Negotiation Exercise

The Swedish Biotechnology Institute has isolated a gene sequence and a

promoter from Arabidopsis, a member of the mustard family, which effectively
allows for the transformation of cotton plants to produce cotton and large amounts
of oil. The oil from the cotton plants can be used directly by diesel engines.
Researchers have not inserted these genetic materials into any other plant, but the
researchers feel that this could be successfully done.

The researchers have not published any papers or made any presentations
concerning the materials. They have prepared a manuscript and will submit it to a
scientific journal after a patent application is filed. No patent application has been
filed, however, a patent attorney is preparing a set of claims for an application.
After the researchers review the claims the attorney will prepare the application.

Somehow the Edinburgh Research and Development Corporation learned

of the material. However, the Corporation knew very little about the material. The
one bit of “information” (gossip) that most intrigued the company was the
production of the biodiesel fuel. Corporation researchers wanted to test the
material to see if it really did cause plants to increase the amount of oil produced
and that the oil could be used as a fuel for vehicles.

The corporation has had a few successes, but is looking for something that
could make a very big impact and earn a lot of money. Overall the corporation is
considered as an R&D company, it is not outstanding in any way. Developing a
biofuel which could reduce the country’s dependence on foreign petroleum would
certainly take them out of the “average” category.

Corporation executives have decided to “borrow” the material from the

Swedish Biotechnology Institute and to use it to find an economical way to
produce large quantities of biofuel. The corporation executives do not believe the
Institute realizes the importance of its work nor is it thought to be capable of
conducting the needed research.

Corporation attorneys have prepared a material transfer agreement that suits

its needs and sent it, plus a letter, requesting the Institute transfer the material to
the corporation. The institute has received the letter and material transfer
agreement and has reviewed it. Representatives from the corporation are visiting
the institute to obtain an executed copy of the agreement and the material. Half of
you are from the corporation and half from the institute, you meet, what happens?

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 Negotiation - Material Transfer Agreement

1. This Material Transfer Agreement is made and entered into as of March 30,
2021 (the “Effective Date”) by and between the Swedish Biotechnology Institute
(hereinafter referred to as “LENDER”) having its principle office at 1421 Nobel
Place, Stockholm, Sweden and the Edinburgh Research and Development
Corporation (Hereinafter referred to as “BORROWER”) having its principle office
at 75663 Piccadilly Square, London England.

2. In consideration of the mutual covenants contained herein and with the

intention of being legally bound under the laws of Great Britain.

3. The “MATERIAL” covered by this Agreement is defined as and includes the

following; a promoter, G463, and a gene sequence, O2981, which controls oil
production in cotton plants (hereinafter referred to as “MATERIAL”) developed
by Dr. Hans Johnson. The MATERIAL was isolated from a mutant Arabidopsis
seedling and multiplied through transplantation into non-mutant Arabidopsis
plants. Presently one manuscript is in preparation which characterizes the
MATERIAL. A Patent application covering the MATERIAL, G463 and O2981,
has not been drafted

4. BORROWER desires to obtain samples of the MATERIAL and the LENDER

is willing to provide the MATERIAL to the BORROWER solely for the permitted
uses and on the terms and conditions set forth in this Agreement.

5. BORROWER agrees that this MATERIAL can be released by the

BORROWER to those persons currently conducting oil plant research and to co-
workers working directly under a signatory’s supervision who have agreed to
abide by the terms and conditions of this Agreement. No one is permitted to take
or send This MATERIAL can be sent to any other location without written
permission from the LENDER.

6. The MATERIAL has been developed over a substantial period of time at

substantial expense and is of great importance to the LENDER business.
BORROWER acknowledges that the LENDER is and will at all times remain the
owner of the MATERIAL, unless the BORROWER locates a potential buyer or
licensee of the MATERIAL. Under such conditions ownership will be assigned to
BORROWER. BOOROWER shall share any profit it obtains through the sale or
licensing of MATERIAL

7. The BORROWER retains ownership of: (a) modifications which

contain/incorporate the MATERIAL (except that, the LENDER retains ownership
rights to the MATERIAL included therein except as noted in Paragraph 7), and (b)
those substances created through the use of the MATERIAL or modifications, but

