EXCLUSIVE LICENSE AGREEMENT

This Exclusive License Agreement (Agreement) is made as of the date of

execution by the last-executing party (Effective Date), by and between Board of Regents of the
Nevada System of Higher Education, on behalf of the [[INSERT INSTITUTION]] (Licensor),
having offices at [[INSERT INSTITUTION ADDRESS]], and [[INSERT COMPANY NAME]]
(Licensee), a [[INSERT ENTITY TYPE AND STATE OF FORMATION]], having an address
at [[INSERT COMPANY ADDRESS]].
BACKGROUND
WHEREAS, Licensor is the owner of certain intellectual property defined and
identified herein as the Licensed Intellectual Property.
WHEREAS, Licensee desires to obtain an exclusive license to the Licensed
Intellectual Property as set forth in, and pursuant to, this Agreement.
WHEREAS, Licensor is willing to grant such an exclusive license on the terms
and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth, Licensor and Licensee agree as follows:
ARTICLE 1. DEFINITIONS
For the purpose of this License Agreement, unless the context clearly or
necessarily indicates otherwise, the following words and phrases shall have the meanings set
forth below:
1.1

Affiliate means any entity which directly or indirectly, including through one or
more intermediaries, controls, is controlled by, or is under common control with a
party. Control means that the entity (a) owns or directly or indirectly controls at
least 50% of the voting stock of the other corporation or entity; or (b) possesses

DMEAST #12416112 v5

directly or indirectly, the power to direct or cause the direction of the management
and policies of such entity.
1.2

Aggregate Consideration means:

(a)

for an Asset Sale, cash received by Licensee, as well as the fair market
value of all securities or other property received or receivable by Licensee
as part of the transaction, payable when actually paid to Licensee, less all
liabilities, other than contingent liabilities, not assumed or discharged by
the buyer as part of the Asset Sale.

(b)

for a Merger or Stock Sale, cash received by Licensee, as well as the fair
market value of all securities or other property transferred to Licensees
stockholders or members (and option or warrant holders) in return for their
stock at the time of the Merger or Stock Sale, as well as for Delayed
Consideration when actually paid.

1.3

Asset Sale means a sale of all or substantially all of Licensees assets related to
the subject matter of this Agreement.

1.4

Clinically-Approved Product means any Licensed Product or Licensed Service

requiring approval or permission of the FDA, to the extent such approval or
permission requires human clinical trials whose direct costs to Licensee
(including its Affiliates or Sublicensees) would exceed one-million dollars
($1,000,000), prior to the Clinically-Approved Product being sold in a relevant
jurisdiction for the treatment, diagnosis, or prophylactic use in humans or use as a
medical device for humans.

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1.5

Combination Product means a product sold in a form containing a Licensed

Product and at least one other product, component or ingredient which could be
sold separate and apart from the Licensed Product, or providing Licensed Services
in conjunction with other services which could be performed separate and apart
from the Licensed Services (each, a Combination Product). Net Sales for such
Combination Products will be calculated by multiplying actual Net Sales of such
Combination Products by the fraction A/(A+B), where A is the Net Sales price
of the Licensed Product or Licensed Services if sold or performed separately, and
B is the Net Sales price of the other product, component or ingredient or service
in the Combination Product if sold separately. If, on a country-by-country basis,
the other product, component or ingredient or service in the Combination Product
is not sold separately in said country, Net Sales for the purpose of determining
Running Royalties of the Combination Product shall be calculated by multiplying
actual Net Sales of the Combination Product by the fraction A/C where A is the
Net Sales price of the Licensed Product or Licensed Services, if sold separately,
and C is the Net Sales price of the Combination Product. If, on a country-bycountry basis, neither the Licensed Product or Licensed Services, nor the other
product, component or ingredient or service in the Combination Product is sold
separately in said country, Net Sales for the purpose of determining Running
Royalties of the Combination Product shall be determined in good faith by the
parties. A Combination Product may include a Licensed Product and any separate
product, component or ingredient or service developed by or in-licensed by
Licensee from a third party.

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1.6

Company Inventor means any inventor of any claim that is, was, could be, or
could have been obtained or presented in any of the Licensed Patents who, prior
to the Triggering Event, as of the Effective Date of this Agreement, (i) was, is, or
later becomes employed by Licensor; and (ii) had, has, or later acquires an
executive position with Licensee or has an ownership interest in Licensee.

1.7

Delayed Consideration means any payments due for any contingent or deferred
consideration payable to Licensee or its security holders including any postclosing milestone payment, escrow or holdback of consideration.

1.8

Developed Technology means all information, data, know-how, inventions,

trade secrets, discoveries, methods, techniques, formulae, processes, algorithms,
software, compositions of matter, and intellectual property of any kind, whether
or not copyrightable or patentable, that are conceived and reduced to practice or
developed by Licensee during or after the term of this Agreement, other than
Licensed Technology, Improvements, and Modifications, as each term is defined
in this Agreement.

1.9

FDA means, for the United States, the United States Food and Drug
Administration, or other federal agency that carries out analogous functions, and,
for jurisdictions other than the United States, any equivalent agency or
governmental body that carries out analogous functions to the United States Food
and Drug Administration.

1.10

Field of Use means [[INSERT FIELD OF USE]] and such additional fields that
are identified in writing during the term of this Agreement and added to this
definition as mutually agreed.

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1.11

Improvement means any modification of a Licensed Product or a Licensed

Service described in the Licensed Patents, so long as the modified Licensed
Product or modified Licensed Service remains a Licensed Product or Licensed
Service. If a modification of a Licensed Product or a Licensed Service results in
the product or service no longer being Licensed Product or Licensed Service, the
modification shall not be an Improvement.

1.12

Independent Patent Disclosure means, for the Licensed Technology, a single

patent application, including national stage applications, PCT applications, and
continuing patent applications of said patent application, covering one or more
technologies sufficiently related to logically and naturally form part of a single
patent application.

1.13

Initial Public Offering refers to the result of an effective registration statement

for the first sale of Licensees, or Licensees successor in interests, common
stock in a firm commitment underwritten public offering registered under the
amended Securities Act of 1933.

