TERMSHEET

Dated: ______

Relating to: ______

Parties:

(1)[name and address] (“ABC”); and

(2)[name and address] (“FGH”)

1.Purpose. This Term Sheet sets out the main commercial principles of a proposed agreement between ABC and FGH (the “Parties”) relating to [ ] (“Agreement”). The Parties intend to negotiate and (subject to obtaining approval from their respective Boards of the negotiated terms) execute an Agreement, no later than [90] days from the date on which they sign this Term Sheet. The parties intend that any such Agreement will include provisions based on the principles of this Term Sheet and other provisions.

  1. Main commercial terms. The Agreement would include terms based on the following principles:

(a)An exclusive, sub-licensable licence under the Patents in the Field and Territory.

  1. Patents means [ ]
  2. Field means [ ]
  3. Territory means [ ]

(b)Payments:

  1. An upfront payment of [ ]
  2. Royalties of [ ]% of Net Sales
  3. Net Sales means [ ]
  4. Minimum annual royalties of [ ]

(c)Performance obligations: [ ]

(d)Duration: [ ]

  1. Confidentiality. [The terms of the confidentiality agreement between the parties dated [ ] continue to apply.]
  1. [Restrictions. For a period of 90 days from the date of this Term Sheet, neither party will negotiate or enter into any agreement with any other person in relation to the licensing of patents in the Field.]
  1. Other terms. The Agreement will include other conventional terms, including without limitation warranties to be given by either party, product liability indemnities to be given by the selling party in its territory, law and dispute resolution provisions (including referral of disputes in appropriate cases to the CEOs of the Parties), confidentiality and termination provisions.
  1. General. Except for clauses 3 and 4 above (which are binding), this Term Sheet is not intended to create, evidence or imply any legal relationship or contract between the Parties. Either party may withdraw from the negotiations without liability. To the extent that any legal issue arises in connection with this Term Sheet, it will be governed by and construed in accordance with English law and will be subject to the exclusive jurisdiction of the English courts.

AGREED by the Parties through their authorised signatories with effect from the date first stated above:

On behalf of ABC:On behalf of FGH:

______

signedsigned

______

print nameprint name

______

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Sample term sheet for EPO 2010. Health warning: this term sheet has been prepared to illustrate some of the points discussed during Module 4C. It is not being put forward as suitable for any particular transaction, and indeed may be highly unsuitable for some types of licensing transaction. Legal advice should be sought as to the appropriate terms for an individual transaction.