provisions contained in this document are expressly non-binding, are
set out for discussion purposes only and are part of the ongoing
negotiations between North Carolina State University and
_______________. There is no legal or other commitment by any party
as to any of the provisions in this document unless and until the
necessary internal approvals have been given and a formal written
agreement has been signed by authorized signatories of both parties.
Agreement is entered into this _______________
day of ____________,
Date”) between NORTH CAROLINA STATE UNIVERSITY, a constituent
institution of the University of North Carolina and a
educational and research institution organized under the laws of
North Carolina ("NCSU"), having its principal office at
Campus Box 8210, Raleigh, North Carolina 27695-8210, and
a corporation organized under the laws of ___________
with its corporate headquarters in _________________ and having its
principal office at_____________________.
controls valuable research material as described in Appendix
is incorporated herein).
license its research material in a manner that will benefit the
public and best facilitate the distribution of useful products and
the utilization of new processes.
has expertise in developing commercial products and has the necessary
resources to invest in development and marketing of products and
processes based on the research material.
desires to obtain a license to use the research material under the
terms and conditions set forth below.
1 – DEFINITIONS
the purposes of this Agreement, the terms and phrases below have the
means any corporation or non-corporate entity that controls, is
controlled by, or is under the common control with a party. An
entity is deemed to be in control of another entity if (a) it owns or
directly or indirectly controls at least 50% of the voting stock of
the other corporation or (b) in the absence of at least 50% of the
voting stock of a corporation, or in the case of a non-corporate
entity, if it possesses directly or indirectly the power to direct or
cause the direction of the management and policies of such
corporation or non-corporate entity, as applicable.
means any product comprised of a combination of a Licensed Product
and at least one other product where the other product is an active
ingredient, device, delivery system or other separately sold product
co-packaged such that the Licensed Product and the other product are
integrated into a singular product.
means the research material referenced and described in Appendix A.
means Licensed Material and any products containing or otherwise
incorporating Licensed Material or Licensed Technical Information
sold or distributed by Licensee to parties other than Affiliates or
third party service providers.
means technical data, practices, plans, specifications, and other
information or assistance with respect to reproducing or using the
1.06 “Net Sales”
for the purpose of computing royalties under this Agreement means the
total invoiced sales price less any charges for (i) sales taxes or
other taxes separately stated on the invoice, (ii) shipping and
insurance charges, (iii) deductions for actual allowances for
returned or defective goods and (iv) trade discounts, but not cash
discounts. In order to assure NCSU the full royalty payments
contemplated in this Agreement, Licensee agrees that in the event any
Licensed Products are sold for purposes of resale to an Affiliate,
the royalties to be paid in respect to such Licensed Products will be
computed on the Net Sales Price at which the purchaser for resale
sells such products rather than upon the Net Sales Price of the
1.07 “Sale or Sold” for purposes of
computing royalties, means when invoiced, exchanged or otherwise
transferred by gift or otherwise, including the use of Licensed
Products by Licensee or any other person authorized by Licensee,
except to the extent that such Licensed Products and Licensed
Services are used strictly for development of a Licensed Product.
Where products are not sold, but are otherwise
transferred, Net Sales for the purposes of computing royalties will
be the selling price at which products of similar kind and quality,
sold in similar quantities, are currently being offered for sale by
Licensee. Where such products are not currently being offered for
sale by Licensee, the Net Sales of products otherwise transferred
will be the average selling price at which products of similar kind
and quality, sold in similar quantities, are then currently being
offered for sale by other manufacturers.
other defined terms have the meanings given them elsewhere in this
2 - LICENSE
to the terms and conditions of this Agreement, NCSU hereby grants to
Licensee a non‑exclusive,
non‑transferable license to use Licensed Material and Licensed
Technical Information for internal research, development and sales of
Licensed Products for research purposes. For the avoidance of doubt,
this license does not include the right to sell or distribute
Licensed Products, Licensed Material and/or Licensed Technical
Information for diagnostics, therapeutics or any other non-research
License granted herein does NOT
include the right to sublicense.
expressly consents to the transfer of Licensed Material and Licensed
Technical Information by Licensee to its Affiliates and third party
service providers who agree to be bound by the terms and conditions
of this Agreement.
as expressly provided herein, the license granted hereunder does not
confer any rights upon Licensee by implication, estoppel or otherwise
as to any technology or intellectual property (including, but not
limited to, patent applications, patents, and know-how).
the foregoing, any and all licenses granted hereunder may be subject
to the rights of the United States Government which may arise out of
its sponsorship of the research which led to the Licensed Material.
