is greater.

 


 

17.       Notification of Claims

INSTITUTION shall notify SPONSOR within such a time frame as not to materially prejudice the rights of SPONSOR, after receipt of notice of injury, claim or suit.

 


 

18.       Software Indemnification (Claims of Infringement)

SPONSOR represents that it owns and/or has the right to license the Licensed Software and agrees that it shall indemnify and defend the Institution from claims of infringement provided the Institution does the following: (i) promptly informs SPONSOR thereof, and furnishes to SPONSOR a copy of each communication, notice or action relating to the alleged infringement, (ii) give SPONSOR the authority, information and assistance necessary to settle, compromise or litigate such suit or proceeding, and (iii) does not settle, or agree to settle, any such suit without the express written permission of SPONSOR. If the Licensed Software is held in any such suit to infringe and its use is enjoined, SPONSOR will have the option, at its own expense, to procure the right to continue using the Licensed Software for the Institution; or replace same with non-infringing Licensed Software; or modify same to make it non-infringing; or refund the cost of such Licensed Software, and accept the return of same.

 


 

19.       Software Maintenance Definitions

“Enhancement” - Any modification or addition that, when made or added to the Licensed Software, materially changes its utility, efficiency, functional capability, or application, but that does not constitute solely an Error Correction. Enhancements may be designated by LICENSOR as minor or major, depending on LICENSOR’s assessment of their value and of the function added to the preexisting Licensed Software.

“Error” - Any failure of the Licensed Software to conform in all material respects to any specifications provided to INSTITUTION by LICENSOR. However, any nonconformity resulting from INSTITUTION’s misuse, improper use, alteration, or damage of the Licensed Software, or INSTITUTION’s combining or merging the Licensed Software with any hardware or software not supplied or identified as compatible by LICENSOR, shall not be considered an Error.

“Error Correction” - Either a modification or an addition that, when made or added to the Licensed Software, establishes material conformity of the Licensed Software to any specifications provided by LICENSOR to INSTITUTION, or a procedure or routine that, when observed in the regular operation of the Licensed Software, eliminates the practical adverse effect on INSTITUTION of such nonconformity.

 


 

20.       State Agency Language

Institution is an agency of the State of Texas, and under the Constitution and laws of the State of Texas possesses certain rights and privileges, is subject to certain limitations and restrictions, and only has such authority as is granted to it under the Constitution and laws of the State of Texas. Notwithstanding any provision hereof, nothing in this Master Agreement is intended to be, nor will it be construed to be, a waiver of the sovereign immunity of the State of Texas or a prospective waiver or restriction of any of the rights, remedies, claims, and privileges of the State of Texas. Moreover, notwithstanding the generality or specificity of any provision hereof, the provisions of this Master Agreement as they pertain to Institution are enforceable only to the extent authorized by the Constitution and laws of the State of Texas; accordingly, to the extent any provision hereof conflicts with the Constitution or laws of the State of Texas or exceeds the right, power or authority of Institution to agree to such provision, then that provision will not be enforceable against Institution or the State of Texas.

 


 

21.       Waiver of Moral Rights

Artist hereby acknowledges the existence of [his/her] statutory moral rights as described in 17 U.S.C. 106A(a), and knowingly waives on the following terms:

a.         Scope.  This waiver applies to the following works: [LIST WORKS or refer to definition of works in contract].

b.         Uses Covered.  This waiver applies to any and all applications in which either the attribution right or the integrity right may be implicated.

c.          Waiver.  For works subject to subparagraph (a) above and for uses listed in subparagraph (b) above, Artist hereby expressly and forever waives any and all rights arising under 17 U.S.C. 106A, and any rights arising under U.S. federal or state law or under the laws of any other country that convey rights of the same nature as those conveyed under 17 U.S.C. 106A, or another type of moral right or adroit moral.

OR

If the Work is one to which the provisions of 17 U.S.C. 106A apply, the Author hereby waives and appoints University to assert on the Author’s behalf the Author’s moral rights or any equivalent rights regarding the form or extent of any alteration of the  the Work (including, without limitation, removal or destruction) or the making of any derivative works based on the Work, including, without limitation, photographs, drawings or other visual reproductions of the Work, in any medium, for University purposes.

 


 

[This provision clearly defines “financing transaction” to expressly include any issuance of stock for value, whether for services or for goods, and designates a fairly standard five-year expiration date for the warrants.]

22.       Warrants

If, as and when LICENSEE issues additional shares of its common stock in connection with any issuance of the corporation’s stock for value, whether for goods or services (hereinafter “FINANCING TRANSACTION”) after the EFFECTIVE DATE of this Agreement and prior to its initial offering of securities to the public, LICENSEE shall issue to LICENSOR warrants (hereinafter “WARRANTS”) to purchase from LICENSEE additional shares of LICENSEE’s common stock (hereinafter “WARRANT SHARES”) equal in number to five percent (5%) of the number of shares of common stock then being issued by LICENSEE. The WARRANTS shall be exercisable before five (5) years from their date of issue. If WARRANTS issued to BOARD and outstanding are not exercised with sixty (60) days prior to the initial public offering of securities by LICENSEE, such WARRANTS shall automatically terminate. LICENSEE shall give BOARD one hundred twenty (120) days written notice prior to the effective date of any such initial public offering. In the event that any of LICENSEE’s common stock is issued in a FINANCING TRANSACTION, the exercise price per WARRANT SHARE shall be equivalent to the lowest price per share of common stock issued in such FINANCING TRANSACTION.

 


 

23.       Work for Hire

23.1      Title.  Company and University intend this to be a contract for services and each considers the Work and any and all documentation or other products and results of the services to be rendered by Company hereunder to be a work made for hire. Company acknowledges and agrees that the Work (and all rights therein) belongs to and shall be the sole and exclusive property of University.

23.2      Copyright Assignment.  If for any reason the Work would not be considered a work-for-hire under applicable law, Company does hereby sell, assign, and transfer to University, its successors and assigns, the entire right, title and interest in and to the copyright in the Work and any registrations and copyright applications relating thereto and any renewals and extensions thereof, and in and to all works based upon, derived from, or incorporating the Work, and in an to all income, royalties, damages, claims and payments now or hereafter due or payable with respect thereto, and in and to all causes of action, either in law or in equity for past, present, or future infringement based on the copyrights, and in and to all rights corresponding to the foregoing throughout the world.

Company agrees to execute all papers and to perform such other proper acts as University may deem necessary to secure for University or its designee the rights herein assigned.