EXCLUSIVE TECHNOLOGY LICENSE AGREEMENT

WITH EQUITY

(Form Document 4-04-03)

License Agreement (“Agreement”), dated as of ______, 20__, between THE BOARD OF TRUSTEES OF THE UNIVERSITY OF ILLINOIS, a body corporate and politic of the State of Illinois (the “University”), and ______, a(n) ______(“Licensee”).

Preliminary Statement

UNIVERSITY holds certain rights to the Technology described below and desires to have the Technology perfected and exploited for commercial purposes. Licensee wishes to obtain the exclusive right to exploit the Technology in commercial settings. Therefore, in consideration of the mutual obligations set forth below and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, University and Licensee agree as follows.

ARTICLE 1

DEFINITIONS

The following capitalized terms are used in this Agreement with the following meanings:

“Affiliate” means, as to any person or entity, any other person or entity that directly or indirectly controls, is controlled by, or is under common control with such person or entity. For purposes of the preceding sentence, “control” means the right to control, or actual control of, the management of such other entity, whether by ownership of securities, by voting rights, by agreement or otherwise.

“Equity Rights” means the capital stock and related rights granted to the University by Licensee and its Affiliates and other parties as set forth in Section 3.14 and on Schedule 3 attached to this Agreement.

“Inventions” means the devices, machines, methods, processes, manufactures, compositions of matter and uses described in the Invention Disclosure(s) listed on Schedule 1 attached to this Agreement.

“Licensed Field” means the field of use described on Schedule 1.

“Licensed Patent Rights” means (a) the patents and patent applications arising or that may arise from the Inventions described on Schedule 1, and (b) all patents and patent applications which are divisions, continuations, reissues, renewals, re-examinations, foreign counterparts, substitutions or extensions of or to any patent applications or patents described in clause (a) of this sentence.

“Licensed Processes” means the processes which are covered in whole or in part by an issued, unexpired claim or a pending claim contained in the Licensed Patent Rights.

“Licensed Product” means any product within the scope of any claim of any patent or patent application within the Licensed Patent Rights, and any product made, obtained or identified by any art, method or process within the scope of any claim of any patent or patent application within the Licensed Patent Rights.

“Net Sales” means:

(a) with respect to Licensed Products and Licensed Processes, in either case sold or transferred to any third party, the gross sales price actually charged in the sale of such Licensed Product or Licensed Process (if Licensee or any Sublicensee sells to an Affiliate, the normal non-discounted invoice price to non-Affiliates shall be deemed the invoice price for purposes of this Agreement), less:

(i) customary trade, quantity or cash discounts, rebates, and non-affiliated brokers’ or agents’ commissions actually allowed and taken;

(ii) amounts repaid or credited to customers on account of rejections or returns of specified products for which a Royalty was paid or payable under this Agreement; and

(iii) freight and other transportation costs, including insurance charges, and duties, tariffs, sales and excise taxes and other governmental charges based directly on sales, turnover or delivery of the specified products and actually paid or allowed; and

(b) with respect to all Licensed Products and Licensed Processes used or consumed by Licensee or an Affiliate or Sublicensee of Licensee in the manufacture or creation of another product, an amount equal to the gross list sales price normally charged in the sale of such Licensed Product or Licensed Process (if Licensee or any Sublicensee sells to an Affiliate, the normal non-discounted invoice price to non-Affiliates shall be deemed the invoice price for purposes of this Agreement), less the deductions, if any, as described in subparts (a)(i) and (ii) above.

For purposes of this Agreement, a “sale” shall be deemed to occur upon the earliest of (i) the date of an invoice for a Licensed Product or Licensed Process sold or transferred to a third party, (ii) the date on which a Licensed Product or Licensed Process is shipped for delivery to, or first performed for, a third party, or (iii) the date on which a Licensed Product or Licensed Process is used or consumed by Licensee, or an Affiliate or Sublicensee of Licensee. If Licensee or any Affiliate or Sublicensee transfers or sells any Licensed Product or Licensed Process to any third party for non-cash consideration, or for no consideration, the sale price shall be deemed to be (i) the gross list sales price normally charged in the sale of such Licensed Product or Licensed Process, or (ii) if no such gross list sales price has been established, a commercially reasonably price acceptable to the University.

“Patent Costs” means out-of-pocket expenses incurred prior to the execution of this Agreement and during the term of this Agreement in connection with the preparation, filing, prosecution and maintenance of the patent applications and patents under the Licensed Patent Rights. Such Patent Costs include without limitation the fees and expenses of attorneys and patent agents, filing fees and maintenance fees, but exclude costs involved in any patent infringement claims.

“Royalties” means all amounts payable under Sections 3.1 and 3.2 of this Agreement.

“Sublicense” means any grant by Licensee of any rights to a Sublicensee in accordance with Article 2 of this Agreement.

“Sublicensee” means any person or entity to which a Sublicense is granted in accordance with Article 2 of this Agreement

“Technical Information” means the technical information and knowhow, if any, as set forth on Schedule 1, existing on the date of this Agreement, (a) relating to the Inventions, Licensed Patent Rights or Licensed Processes and arising from activities conducted in the laboratories of Dr. ______, (b) communicated, transferred or otherwise conveyed to Licensee by any of the University or any employee or agent of the University, and (c) which, at the time it is communicated to Licensee, is not in the public domain and is not subject to any agreement, arrangement or other rights of third parties restricting the right to disclose such matters to Licensee.

“Territory” means the territory set forth on Schedule 1.

“Technology” means the Inventions, Licensed Patent Rights and Technical Information, collectively.

