NORTH CAROLINA STATE UNIVERSITY LICENSE AGREEMENT

Exhibit 10.5

This Agreement is made by and between North Carolina State University (hereinafter referred to as “NCSU”), a constituent institution of the University of North Carolina and an educational institution organized under the laws of North Carolina, and having its principal office at 0 Xxxxxxxx Xxxx, Xxx 0000, Xxxxxxx, Xxxxx Xxxxxxxx 00000-0000, and Biolex, Inc. (“hereinafter referred to as “LICENSEE”), a corporation organized under the laws of Delaware and having its principal place of business at Raleigh, North Carolina.

WHEREAS, Dr. Xxxx-Xxxxx Stomp has discovered an invention titled “Genetically Engineered Duckweed”, (NCSU File No. 95-60), and NCSU owns all rights, title, and interest in and to the Patent Rights (as hereinafter defined) pertaining to such invention; and

WHEREAS, NCSU has the right to grant licenses to the foregoing invention, and wishes to have the invention utilized in the public interest; and

WHEREAS, NCSU is willing to grant a license to LICENSEE to the invention and related Patent Rights and Subject Technology subject to the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth herein, and for good and valuable consideration, the receipt and sufficiency of which is acknowledged, the parties hereto, intending to be legally bound, agree as follows:

ARTICLE 1 - DEFINITIONS

1.01 “Subject Technology” shall mean (a) the invention entitled “Genetically Engineered Duckweed”, and all know-how, unpublished research and development information, and technical data directly related to said invention and to the Patent Rights (as hereinafter defined) which are licensed hereunder, and all alterations, modifications, and extensions thereto which have heretofore been conceived and/or reduced to practice by NCSU, its employees, faculty members, or students as evidenced by written records; and (b) the collection of lemna species in the laboratory of Dr. Xxxx-Xxxxx Stomp of NCSU.

1.02 “Patent Rights” shall mean any and all United States and foreign patent applications now or hereafter filed with respect to the Subject Technology and any patent now issued or hereafter issuing on any such patent applications, as well as substitutes, continuations, divisions, continuations-in-part, reissues and renewals thereof. As of the Effective Date of this Agreement, the following patent applications are pending:

•

U.S. Application Serial No. 60/055.474 (filed 12 August 1997)

1.03	“Field” or “Field of Use” shall mean all applications of the Subject Technology.

1.04 “Licensed Product” shall mean any product, process or use thereof (a) which utilizes or incorporates the Subject Technology; (b) which is covered by an unexpired claim contained in the Patent Rights in the country in which the licensed Product(s) is made,

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

used, sold or transferred; (c) which is manufactured by using a process which is covered in an unexpired claim contained in the Patent Rights in the country in which the Licensed Product(s) is made, used, sold or transferred; or (d) the use of which is covered in an unexpired claim contained in the Patent Rights in the country in which the Licensed Product(s) are made, used, sold or transferred.

1.05 “Net Sales” shall mean LICENSEE’s invoiced sales price for the Licensed Products sold by LICENSEE, less the sum of the following:

(a)

Allowances, credits, rebates, and discounts allowed in amounts customary in the trade;

(b)

Sales, tariff duties and/or value added, excise or use taxes and other government charges directly imposed and actually paid and with reference to particular sales;

(c)

Outbound transportation, shipping, and insurance prepaid or allowed; and

(d)

Amounts allowed or credited on returns or rejections.

In the event any Licensed Product is sold as a component of a combination of functional elements, the Net Sales Price of the Licensed Products so sold shall be calculated for the purpose of computing royalties due by applying to the total net selling price (as herein defined) of the combined or composite products a fractional multiplier having as its denominator the total net selling price of the combined or composite products and as its numerator the net selling price of the included Licensed Products. In the event that there is no separate sale of such above designated Licensed Products or other element of the combination during the accounting period in which the sales of the combined or composite product were made, the Net Sales Price of the Licensed Products so sold shall be calculated for the purpose of computing royalties due by applying to the total net selling price (as herein defined) of the combined or composite products a fractional multiplier having as its denominator the total manufacturing cost of the combined or composite products (determined in accordance with LICENSEE’s customary accounting procedures) and as its numerator the manufacturing cost of the included Licensed Products (similarly determined).