ARTICLE 3 -
the Effective Date, Licensee must pay to NCSU a non-refundable,
non-creditable lump sum fee of US$
This represents a materials administration fee of $X and a license
fee of $X.
the times and in the manner set forth in this Agreement, Licensee
must pay to NCSU a royalty equal to ______percent (%) of the Net
Sales of Licensed Products sold by Licensee or its Sublicensees.
obligation to pay minimum annual royalties begins on December 31st
20XX. Non-refundable, non-creditable minimum annual royalties are
payable to NCSU as specified below. If actual royalties due under
3.02 in any year are greater than the minimum royalty payment due for
that year, the minimum royalty will be credited against actual
royalties due in that year. Minimum annual royalties are as follows:
and each calendar year thereafter in which this license Agreement is
in effect: US$__________.
If a Licensed
Product is sold as part of a Combination Product, the Net Sales price
of any such Combination Product shall be determined in any accounting
period by multiplying the Net Sales price of the Combination Product
by the fraction A/(A+B), where A is the average invoiced price per
unit of the Licensed Product when sold as a stand-alone Licensed
Product in finished form in the applicable country and B is the
average invoice price of the other product(s) sold as stand-alone
product(s) in finished form in the applicable country. In the event
that such average invoiced price cannot be determined for the
Licensed Product or the other product(s), the fraction applied to the
Net Sales price in the applicable country for purposes of determining
royalties shall be the percentage determined by dividing one by the
number of active ingredients/stand-alone product(s) in that
under this Agreement shall be made on or before the due date or
within thirty (30) days of any invoice date on invoices received from
NCSU. If overdue, payments shall bear interest until payment at the
rate for past-due accounts receivable set by the Secretary of the
North Carolina Department of Revenue and in effect on the due date.
N.C.G.S. §105-241.21 and N.C.G.S. §147-86.23. The payment of such
interest does not foreclose NCSU from exercising any other rights it
may have as a consequence of the lateness of the payment, including
termination in accordance with Article 12.03 herein.
Licensed Products or LicensedServices
are sold in a currency other than United States dollars, the Net
Sales shall first be determined in the foreign currency of the
country in which such Products or Services are sold and then
converted to United States dollars at the rate published by the Wall
Street Journal (U.S. edition) for conversion of that foreign currency
into United States dollars on the last day of the quarter for which
such payment is due.
4 – DELIVERY OF LICENSED MATERIAL
thirty (30) days from the Effective Date of this Agreement,
University, through the Investigator, will provide Licensee with the
Licensed Material and the Licensed Technical Information. The
Licensed Material and Licensed Technical Information will be sent to
the attention of the Licensee at the address designated in Article
- DUE DILIGENCE REQUIREMENTS
must use its best efforts to bring Licensed Products to market
through a thorough, vigorous and diligent program for exploitation of
the Licensed Materials, to develop manufacturing capabilities, and to
continue active, diligent marketing efforts for Licensed Products
throughout the term of this Agreement.
6 – REPORTS
the first commercial sale of a Licensed Product or Licensed Service,
and in addition to the reports required under Article 5.01, Licensee
must render to NCSU quarterly a written report setting forth for the
preceding calendar quarter all applicable information specified in
Appendix D. Quarterly reports shall be due within thirty (30) days
of March 31, June 30, September 30, and December 31 and each royalty
report shall be accompanied by the payment of all royalties due for
the calendar quarter preceding. Reports tendered must include the
calculation of royalties by product by country (if Territory is
greater than U.S.) in substantially the format provided in Appendix
D. Minimum annual royalties, if any, which are due NCSU for any
calendar year must be paid by Licensee along with the written report
due in the quarter following the end of the calendar year to which
the minimum pertains.
must keep full, true and accurate books of accounts and other records
containing all particulars necessary to properly ascertain and verify
the amounts payable to NCSU hereunder. These books of account must
be kept at Licensee’s principal place of business or the principal
place of business of the appropriate division of Licensee to which
this Agreement relates for a minimum of 5 years following the end of
the calendar year to which they pertain.
shall have the right, from time to time and at reasonable times
during normal business hours, through an independent certified public
accountant, to examine the records of Licensee, including, but not
limited to, sales invoice registers, sales analysis reports, original
invoices, inventory records, price lists, sublicense and distributor
agreements, accounting general ledgers, and sales tax returns, in
order to verify the calculation of any royalties and/or fees payable
under this Agreement. Such examination and verification shall not
occur more than once each calendar year. If any such examination and
verification reveals an underpayment by Licensee to NCSU of more than
5% for any quarter examined, Licensee shall immediately pay NCSU the
amount of such underpayment plus interest (in accordance with Article
3.09) and shall reimburse NCSU for all expenses incurred in the
examination and verification of the records by the independent
certified public accountant.
