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By: Dr. Frederic Erbisch, Director (Retired), Office of Intellectual Property, Michigan
State University
This
Agreement is made and entered into between the__________________, a research
establishment under _______________ laws (hereinafter “Grantor”) having
its principle office at, _______________________________________________________
and ______________________________________ a company organized under the laws
of __________________ (hereinafter “Grantee”), having its principle
office at __________________________________________________________.
1.
Grant of Option. In consideration of payment of the Option Price by the
Grantee to the Grantor, receipt of which the Grantor
acknowledges, the Grantor grants the Grantee an exclusive option
to obtain a license from the Grantor to the Optioned Rights, in
accordance with this Option Agreement.
2.
Definitions.
a. Option
Price means that amount which the Grantor and the Grantee agree
shall be paid for the Optioned Rights within the Term. The Option Price shall
be ___________________________ (___________________)
b. Optioned
Rights means the intellectual property herein described
as:__________________________________________________
c. Term
means that period of time which Grantor and Grantee agree shall
allow Grantee to evaluate the Optioned Rights. The Term shall be
___________ to __________________.
3.
Exercise of the Option.
The Grantee may exercise its option at any time prior to expiration of
the Term by giving written notice signed by the Grantee to the Grantor
at its address stated above. The notice must be personally delivered or
postmarked before the expiration of the Term.
4.
Confidentiality.
The parties agree to maintain discussions and proprietary information revealed
pursuant to the Option Agreement in confidence, to disclose them only to persons
within their respective companies having a need to know, and to furnish
assurances to the other party that such persons understand this duty of
confidentiality.
5.
Conditions to License.
In the event the Grantee elects to exercise its option, execution of a
license agreement, fulfillment of the following conditions to license shall
occur within thirty (30) days after the Grantor receives the notice that
the Grantee is exercising the option. The Grantee shall pay to
the Grantor the following amount and meet the following requirements at
the time it enters into a license agreement with the
Grantor:
a. Pay
an initial license fee of ________________________ ( ) and a royalty
rate not to exceed ____________ percent ( %) of the net sales of Products (as
defined in the License Agreement), and
b. Provide
the Grantor with a preliminary business plan acceptable to the Grantor
that describes the steps proposed by the Grantee to commercialize the
Optioned Rights.
6.
Terms of License.
Terms and conditions of the license agreement will be negotiated in good faith
so as to result in a license acceptable to both parties substantially in the
form of Exhibit A.
7.
Failure to Exercise Option or to Close.
If the Grantee fails to exercise its option properly before expiration of
the Term or fails to meet the conditions to license and enter into a license
within the time allowed, this Option Agreement shall terminate and the
Grantor may retain the Option Price and shall have no further obligation to
the Grantee.
8.
Assignment.
This Option Agreement shall bind and benefit the parties' successors and
assigns. Neither party may assign rights under this Option Agreement without
the prior written consent of the other party.
9.
Entire Agreement; Amendment.
This Option Agreement contains the entire agreement of the parties with respect
to the transaction described in this Option Agreement, and no prior or
simultaneous oral or other written representations or promises shall be a part
of this Agreement or otherwise effective. This Option Agreement may not be
amended or released, in whole or in part, except by a document signed by both
parties.
10.
Indemnity.
Grantee shall indemnify, hold harmless, and defend Grantor and its
trustees, officers, employees and agents against any and all allegations and
actions for death, illness, personal injury, property damage, and improper
business practices arising of the Optioned Rights.
11.
Warranty.
Optioned Rights is experimental in nature nd it is provided WITHOUT WARRANTY OR
REPRESENTATIONS OF ANY SORT, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE OF
NON-INFRINGEMENT. Grantor makes no representations and provides no
warranty that the use of the optioned Rights will not infringe any patent or
proprietary rights of third parties.
12.
Interpretation. The paragraph headings used in this Option Agreement are
provided for convenience of reference only and shall not be used to interpret
the provisions of this Option Agreement. In the event any provision of this
Option Agreement proves to be illegal or unenforceable, the remaining provisions
of this Option Agreement shall be interpreted as if such illegal or
unenforceable provision were not a part of this Option Agreement.
13.
Law.
This Option Agreement is executed and delivered in the ______________ ______ and
shall be constructed in accordance with the laws of the Government of
___________________________________________..
To
evidence their agreement to the foregoing terms and conditions, the Grantor
and the Grantee have executed this Option Agreement below.
Grantor:
______________ Grantee :
______________
By:_____________________________ By :
_____________________________
Signature:
_______________________ Signature :
________________________
Title:___________________________ Title :
_____________________________
Date:___________________________ Date:
_____________________________
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