Net Sales shall not include sponsored research fees or payments and other associated success fees or payments received by LICENSEE.

No deductions shall be made for commissions paid to individuals whether they be independent sales agents or regularly employed by LICENSEE and on its payroll, nor for the cost of collections. Licensed Products shall be considered “sold” when xxxx out or invoiced. Net Sales in the case of Licensed Products used or transferred by LICENSEE shall mean the fair market value of Licensed Products as if they were sold to an unrelated third party in similar quantities.

1.06 “Affiliate” or “Affiliates” shall mean (i) any corporation, company or other entity in which LICENSEE owns or controls at least fifty percent (50%) of the stock entitled to vote in election of members of the Board of Directors; or (ii) any corporation, company or other entity which owns or controls at least (50%) of the stock of LICENSEE.

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1.07 “Effective Date” shall mean April 30, 1998.

ARTICLE 2 - LICENSE

2.01 NCSU hereby grants to LICENSEE and LICENSEE hereby accepts from NCSU, upon the terms and conditions herein specified, an exclusive license (with the right to grant sublicenses) in the Field or Field of Use under the Subject Technology and Patent Rights to make, have made, use and sell Licensed Products. Such license is worldwide and shall remain in effect, on a country by country basis, until the full end of the term or terms for which Patent Rights are issued, unless sooner terminated as hereinafter provided. The foregoing notwithstanding, LICENSEE’s rights and license shall be subject to the rights of the U.S. Government pursuant to any funding agreement between NCSU and the U.S. Government.

2.02 LICENSEE shall have the right to grant sub-licenses to its Affiliates and to non-Affiliates and to extend any license granted to LICENSEE to its Affiliates. Any such sub-licenses or extensions shall be subject to the terms of this Agreement and shall be no less favorable to NCSU than is this license. A copy of each sub-license shall be provided to NCSU. LICENSEE agrees to be responsible for the performance hereunder by its Affiliates and sub-licensees, if any. Should this Agreement be terminated for any reason, LICENSEE agrees to assign all such sub-licenses directly to NCSU. From sub-licensing revenues received by LICENSEE, LICENSEE shall pay to NCSU a portion of said revenues according to the following schedule:

(a)

for the first ten million dollars ($10,000,000) of annual sales of Licensed Products by each of LICENSEE’s sublicensees, LICENSEE shall pay to NCSU an amount equivalent to the applicable royalty rate (as specified in Section 4.02 hereof) applied against sales of Licensed Products by each of LICENSEE’s sublicensees.

(b)

for annual sales of Licensed Products by each of LICENSEE’s sublicensees in excess of $10,000,000 but less than $30,000,000, LICENSEE shall pay to NCSU an amount equivalent to 80% of the applicable royalty rate (as specified in Section 4.02 hereof) applied against sales of Licensed Products by each of LICENSEE’s sublicensees.

(c)

for annual sales of licensed Products by each of LICENSEE’s sublicensees in excess of $30,000,000 but less than $50,000,000, LICENSEE shall pay to NCSU an amount equivalent to 60% of the applicable royalty rate (as specified in Section 4.02 hereof) applied against sales of Licensed Products by each of LICENSEE’s sublicensees.

(d)

for annual sales of Licensed Products by each of LICENSEE’s sublicensees in excess of $50,000,000 but less than $70,000,000, LICENSEE shall pay to NCSU an amount equivalent to 40% of the applicable royalty rate (as specified in Section 4.02 hereof) applied against sales of Licensed Products by each of LICENSEE’s sublicensees.

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(e)

for annual sales of Licensed Products by each of LICENSEE’s sublicensees in excess of $70,000,000, LICENSEE shall pay to NCSU an amount equivalent to 25% of the applicable royalty rate (as specified in Section 4.02 hereof) applied against sales of Licensed Products by each of LICENSEE’s sublicensees.

In the event that LICENSEE receives consideration for a sub-license in a form other than cash or securities, NCSU shall be paid by LICENSEE an amount equal to the applicable royalty rate (as specified in Section 4.02 hereof) applied against all sales of Licensed Products by each such sub-licensee.