1.14

Invention means any claim issued in any patent of the Licensed Patents and any
claim which is or could be presented in any pending patent application of the
Licensed Patents.

1.15

Licensee means Licensee and any successor entities formed other than through
a Triggering Event.

1.16

License Year means each one year period starting on January 1 of one year and
ending on December 31 of the same year in which Licensed Products are sold or
Licensed Services are provided.

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1.13

Licensed Intellectual Property means the Licensed Patents and the Licensed
Technology. The Licensed Intellectual Property is further described in Exhibit A.

1.17

Licensed Patents means the patents and patent applications identified on Exhibit
A, together with all foreign and domestic revisions, extensions of such patents or
patent applications and all continuations, continuations-in-part or divisional
applications based thereon, and any letters patents that may issue therefrom,
including any reissues or renewals thereof, and any continuation, continuation-inpart, re-examination or divisional applications based upon or claiming priority
from any of the foregoing, or reissue of such, or the equivalent of such, in the
United States of America or in any other country, which are necessary or useful in
the manufacture, use or Sale of Licensed Products or the provision of Licensed
Services. Exhibit A may be updated by the parties, by mutual written agreement
between an authorized representative of Licensee and the Director of Licensors
Technology Transfer Office, from time to time as necessary during the term of
this Agreement.

1.18

Licensed Product means any apparatus, kit, article of manufacture, composition

of matter, material, compound, component, software, or product prepared,
utilized, or utilized at least in part, using any Licensed Patent, or the manufacture,
use, Sale, offer for Sale or import of which, but for the license granted in this
Agreement would infringe, or contribute to, or induce the infringement of, or read
on, any Invention.

1.19

Licensed Services means any service provided by Licensee, an Affiliate, or

sublicense to a third party in exchange for consideration when such service (a)

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involves the use of any Licensed Patent; or (b) involves any process, art, or
method the use or practice of which, but for the license granted in this Agreement,
would infringe, or contribute to, or induce the infringement of, or read on, any
Invention.
1.20

Licensed Technology means (a) [[INSERT TECHNOLOGY DESCRIPTION]]

known as XX owned or controlled by Licensor as of the date of this Agreement,
which Licensor is free to disclose, and which information is now known to
[[INSERT FACULTY/INVENTOR NAMES]], each members of the faculty
[[MODIFY AS NECESSARY]] of Licensor, or which is disclosed to Licensee or
its Sublicensees under this Agreement, plus any Improvements or Modifications,
to the extent the Bayh-Dole Act allows, to any of the foregoing that are conceived
or reduced to practice during the term of this Agreement, (excluding
improvements or modifications that constitute Developed Technology), together
with any patent rights that claim any of the foregoing; and (b) any other such
items related to the XX that are identified by Licensee during the term of this
Agreement that are owned or controlled by Licensor and useful in the
development, regulatory approval, manufacturing, use, or Sale of Licensed
Products or the provision of Licensed Services, but solely to the extent so useful.
The Licensed Technology is further described and defined in Exhibit A.

1.21

Liquidation Event means a Merger, Stock Sale, or Asset Sale in which the
stockholders or other equity owners of Licensee prior to such transaction do not
own a majority of the voting power of the acquiring, surviving, or successor
entity, as the case may be. Liquidation Event does not include bona fide

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financing transactions in which voting control of Licensee transfers to one or

more persons or entities who acquire ownership interests in Licensee in exchange
for either an investment in Licensee, including the cancellation or forgiveness of
Licensees debt.
1.22

Merger means a merger, share exchange, or other reorganization.

1.23

Modifications means updates, corrections, bug fixes, patches, or enhancements

relating to any algorithms and software in the Licensed Technology.

1.24

Net Sales means the amount received by Licensee, its Affiliates, or

Sublicensees for Sale of Licensed Products and the provision of Licensed
Services, less: (a) customary trade, quantity, wholesaler, distributor, prompt
payment or cash discounts and non-affiliated brokers or agents commissions
actually allowed and taken; (b) amounts repaid or credited by reason of rejection,
return or retroactive price reduction; (c) to the extent separately stated on
purchase orders, invoices, or other documents of sale, taxes levied on and/or other
governmental charges made as to production, sale, transportation, storage,
delivery or use and paid by or on behalf of Licensee, its Affiliates, or
Sublicensees; and (d) reasonable charges for delivery, transportation, storage, and
packing provided by third parties, if separately stated.

1.25

Non-Clinical Product means Licensed Products or Licensed Services that are

not Clinically-Approved Products.

1.26

Pre-Money Valuation means the price per share of common stock sold in the
Initial Public Offering multiplied by the total number of outstanding shares of
common stock of Licensee immediately before the closing of the Initial Public

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Offering, determined on a fully diluted, as converted into common stock basis,

including any stock split, stock dividend, stock combination, recapitalization or
similar action affecting Licensees capitalization that takes place, or is deemed to
take place, on completion of the Initial Public Offering.
1.27

Sale or Sales mean any bona fide transaction for which consideration is
received or expected for the sale, license (including renewals and upgrades), use,
lease, transfer, or other disposition of a Licensed Product or the provision of
Licensed Services. A Sale of a Licensed Product or Licensed Services shall be
deemed completed at the time that Licensee or any Sublicensees receives payment
for such Licensed Product or Licensed Service.

1.28

Stock Sale means the sale by one or more stockholders of a majority of the
voting power of the Licensee.

1.29

Sublicensee means any third party to whom Licensee or its Affiliates or

Sublicensees grants rights under the Licensed Patents.

1.30

Territory means worldwide.

1.31

Triggering Event means a Liquidation Event or an Initial Public Offering.

ARTICLE 2. LICENSE GRANT

2.1

Licensor hereby grants to Licensee, and Licensee accepts, for the term of this
Agreement, an exclusive license for the Licensed Intellectual Property in the Field
of Use in the Territory, with the right to sublicense, to make, have made, use, and
sell Licensed Products and provide or perform Licensed Services.

