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CONFIDENTIAL ENGAGEMENT AGREEMENT CLIENT: …

CONFIDENTIAL ENGAGEMENT AGREEMENT CLIENT: [ insert ] Fish & Richardson (the Firm ) is pleased to enter into a professional relationship with [ insert ] (the Client ) in connection with the preparation and filing of one provisional patent application. This document confirms our ENGAGEMENT and sets forth our understanding as to certain aspects of our representation (the AGREEMENT ). The Client understands that our attorney-client relationship will be only with the Client, and not any affiliates, owners, or agents of the Client. Thus, we do not represent any of the parents, subsidiaries, commonly owned corporations, partnerships, employees, officers, directors, investors or members of the Client. 1. Subject Matter. The Firm has been retained by and on behalf of the Client to represent the Client in connection with the preparation and filing of one provisional patent application. The parties understand that this AGREEMENT does not apply to any other matters unless specifically referenced herein (including, for example, filing utility application(s), PCT application(s), preparation/filing of additional patent applications, and prosecution of patent applications).

CONFIDENTIAL ENGAGEMENT AGREEMENT CLIENT: [INSERT] Fish & Richardson P.C. (the “Firm”) is pleased to enter into a professional relationship with

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Transcription of CONFIDENTIAL ENGAGEMENT AGREEMENT CLIENT: …

1 CONFIDENTIAL ENGAGEMENT AGREEMENT CLIENT: [ insert ] Fish & Richardson (the Firm ) is pleased to enter into a professional relationship with [ insert ] (the Client ) in connection with the preparation and filing of one provisional patent application. This document confirms our ENGAGEMENT and sets forth our understanding as to certain aspects of our representation (the AGREEMENT ). The Client understands that our attorney-client relationship will be only with the Client, and not any affiliates, owners, or agents of the Client. Thus, we do not represent any of the parents, subsidiaries, commonly owned corporations, partnerships, employees, officers, directors, investors or members of the Client. 1. Subject Matter. The Firm has been retained by and on behalf of the Client to represent the Client in connection with the preparation and filing of one provisional patent application. The parties understand that this AGREEMENT does not apply to any other matters unless specifically referenced herein (including, for example, filing utility application(s), PCT application(s), preparation/filing of additional patent applications, and prosecution of patent applications).

2 2. Patent Services Provided by the Firm. The Firm agrees to prepare and file one provisional patent application. Upon the written AGREEMENT of both the Client and the Firm, the Firm may, in its sole discretion, provide additional legal services to the Client under this AGREEMENT . 3. Fee AGREEMENT . The Firm will provide legal services and advance all required Expenses to the Client for the preparation and filing of one provisional patent application until the occurrence of a Client Event (as defined herein). In exchange for advancing its legal services and all such required Expenses, upon execution of this AGREEMENT , the Client agrees to issue to the Firm a warrant, exercisable within a ten year period from the execution date of this AGREEMENT , to purchase a number of common shares equal to 1% of the company s equity at the time the warrant is exercised, at an exercise price equal to $ per share. The Firm shall exercise the warrant upon the occurrence of an Initial Public Offering or a bona-fide arm s length acquisition of the Client.

3 If not exercised, the warrant will be forfeited and surrendered. In addition to the warrant, the Firm shall receive compensation in the amount equal to the incurred fees (calculated at the Firm s standard hourly billing rates) and disbursements for preparing and filing the provisional patent application (typically in the range of $10,000 to $15,000) upon the occurrence of the Client Event. After the filing of the provisional patent application, the Client agrees to pay legal fees at the Firm s standard hourly rate and all Expenses. Page 2 (a) Client Event Defined. The term Client Event refers to any one of the following: (i) the Client has raised $250,000 in any combination of grants, debt or equity in one or more arms-length transactions (a Qualified Financing ); (ii) the Client s cumulative revenues exceeds $250,000; (iii) the Client has been merged into or acquired by a third party or substantially all of Client s assets have been sold (a Change of Control ); or (iv) the patent applications prepared with the assistance of the Firm, any patent applications derived from such applications, or any patents issuing from either of the foregoing have been assigned to a third party.

4 (b) Expenses. The Firm will advance certain disbursements ( Expenses ) in connection with the preparation and filing of the provisional patent application under this AGREEMENT . Patent Prosecution expenses are limited to United States Patent & Trademark Office ( USPTO ) fees relating to the filing of the provisional patent application. 4. Right to Purchase. Should the Client decide to sell or assign the patent prepared under this AGREEMENT or should the Client dissolve, the Firm (or an entity designated by the Firm) shall have the right to match the highest bid for the patents. 5. Right to Assume Responsibility for Prosecution. If the Client elects to cease prosecution of the patent or if the Client allows any issued patent to lapse through failure to pay any maintenance or annuity fees, upon the Firm s request, the Client agrees to assign the patent to the Firm (or an entity designated by the Firm) and the Firm may, in its sole discretion, continue prosecution or assume responsibility for the maintenance or annuity fees.