2.03 The license granted hereunder shall not be construed to confer any rights upon LICENSEE by implication, estoppel or otherwise as to any technology not part of the Subject Technology or the Patent Rights licensed hereunder.

2.04 LICENSEE agrees that any products constituting Licensed Products or produced through the use of Licensed Products will be manufactured substantially in the United States to the extent required by 35 U.S.C. Sec. 204, if such statute shall be applicable.

ARTICLE 3 - DUE DILIGENCE

3.01 LICENSEE agrees to diligently pursue the development of the Subject Technology. This will include manufacturing or producing a Licensed Product utilizing the Subject Technology for testing, development, and sale, and also seeking required governmental approvals, if applicable, of such Licensed Product. In addition to this general commitment to diligence, LICENSEE agrees to the following diligence requirements:

(a)

Licensee shall support a program of collaborative research for at least one year. The parties will negotiate a separate Master Collaborative Research Agreement under which LICENSEE shall support research at NCSU.

(b)

Within three (3) months from the Effective Date of this Agreement, LICENSEE shall deliver to NCSU a report showing LICENSEE’s plans for commercializing the Subject Technology and shall provide a similar report on the anniversary date of such report each year thereafter until first commercial sale of a Licensed Product .

(c)

LICENSEE agrees to commercialize Licensed Products and to pursue additional financing for its business activities consisting of debt financing, equity financing, sublicensing fees, sponsored research payments, or any combination thereof according to the following schedule:

(1) Two hundred fifty thousand dollars ($250,000) in financing consisting of debt financing, equity financing, sublicensing fees, sponsored research payments, or any combination thereof raised within one year of the Effective Date.

(2) A cumulative total of $1 million of financing consisting of debt financing, equity financing, sublicensing fees, sponsored research payments, or any combination thereof raised by the end of the second year following the Effective Date.

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3.02 For any Licensed Products where applicable, LICENSEE agrees to use its best efforts to have the Licensed Products cleared for marketing in those countries in which LICENSEE intends to sell Licensed Products by the responsible government agencies requiring such clearance. To accomplish such clearances at the earliest possible date, LICENSEE agrees to file, according to the usual practice of LICENSEE, any necessary data with such government agencies. Should LICENSEE terminate this Agreement, LICENSEE agrees to assign its full interest and title in such market clearance application, including all data relating thereto, to NCSU at no cost to NCSU.

3.03 Failure by LICENSEE to comply with the provisions of this Article 3 shall result in NCSU having the right, at its option, to convert any exclusive license to a non-exclusive license, or to cancel the license upon thirty (30) days notice, and to require a reversion of rights to all relevant materials, research information and technology, including Patent Rights, transferred to LICENSEE by NCSU.

ARTICLE 4 - LICENSE FEE, ROYALTIES, RECORDS, AND REPORTS

4.01 As partial consideration for the license granted herein, LICENSEE shall issue to NCSU such number of shares of LICENSEE’s Class B Non-Voting Common Stock that, as of the date hereof, is equal to five percent (5%) of LICENSEE’s issued and outstanding shares of capital stock. If LICENSEE issues shares of its capital stock in connection with one or more equity financings up to an aggregate amount of $1,000,000, LICENSEE shall issue to NCSU additional shares of LICENSEE’s Class B Non-Voting Common Stock so that, after taking into account the shares of LICENSEE’s capital stock issued in connection with such financing or financings up to an aggregate of $1,000,000, NCSU, and its permitted transferees, hold, in the aggregate, five percent (5%) of LICENSEE’s then issued and outstanding shares of capital stock excluding any shares of LICENSEE’s capital stock that may be issuable upon the exercise of options granted to employees, directors, or other advisors pursuant to a stock option plan that may be adopted by LICENSEE.