2.2

The license of Section 2.1 is subject to Licensors reservation of any necessary

rights for itself and its Affiliates to practice the Licensed Intellectual Property for

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non-commercial purposes including without limitation, the right of Licensor to

perform educational activities or research and development for itself. In addition,
the license of Section 2.1 may, for certain Licensed Patents, be subject to reserved
rights of the United States Government under the provisions of 35 U.S.C. 200212 and applicable regulations. For Licensed Patents subject to government
rights, Licensee is aware that any Licensed Products used or sold in the United
States must be substantially manufactured in the United States.
2.3

The right to sublicense granted to Licensee hereunder is subject to the following

conditions.
(a)

In each sublicense, which shall be in writing, the Sublicensee shall be

subject to the terms and conditions of the license granted to Licensee
hereunder, including, but not limited to, the provisions contained in
Articles 4 (Reporting by Licensee), 5 (Books and Records), 7 (Transfer
and Protection of Technical Information), 11 (Disclaimer of Warranties),
12 (Limitation of Liability), 14 (Insurance), 15 (Indemnification), and 18
(Alternative Dispute Resolution).

(b)

Each sublicense shall expressly provide that Licensor makes no warranties

or representations regarding the Licensed Intellectual Property, and shall
provide that Licensor has no liability to the Sublicensee with regard to the
Licensed Intellectual Property.

(c)

Licensee shall forward to Licensor, within thirty (30) days of execution,

the name and address of each Sublicensee and the identity of any
designated representative of the Sublicensee (name, title, location) to

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receive communications relative to the sublicense and copies of each

sublicense agreement upon written request of Licensor.
(d)

With respect to sublicenses granted pursuant to Section 2.1, Licensee

shall:
(i)

Not receive, or agree to receive, anything of value in lieu of cash

as considerations from a third party under a sublicense granted
pursuant to Section 2.1 without the express written consent of
Licensor;

(ii)

To the extent applicable, include all of the rights of and obligations

due to Licensor and contained in this Agreement; and

(iii)

Collect and guarantee payment of all payments due, directly or

indirectly, to Licensor from Sublicensees and summarize and
deliver all reports due, directly or indirectly, to Licensor from
Sublicensees.

(e)

Upon termination of this Agreement for any reason, other than Licensors
breach of a material term of this Agreement, Licensor, at its sole
discretion, shall determine whether Licensee shall cancel or assign to
Licensor any and all sublicenses.

2.4

If Licensee is unable or unwilling to serve or develop a potential market or market

territory for which there is a company willing to be a sublicensee, Licensee will,
at Licensors request, negotiate in good faith a sublicense with any such
sublicensee. Licensor would like licensees to address unmet needs, such as those
of neglected populations or geographic areas, giving particular attention to

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improved therapeutics, diagnostics and agricultural technologies for the

developing world. In addition, in consideration of Licensor being an institution of
the State of Nevada and encouraging economic diversification and development
in Nevada, Licensee agrees to, to the extent practicable, carry out its business
within Nevada.
2.5

The rights and licenses granted to Licensee herein shall be effective as of the
Effective Date.

ARTICLE 3. CONSIDERATION
3.1

Upon the first to occur Triggering Event, Licensee will pay Licensor a License
Fee equal to three-quarters of one percent (0.75%) of either the Aggregate
Consideration (including Delayed Consideration, if any) for a Liquidation Event
or the Pre-Money Valuation for an Initial Public Offering. The License Fee shall
be paid upon closing of the Triggering Event, except for Delayed Consideration,
which shall be payable within thirty (30) days after the actual receipt of such
Delayed Consideration by Licensee or its security holders. As to Company
Inventors, the License Fee shall be exempt from the revenue sharing provisions of
Licensors Intellectual Property/Patent Policy. Licensee shall assist Licensor in
obtaining written confirmation of such waiver from the Company Inventors,
which confirmation shall be obtained no later than a reasonable time after
execution of this Agreement. Completion of such written confirmation is a
material term of this Agreement.

3.2

When the Triggering Event is a Liquidation Event, the License Fee shall be paid
in the same form, such as cash, securities, or other property, and proportion
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Licensee and/or its security holders receive consideration. However, to the extent
any portion of the License Fee is payable in securities for which there is not an
active public market, Licensee shall instead make a cash payment to Licensor
equal to the fair market value of such securities (determined in Section 3.3).
When the Triggering Event is an Initial Public Offering, the License Fee shall be
paid in cash.
3.3

The value of securities and other property shall be determined as follows, with an
appropriate discount to represent fair market value when the securities or property
are subject to restrictions on marketability (such as being subject to investment
letters), and in order of precedence:
(a)

The value of the securities or property as set forth in the agreement

governing a Liquidation Event;

(b)

if the value in (a) in not readily determinable from the agreement, then the
value shall be the average of the closing price of the securities on the stock
(or other securities) exchange on which the securities are traded, if any, for
the thirty (30) day period prior to the closing of the Liquidation Event;

(c)

if (a) and (b) are not sufficient to determine the value, and the securities or
property are traded as unlisted stock, such as over-the-counter stock, the
value shall be, for the thirty (30) day period ending three days prior to the
closing of the Liquidation Event, the average closing bid prices;

(d)

if the value is not determinable from the agreement or a public market,

then the value shall be determined, at Licensors option, by Licensees
Board of Directors, in good faith, and approved by Licensor, which

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approval shall not be unreasonably withheld, or by an independent

appraiser selected and paid for by Licensee.
3.4

Licensee shall pay Licensor a running royalty on Net Sales of all Licensed
Products and Licensed Services in the following amounts:

3.5

(i)

one percent (1%) on Net Sales of Clinically-Approved Products

(ii)

two percent (2%) on Net Sales of Non-Clinical Products

Licensee shall pay as a royalty to Licensor ten percent (10%) of all income
received by Licensee though any transaction that includes the grant of a
sublicense under this Agreement.