ARTICLE 8 - TERM AND
sooner terminated as otherwise provided in this Agreement, the term
of this Agreement shall commence on the Effective Date and shall
continue for a period of ___ years, extendable upon mutual written
agreement of the parties..
may terminate this Agreement at its sole discretion by giving NCSU
written notice at least 3 months prior to such termination. It is
understood that Licensee will remain responsible for all monetary
payments or other obligations that mature prior to the effective date
shall have the right to terminate this Agreement upon the occurrence
of any one or more of the following events:
of Licensee to make any payment required pursuant to this Agreement
to diligently commercialize as set forth in Article 4;
of Licensee to render reports to NCSU as required by this Agreement;
insolvency of the Licensee or the institution of any proceeding by
Licensee under any bankruptcy or insolvency law or placement of
Licensee’s assets in the hands of a trustee or receiver; or
breach of any other material term of this Agreement.
and Right to Cure
all cases of breach, NCSU may exercise its right of termination by
giving Licensee or Licensee’s trustees, receivers, or assigns,
thirty (30) days prior written notice of NCSU’s election to
terminate. Upon expiration of such period, this Agreement shall
automatically terminate unless Licensee has cured the breach. Such
notice and termination shall not prejudice NCSU’s right to receive
royalties or other sums due hereunder and shall not prejudice any
cause of action or claim of NCSU accrued or to accrue on account of
any breach or default by Licensee. Licensee’s ability to cure a
breach will apply only to the first two breaches properly noticed
under the terms of this Agreement; any subsequent breach will entitle
NCSU to terminate upon notice.
Within 30 days of expiration or termination of this Agreement,
Licensee must, as directed by NCSU, return or destroy Licensed
Mateirals and Licensed Technical Data provided to Licensee during the
term of this Agreement, retaining no copies. If destroyed, Licensee
must provide NCSU with a written statement signed by an authorized
representative of Licensee certifying the destruction of all
information data, and relevant materials in a safe and legal manner.
ARTICLE 9 -
agrees to maintain Licensed Material and Technical Information in
confidence and not distribute to others except Licensee’s
Affiliates and third party service providers under an obligation of
confidentiality, without the prior written permission of University.
Licensee agrees to take measures consistent with the industry
standard to maintain the Licensed Material and Technical Information
in a secure location that allows access only by authorized
individuals. Licensee’s obligation of confidentiality shall endure
for as long as this Agreement is in effect and for five (5) years
thereafter, but shall not apply to Licensed Technical Information
already known to the receiving party at the time of the disclosure;
(b) becomes publicly known without the wrongful
act or breach of this Agreement by the receiving party;
rightfully received by the receiving party from a third party on a
subsequently and independently developed by employees of the
receiving party who had no knowledge of the information, as verified
by written records;
approved for release by prior written authorization of the disclosing
disclosed pursuant to the requirements of applicable law or pursuant
to any judicial or government requirement or order, provided that the
party so disclosing takes reasonable steps to provide the other party
sufficient prior notice in order to contest such request, requirement
or order and provided that
such disclosed confidential information otherwise remains subject to
the obligations of confidentiality set forth in this Article 9.
10 - NOTICES
the purpose of all written communications and notices between the
parties, their addresses are:
Notice Licensee Notice
delivery via the U.S. Postal Service
of Research Commercialization ______________________________
any other addresses of which either party shall notify the other
party in writing.
date of giving any such notice, request, report, statement,
disclosure or other communications, and the date of making any
payment hereunder required (provided such payment is received), is
the date of the U.S. postmark of such envelope if marked or the
actual date of receipt if not marked or if delivered otherwise.
11 - ASSIGNMENT
Licensee possesses unique expertise and resources to fully develop
and commercialize the Licensed Materials. This Agreement may not be
assigned, in whole or in part, by Licensee without the prior written
consent of NCSU, which, in connection with the sale of substantially
all of Licensee assets, will not be unreasonably withheld. Any
assignment of this Agreement without the prior written consent of
NCSU shall be void. This Agreement shall bind and inure to the
benefit of the successors and permitted assigns of the parties.
