EXCLUSIVE LICENSE AGREEMENT

This Exclusive License Agreement (hereinafter called “Agreement”), to be
effective as of the 21 day of DEC, 2005 (hereinafter called “Agreement Date”),
is by and between Protea Biosciences, Inc., a Delaware corporation having its
principal place of business at 955 Hartman Run Road #210, Morgantown, WV 26507,
(hereinafter referred to as “LICENSEE”) and West Virginia University Research
Corporation (hereinafter referred to as “LICENSOR”), a nonprofit West Virginia
corporation having its principal place of business at Chestnut Ridge Research
Building, 886 Chestnut Ridge Road, PO Box 6216, Morgantown, WV 26506-6216,
acting for and on behalf of West Virginia University (“WVU”).

WHEREAS, LICENSOR has developed or is developing and owns certain technologies
defined as “Subject Technology” below;

WHEREAS, LICENSEE has an exclusive option on the “Subject Technology” (as
defined below) resulting from an Exclusive Option Agreement signed by the
Parties on 9/19/01;

WHEREAS, the Parties have terminated a previous license on the “Subject
Technology” concurrently with the signing of this Agreement;

WHEREAS, LICENSOR is willing to grant a new worldwide, exclusive license on the
terms set forth herein to the “Subject Technology” (as defined below) to
LICENSEE in this Agreement; and

WHEREAS, LICENSEE desires to obtain said worldwide, exclusive, license to the
Subject Technology;

NOW, THEREFORE, WITNESSETH, that for and in consideration of the mutual promises
and agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of all of which are hereby acknowledged, the Parties
hereto expressly agree as follows:

1.
DEFINITIONS

1.1         The term “Affiliate(s)” shall mean any corporation, partnership,
joint venture or other entity of which the common stock or other equity
ownership thereof is twenty-five percent (25%) or more owned or controlled,
directly or indirectly, by LICENSEE.

1.2         The term “Gross Sales” shall mean the total invoiced amount less all
bona fide trade, quantity and cash discounts actually allowed, the cost of
extended warranty agreements, if any, and credits and allowances actually
incurred on account of bona fide rejections, returns or billing errors.

 
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1.3         The terms “Improvement” or ‘Improvements” shall mean any
modification or enhancement of, or relating to the Subject Technology, or to the
creation, modification, or enhancement of any device, method, or product related
to the Subject Technology. If Subject Technology is or becomes patented, then
any modification or enhancement shall be deemed an Improvement provided such a
modification or enhancement, if unlicensed, would infringe one or more claims of
such patent(s).

1.4         The term “Licensed Product(s)” shall mean all products that
incorporate, utilize or are made with the use of the Subject Technology.

1.5         The term “the Parties” shall mean LICENSEE and LICENSOR.

1.6         The term “Principal Investigator” shall mean Daniel Flynn, Ph.D.,
John Barnett, Ph.D., Aaron Timperman, Ph.D., and Barbara Ducatman, M.D.

1.7         The term “Subject Technology” shall mean all LICENSOR technology,
cell lines, biological materials, compounds, hardware, software, know-how,
methods, documents, materials, tests, trade secrets, Trademarks, Improvements,
and all other LICENSOR proprietary or confidential information, or intellectual
property related to the Field of Invention listed in the attached Appendix
developed as of the Agreement Date or which are developed during the term of
this Agreement or the Exclusive Option Agreement between the parties. The term
Subject Technology shall include all inventions by the listed Principal
Investigator within the Field of Invention in the attached Appendix. Should a
Principal Investigator have more than one Field of Invention, then each Field of
Invention shall be a separate Subject Technology. Should a second Principal
Investigator have inventions within the same Field of Invention as a first
Principal Investigator, than each Principal Investigator shall have a separate
Subject Technology for the Field of Invention unless the first and second
Principal Investigators collaborated within the Field of Technology on the
invention and listed such in the disclosure to WVURC. The term Subject
Technology shall also include any United States Patent Applications and any
United States or Foreign Patents issuing thereof, together with all patents or
like protection that may in the future be granted on said Subject Technology
whether in the United States of America or any other country and all
substitutions for and divisions, continuations, continuations-in-part, renewals,
reissues, extensions and the like on said applications and patents.