3.6

To retain its license under this Agreement, Licensee shall pay Licensor, as
minimum annual royalties, no less than the amounts set forth below:
(a)

During the first and second License Years: none

(b)

During the third through fifth License Years: $15,000 for clinically
approved products, $5,000 for Non-Clinical Products

(c)

During the sixth License Year and subsequent License Years: $30,000 for
clinically approved products, $10,000 for Non-Clinical Products

3.7

Notwithstanding the minimum annual royalties of Section 3.6, Licensor has the
right, in its sole and unfettered discretion, to convert the exclusive license of
Section 2.1 to a non-exclusive license in the event Licensees gross annual sales
of Licensed Products and Licensed Services for each of two consecutive License
Years after the [[INSERT LICENSE YEAR]] License Year would produce a
royalty less than the minimum annual royalty (Section 3.6) for the License Year.

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In the event Licensor exercises this right, all other terms of this Agreement shall
remain in full force and effect.
3.8

Licensee shall meet the following milestone schedule: [[NOTE, THE

MILESTONES HERE ARE REPRESENTATIVE ONLY. THE ACTUAL
MILESTONES AND DATES WILL BE DETERMINED ON A CASE BY
CASE BASIS]]
(a)

Submission of a business plan to Licensor, including designation of the

corporate (business) management team, the business plan reasonably
acceptable to Licensor, by XX;

(b)

Initial funding, including grants, of at [[WRITTEN AMOUNT]] dollars

($XX[[NUMERICAL AMOUNT]] by XX, or Net Sales of [[TEXT
AMOUNT]] dollars ($XX [[NUMERICAL AMOUNT]]) by XX;

(c)

Initial product specification of a Licensed Product and preliminary testing

of such product by XX; and

(d)
3.9

First Sale of Licensed Product or Licensed Service by XX.

Should Licensee fail to meet any milestone of Section 3.8, Licensee and Licensor
shall meet to discuss the circumstances surrounding the missed milestone.
Licensor, at its sole discretion, may adjust the milestone or terminate this
Agreement by providing Licensee with written notice and an opportunity to cure
in accordance with Section 9.3.

3.10

All payments shall be made to Licensor in United States Dollars. For converting
payments into United States Dollars associated with Running Royalties that
accrue in a foreign currency, the parties shall use the average of the closing

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buying rates as published in the Wall Street Journal applicable to transactions

under exchange regulations for the particular currency on the last business day of
the accounting period for which payment is due.
3.11

The Running Royalties shall be paid by Licensee annually no later than thirty (30)
days after the last day of the License Year.

3.12

Licensees obligation to pay Running Royalties (for itself and on behalf of its
Affiliates and Sublicensees) shall continue for the term of this Agreement.
Licensor shall receive only one Running Royalty payment for any individual
transaction involving the Sale of Licensed Product or the provision of Licensed
Services. Licensee shall notify Licensor of the date of first commercial Sale of
Licensed Product or provision of Licensed Services within each country in the
Territory within thirty (30) days of the date of such first Sale.

3.13

Running Royalty payments shall be payable to Board of Regents of the Nevada

System of Higher Education, on Behalf of [[INSTITUTION]] and sent to:
UNR-DRI Technology Transfer Office
Ross Hall 218/Mail Stop 321
Attn: Director
Reno, NV 89557

ARTICLE 4. REPORTING BY LICENSEE

4.1

Licensee shall prepare annual royalty reports setting forth Sales of Licensed
Products and provision of Licensed Services during the applicable License Year
by Licensee, its Affiliates and its Sublicensees. These reports shall be delivered
to Licensor with the Running Royalty payments within thirty (30) days following
the end of each License Year.

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4.2

If no Sales of Licensed Products have been made, or provision of Licensed

Services performed, by Licensee and/or its Affiliates or Sublicensees during any
License Year, a statement to that effect shall be delivered by Licensee to Licensor
within thirty (30) days following the end of the License Year.

ARTICLE 5. BOOKS AND RECORDS

Licensee shall maintain, and require its Affiliates and Sublicensees to maintain,
full, true, and accurate books of accounts and other records containing all particulars which may
be necessary to ascertain and verify the royalties payable under this Agreement. Upon
Licensors written request, Licensee and/or its Affiliates or Sublicensees shall permit an
independent Certified Public Accountant selected by and paid for by Licensor to perform an
audit at reasonable times during regular business hours such of their records as may be
reasonably necessary to determine the accuracy of any report and/or payment made under this
Agreement (the Audit). If such Audit determines an underpayment in Running Royalties has
occurred, Licensee shall reimburse Licensor, or require its Affiliate or Sublicensees who is
responsible for the underpayment to reimburse Licensor, for its costs for performing the Audit.
Such Audit may occur only once per License Year. Once an Audit has occurred for any License
Year, the records related to such License Year cannot be reviewed again.

ARTICLE 6. IMPROVEMENTS BY LICENSEE

Any Improvements or Modifications, patented or unpatented, made to the
Licensed Technology by Licensee during the term of this Agreement shall be the sole property of
Licensee and subject to the royalty obligation of Section 3.4. All Developed Technology shall
be the sole property of Licensee and not subject to royalty obligation.

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ARTICLE 7. TRANSFER AND PROTECTION OF TECHNICAL INFORMATION

7.1

Licensee acknowledges that Licensor considers the Licensed Technology to be

proprietary information and Licensee agrees that it shall maintain the
confidentiality thereof for five (5) years after the expiration or termination of this
Agreement and use such Licensed Technology only within the scope authorized
by the license granted herein.

7.2

Licensed Technology shall, where appropriate, be identified by placing a stamp

thereon bearing the legend [[INSTITUTION]] Technology
Proprietary/Confidential.

7.3

Notwithstanding Section 7.1 above, Licensee shall be permitted to disclose

Licensed Technology to its Affiliates, Sublicensees, employees, suppliers, agents
and other third parties if necessary for the sole purposes of analyzing, developing,
processing, manufacturing, or Sale of Licensed Products or Licensed Services
pursuant to the terms of this Agreement; provided, however, that any such
recipient of Licensed Technology shall be informed of the provisions of this
Article 7 and shall agree in writing with Licensee to be bound to the
confidentiality obligations pertaining to Licensed Technology under this
Agreement.