4.02 For as long as this license is in effect, LICENSEE shall pay to NCSU a royalty as follows: [***] percent ([***]%) of Net Sales of Licensed Products sold for therapeutic purposes; [***] percent ([***]%) of Net Sales of Licensed Products sold for diagnostic purposes; and [***] percent ([***]%) of Net Sales of Licensed Products sold for all other purposes other than therapeutic and diagnostic purposes. In the event LICENSEE is obliged to pay a royalty to a third party to make, have made, use or sell a Licensed Product, LICENSEE may reduce its royalty rate obligation to NCSU for that Licensed Product by an amount which is the lesser of (i) one-half (1/2) of the royalty rate owed NCSU, or (ii) the cumulative royalty rate which LICENSEE is obligated to pay to all third parties

4.03 LICENSEE shall render to NCSU on a quarterly basis a written account of the Net Sales of Licensed Products as of July 1, October 1, January 1, and April 1 of each calendar year. The reports of Net Sales and the royalty payment due NCSU thereon shall be due and payable within sixty (60) days following the applicable date. LICENSEE shall make such reports even if there

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have been no Net Sales or if no royalties are due to NCSU for a particular quarter. LICENSEE’s reports shall include at least the following with respect to the applicable period:

(a)

Total number and description of all Licensed Products manufactured and sold.

(b)

Total invoiced sales price for Licensed Products sold.

(c)

Total amount of all sub-licensing revenues received.

(d)

Total amount of deductions applicable as provided in section 1.05.

(e)

Total sales made to U.S. Government Agencies which require no royalty payment.

(f)

Total royalties due to NCSU.

(g)

Names and addresses of all sub-licensees of LICENSEE.

4.05 LICENSEE and its Affiliates shall keep full, true, and accurate books of accounts and other records containing all particulars which may be necessary to ascertain and verify properly such Net Sales. Upon NCSU’s request, LICENSEE and its Affiliates shall permit an independent Certified Public Accountant selected by NCSU (except one to whom LICENSEE has some reason-able objection) to have access during ordinary business hours to such of LICENSEE’s or its Affiliates’ records as may be necessary to determine, in respect of any three (3) month period ending not more than five (5) years prior to the date of such request, the correctness of any report made under this Agreement. Nothing herein shall be construed to limit the authority of the State Auditor of North Carolina.

4.06 All payments made as a result of this Agreement shall be paid in United States dollars in Raleigh, North Carolina, or at such other place as NCSU may reasonably designate consistent with the laws and regulations controlling in any foreign country. If LICENSEE makes a sale for which royalties are due hereunder in a currency other that United States currency, the royalties due to NCSU thereon shall first be determined in the currency in which the sale was made and then converted into its equivalent in United States currency. If any currency conversion shall be required in connection with the payment of royalties hereunder, such conversion shall be made by using the exchange rate prevailing at the Chase Manhattan Bank (N.A.) on the last business day of the calendar quarterly reporting period to which such royalty payments relate.

4.07 The royalty payments set forth in this Agreement, if overdue, shall bear interest until payment at a per annum rate of four percent (4%) above the prime rate in effect at the Chase Manhattan Bank (N.A.) on the due date. However, in no event shall any penalties hereunder exceed eighteen percent (18%) per annum (or 1.5 % per month).

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ARTICLE 5 - PATENTS

5.01 NCSU shall select patent counsel (reasonably acceptable to LICENSEE) and shall have sole responsibility for filing, prosecuting and maintaining appropriate U.S. and foreign patent application(s) on the Subject Technology in the name of NCSU, and all expenses of such protection incurred both prior to and subsequent to the Effective Date shall be paid by LICENSEE. One year following the Effective Date, LICENSEE shall reimburse NCSU for all previously unreimbursed out-of-pocket patent costs, and subsequent to such date LICENSEE shall reimburse NCSU’s out-of-pocket patent costs as they are incurred. NCSU shall keep Licensee advised as to the prosecution of such applications by forwarding to LICENSEE copies of all official correspondence relating thereto (including, without limitation, Applications, Office Actions, and responses thereto). LICENSEE agrees to cooperate with NCSU in the prosecution of patent application(s) to insure that such applications reflect, to the best of NCSU’s and LICENSEE’S knowledge, all items of commercial, scientific and technical interest and importance. All final decisions with respect to the prosecution of said patent application(s) are reserved to NCSU.

5.02 LICENSEE shall designate the foreign countries, if any, in which LICENSEE desires patent protection, and NCSU agrees to file, prosecute and maintain appropriate applications in such countries. LICENSEE shall pay all expenses with regard to such foreign patent protection. NCSU may elect to seek patent protection in countries not so designated by LICENSEE, in which case NCSU shall be responsible for all expenses attendant thereto; however, in such instances, LICENSEE shall forfeit its rights under this license agreement as to such countries.