ARTICLE 2

GRANT OF LICENSE

2.1. Grant. Subject to Licensee’s compliance with the terms and conditions of this Agreement, University hereby grants to Licensee:

(a) except as otherwise specified in Sections 2.2 and 2.3 below, the exclusive right to use the Technology, and to the extent not prohibited by other intellectual property rights, to identify, make, have made, use, import and sell Licensed Products and Licensed Processes within the Licensed Field and within the Territory; and

(b) the exclusive right and authority to grant Sublicenses of the rights granted in Section 2.1(a) above, subject to the applicable provisions of this Agreement.

2.2. Reservations.

(a) University reserves for itself the irrevocable right to identify, make, have made, use and have used for any purpose (but not sell commercially) the Technology, Licensed Products and Licensed Processes within the Licensed Field and within the Territory. University also reserves for itself, and for all other persons or entities to whom University may from time to time grant such rights, the irrevocable right to identify, make, have made, use, have used, import and sell for any and all commercial, non-commercial, educational or University purposes any Licensed Products, Licensed Processes and Technology outside the Licensed Field and outside the Territory.

(b) The Inventions may have been conceived with the use of United States government funds under a grant from an agency or department of the United States Government. Therefore, there is reserved from the rights granted hereunder the rights, if any, of the United States government to practice the Inventions for its own purposes in such manner to which it is entitled. University further reserves for itself the right to grant to the United States Government a royalty-free license or licenses, with the right to sublicense, to the Technology to the extent that such grant of license(s) is or may be required by funding agreements between the University and the United States Government relating to the Technology.

(c) All rights to any Technology, Licensed Products or Licensed Processes not expressly and specifically granted to Licensee hereunder or reserved to third parties are hereby expressly reserved to the University, and such Technology, Licensed Products and Licensed Processes are licensed under this Agreement only to the extent owned by, or assigned to, University. No title in or to the Technology is transferred to Licensee pursuant to this Agreement. The University does not and shall not have any obligation to pay Licensee a royalty or any other fee for any of the rights reserved to the University in this Section 2.2.

2.3. Other Rights. University previously granted the licenses and other rights with respect to the Technology specified on Schedule 2 attached, and the rights granted in Section 2.1 above are subject to all of the terms and conditions of those licenses and other rights.

2.4. Sublicenses.

(a) Licensee shall obtain the prior written approval of University to the terms of any Sublicense by delivery to University of a written request for such approval (a “Sublicense Request”). Subject to Section 2.4 below, a Sublicense Request shall be deemed approved upon the terms set forth in such Sublicense Request unless University notifies Licensee of its determination to reject such request within ten (10) days of receipt of the Sublicense Request. Each Sublicense Request shall contain the name and principal place of business of the proposed Sublicensee and all material terms and conditions of the proposed Sublicense. Licensee will provide University with a true, accurate and complete copy of each Sublicense entered into by Licensee within five (5) business days of execution. Licensee further agrees to provide University with a copy of each report received by Licensee from a Sublicensee pertinent to any obligations of such Sublicensee to pay royalties or other sums owing to Licensee. Notwithstanding the foregoing, each and every Sublicense granted pursuant to this Agreement shall be consistent with this Agreement, and shall contain Sublicensee’s agreement to be bound by, and subject to, this Agreement for the benefit of University, including without limitation the provisions of Article 1, Section 3.6, 3.9, 4.2, 4.3, 5.5, Article 8, and Sections 9.5 through 9.8.

(b) Upon termination of this Agreement for any reason, and provided that a Sublicensee is in compliance in all material respects with the terms of its Sublicense as in effect on the date of termination, such Sublicense shall continue in full force and effect in accordance with its terms, with the University substituted for the Licensee with respect to such Sublicense, provided that in no event shall University have any obligations of any nature whatsoever with respect to any past, current or future obligations that Licensee may have had, or may in the future have, for the payment or performance of any obligations owing to Sublicensee pursuant to such Sublicense. Licensee shall not receive from any Sublicensee anything of value in lieu of cash payments in consideration for any Sublicense under this Agreement without the prior written consent of University.

2.5. No Obligation to Update Technical Information. Except as expressly stated in this Agreement, none of University or any faculty, staff, employee or student of the University shall have any obligation to provide Licensee or any Sublicensee with any updates of or additional Technical Information owned, controlled or in the possession of any of them, nor shall the University or any faculty, staff, employee or student of the University have any obligation to inform Licensee or any Sublicensee of any errors, omissions or failures of or in the Technical Information.

ARTICLE 3

PAYMENTS

3.1. Royalties. For the licenses granted in Section 2.1 of this Agreement, Licensee shall:

(a) within three (3) business days of the execution of this Agreement, pay University a licensing fee in the amount set forth on Schedule 3 attached to this Agreement (the “Licensing Fee”);

(b) pay University a Royalty on Net Sales of Licensed Products and Licensed Processes sold by Licensee or any of its Affiliates in the percentage set forth on Schedule 3; and

(c) pay University a Royalty equal to the greater of (i) the percentage set forth on Schedule 3 of all payments or other consideration received by Licensee or any of its Affiliates with respect to any Sublicense from any Sublicensee, regardless of whether such payments or other consideration are denominated as fees, royalties or otherwise, or (ii) the percentage set forth on Schedule 3 on Net Sales of Licensed Products and Licensed Processes sold by any Sublicensee. In the case of subpart (i) above, such percentage will be reduced to the percentage alternatively set forth on Schedule 3 if and when Licensee shall have met the expenditure and development commitments set forth on such Schedule.