7.4

The provisions of this Article 7 shall not apply to Licensed Technology or other
information which (a) is, or becomes through no fault of Licensee, part of the
public domain, (b) was known to Licensee at the time of disclosure by the
Licensor, (c) becomes known to Licensee from a source other than the Licensor
without breach of this Agreement by Licensee, or, to Licensees reasonable belief,
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no breach by the source of a duty of confidentiality to Licensor, or (d) the

disclosure of which is required by law, regulation, or court order, provided that
Licensee gives Licensor notice in sufficient time to, with Licensees cooperation,
contest the law or order and obtain a suitable protective order.

ARTICLE 8. INFRINGEMENT
8.1

With respect to any Licensed Patents that are exclusively licensed to Licensee
pursuant to this Agreement, Licensee shall have the right to prosecute in its own
name and at its own expense any infringement of such Licensed Patents, so long
as such license is exclusive at the time of the commencement of such action, and
to the extent such license remains exclusive throughout the action. Each party
agrees to notify the other promptly and in no event later than ten (10) days after
becoming aware of any discovered or suspected infringement of the Licensed
Patents. Before Licensee commences an action with respect to any infringement
of such Licensed Patents, or notifying an alleged infringer of any alleged
infringement, Licensee shall give careful consideration to the views of Licensor
and to potential effects on the public interest.

8.2

Participation, costs, recoveries, and reimbursements.

(a)

If Licensee elects to commence an action as described above, Licensor

may, to the extent permitted by law and at its sole cost and expense, elect
to join as a party in that action. Regardless of whether Licensor elects to
join as a party, or if Licensor is required as a necessary party to any such
action, Licensor shall cooperate with Licensee in connection with any
such action, at Licensees sole cost and expense.
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(b)

If Licensor elects to join as a party pursuant to Section 8.2(a), Licensee

shall remain in control of the action.

(c)

Recoveries or reimbursements from actions commenced pursuant to this

Section 8.2 shall first be applied to reimburse Licensee and Licensor for
litigation costs. Any remaining recoveries or reimbursements shall be
retained by Licensee; provided however, that such amount, minus the
costs and expenses to Licensee of such action, shall be deemed to
constitute Net Sales for purposes of this Agreement and subject to the
royalty of Section 3.4.

8.3

If Licensee elects not to exercise its right to prosecute an infringement of the

Licensed Patents pursuant to this Article, Licensor may do so at its own expense,
controlling such action and retaining all recoveries therefrom. Licensee shall
reasonably cooperate with Licensor, at Licensors sole expense, including the
reasonable costs of counsel of Licensee, in connection with any such action.
Recoveries or reimbursements from actions commenced pursuant to this Section
8.3 shall first be applied to reimburse Licensor and Licensee for litigation costs.
Any remaining recoveries or reimbursements shall be retained by Licensor.

8.4

If a declaratory judgment action is brought by a non-affiliated third party naming

Licensee as a defendant and alleging invalidity of any of the Licensed Patent or
any suit is brought by a third party naming Licensee as a defendant alleging patent
infringement involving the sale, manufacture, distribution or marketing of a
Licensed Product or Licensed Service, and alleging invalidity of any Licensed
Patent as a counterclaim, Licensee shall have the right to defend such action and

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maintain the control of the defense of the action at its own expense. Licensor
shall cooperate fully with Licensee, at Licensees sole expense, in connection
with any such action. If Licensee ultimately prevails and receives an award from
such non-affiliated third party as a result of such action (whether by way of
judgment, award, decree, settlement or otherwise), such award shall be retained
by Licensee; provided however, that such amount, minus the costs and expenses
to Licensee of such action, shall be deemed to constitute Net Sales for purposes of
this Agreement. If Licensee fails to defend such declaratory judgment action or
counterclaim, Licensor may elect to take over the sole defense of the action at its
own expense, in which case Licensor shall have the option to convert Licensees
license of Section 2.1, as to the Licensed Patent(s) forming the subject of the
action, to a non-exclusive license, all other terms of this Agreement shall remain
in full force and effect. Licensee shall cooperate fully with Licensor in
connection with Licensors defense of any such action.

ARTICLE 9. TERM AND TERMINATION

9.1

This Agreement, unless sooner terminated as provided herein, shall terminate

upon the later to occur of the expiration of the last to expire Licensed Patents or
the twentieth anniversary of the Effective Date.

9.2

Licensor may terminate this Agreement if any of the following occur:

(a)

Licensee is in arrears in payment of Running Royalties due pursuant to

this Agreement, Licensor sends a notice of such default, and Licensee
does not provide full payment within thirty (30) days of receipt of such
notice; or
-

21 -

(b)

Licensee files, or has filed against it, a petition or proceeding under any
bankruptcy, insolvency or similar law, or becomes insolvent, makes an
assignment for the benefit of creditors, appoints, or has appointed, a
receiver or trustee over its property.

9.3

If either party fails to fulfill any material obligation under this Agreement or
materially breaches any of the representation, warranty, or covenant contained
herein, the non-breaching party may terminate this Agreement upon written notice
to the breaching party as provided below. Such notice must contain a full
description of the event or occurrence alleged to constitute a breach of the
Agreement. The party receiving notice of the breach shall have the opportunity to
cure that breach within sixty (60) days of receipt of notice (30 days for financial
breach). If the breach is not cured within that time, the termination will be
effective immediately upon the end of such cure period unless the parties are
continuing to work in good faith to resolve any dispute.

9.4

If Licensor terminates this Agreement under Section 9.2, and/or 9.3, by reason of
defaults by Licensee, then Licensee and its Affiliates and Sublicensees shall cease
using all Licensed Intellectual Property and, at Licensors request, return all
Licensed Technology to Licensor. If this Agreement expires at the end of its
stated term, or is terminated by Licensee under Section 9.3 because of a material
breach by Licensor, then Licensee shall hold an exclusive or non-exclusive,
corresponding to the state of Licensees license at the time of Licensors breach or
such expiration, fully paid up perpetual license under the Licensed Intellectual
Property, with the right to sublicense, solely to use with respect to Licensed

22 -

Products and Licensed Services; provided that Licensee has paid all Running
Royalties due to Licensor and has complied with all of its obligations under this
Agreement prior to such expiration or termination, and subject to continuing
compliance with the confidentiality provisions of this Agreement.
9.5

Licensees obligation to pay Running Royalties accrued under Article 3 hereof for
Sales of Licensed Products or Licensed Services prior to such termination or
expiration shall survive termination or expiration of this Agreement. In addition,
the provisions of Articles 5 (Books and Records), 7 (Transfer and Protection of
Technical Information), 9 (Term and Termination) and 15 (Indemnification) shall
survive such termination or expiration.