2.
GRANT OF LICENSEE

2.1         LICENSOR hereby grants to LICENSEE, and LICENSEE hereby accepts,
upon and subject to all the terms and conditions of this Agreement, an
exclusive, worldwide, license under the Subject Technology to make, have made,
use, market, sell, sublicense, and offer for sale Licensed Products and
services.

2.2         The foregoing notwithstanding, the grant in Section 2.1 shall be
further subject to, restricted by, and non-exclusive with respect to:

 
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(i)    the use of the Subject Technology by LICENSOR alone or in combination
with third parties, for research, teaching and other education or
research-related purposes; (as indicated in Section 2.4, any such use of Subject
Technology shall be conducted in a manner as to protect the confidentiality or
proprietary nature of the same);

(ii)   the use of the Subject Technology by the inventors thereof for research
purposes at academic or research institutions; and

(iii)  any non-exclusive license of the Subject Technology that LICENSOR is
required by law or regulation to grant to the United States of America or to a
foreign state pursuant to an existing or future treaty with the United States of
America.

2.3         Within thirty (30) days of the execution hereof, LICENSOR will
furnish to LICENSEE all relevant information in its possession at the date of
the execution hereof comprising the Subject Technology, in such form, electronic
or otherwise, as the same is regularly maintained by LICENSOR and as is
reasonably requested by LICENSEE. Provided, however, LICENSOR will be under no
obligation to modify, expand, develop or enhance the Subject Technology, or
create new material in substance or form, beyond the state the Subject
Technology exists at the Agreement Date, absent the further written agreement,
provided however if LICENSOR does so modify, expand, develop, or enhance the
Subject Technology, or create new material in any substance or form beyond the
state the Subject Technology exists at the date of execution of this Agreement,
LICENSOR shall exclusively provide a written right of first refusal to LICENSEE
for such modification, expansion, development or enhancement, to be covered
under the terms and conditions of a new agreement with terms and conditions
substantially the same as those set forth in this Agreement.

2.4         All information and materials provided to LICENSEE by LICENSOR or by
LICENSEE to LICENSOR hereunder shall be treated as confidential in accordance
with the provisions of Section 14 below, and shall be returned to originating
party upon the termination of this Agreement, for whatever reason.

2.5         Subject to the definitions of Improvements and Subject Technology in
Sections 1.3 and 1.7 and subject to the licensing requirements pursuant to
Section 2.1, Improvements made solely by employees of one Party shall be owned
by that Party; Improvements made jointly by employees of both Parties shall be
owned jointly by both Parties. The Parties shall cooperate with each other in
preparing and prosecuting patents and other forms of intellectual property
protection on jointly-owned Improvements, and LICENSEE shall reimburse WVURC for
all patent expenses incurred in connection with such patent applications to the
same extent as set forth in Section 7 below, with the prior approval of
Licensee. Any Improvements made by one Party shall be promptly disclosed to the
other Party, and if the disclosing Party decides not to file a patent
application with respect to an Improvement, the other Party shall have the
option to file such application at its expense in which event all patents and
Improvements resulting there from shall belong to such Party free and clear of
any and all claims or rights of the other Party under this Agreement or
otherwise.

 
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3.
COMMERCIALIZATION EFFORTS

LICENSEE will use commercially reasonable efforts in a diligent manner for the
development and commercialization of the Subject Technology.

4.
PAYMENTS AND REPORTS

4.1         LICENSEE shall provide semi-annual reports to LICENSOR with
supporting documentation regarding the development and progress of the Subject
Technology. LICENSEE will develop and execute marketing, communications, and
promotional plans/or policies for the commercialization and sales of the Subject
Technology which shall be submitted to LICENSOR for review and approval.
LICENSEE will appoint a representative who reports to LICENSOR for purposes of
these activities and who will be the primary point of contact in dealing with
LICENSOR under this Section and will have the authority to make decisions with
respect to actions taken under this paragraph.

4.2         As partial consideration for the rights conveyed by LICENSOR under
this Agreement, LICENSEE shall pay LICENSOR a license fee of twenty-five
thousand dollars ($25,000) due within ninety (90) days of the date on which the
First Notice of Allowance issued by the United States Patent and Trademark
Office or by a similar governmental agency of a foreign country with respect to
any Subject Technology is received by LICENSEE. In no event shall LICENSEE be
required to pay the above license fee more than one time with respect to any
individual Subject Technology, including but not limited to continuations,
continuations in part, extensions, divisions, and counterpart issuances from
additional jurisdictions.