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which are not progeny, unmodified derivatives or modifications (those substances
that do not contain the original MATERIAL, progeny, unmodified derivatives of
the LENDER). If either 2 (a) or 2 (b) results from the collaborative efforts of the
LENDER and the BORROWER joint ownership may be negotiated

8. This Agreement and the resulting transfer of MATERIAL constitute a

restricted exclusive license for BORROWER to use the MATERIAL..
MATERIAL will not be used for any purpose inconsistent with this Agreement
Upon completion of the work for which this license is granted, MATERIAL,
which has not been destroyed, will be disposed of as explicitly directed by the
LENDER. The LENDER retains title to the MATERIAL, and BORROWER
shall not obtain any ownership rights in MATERIAL except as noted in
Paragraph 7

9. MATERIAL is experimental in nature and it is provided AS IS WITHOUT

WARRANTY OF ANY SORT, EXPRESSED OR IMPLIED, INCLUDING
WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR USE. LENDER warrants that the use of the
MATERIAL by BORROWER for any purpose will not infringe any patent of
proprietary rights of third parties.

10. BORROWER agrees that it will follow all applicable laws and guidelines set
forth by proper authority regarding the use and handling of such MATERIAL.

11. BORROWER agrees that it will not use the MATERIAL in human
subjects, in clinical trials, or for diagnostic purposes involving human subjects
without informing the LENDER of such activity.

12. The BORROWER shall be responsible for any and all import/export
requirements and regulations for the reception of such MATERIAL.

13. If the BORROWER intends to use such MATERIAL to determine if a

commercializable system can be developed as a result of the BORROWER having
received this MATERIAL whether patentable or not, BORROWER shall promptly
notify the LENDER in writing of the substance of each such discovery and of the
filing of any patent application thereon. BORROWER agrees to share profits
received with LENDER with seventy percent of such profits (70%) to be retained
by BORROWER. Prior to distributing such profits BORROWER shall deduct any
patent expense from the LENDER’S share of the profits.

14. BORROWER shall provide LENDER with a manuscript of any proposed

publication or presentation resulting from the study using MATERIAL at least one
hundred eighty (180) days prior to submission thereof for publication or
presentation. LENDER shall notify BORROWER in writing within fourteen (14)

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days concerning editorial modifications in the manuscript.

15. BORROWER hereby agrees, upon the request of the LENDER, to provide the
LENDER with a report of observations related to the MATERIAL by providing
the LENDER with a report describing the results of such research using the
MATERIAL. LENDER shall maintain such report in confidence for twenty five
(25) years from the date of receipt.

16. BORROWER hereby grants the LENDER a non-exclusive, royalty bearing

license to use for its internal research purpose any information or new material
developed by BORROWER using the LENDER MATERIAL whether patentable
or not. Such license shall be restricted to the country of Sweden. The LENDER
agrees not to publish results involving BORROWER’s data without citing its
source and giving credit of authorship/creatorship to BORROWER, provided that
is desired by BORROWER.

17. The BORROWER may disclose the LENDER’S confidential Information to a

governmental authority if it believes that such disclosure is required by applicable
law or regulation or by subpoena or order of court of competent jurisdiction,
provided that such disclosure is subject to all applicable governmental or judicial
protection available for like material and reasonable advance notice is given to the
other party. LENDER shall hold any and all of BORROWER’S information in
strict confidence. Any such breach of this confidence shall be considered as
neglect and LENDER shall be responsible for any damage BORROWER
determines was caused by such a breach.

18. BORROWER will exercise all reasonable precautions to protect the integrity
and confidentiality of the MATERIAL, and BORROWER shall maintain records
of the location of all MATERIAL.

19. This Agreement will terminate on the earliest of the following dates: (1) when
the MATERIAL becomes generally available from third parties, (2) on completion
of BORROWER’s current research with the MATERIAL, (3) on (30) thirty days
written notice by either party to the other, or (4) on 30 March, 2025.

20. This Agreement shall be governed by the laws of Great Britain.

21. IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement.

LENDER _________________ BORROWER _______________

By: ______________________ By: _______________________
Name: ____________________ Name: ____________________
Title: _____________________ Title: ______________________