9.6

Any failure on the part of either party to terminate hereunder shall not be deemed
a condonation of such default or breach or a waiver of any future default or
breach.

9.7

Termination of this Agreement by either party for any reason shall not affect and
shall be without prejudice to the rights and obligations of the parties accrued prior
to the effective date of termination of this Agreement.

ARTICLE 10. REPRESENTATIONS AND WARRANTIES

10.1

Licensor represents, covenants, and warrants that Licensor has the right to enter
into this Agreement, to grant to Licensee all of the rights and licenses granted
herein, and to perform all other obligations of this Agreement and, as of the
Effective Date, is not actually aware of any actual or potential infringement by the
Licensed Technology of any valid rights of any third party where the possibility
of such infringement is not already known to Licensee. The transactions
-

23 -

contemplated by this Agreement do not and will not conflict with or result in a
breach or default with respect to any agreements to which Licensor is subject.
10.2

Licensee hereby represents and warrants that the execution, and performance of
this Agreement by Licensee and the consummation of the transactions
contemplated by this Agreement do not and will not conflict with or result in a
breach of or default with respect to the provisions of any agreements to which
Licensee is subject and will not (i) violate any provision of any law or regulation
applicable to Licensee, or any other judgment or decree of any court or other
agency of any government binding on Licensee, or (ii) require any approval by,
consent of, or filing with, any person, entity, or agency of any government.

10.3

Licensee further represents that it is a [[INSERT ENTITY TYPE AND STATE

OF FORMATION]] and has the necessary power and authority to enter into this
Agreement.

ARTICLE 11. DISCLAIMER OF WARRANTIES

EXCEPT AS OTHERWISE PROVIDED HEREIN, THE TECHNOLOGY
LICENSED UNDER THIS AGREEMENT IS PROVIDED ON AN AS IS BASIS, AND
LICENSOR MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT THERETO. BY WAY OF EXAMPLE BUT NOT OF
LIMITATION, LICENSOR MAKES NO REPRESENTATION OR WARRANTIES (i) OF
COMMERCIAL UTILITY; (ii) OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.

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ARTICLE 12. LIMITATION OF LIABILITY

NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY (OR TO
ANY PERSON CLAIMING RIGHTS DERIVED FROM THE OTHER PARTYS RIGHTS,
INCLUDING SUBLICENSEES) FOR INCIDENTAL, CONSEQUENTIAL, SPECIAL,
PUNITIVE, OR EXEMPLARY DAMAGES OF ANY KIND, INCLUDING LOST PROFITS,
LOSS OF BUSINESS, OR OTHER ECONOMIC DAMAGE, AND FURTHER INCLUDING
INJURY TO PROPERTY, AS A RESULT OF BREACH OF ANY WARRANTY OR ANY
MATERIAL OBLIGATION OF THIS AGREEMENT, REGARDLESS OF WHETHER THE
PARTY ALLEGEDLY LIABLE WAS ADVISED, HAD OTHER REASON TO KNOW, OR
IN FACT KNEW OF THE POSSIBILITY THEREOF. EACH PARTY ACKNOWLEDGES
THAT THE FOREGOING SENTENCE REFLECTS AN INFORMED, VOLUNTARY
ALLOCATION BETWEEN THE PARTIES OF THE RISKS (KNOWN AND UNKNOWN)
THAT MAY EXIST IN CONNECTION WITH THIS AGREEMENT, THAT SUCH
VOLUNTARY RISK ALLOCATION WAS A MATERIAL PART OF THE BARGAIN
BETWEEN THE PARTIES, AND THAT THE ECONOMIC AND OTHER TERMS OF THIS
AGREEMENT WERE NEGOTIATED AND AGREED TO BY THE PARTIES IN RELIANCE
ON SUCH VOLUNTARY RISK ALLOCATION.

ARTICLE 13. DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE

13.1

Within thirty (30) days of the Effective Date, Licensee shall reimburse Licensor
for past patent expenses incurred by Licensor relating to the Licensed Patents or
advise Licensor that Licensee wishes to Licensor to consider deferring repayment
of such patent expenses, as well as future patent expenses, relating to the Licensed
Patents existing as of the Effective Date under the terms of Section 13.4. If

25 -

Licensor agrees to such deferment, reimbursement shall be governed by Section

13.4. If Licensor does not agree to such deferment, Licensee shall reimburse
Licensor for past patent expenses within thirty (30) days of receiving Licensors
decision not to allow deferment. Future patent costs will be reimbursed according
to Section 13.2.
13.2

For future patent expenses relating to Licensed Patents in existence as of the

Effective Date, if Licensee has not chosen to defer payment of such expenses,
Licensee shall reimburse Licensor for all patent expenses within thirty (30) days
of the receipt of each notification or bill therefor from Licensor.

13.3

For Licensed Patents resulting from Independent Patent Disclosures arising after
the Effective Date, Licensee shall promptly indicate to Licensor whether Licensee
will pay patent expenses as they accrue or if Licensee wishes to defer expenses
under Section 13.4. If Licensee does not wish to defer expenses, Licensee shall
reimburse Licensor for all patent expenses within thirty (30) days of the receipt of
each notification or bill therefor from Licensor.

13.4

Deferment of patent expenses.

(a)

For each Independent Patent Disclosure, Licensee may request that

Licensor defer Licensees responsibility to pay and/or repay patent
expenses under this Agreement. If Licensor agrees to Licensees request,
which agreement is at Licensors sole discretion, Licensees responsibility
to repay past patent expenses and to pay ongoing patent expenses will be
deferred for a period (Deferment Period) of three years from the
Effective Date, for Independent Patent Disclosures existing as of the

26 -

Effective Date, or from the date of Licensees deferment request, for

Independent Patent Disclosures developed after the Effective Date.
(b)

For each Independent Patent Disclosure for which Licensee requests, and
Licensor agrees to provide, patent expense deferment, the License Fee of
Section 3.1 shall be increased by:
(i)

0.125% per concurrently pending U.S. Patent Application,

including U.S. national stage applications filed from PCT
applications for which deferment was granted under (ii), below;

(ii)

0.10% per concurrently pending PCT patent application, including

a U.S. national stage filing at the U.S. national stage deadline;

(iii)
(c)

Deferment is not available for non-U.S. national stage applications.