4.3         In addition to the foregoing and subject to Section 4.4, LICENSEE
shall pay LICENSOR an earned royalty on Gross Sales of four percent (4%).

4.4         If LICENSEE is required to license intellectual property rights from
third parties in order to practice or commercialize the Subject Technology, the
royalty payments due in Section 4.3 shall be reduced by the lesser of (i) fifty
percent (50%) or (ii) the royalty and licensing fees actually incurred by
LICENSEE to license such third party intellectual property rights.
Notwithstanding the foregoing, LICENSOR shall be entitled to receive earned
royalties of at least two percent (2%) on Gross Sales following such reduction.

 
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4.5         Payment of the royalties specified this Section shall be made
semiannually by LICENSEE to LICENSOR on a calendar year basis within thirty (30)
days after June 30 and December 31 of each calendar year during the term of this
Agreement covering the Gross Sales of Licensed Products sold by LICENSEE during
the preceding accounting period. After termination or expiration of this
Agreement, a final payment shall be made by LICENSEE covering the final calendar
year or portion thereof during which sales of Licensed Products took place. Each
semi-annual payment shall be accompanied by a written royalty statement in a
form acceptable to LICENSOR. Such royalty statement shall be certified as
accurate by a duly authorized representative of LICENSEE reciting stock number,
item, units sold, description, quantity shipped, gross invoice, amount billed
customers less discounts, allowances, returns and reportable sales for each
Licensed Product. A royalty obligation shall accrue upon the sale of the
Licensed Products regardless of the time of collection by LICENSEE. A Licensed
Product shall be considered “sold” when such Licensed Product is billed,
invoiced, shipped, or paid for, whichever occurs first.

4.6         Should LICENSEE fail to make any payment when due and payable to
LICENSOR hereunder, LICENSOR may, at its sole option, upon thirty (30) days
written notice to LICENSEE of LICENSEE’s right to cure, terminate this Agreement
as provided in Section 8 below.

4.7         All payments due hereunder are expressed in and shall be paid in
United States of America currency, without deduction of exchange, collection or
other charges, to LICENSOR, or to the account of LICENSOR at such bank or other
agent as LICENSOR may from time to time designate by notice to LICENSEE.

4.8         In the event that any payment due hereunder is not made when due,
the payment shall bear interest beginning on the 10th day following the due date
thereof, calculated at the annual rate of the sum of (i) two percent (2%) plus
(ii) the prime interest rate quoted by The Wall Street Journal on the date said
payment is due, the interest being compounded on the last day of each calendar
quarter, provided, however, that in no event shall said annual interest rate
exceed the maximum legal interest rate for corporations. Each such royalty
payment when made shall be accompanied by all interest so accrued. Said interest
and the payment and acceptance thereof shall not negate or waive the right of
LICENSOR to seek any other remedy, legal or equitable, to which it may be
entitled because of the delinquency of any payment.

5.
RECORDS, INSPECTION, AND QUALITY CONTROL

5.1         LICENSEE shall maintain or cause to be maintained a true and correct
set of records pertaining to the Gross Sales of Licensed Products by LICENSEE
under this Agreement. During the term of this Agreement and for a period of
three (3) years thereafter, LICENSEE agrees to permit an accountant or agent
selected and paid by LICENSOR to have access during ordinary business hours to
such records as are maintained by LICENSEE as may be necessary, in the opinion
of such accountant or agent, to determine the correctness of any report and/or
payment made under this Agreement. In the event that the audit reveals an
underpayment of royalty by seven percent (7%) or more, all costs and fees
associated with such audit shall be paid by LICENSEE to LICENSOR. If the
underpayment is less than seven percent (7%), LICENSOR shall pay all costs and
fees associated with such audit. Such accountant or agent shall maintain in
confidence, and shall not disclose to LICENSOR, any information concerning
LICENSEE or its operations or properties other than information directly related
to the correctness of such reports and payments.

 
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5.2         LICENSEE agrees and acknowledges that LICENSOR has all the rights to
inspect the records and operations of LICENSEE during regular business hours.