5.03 For each country in which Licensed Products will be sold, LICENSEE agrees to xxxx all Licensed Products it commercializes with the applicable patent number.

ARTICLE 6 - GOVERNMENT CLEARANCE. PUBLICATION. OTHER USE, EXPORT. DUTIES

6.01 LICENSEE agrees that the right of publication of the Subject Technology shall reside in the inventor and other staff of NCSU. NCSU shall use its best efforts to provide a copy of each publication at the time of submission for pre-publication review, or in any event not less than thirty (30) days prior to the expected date of publication. Such review will be in no way construed as a right to restrict such publication.

6.02 It is agreed that, notwithstanding any provisions herein, NCSU is free to use the Subject Technology and Patent Rights for its own not-for-profit educational, teaching, and research purposes without restriction and without payment of royalties or other fees.

6.03 This Agreement is subject to, and LICENSEE will comply with, all of the United States laws and regulations controlling the export of technical data, computer software, laboratory prototypes, and other commodities and technology which may be applicable.

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6.04 LICENSEE shall be solely responsible for the payment and discharge of any taxes or duties relating to any transaction of LICENSEE, its employees, contractors, agents, or sub-licensees, in connection with the manufacture, use, or sale in any country of Licensed Product(s).

ARTICLE 7 - DURATION AND TERMINATION

7.01 This Agreement shall become effective upon the Effective Date and, unless sooner terminated in accordance with any of the provisions herein, shall remain in full force and effect for the life of the last-to-expire of the patents included in the Patent Rights.

7.02 In the event an order for relief is entered against LICENSEE under the Federal Bankruptcy Code, or an order appointing a receiver for substantially all of LICENSEE’s assets is entered by a court of competent jurisdiction, or LICENSEE makes an assignment for the benefit of creditors, or a levy of execution is made upon substantially all of the assets of LICENSEE and such levy is not quashed or dismissed within thirty (30) days, this Agreement shall automatically terminate effective on the date of such order or assignment or, in the case of such levy, the expiration of such thirty day period; provided, however, that such termination shall not impair or prejudice any right of remedy that NCSU might have under this Agreement.

7.03 LICENSEE may terminate this Agreement by giving NCSU written notice at least ninety (90) days prior to such termination, and thereupon terminate the manufacture, use, or sale of Licensed Products.

7.04 Should LICENSEE fail to pay NCSU royalties due and payable hereunder, NCSU shall have the right to terminate this Agreement on thirty (30) days’ notice, unless LICENSEE shall pay NCSU, within the thirty (30) day period, all such royalties and interest due and payable. Upon the expiration of the thirty (30) day period, if LICENSEE shall not have paid all such royalties and interest due and payable, the rights, privileges and license granted hereunder shall terminate.

7.05 Either party may immediately terminate this Agreement for fraud, willful misconduct, or illegal conduct of the other party upon written notice of same to that other party. Except as provided above, if either party fails to fulfill any of its obligations under this Agreement, the non-breaching party may terminate this Agreement by providing written notice to the breaching party, as provided below. Such notice must contain a full description of the event or occurrence constituting a breach of the Agreement. The party receiving notice of the breach will have the opportunity to cure that breach within thirty (30) days of receipt of notice. If the breach is not cured within that time, the termination will be effective as of the thirtieth (30th) day after receipt of notice. A party’s right to cure a breach will apply only to the first two (2) breaches properly noticed under the terms of this Agreement, regardless of the nature of those breaches. Any subsequent breach by that party will entitle the other party to terminate this Agreement upon proper notice, with no opportunity to cure.

7.06 If at any time prior to the first commercial sale of a licensed Product under this Agreement LICENSEE shall cease to pursue commercial development of the Subject Technology and Patent Rights as contemplated herein, LICENSEE shall be obligated to so

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notify NCSU, and this Agreement shall automatically terminate without obligation on the part of NCSU to refund any of the fees or royalties which may have been paid by LICENSEE prior to such termination.