For each Independent Patent Disclosure, within thirty (30) days of the
expiration of the relevant Deferment Period, Licensee shall reimburse
Licensor for past patent expenses, and patent expenses incurred within the
deferment period.

(d)

For each Independent Patent Disclosure, the maximum deferrable

expenses are thirty-thousand dollars ($30,000). Once the maximum
deferrable expenses have been reached, Licensee shall be responsible for
paying additional expenses pursuant to Section 13.3. The previously
incurred expenses shall continue to be deferred for the Deferment Period.

13.5

Licensor will maintain responsibility for filing, prosecuting, and maintaining the
Licensed Patents directly, if acceptable to both Licensor and Licensee, or through
outside counsel mutually acceptable to Licensor and Licensee. Licensor shall

27 -

provide to Licensee written notice of actions taken in connection with

management of the Licensed Patents and Licensee shall have the opportunity to
review and comment upon the breadth and coverage of the Licensed Patents.
Although Licensor shall control patent preparation, prosecution, and maintenance,
Licensee shall have reasonable opportunities to advise Licensor. Licensor will
use its best efforts to accommodate Licensees reasonable concerns and
suggestions, to ensure that the Licensed Patents adequately address the current
and future commercial and business needs of Licensee. As long as this license
remains exclusive, Licensee shall have the right to identify additional jurisdictions
where patent filings are advisable, and will, at Licensees sole expense, file such
patents and pursue patent protection and maintenance in such countries. Any
such patents and patent applications shall be Licensed Patents hereunder.
13.6

Should Licensee wish to discontinue pursuit or maintenance of any Licensed

Patent in any jurisdiction, Licensee shall notify Licensor in writing not less than
thirty (30) days before the deadline for taking action to avoid abandoning
Licensed Patents in any jurisdiction, including failing to maintain any such
Licensed Patent, continue prosecution of any patent application included in the
Licensed Patents, or make any required filing to preserve any U.S. or foreign right
within the Licensed Patents so that Licensor may decide whether to proceed with
such filing, prosecution, or maintenance at Licensors sole expense. Any such
patent or patent application pursued or maintained at Licensors expense shall not
be within the Licensed Patents or Licensed Technology and Licensee shall have
no rights therein, either express or implied.

28 -

13.7

Each party shall reasonably cooperate with the other in the preparation, filing,
prosecution, and maintenance of Licensed Patents and of all patents and patent
applications licensed to Licensee hereunder, including executing all papers and
instruments as to enable Licensor to apply for, to prosecute, and to maintain
patent applications and patents in Licensors name in any country. Licensee shall
keep Licensor advised of Licensees eligibility status under the U.S. Patent Office
small business concern rules and regulations as necessary related to any such
filings. Each party shall provide to the other prompt notice as to all matters which
come to its attention and which may affect the preparation, filing, prosecution or
maintenance of any such patent applications or patents.

13.8

If Licensee wishes to contest the validity or enforceability of the Licensed Patents

or a license under this Agreement, Licensee will provide written notice to
Licensor at least forty-five (45) days before instituting any legal proceeding.

ARTICLE 14. INSURANCE

14.1

Licensee shall, before any Licensed Products are sold or Licensed Services
provided, and thereafter throughout the term of this Agreement, obtain and
maintain at its own cost and expense from an insurance company licensed to do
business in Nevada with Moodys Rating of A, a Comprehensive General
Liability (CGL) insurance policy which will include a standard product liability
endorsement covering Licensee and its Affiliates for any Licensed Products sold
or Licensed Services performed by Licensee or its Affiliates based upon practice
of the Licensed Intellectual Property. Such insurance policy shall name Licensor,
its officers, directors, trustees, employees and agents as additional insureds.

29 -

14.2

The amount of coverage shall be at least five (5) million dollars ($5,000,000) per
occurrence.

14.3

Licensee shall furnish Licensor a certificate of insurance evidencing same within

ten (10) days prior to the first Sale of a Licensed Product or a Licensed Service.
In no event shall Licensee sell or permit the Sale of Licensed Products or
Licensed Services prior to receipt by Licensor of such evidence of insurance.
Licensee shall also require that each sublicensee obtain similar insurance
coverage.

14.4

Licensee shall notify Licensor in writing within thirty (30) days of any
modification, alteration, cancellation or termination of any insurance policy
issued to Licensee under this clause. In the case of any cancellation, termination
or other action adversely affecting the coverage required under paragraphs 14.1
and 14.2, Licensee shall obtain replacement coverage that complies with this
Article 14. During any gap in coverage Licensee and its sublicensees shall
immediately cease selling Licensed Products until replacement coverage is
obtained.

ARTICLE 15. INDEMNIFICATION

Licensee agrees to indemnify, defend and hold harmless Licensor, its Affiliates,
and the officers, directors and employees of each of them (the Licensor Indemnified Parties)
against any claims, damages, liabilities, costs, and expenses (including reasonable attorneys
fees) incurred by or awarded against the Licensor Indemnified Parties based on or resulting from
any act or omission of Licensee or its Affiliates relating to this Agreement. This obligation shall
survive the termination of this Agreement. Licensee and Licensor shall give each other prompt

30 -

notice of each threat, claim or suit arising from such conduct, and Licensee shall have sole
control over the defense and/or settlement of such threats, claims or suit. Licensee shall require
any Sublicensees to provide similar indemnification to the Licensor Indemnified Parties under
any sublicense agreement.