6.
SUBLICENSES

6.1         LICENSEE shall obtain prior written approval from LICENSOR, which
approval shall not be unreasonably withheld, and shall include LICENSOR as a
signatory party to any sublicensing agreement, prior to entering into any
sublicensing agreement. LICENSEE shall give LICENSOR prompt notification of the
identity and address of each sublicensee with whom it concludes a sublicense
agreement and shall supply LICENSOR with a copy of each such sublicense
agreement. LICENSEE shall be responsible for its sublicensees and shall not
grant any rights that are inconsistent with the rights or obligations of
LICENSEE hereunder. No such sublicense agreement shall contain any provision
that would cause it to extend beyond the term of this License Agreement.

6.2         All sublicenses granted by LICENSEE of its rights hereunder shall be
subject to the terms of this Agreement. LICENSEE shall remain responsible to pay
LICENSOR its licensing royalty in accordance with the royalty payment schedule
set forth in Section 4. Any act or omission of a sublicensee that would be a
breach of this License Agreement if performed by LICENSEE shall be deemed to be
a breach by LICENSEE of this Agreement. Each sublicense agreement granted by
LICENSEE shall include an audit right by LICENSOR of the same scope as provided
in Section 5 hereof with respect to LICENSEE.

6.3         For each sublicense granted to sublicensees, LICENSEE agrees to pay
LICENSOR a sublicense fee equal to ten percent (10%) of any license fee and
other payments or fees received from the sublicensee. Sublicense fees owed
LICENSOR shall be due and payable to LICENSEE within ten (10) days of receipt of
payment from the sub licensee.

7.
INTELLECTUAL PROPERTY AND INFRINGEMENT

7.1         During the term of this Agreement, LICENSEE shall control the
development, filing, prosecution, and maintenance of all patents for the Subject
Technology (“the Patent Rights”); provided, however, that (i) all filings shall
be made in the name and for the benefit of WVU, (ii) LICENSEE shall provide
LICENSOR with a reasonable opportunity to review and provide input with respect
to any patent applications, continuations, divisional or related applications
with respect to Subject Technology prior to the filing thereof; (iii) LICENSEE
shall not make any substantive decision with respect to the Patent Rights
without first obtaining the consent of LICENSOR, which will not by unreasonably
withheld; and (iv) LICENSOR shall not abandon any patent application at any
stage in the prosecution process or allow a provisional patent application to
lapse without filing an application claiming priority without informing LICENSOR
within a reasonable timeframe to allow LICENSOR to maintain the application.

 
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7.2         LICENSEE agrees to pay all costs incident to the Patent Rights in
the United States and elected foreign countries including, but not limited to,
all costs incurred in filing continuations, divisionals or related applications,
thereon and any re-examination or reissue proceedings thereof. LICENSEE shall
select all counsel for the protection of the Patent Rights. Should LICENSEE
elect for the Patent Rights to be prosecuted by patent attorneys or agents
employed by LICENSOR than LICENSEE shall be billed by LICENSOR for such
prosecution at reasonable market rates.

7.3         LICENSEE agrees to keep LICENSOR and its patent counsel fully
informed of all prosecutions and other actions pursuant to this Section,
including submitting to LICENSOR copies of all official actions and responses
thereto.

7.4         In the event LICENSEE decides not to pay for the costs associated
with either (i) the prosecution of any patent application that forms a part of
the Patent Rights to issuance or (ii) maintenance of any United States or
foreign issued patent on any Subject Technology, LICENSEE shall timely notify
LICENSOR of such a decision, which notice shall constitute an irrevocable waiver
of LICENSEE’s rights therein, if any, including, without limitation,
Improvements thereto, and LICENSOR shall have the right to assume such costs.
LICENSEE’s right to practice the Subject Technology under such patent shall
immediately terminate upon the giving of such notice. If LICENSEE fails to
notify LICENSOR to assume such costs prior to abandonment or expiration of any
Patent Rights, LICENSEE shall be considered in default of this Agreement and
liable for any damages resulting by such abandonment.

7.5         Each party shall promptly inform the other of any suspected
infringement of any claims in the Subject Technology, or any misuse,
misappropriation, theft or breach of confidence of other proprietary rights in
the Subject Technology by a third party, and with respect to such activities as
are suspected, LICENSOR shall have the right, but not the obligation, to
institute an action for infringement, misuse, misappropriation, theft or breach
of confidence of the proprietary rights against such third party. If LICENSOR
fails to bring such an action or proceeding within a period of three (3) months
after receiving notice or otherwise having knowledge of such infringement, then
LICENSEE shall have the right, but not the obligation, to prosecute at its own
expense any such claim. Should either LICENSOR or LICENSEE commence suit under
the provisions of this Section and thereafter elect to abandon the same, it
shall give timely notice to the other party who may, if it so desires, continue
prosecution of such action or proceeding at its own expense. Any damages
recovered from such action will be divided between the Parties in proportion to
the percentage of such costs which they have paid.