5 6. Firm Statements. The Firm will prepare and submit monthly statements to the Client that itemize the legal fees and Expenses incurred on behalf of the Client. It is possible that statements for some Expenses will be delayed by several months because of delays in the Firm s receipt of invoices from third parties. 7. Client Aid & Support. In addition to the other responsibilities set forth in this AGREEMENT , the Client agrees to aid and support the Firm in the preparation and prosecution of patent and trademark applications. The Client shall be candid and cooperative with the Firm and keep the Firm informed with complete and accurate factual information, documents, and other communications relevant to the Firm s representation. The Firm will keep the Client reasonably informed of significant developments in the representation and will consult with the Client as to issues that may arise from time to time. The Client recognizes that timely decisions may be required, and that any failure to cooperate could be prejudicial to its interests.

6 The Client will reasonably assist the Firm by making timely strategic and tactical decisions to allow the Firm to represent Client competently. The Client understands that its aid and support of the Firm may require a substantial investment of time and resources. The Client shall reasonably bear the expense of its own time and resources in connection with the Client Aid & Support. Page 3 8. Exclusivity. The Firm s representation with respect to the application prepared and filed in accordance with Section 2 shall be exclusive unless the Client terminates its relationship with the Firm under Section 9 or the Firm withdraws under Section 10. A circumstance may arise where the Client desires to file additional patent applications or undertake additional actions outside of the scope of the ENGAGEMENT as defined in Section 2, in this event, the Client may engage the Firm to prepare, file, and prosecute these patent applications at the Client s expense (billed according to our standard rates).

7 9. Client s Right to Terminate Representation. Under this AGREEMENT , the Client retains the right to terminate the attorney-client relationship with the Firm at any time. If the Client chooses to terminate representation, the Client s ENGAGEMENT of another firm to continue preparation and filing of the provisional patent application will be treated as a Client Event under Section 3(a). In that event, the Firm shall be entitled to immediate payment of the amount set forth in Section 3 (including the warrant set forth in Section 3). Should the Client elect to terminate the Firm s representation, the Client agrees to pay for all of the Firm s costs and attorney fees associated with the Client s transition to new representation, if any. 10. The Firm s Right to Withdraw From Prosecution. The Firm retains the right to withdraw its representation of the Client at any time and after reasonable notice. Upon withdrawal, the Firm s compensation, if any, will depend on whether the withdrawal was for cause or without cause.

8 (a) Withdrawal For Cause. A withdrawal for cause occurs in any one of the following circumstances: (i) the Client fails to provide the reasonable support and aid to the Firm required by this AGREEMENT ; (ii) the Client fails to fully comply with the disclosure requirements of any patent office or other patent examining or issuing entity; or (iii) an irreconcilable ethical conflict of interest arises that is not caused by the Firm and the Firm has not obtained a waiver of the conflict of interest satisfactory to the Firm. (b) Firm Compensation After Withdrawal For Cause: In the event of a withdrawal from continued prosecution or other representation by the Firm for cause, the Firm shall be entitled to the amounts set forth in Section 10 (Client s Right to Terminate Representation). (c) Firm Withdrawal Without Cause: The Firm may withdraw without cause at any time. In the event of such a withdrawal prior to the filing of the provisional application, the Firm shall not be entitled to any compensation (inclusive of the warrant) or reimbursement of Expenses.

9 In such a case, the Client is free to select other legal counsel to Page 4 continue preparation and filing of the provisional patent application subject to this AGREEMENT . (d) Client Transition. Should the Firm elect to withdraw, the Firm shall undertake reasonable efforts to assist in and facilitate the Client s transition to new representation, including, but not limited to, the transfer of files to the Client or its agent. The Client agrees to use its best efforts to find a replacement for the Firm, should a replacement be necessary, within 30 days of the Firm s decision to withdraw. Should the Client fail to provide a replacement firm within 30 days, the Client agrees to allow the Firm to withdraw from representation. In such a situation, the Firm will send the Client a bill for all fees and expenses and failure to pay will be viewed as cause to withdraw under rule 37 (c)(1)(vi). 11. Waiver of Conflict.

10 This letter confirms with the Client that the Firm s AGREEMENT to represent it is conditioned upon the understanding that the Firm is free to represent any clients (including the Client s adversaries) and to take positions adverse to either the Client or a Client-affiliated entity in any matters (whether involving the same substantive area(s) of law for which the Client has retained us or some unrelated area(s), and whether involving business transactions, counseling, intellectual property prosecution, litigation or otherwise), which do not involve the same factual and legal issues as matters for the Client has retained us or may hereafter retain us. The Client should be aware that, in similar ENGAGEMENT letters with other clients of the Firm, we have asked for similar agreements to preserve our ability to represent the Client. 12. Information Rights; Right of Inspection. The Client will prepare and submit bi-annual statements to the Firm accounting team within 30 days of the end of the calendar half-year that provide an accounting of the revenue earned by the Client and any financing.


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