ARTICLE 16. NOTICES

All notices required under this Agreement shall be in writing and sent by
facsimile or electronic mail with confirmation received, by mail or by courier that requires
acknowledgment of receipt to the applicable party or entity at the following addresses (or to such
other address as may hereafter be designated by a party or entity by notice to the other given in
accordance with this Section):
Notices to LICENSEE
[[INSERT CONTACT INFORMATION]]

Notices to LICENSOR
UNR-DRI Technology Transfer Office
Ross Hall 218/Mail Stop 321
Attn: Director
Reno, NV 89557
Any notice given in accordance with this Agreement shall be effective upon
receipt by the addressee.

ARTICLE 17. GOVERNING LAW, JURISDICTION, AND ATTORNEYS FEES

This Agreement shall be interpreted and construed in accordance with the laws of
the State of Nevada. The parties hereby consent and submit to the exclusive jurisdiction of the
respective federal and state courts in and of the State of Nevada.

31 -

ARTICLE 18. ALTERNATIVE DISPUTE RESOLUTION

In the event of any controversy or claim arising out of or relating to any provision
of this Agreement or the breach thereof, the parties shall try to settle those conflicts amicably
between themselves. Within five business days of receiving written notice from a party that a
dispute exists, the parties shall meet and negotiate in good faith for a period not to exceed one
business day to resolve such dispute. If good faith negotiation between the representatives does
not result in resolution, each party shall nominate one representative having a position not less
than vice president or his/her designee, to participate in additional good faith negotiations (High
Level Negotiations) within ten business days after the first negotiation. If within thirty (30)
days of the start of such High-Level Negotiations there is no resolution of the dispute, the parties
shall each submit a written statement within five (5) business days to a third party mediator
mutually acceptable to both parties. The parties and the mediator shall meet within five (5)
business days of the written submission for a non-binding mediation session. The cost of
mediation shall be shared equally by the parties.
Should the parties not resolve their issues by mediation within one hundred
twenty (120) days of initiation of the mediation process, the dispute shall be subject to binding
arbitration. All disputes arising in connection with this Agreement shall be finally settled under
the Rules of Conciliation and Arbitration of the International Chamber of Commerce by three (3)
arbitrators appointed in accordance with these Rules. All documents and correspondence in
relation to those disputes shall be drafted in English and the arbitration shall be conducted in
English. The arbitrators to be appointed shall have a good working knowledge of the English
language. The place of arbitration shall be Reno, Nevada, USA. The arbitration award shall be

32 -

final, binding and not subject to appeal and shall be enforceable in any court of competent
jurisdiction. The party in whose favor the arbitration award is rendered shall be entitled to
recover the cost and expenses of the arbitration panel. However, the parties own internal
management time and costs (including the costs of the in-house counsel) and the costs of outside
lawyers shall be borne by each party.

ARTICLE 19. INFRASTRUCTURE LEASE AGREEMENTS

The parties acknowledge that Licensee, from time to time, may wish to lease, use,
or otherwise have access to Licensors space and tools in order to develop products and services
on behalf of Licensee. Licensee agrees that any such lease, use , or access shall be subject to a
separate written agreement between Licensee and Licensor. Unless otherwise agreed to by the
parties, to the extent that any such products or services are commercialized by Licensee, such
products or services shall not be Licensed Products or Licensed Services under the auspices
of this Agreement solely because any such development took place at locations owned or
controlled by Licensor; rather the use, or non-use, as the case may be, of Licensed Intellectual
Property, and the terms of this Agreement, shall govern whether such products or services are
Licensed Products or Licensed Services hereunder.

ARTICLE 20. MISCELLANEOUS

20.1

The parties hereto acknowledge that they have read this Agreement and
understand it, and they agree to be bound by all of its terms and conditions. They
further agree that this Agreement constitutes the entire agreement between the
parties with respect to the subject matter thereof and merges all prior and
contemporaneous communications therein. This Agreement shall not be modified

33 -

except by a written agreement signed by duly authorized representatives of

Licensor and Licensee.
20.2

If any provision of this Agreement is held by a court of competent jurisdiction to

be invalid or unenforceable, such ruling shall not affect the validity or
enforceability of the remainder of this Agreement. Notwithstanding the
foregoing, if such ruling substantially impairs the value of the entire Agreement
as to either party, the parties shall enter into good faith negotiations for a period of
sixty (60) days aimed at modifying the entire Agreement in a manner that
compensates such party for the lost value. In the event such negotiations are not
successful, this Agreement shall automatically be terminated upon the expiration
of the negotiating period unless the time of the negotiating period has been
extended by the mutual consent of the parties.

20.3

The headings and captions used in this Agreement are intended for convenience
only and shall not affect its construction or interpretation.

20.4

This Agreement shall be assignable by Licensee, in whole, but not in part,

voluntarily, involuntarily or by operation of law including any merger or
consolidation, substantial change in ownership or control of a partys business, or
any other means, as long as the assignee or successor company agrees, in writing
to assume and be responsible for the obligations of Licensee hereunder.
Otherwise, the consent of the Licensor shall be required for any assignment of this
Agreement. Licensor may assign its rights hereunder.

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20.5

It is agreed that no waiver by either party hereto of any breach or default of any
covenants, terms, or agreements herein set forth shall be deemed a waiver as to
any subsequent and/or similar breach or default.
[Signatures on the following page.]

35 -

IN WITNESS WHEREOF, this Agreement has been duly executed by the

parties through their authorized representative to be effective on the date this agreement is fully
executed by the parties.

Board of Regents of the Nevada System of Higher Education

on behalf of [[INSTITUTION]]

Date:
Daniel Klaich
Chancellor

[[NAME OF COMPANY]]

Date:
[[NAME OF SIGNATORY]]
[[TITLE OF SIGNATORY]]

36 -

EXHIBIT A
Licensed Patents
1. U.S. Patent Application Serial No. XX/XXX,XXX, filed XX
2. U.S. Patent No. X,XXX,XXX issued XX
3. U.S. Provisional Patent Application Serial No. XX/XXX,XXX, filed XX
4. Patent Cooperation Treaty Application Serial No. USXX/XXXXXX, filed XX

Licensed Technology
1. Invention disclosures, grant proposals, iEdision submissions, and related documents
submitted in the following DRI matters: DRI06-002; DRI10-002; DRI10-003; DRI10-004;
DRI10-005; and DRI11-001

A-1