7.6         Neither LICENSOR nor LICENSEE shall settle any action covered by
Section 7.5 without first obtaining the consent of the other party, which
consent will not be unreasonably withheld.

 
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7.7         LICENSOR shall not be liable for any costs, fees, damages or losses
of any sort incurred as the result of an action for infringement brought against
LICENSEE as the result of LICENSEE’s exercise of any right granted under this
Agreement. The decision to defend or not defend any such action shall be in
LICENSEE’s sole discretion.

8.
TERM AND TERMINATION

8.1         This Agreement shall automatically terminate at the latter of the
expiration of the last to expire patent issued on the Subject Technology, or
twenty (20) years from the first commercial sale of the final Licensed Product
by Licensee. After such expiration, LICENSEE shall have a perpetual,
non-exclusive, royalty-free license to the Subject Technology.

8.2         In the event of default or failure by LICENSEE to perform any of the
terms, covenants or provisions of this Agreement between LICENSEE and LICENSOR,
LICENSEE shall have thirty (30) days after the giving of written notice of such
default to LICENSEE by LICENSOR to correct such default. If such default is not
corrected within the said thirty (30) day period, LICENSOR shall have the right,
at its option, to cancel and terminate this Agreement. The failure of LICENSOR
to exercise such right of termination for non-payment or otherwise shall not be
deemed to be a waiver of any other right or remedy LICENSOR might have, nor
shall such failure preclude LICENSOR from exercising or enforcing said right or
remedy upon any subsequent failure by LICENSEE.

8.3         LICENSOR shall have the right, at its option, to cancel and
terminate this Agreement immediately in the event that LICENSEE shall (i) become
involved in insolvency, dissolution, bankruptcy, or receivership proceedings
affecting the operation of its business or (ii) make an assignment of all or
substantially all of its assets for the benefit of creditors, or in the event
that (iii) a receiver or trustee is appointed for LICENSEE.

8.4         At the date of any termination of this Agreement pursuant to Section
8.2 hereof for breach by LICENSEE, or pursuant to Section 8.3 hereof, as of the
receipt by LICENSEE of notice of such termination, LICENSEE shall immediately
cease using any of the Subject Technology and return all documents and records,
including electronic records, of the same to LICENSOR; provided, however, that
LICENSEE, within six (6) months of termination, may dispose of any Licensed
Products actually in the possession of LICENSEE prior to the date of
termination.

8.5         No termination of this Agreement shall constitute a termination or a
waiver of any rights of either Party against the other Party accruing at or
prior to the time of such termination. The obligations of Sections 4, 7, 14 and
15 shall survive termination of this Agreement.

8.6         In the event of termination of this Agreement for any reason all
rights to the Subject Technology shall revert to LICENSOR.

 
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9.
ASSIGNABILITY

This Agreement shall be binding upon and shall inure to the benefit of LICENSOR
and its assigns and successors in interest, and shall be binding upon and shall
inure to the benefit of LICENSEE and the successor to all or substantially all
of its assets or business to which this Agreement relates, but shall not
otherwise be assignable or assigned by LICENSEE without prior written approval
and consent by LICENSOR, on such terms and conditions as the Parties may agree.
Any attempted assignment without such consent shall be void and shall
automatically terminate all rights of LICENSEE under this Agreement.

10.
GOVERNMENTAL COMPLIANCE

LICENSEE shall at all times during the term of this Agreement, and for so long
as it shall sell Licensed Products, comply and cause its sublicensees to comply
with all laws, rules and regulations that may control the import, export,
manufacture, use, sale, marketing, distribution and other commercial
exploitation of Licensed Products or any other activity undertaken pursuant to
this Agreement.

11.
GOVERNING LAW

This Agreement shall be deemed to be subject to, and have been made under, and
shall be construed and interpreted in accordance with the laws of the State of
West Virginia and the United States of America.

12.
NOTICES

Any payment, notice or other communication pursuant to this Agreement shall be
sufficiently made or given on the date of mailing if sent to such Party by first
class mail, postage prepaid, addressed to it at its address set forth below or
as it shall designate by written notice given to the other party.