12 - REPRESENTATIONS
MAKES NO WARRANTIES OF ANY KIND. IN PARTICULAR, THERE ARE NO EXPRESS
OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE NOR IS THERE A WARRANTY THAT THE USE OF THE LICENSED
MATERIALS, LICENSED TECHNICAL INFORMATION OR LICENSED PRODUCTS WILL
NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK OR OTHER RIGHTS. IN
ADDITION, NOTHING IN THIS AGREEMENT MAY BE DEEMED TO BE A
REPRESENTATION OR WARRANTY BY NCSU OF THE ACCURACY, SAFETY, EFFICACY,
OR USEFULNESS, FOR ANY PURPOSE, OF THE LICENSED MATERIALS, LICENSED
TECHNICAL INFORMATION OR LICENSED PRODUCTS. NCSU HAS NO OBLIGATION,
EXPRESS OR IMPLIED, TO SUPERVISE, MONITOR, REVIEW OR OTHERWISE ASSUME
RESPONSIBILITY FOR THE PRODUCTION, MANUFACTURE, TESTING, MARKETING OR
SALE OF ANY LICENSED PRODUCT.
13 - INDEMNITY AND INSURANCE
and its trustees, officers, employees, students, and agents
(collectively, “NCSU Indemnities”) will be indemnified, defended
by counsel acceptable to NCSU, and held harmless by Licensee from and
against any claim, liability, cost, expense, damage, deficiency, loss
or obligation, of any kind or nature (including, without limitation,
reasonable attorneys’ fees and other costs and expenses of defense)
based upon the exercise of the license(s) granted and any action
relating to product liability.
must maintain in force throughout the term of this Agreement or for
five (5) years after the last commercial sale of a Licensed Product,
whichever is later, at its sole cost and expense, with licensed and
reputable insurance companies, general liability insurance and
products liability insurance coverage in amounts reasonably
sufficient to protect against liability under Article 13.01. NCSU
has the right to ascertain from time to time that such coverage
exists, such right to be exercised in a reasonable manner.
party is an agent of the other party for any purpose whatsoever.
14 – EXPORT CONTROLS
The license granted in this
Agreement is conditioned upon compliance with all of the United
States laws and regulations controlling the export of technical data,
computer software, laboratory prototypes and other commodities and
technology. The transfer of certain technical data and commodities
may require a license from the cognizant agency of the United States
Government and/or written assurances by Licensee that Licensee will
not export data or commodities to certain foreign countries without
prior approval of such agency. NCSU makes no promise or
representation that a license is not required nor that, if required,
it will be issued.
15 - USE OF PARTY’S NAME
No party shall, without prior written consent of the other party, use
the name or any trademark or trade name owned by the other party, or
owned by an affiliate or parent corporation of the other party, in
any publication, publicity, advertising, or otherwise, and NCSU may
identify Licensee as a licensee of Licensed Material.
Section 15.01 above, both
parties may release factual statements regarding the existence of
this license agreement such as “NCSU and Licensee have entered into
an exclusive license agreement for XXX technology”. Any other type
of statement, advertisement, press release, promotional activity or
otherwise by either party that uses the name of the other party will
require the prior written consent of the named party.
ARTICLE 16 –
SEVERANCE AND WAIVER
clause of this Agreement is a distinct and severable clause and if
any clause is deemed illegal, void or unenforceable, the validity,
legality or enforceability of any other clause or portion of this
Agreement will not be affected.
failure of a party in any instance to insist upon the strict
performance of the terms of this Agreement is not a waiver or
relinquishment of any of the terms of this Agreement, either at the
time of the party’s failure to insist upon strict performance or at
any time in the future, and such terms will continue in full force
18 – SURVIVAL OF TERMS
provisions of Articles 11.02, 2.04, 12.02, 12.05, 12.06, 13, 17, and
19 shall survive the expiration or termination of this Agreement.
19 – GOVERNING LAW
Agreement is entered into in the State of North Carolina and must be
interpreted in accordance with and its performance governed by the
laws of the State of North Carolina, without reference to its
conflicts of laws provisions. Any and all litigation relating to
this Agreement or the parties' performance hereunder must be in the
State Courts of North Carolina with the venue being Wake County.
ARTICLE 20 - ENTIRE
Agreement represents the entire understanding between the parties,
and supersedes all other agreements, express or implied, between the
parties concerning the subject matter hereof, and is not subject to
any change or modification except by the execution of a written
instrument subscribed to by authorized representatives of the
ARTICLE 21 –
parties to this document agree that a copy of the original signature
(including an electronic copy) may be used for any and all purposes
for which the original signature may have been used. The parties
further waive any right to challenge the admissibility or
authenticity of this document in a court of law based solely on the
absence of an original signature.
the parties have executed this Agreement on the dates set forth