7.07 Upon the termination of this Agreement pursuant to Article 7.03, LICENSEE may notify NCSU of the amount of Licensed Products that LICENSEE has on hand and LICENSEE shall then have a license to sell that amount of Licensed Products, but no more; provided, however, that LICENSEE shall pay NCSU a royalty thereon at the rate and at the time provided for.

7.08 Within thirty (30) days of the termination of this Agreement under Sections 7.02, 7.03, 7.04, or 7.06, or for LICENSEE’s breach under 7.05, LICENSEE shall duly account to NCSU and transfer to NCSU all rights which LICENSEE may have in or to all trade names and trademarks used to identify licensed Products.

ARTICLE 8 - INFRINGEMENT OF THIRD-PARTY RIGHTS

8.01 In the event that NCSU or LICENSEE is charged with infringement of a patent by a third party or is made a party in a civil action as a result of LICENSEE’s or a sub-licensee’s practice of the Patent Rights under this Agreement, LICENSEE shall:

(a)

defend and/or settle any such claim of infringement or civil action;

(b)

assume all costs, expenses, damages, and other obligations for payments incurred as a consequence of such charges of infringement and/or civil action;

(c)

indemnify and hold NCSU harmless from any and all damages, losses, liability, and costs resulting from a charge of infringement or civil action which shall be brought against NCSU and attributable to technology added to, incorporated into or sold with a licensed Product by LICENSEE or a sub-licensee or to manufacturing processes utilized by LICENSEE or a sub-licensee; and

(d)

if such claim of infringement or civil action shall be based on patent claims contained in any pending or issued patent included in the Patent Rights, LICENSEE may terminate this Agreement effective immediately upon NCSU’s receipt of written notice of termination, and LICENSEE shall have no further liability for claims and/or damages arising subsequent to said date of termination except to the extent such claims and/or damages arising subsequent to said date of termination arise as a consequence of or in connection with the sale of licensed Products under Section 7.07.

8.02 NCSU shall give LICENSEE assistance, at LICENSEE’s expense, in the defense of any such infringement charge or lawsuit, as may be reasonably required.

8.03 If an action is brought against LICENSEE as described in Section 9.03, LICENSEE may offset the royalty paid to NCSU in each quarterly period by fifty percent (50%) of the amount of expenses paid by LICENSEE in that royalty period as a result of such action, said expenses to include costs, attorneys’ fees, judgments, and all other expenses directly related to the infringement action, to a

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maximum of fifty percent (50%) of the amount otherwise payable to NCSU in that royalty period. Expenses in excess of fifty percent (50%) of the amounts due in any royalty period may be carried over to subsequent royalty periods.

ARTICLE 9 - INFRINGEMENT OF NCSU’S PATENT RIGHTS BY THIRD PARTIES

9.01 Each Party to this Agreement shall be obligated to inform the other promptly in writing of any alleged infringement of which it becomes aware and of any available evidence of infringement by a third party of any patents within the Patent Rights.

9.02 If during the term of this Agreement LICENSEE becomes aware of any alleged infringement by a third party, LICENSEE shall have the right, but not the obligation, to either:

(a)

settle the infringement suit by sub-licensing the alleged infringer or by other means; or

(b)

prosecute at its own expense any infringement of the Patent Rights. In the event LICENSEE prosecutes such infringement, LICENSEE may, for such purposes, request to use the name of NCSU as party plaintiff. Subject to the approval of the Board of Governors of the University of North Carolina, NCSU may agree to become a party plaintiff, and costs associated therewith shall be borne by LICENSEE.

9.03 In the event that LICENSEE undertakes the enforcement and/or defense of the Patent Rights by litigation, including any declaratory judgment action, the total cost of any such action commenced or defended solely by LICENSEE shall be borne by LICENSEE. Any recovery of damages by LICENSEE as a result of such action shall be applied first in satisfaction of any unreimbursed expenses and attorneys’ fees of LICENSEE relating to the action, and second in satisfaction of unreimbursed legal expenses and attorneys’ fees of NCSU, if any, relating to the action. The balance remaining from any such recovery shall be distributed to LICENSEE, provided that LICENSEE shall pay to NCSU such royalties as would otherwise be applicable under Article 4 hereof for that portion of LICENSEE’s recovery attributable to lost sales. LICENSEE shall be entitled to settle any such litigation by agreement, consent, judgment, voluntary dismissal, or otherwise, with the consent of NCSU, which consent shall not be withheld unreasonably.