If to WVU/WVURC:

Director
Office of Technology Transfer
210 Chestnut Ridge Research Building
886 Chestnut Ridge Road, 2nd Floor
PO Box 6216
Morgantown, WV 26506-6216
(304) 293-7160 Phone
(304) 293-7498 Fax

 
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If to __________

Protea Biosciences, Inc.:
Attn: President
955 Hartman Run Road, #210
Morgantown, WV 26507

13.
MARKETING, ADVERTISING AND PUBLICATIONS

13.1       LICENSEE shall identify LICENSOR as the owner of the Subject
Technology and any patent(s) issued thereon, and include in its packaging and
products appropriate patent markings. However, LICENSEE agrees that it may not
use in any way the name of West Virginia University or any logotypes,
trademarks, or symbols associated with West Virginia University or LICENSOR or
the names of any of the scientists or other researchers at West Virginia
University or LICENSOR without the prior written consent of West Virginia
University or LICENSOR. Further, LICENSEE shall not, by advertising or
otherwise, indicate or imply the existence of any relationship between LICENSEE
and West Virginia University or LICENSOR other than that of licensee-licensor
unless the indication of a relationship is to convey the percentage ownership of
WVURC in Protea Biosciences, Inc.

13.2       LICENSEE shall provide to LICENSOR copies of all packaging,
advertising and other material intended to be used in relation to the Licensed
Products. Should LICENSOR object to any of the packaging, advertising or other
material intended to be used in relation to the Licensed Products, LICNESEE
shall suspend such usage until the Parties find a satisfactory amendment.

13.3       LICENSOR and LICENSEE shall have the right to publish papers and
other scholarly materials with respect to the Subject Technology in appropriate
literature. Such publication shall in no event disclose proprietary or
confidential information of the other party. Provided, however, LICENSOR and
LICENSEE shall have the right to review the other party’s materials related to
the Subject Technology prior to the submission for public disclosure including
publications, posters, lectures, and seminars thereof and require changes or
delay submission for up to seven (7) days from receipt thereof for purposes of
protecting such information and protecting LICENSOR’s right to obtain patent
protection on any inventions or Improvements disclosed thereby. In the event
either party has not responded to the other party with written comments or
changes within such seven (7) day period, then the submitting party shall
authorize to proceed with its disclosure of the materials submitted for review.

 
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14.
CONFIDENTIALITY

LICENSEE and LICENSOR agree to maintain the Subject Technology and all
associated proprietary, confidential information, and intellectual property, of
each other in confidence, and to use the same only in accordance with this
Agreement. Such obligation of confidentiality shall not apply to information
which either party can demonstrate: (i) was at the time of disclosure in the
public domain; (ii) has come into the public domain after disclosure through no
fault of either party; (iii)was lawfully disclosed to either party by a third
party which was not under an obligation of confidence to either party with
respect thereto; (iv) which either party can reasonably demonstrate was
independently developed by LICENSEE without use of the Subject Technology; or
(v) which LICENSEE shall be compelled to disclose by law or legal process. The
foregoing obligation of confidentiality shall survive termination of this
Agreement.

15.
RECOGNITION OF OWNERSHIP

LICENSEE recognizes LICENSOR’S title to the Subject Technology and shall not at
any time do or suffer to be done any act, omission, or thing which will in any
way impair the rights of LICENSOR in and to the Subject Technology. It is
understood and agreed that LICENSEE, or any parent, subsidiary or Affiliate
thereof, shall not acquire and shall not claim any title to the Subject
Technology by virtue of the license granted to LICENSEE, or through LICENSEE’s
use of the Subject Technology, it being the intention of the parties that all
use of the Subject Technology by LICENSEE shall at all times inure to the
benefit of LICENSOR.

16.
INDEMNITY

Each Party shall notify the other of any claim, lawsuit or other proceeding
related to the Subject Technology. LICENSEE agrees that it will defend,
indemnify and hold harmless LICENSOR, its faculty members, scientists,
researchers, employees, officers, trustees, directors, and agents and each of
them (the “Indemnified Parties”), from and against any and all claims, causes of
action, lawsuits or other proceedings filed, including, costs and reasonable
attorney’s fees, or otherwise instituted against any of the Indemnified Parties
related directly or indirectly to or arising out of the design, process,
manufacture, sale or use by any person or party of the Subject Technology, the
Licensed Products or any other embodiment of the Subject Technology into
Licensed Products, including, without limitation, actions founded on product
liability.

