gunnabeoneday, about to pump some iron so will have to be quick. Frog didn't give you any answers? I am surprised because I know for a fact that he is fully acquainted with the terms of the option from previous RB postings.
I believe that the option does not apply to Retinome because there is a 6 month expiry (see below). Frog's point 2 is wrong IMHO. Yes, to point 3. Any product that involves funding from a third party is exempt from the Option.
Here is my understanding of the option process from a previous RB post (where I agreed with frogdreaming of all things). The clauses referred to are the actual clauses in the Option agreement taken from the relevant 10K. It is complicated and this is my interpretation which may be wrong, but I think it works this way:
DNAP notify Orchid of some new intellectual property (IP). Orchid may decline to exercise its option there and then, otherwise DNAP negotiate with Orchid for the transfer of the IP (starting within 90 days of Orchid exercising its option) and may not negotiate with any third-party without first negotiating with Orchid. These negotiations can last for a total elapsed time of 6 months (this would be 9 months elapsed time if DNAP drag their heels for 90 days before starting negotiations but there is no point in them doing this so in practice it should be 6 months only). DNAP can force Orchid to exercise its option at any time after it has disclosed the IP by giving 90 days prior written notice to Orchid. This seems to be a long stop to prevent Orchid from just not responding to the initial IP notification and delaying indefinitely the start of the 6 month negotiating period (note in practice Orchid can drag their heels and extend the negotiation elapsed time by 90 days but I do not think that it is in their interests to do so). Orchid may exercise its option to any IP not previously sold, licensed or partnered, at any time during the term of the agreement and for 25 years after (a long stop for Orchid which should never apply in practice).
If Orchid declines to negotiate, or the parties fail to execute a license or other agreement after 6 months of negotiations, DNAP may negotiate with third parties. On receipt of an offer for IP from a third party, DNAP make the same offer to Orchid who have 20 business days to accept or reject the offer. Orchid have to include equivalent terms to those made by the third party in any acceptance, and the independent valuation process related to this (which can entail a further 10 day delay) is described. If Orchid reject the offer then DNAP can proceed with the third party. Note that I think that clauses 8.5 and 8.7 in the agreement are saying the same thing and that the 20 business days in 8.5 is the same as the 30 days in 8.7. It seems (clause 8.6) that DNAP may accept a third party offer outright without reference to Orchid if the consideration is not less than Orchid’s last offer plus 50% of the difference between the last amount offered by Orchid and DNAP during negotiations. I assume that this is the case.
Hope this helps!