9.04 In the event LICENSEE does not undertake action to prevent the infringing activity within three (3) months of having been made aware and notified thereof, NCSU shall have the right, but shall not be obligated, to prosecute at its own expense any such infringements of the Patent Rights and, in furtherance of such right, NCSU may use the name of LICENSEE as a party plaintiff in any such suit without expense to LICENSEE. The total cost of any such infringement action commenced or defended solely by NCSU shall be borne by NCSU. Any recovery of damages by NCSU for any infringement shall be applied first in satisfaction of any unreimbursed expenses and attorneys’ fees of NCSU relating to the suit, and second toward reimbursement of LICENSEE’s reasonable expenses, including reasonable attorneys’ fees, relating to the suit. The balance remaining from any such recovery shall be distributed to NCSU.

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9.05 In any infringement suit instituted by either party to enforce the Patent Rights pursuant to this Agreement, the other party hereto shall, at the request and expense of the party initiating such suit, cooperate in all respects and, to the extent possible, have its employees testify when requested and make available relevant records, papers, information, samples, specimens, and the like.

9.06 LICENSEE shall have the sole right in accordance with the terms and conditions herein to sub-license any alleged infringer under the Patent Rights for future infringements.

9.07 Any of the foregoing notwithstanding, if at any time during the term of this Agreement any of the Patent Rights are held invalid or unenforceable in a decision which is not appealable or is not appealed within the time allowed, LICENSEE shall have no further obligations to NCSU with respect to its future use or sale of any product or process covered solely by such Patent Rights, including the obligation of paying royalties. Nevertheless, LICENSEE shall not have a damage claim or a claim for refund or reimbursement against NCSU.

ARTICLE 10 - INDEMNITY. INSURANCE. REPRESENTATIONS

10.01 LICENSEE shall indemnify, defend and hold NCSU, its trustees, officers, employees and affiliates, harmless against all claims and expenses, including legal expenses and reasonable attorneys’ fees, arising out of the death or injury to any person or persons or out of any damage to property and against any other clam, proceeding, demand, expense and liability of any kind whatsoever resulting from utilization of the Patent Rights in the production, manufacture, sales, use, lease, consumption or advertisement of the Licensed Products by LICENSEE and its sub-licensees or arising from any obligations of LICENSEE hereunder, except for any claims or expenses arising out of the negligence or willful misconduct of NCSU or its officers, agents or employees. The parties acknowledge that NCSU’s liability under this paragraph shall be subject to the limitations of the North Carolina Tort Claims Act (N.C. General Statutes Section 143-291).

10.02 LICENSEE shall maintain reasonable levels of product liability insurance as soon as it has commercialized Licensed Products. NCSU shall have the right to require such insurance policies or certificates of insurance, at NCSU’s discretion, to be made available for NCSU’s inspection.

10.03 NCSU MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND VALIDITY OF PATENT RIGHTS CLAIMS ISSUED OR PENDING.

10.04 Nothing in this Agreement shall be deemed to be a representation or warranty by NCSU of the validity of any of the Patent Rights or the accuracy, safety, efficacy, or usefulness for any purpose, of any Subject Technology. NCSU shall have no obligation, express or implied, to supervise, monitor, review, or otherwise assume responsibility for the production, manufacture, testing,

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marketing, or sale of any Licensed Product, and NCSU shall have no liability whatsoever to LICENSEE or any third parties for or on account of any injury, loss, or damage, of any kind or nature, sustained by, or any damage assessed or asserted against, or any other liability incurred by or imposed upon LICENSEE or any other person or entity, arising out of or in connection with or resulting from:

(a)

the production, use, or sale of any Licensed Product;

(b)

the use of any Subject Technology; or

(c)

any advertising or other promotional activities with respect to any of the foregoing.

ARTICLE 11 - GOVERNING LAW

11.01 This Agreement shall be construed as having been entered into in the State of North Carolina and shall be interpreted in accordance with and its performance governed by the laws of the State of North Carolina.