17.
LICENSOR’S DISCLAIMERS

Neither LICENSOR nor West Virginia University, nor any of their faculty members,
researchers, trustees, officers, employees, directors, or agents, assumes any
responsibility for the manufacture, product specifications, sale or use of the
Subject Technology or the Licensed Products which are manufactured by or sold by
LICENSEE.

 
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18.
INDEPENDENT CONTRACTORS

The Parties hereby acknowledge and agree that each is an independent contractor
and that neither Party shall be considered to be the agent, representative,
master or servant of the other Party for any purpose whatsoever, and that
neither Party has any authority to enter into a contract, to assume any
obligation or to give warranties or representations on behalf of the other
Party. Nothing in this relationship shall be construed to create a relationship
of joint venture, partnership, fiduciary or other similar relationship between
the Parties.

19.
DISCLAIMER OF WARRANTY

LICENSOR MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESSED OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF FITNESS OR MERCHANTABILITY,
REGARDING OR WITH RESPECT TO THE SUBJECT TECHNOLOGY OR LICENSED PRODUCTS AND
LICENSOR MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESSED OR IMPLIED, AS TO THE
PATENTABILITY OF ANY EMBODIMENT OF THE SUBJECT TECHNOLOGY INTO LICENSED PRODUCTS
OR TO THE ENFORCEABILITY OF ANY PATENTS, IF ANY, ISSUING THEREUPON, OR THAT THE
SUBJECT TECHNOLOGY OR LICENSED PRODUCTS ARE OR SHALL BE FREE FROM INFRINGEMENT
OF ANY PATENT OR OTHER RIGHTS OF THIRD PARTIES.

20.
NON-WAIVER

The Parties covenant and agree that if a party fails or neglects for any reason
to take advantage of any of the terms hereof providing for termination of this
Agreement or if a party, having the right to declare this Agreement terminated,
shall fail to do so, any such failure or neglect by such party shall not be a
waiver or be deemed or be construed to be a waiver of any cause for the
termination of this Agreement subsequently arising, or as a waiver of any of the
terms, covenants, or conditions of this Agreement or of the performance thereof.
None of the terms, covenants, and conditions of this Agreement may be waived by
a party except by its written consent.

21.
REFORMATION

All Parties hereby agree that neither Party intends to violate any public
policy, statutory or common law, rule, regulation, treaty or decision of any
government agency or executive body thereof of any country or community or
association of countries; that if any word, sentence, Section or clause or
combination thereof of this Agreement is found, by a court or executive body
with judicial powers having jurisdiction over this Agreement or any of its
Parties hereto, in a final non-appealed order to be in violation of any such
provision in any country or community or association of countries, such words,
sentences, Sections, clauses or combination shall be inoperative in such
country, community, or association of countries, and the remainder of this
Agreement shall remain binding upon the Parties hereto.

 
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22.
FORCE MAJEURE

No liability hereunder shall result to a party by reason of delay in performance
caused by force majeure, that is, circumstances beyond the reasonable control of
the party, including, without limitation, acts of God, fire, flood, war, civil
unrest, labor unrest, or shortage of or inability to obtain material or
equipment.

23.
WAIVER AND ALTERATION

23.1       The waiver of a specific breach hereunder may be affected only by
writing signed by the waiving party and shall not constitute a waiver of any
other breach or Section of this Agreement.

23.2       A provision of this Agreement may be altered only by a writing signed
by both parties.

24.
ENTIRE AGREEMENT

The terms and conditions herein constitute the entire agreement between the
Parties and shall supersede all previous agreements, either oral or written,
between the Parties hereto with respect to the subject matter hereof. No
agreement or understanding bearing on this Agreement shall be binding upon
either Party hereto unless it shall be in writing and signed by the duly
authorized officer or representative of each of the Parties and shall expressly
refer to this Agreement.

25.
NO INFERENCE

This agreement is the product of arm’s length negotiation between the parties
and no inference shall be drawn or prejudice result from the fact that the final
version hereof may have been drafted by counsel for one party or the other.

26.
AUTHORITY TO ACT

The Parties represent and warrant that they have the full power and authority to
enter into this Agreement and carry out the transactions contemplated hereby,
that all necessary corporate or other action has been duly taken in this regard
and that the person executing this Agreement on each party’s behalf has the
requisite authority to bind the respective party.

 
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27.
MEDIATION

The Parties agree that it shall be a prerequisite to any suit by either party
against the other for any cause arising out of the terms of this Agreement that
the Parties shall first submit their dispute to non-binding mediation before a
qualified mediator authorized to provide mediation services in connection with
the court-annexed alternative dispute procedures of the Circuit Courts, or of
the United States District Courts, of the State of West Virginia. In the event
of such duty to mediate arising hereunder, the Parties shall select a mutually
acceptable mediator, or, if they are unable to do so, each shall select a
qualified mediator to act as their representative, and those two so selected
shall select a qualified third mediator who shall actually mediate the case. Any
mediation hereunder shall be conducted in accordance with the Mediation Rules
set forth in the Rules for West Virginia Trial Courts of Record or such other
similar standards as the parties may agree or the mediator may designate.

28.
EXPORTS

LICENSEE is responsible for complying with, and assures LICENSOR that it will
comply with all export regulations of the U. S., including the U. S. Department
of State International Traffic In Arms Regulations (Title 22, CFR Parts
120-130), the U.S. Department of Commerce Export Administration Regulations
(Title 15, CFR 730-774), and any other U.S. Government regulation applicable to
the export, re-export, or disclosure of such controlled technical data (or the
products thereof) to Foreign Nationals, whether within, or without, the U.S.,
including those employed by, or otherwise associated with LICENSEE. This duty of
compliance does not expire with the expiration of the term of this Agreement, or
the existence of any of the conditions as set forth in this Agreement, or the
period of performance as set forth in this Agreement.

29.
NON-COMPETE

LICENSEE hereby agrees not to solicit for employment, employ, or assist any
other entity in employing any employee, staff, or faculty member during the term
of and for a two-year period after the expiration of this Agreement who is now
or hereafter employed or engaged by the LICENSOR.

30.
FURTHER ASSURANCES

LICENSOR and LICENSEE covenant and agree to execute all documents and take all
reasonable actions necessary to protect the Subject Technology and any Licensed
Products, including improvements and enhancements thereto.

 
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IN WITNESS WHEREOF, the Parties hereto have executed and delivered this
Agreement in multiple originals by their duly authorized officers and
representatives on the respective dates shown below, but effective as of the
Agreement Date.

 
WEST VIRGINIA UNIVERSITY
 
RESEARCH CORPORATION, Licensor
     
Sign:
/s/ Alan B. Martin
   
Dated:
12/21/05
 
Title:
       
/s/ Stepehen Turner
 
Licensee
     
Sign:
Stephen Turner
   
Dated:
   
Title:
CEO

 
 
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APPENDIX I (SUBJECT TECHNOLOGY I)
FIELD OF INVENTION—MICROFLUIDICS
PRINCIPAL INVESTIGATOR—AARON TIMPERMAN, PhD.

1. Disclosure # 157. Integrated Microfluidic System for Proteome Analysis.

2. Disclosure #198. Porous Capillary Interface for Microfluidic Chip System.

3. Disclosure # 194. Edman Degradation in Microfludic Chip System.

4. Disclosure # 199. Novel Electroextraction Method.

5. Disclosure # 201 and 217. Microfluidic Valve.

6. Disclosure # 202 and 214. Apparatus and Method for Edman Degradation on a
Microfluidic Device Utilizing an Electroosmotic Flow Pump.

7. Disclosure #213. Integration of Bi-Direction Capillary Electrophoresis into
the Integrated Microfluidic System for Proteome Analysis.

8. Disclosure # 216. An Integrated Microfluidic System for Proteome Analysis
Using a Concentrating Membrane.

9. Disclosure # 245. Use of Laser Micromachining to Produce Hydrodynamic Flow
Restrictors in Microfluidic Devices.

10. Disclosure #215 and # 246. Novel Interfaces for Coupling Microfluidic
Systems with Electrospray Ionization Mass Spectromety.

11. Disclosure #255. A Novel Saw-Toothed Shaped Gradient for Chromatographic
Separations.

 
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APPENDIX II (SUBJECT TECHNOLOGY II)
FIELD OF INVENTION—AFAP
PRINCIPAL INVESTIGATOR Daniel Flynn, PhD.

1. Disclosure # 230. AFAP Sequences.

 
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