ARTICLE 12 - NON ASSIGNABILITY

12.01 This Agreement may not be assigned by LICENSEE except in connection with the sale or other transfer of LICENSEE’s entire business or that part of LICENSEE’s business to which this license relates. LICENSEE shall give NCSU thirty (30) days prior written notice of such assignment or transfer. Any other assignment of this Agreement without the prior written consent of NCSU shall be void.

ARTICLE 13 - NOTICES

13.01 It shall be a sufficient giving of any notice, payment, request, report, statement, disclosure or other communication hereunder, if the party giving the same shall deposit a copy thereof in the Post Office in certified mail, postage prepaid, addressed to the other party at its address hereinafter set forth or at such other address as the other party shall have theretofore in writing designated:


NCSU		LICENSEE

Associate Vice Chancellor		Biolex, Inc.
Office of Technology Transfer		X.X. Xxx 00000
and Industry Research		Xxxxxxx, XX 00000
North Carolina State University		ATTN: President
Xxx 0000
0 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000-0000

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The date of giving any such notice, request, report, statement, disclosure or other communication, and the date of making any payment hereunder required (provided such payment is received), shall be the date of the U.S. postmark of such envelope if marked or actual date of receipt if delivered otherwise.

ARTICLE 14 - NON-USE OF NAMES

14.01 LICENSEE shall not use the name of NCSU, or any trademark, trade device, service xxxx, symbol, or any abbreviation, contraction, or simulation thereof, owned by NCSU, nor the names of any of its employees, or any adaptation thereof, in any advertising, promotional, or sales literature without prior written consent obtained from an authorized officer of NCSU in each case, except that LICENSEE may state that it is licensed by NCSU under one or more of the patents and/or patent applications comprising the Patent Rights. Failure by LICENSEE to comply with this restriction shall be deemed a material breach of this Agreement pursuant to section 7.05. Such material breach shall be deemed cured if the offending use is terminated within ninety (90) days of LICENSEE’s receipt of a written notice from NCSU.

ARTICLE 15 - SEVERANCE

15.01 Each clause of this Agreement is a distinct and severable clause and if any clause is deemed illegal, void, or unenforceable, the validity, legality, or enforceability of any other clause or portion of this Agreement will not be affected thereby.

ARTICLE 16 - ENTIRE AGREEMENT

16.01 This Agreement, including any schedules or other attachments which are incorporated herein by reference, contain the entire agreement between the parties as to its subject matter. This Agreement merges all prior discussions between the parties and neither party shall be bound by conditions, definitions, warranties, understanding, or representations concerning such subject matter except as provided in this Agreement or as may be specified later in writing and signed by the properly authorized representatives of the parties. This Agreement can be modified or amended only by written agreement duly signed by persons authorized to sign agreements on behalf of the parties. This Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument.

ARTICLE 17 - WAIVER

17.01 The failure of a party in any instance to insist upon the strict performance of the terms of this Agreement shall not be construed to be a waiver or relinquishment of any of the terms of this Agreement, either at the time of the party’s failure to insist upon strict performance or at any time in the future, and such term or terms shall continue in full force and effect.

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ARTICLE 18 - TITLES

18.01 All titles and article headings contained in this Agreement are inserted only as a matter of convenience and reference. They do not define, limit, extend, or describe the scope of this Agreement or the intent of any of its provisions.

ARTICLE 19 - SURVIVAL OF TERMS

19.01 The provisions of Articles 1, 4, 8, 10, 11, 13, and 14 shall survive the expiration or termination of this Agreement.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the dates set forth below.


		NORTH CAROLINA STATE UNIVERSITY

		By:	/s/ Xxxxxxx X. Xxxxxxxx
			Xxxxxxx X. Xxxxxxxx
			Vice Chancellor for Research,
			Outreach, Extension, and Economic Development

		Date: 4/30/98

ATTEST:

By:	/s/ illegible

SEAL

		BIOLEX, INC.

		By:	/s/ Xxxxxxx X. Xxxx
			Xxxxxxx X. Xxxx
			President

		Date: 4/30/98

ATTEST:

By:	/s/ Xxxxxx Xxxxx

SEAL

			*[Revised April 30, 1998]*

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NORTH CAROLINA STATE UNIVERSITY LICENSE AGREEMENT

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