Document:

SPONSORED
      RESEARCH AGREEMENT FY06-ORA3-06

     

    THIS
      AGREEMENT is entered into by and between the Board of Regents of the University
      of Oklahoma,
      an educational agency of the State of Oklahoma (hereinafter referred to as
      "University") and 3DICON Corporation, an Oklahoma corporation with principal
      offices at P O Box 470941, Tulsa, OK 74147-0941
      (hereinafter referred to as "Sponsor").

     

    WITNESSETH

     

    WHEREAS,
      the research program contemplated by this Agreement is of mutual interest and
      benefit to
      University and to Sponsor, will further the instructional and research
      objectives of University in a manner
      consistent with its status as a non-profit, state, educational institution,
      and
      may derive benefits for both
      Sponsor and University through the advancement of knowledge through discovery
      and the creation of
      new
      technologies;

     

    NOW,
      THEREFORE, in consideration of the mutual promises contained herein and other
      good and valuable
      consideration, the receipt and sufficiency of which are acknowledged, the
      parties agree to the following:

     

    SECTION
      1. DEFINITIONS

     

    1.1
      "Confidential/Proprietary Information" shall mean any and all proprietary
      knowledge, know-how, practices,
      processes, or other information related to the Project disclosed or submitted
      in
      writing or in other tangible form to either party by the other and which is
      conspicuously marked "Confidential" or similar
      proprietary legend.

     

    1.2
      "Invention" shall mean any invention, discovery, improvement, enhancement,
      concept, product, or
      idea
      made during the Project whether or not patentable or copyrightable, including
      but not limited to processes,
      machines, methods, computer software, formulas, and know-how directly relating
      thereto An Invention
      is "made during the Project" if it arises from work performed pursuant to the
      Project conducted under this Agreement and is made during the Period of
      Performance.

     

    l.3
      "Joint Invention" shall mean all Inventions made jointly by one or more
      employees of University and
      by
      one or more employees of Sponsor during the Period of Performance and the
      Project.

     

    1.4
      "Period of Performance" is the term of this Agreement as set forth in Section
      3
      below, unless earlier
      terminated as provided for in Section 5.

     

    1.5
      "Project" shall mean the research project entitled Investigation of
      3-Dimensional Display Technologies
      as described in Appendix A, under the direction of James Sluss Jr. as Principal
      Investigator.

     

    1.6
      "Sponsor Invention" shall mean individually and collectively all Inventions
      conceived and/or made
      solely by one or more, employees of Sponsor during the Period of Performance
      and
      the Project.

     

    1.7
      "University Invention" shall mean individually and collectively all Inventions
      conceived and/or made
      solely by one or1
      more
      employees of University during the Period of Performance and the
      Project.

     

    
      
        
        

      

      
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    SECTION
      2. RESEARCH WORK

     

    2.1  University
      does not guarantee specific research results but will exercise good faith
      efforts to perform
      the Project substantially in accordance with the terms and conditions of this
      Agreement Sponsor understands
      that University's primary mission is education and advancement of knowledge
      and
consequently
      the Project will be designed to carry out that mission

     

    2.2  The
      manner of performance of the Project shall be determined solely by the Principal
      Investigator.
      In the event the Principal Investigator becomes unable 01 unwilling to continue
      the Project and
      a
      mutually acceptable substitute is not available, either party shall have the
      option to terminate the Project.

     

    2.3  Sponsor
      agrees that, if funds are exhausted prior to completion of the research,
      University will, at
      the
      option of Sponsor, submit a final report of accomplishments or provide an
      estimate of additional funds
      required to complete the Project and will continue the research if such funds
      are provided by Sponsor
      On a calendar quarterly basis, University shall provide Sponsor a report of
      the
      status of the use of
      funds
      on the Project.

     

    2.4
      University shall be free to continue research, and Sponsor shall not gain any
      rights via
      this
      Agreement to other research. University does represent that no research shall
      be
      done in direct competition
      with the Project provided herein.

     

    2.5
      The
      Principal Investigator shall furnish Sponsor periodic (not less frequently
      than
      quarterly) letter reports
      summarizing progress on the Project The Principal Investigator shall prepare
      and
      submit, on behalf
      of
      University, a final report to the Sponsor within ninety (90) days of the
      termination of this Agreement

     

    2.6
      In
      the event of termination of the Project under section 2.2 or section 2.3 or
      section 5 below, the University
      shall provide an option to Sponsor to the research developed under this
      Agreement to the date of
      termination in accordance with Section 8.3 Such option shall be negotiated
      in
      accordance with Section
      8.3.

     

    SECTION
      3. PERIOD OF PERFORMANCE

     

    3.1
      The
      Period of Performance will be: July 15, 2005 through January 14, 2007.

     

    SECTION
      4. COSTS, BILLINGS AND OTHER SUPPORT

     

    4.1
      Unless this agreement or the project is terminated before the expiration of
      the
      Period of Performance,
      for the services, reports, and other items to be delivered hereunder Sponsor
      shall pay University
      a fixed price in the amount of Four Hundred Fifty-Three Thousand Five Hundred
      Eighty Four Dollars
      and no cents ($453,584 00). Upon execution of this contract, Sponsor shall
      pay
      University Five Hundred
      Dollars and 00/00 cents ($500.00). Within ninety days of the execution of this
      contract, Sponsor shall
      pay
      University Seventy-Five Thousand and Ninety-Seven Dollars and 33/00 cents
      ($75,097 33) The
      remaining portion or Three Hundred Seventy-Seven Thousand Nine Hundred
      Eighty-Six Dollars and 67/00
      cents ($377,98667) shall be due and payable without interest to the University
      of Oklahoma as follows:
      on October 15, 2005: $75,597.33; on January 15, 2006: $75,597.33; on April
      15,
      2006: the balance
      of $226,792 01, The University agrees to incur expenses primarily in accordance
      with the cost estimate
      included in Appendix
      B ("Budget"),
      which by reference is made a part hereof for all purposes If
      Sponsor terminates this Agreement prior to the expiration of the Period of
      Performance, it shall pay all amounts
      due and owning the University through the date of termination including all
      non-cancelable commitments
      for equipment; provided, that any equipment Sponsor has financed as of the
      date
      of termination
      shall be transferred to Sponsor.

     

    
      
        
        

      

      
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    4.2
       The
      University agrees to incur1
      expenses
      substantially in accordance with the cost estimate included
      in Appendix B ("Budget"), incorporated herein by reference., University reserves
      the right to re-budget
      funds as necessary for completion of the Project. Any proposed rebudget greater
      than 25% shall be
      reported to Sponsor.

     

    4 3
      If this
      Agreement is terminated by University or Sponsor before the end of the eighteen
      month period,
      Sponsor shall retain title to any equipment purchased with funds provided by
      Sponsor under this Agreement
      Title to equipment furnished by Sponsor to University, if any, shall remain
      with
      the Sponsor, The
      costs
      of transporting, installing and servicing any equipment used herein, whether
      the
      property of University
      or Sponsor, shall be allowable under this Agreement.

     

    SECTIONS
      5. TERMINATION

     

    5.1
      Either
      party may terminate this Agreement at any time by giving not less than sixty
      (60) days prior
      written notice to the other. In the event of early termination, Sponsor agrees
      that University shall be reimbursed
      the fixed price of this agreement on a pro-rated scale to the date of the
      termination

     

    5.2
       In
      the
      event that either party shall commit any breach of or default in any of the
      terms or conditions
      of this Agreement, and also shall fail to remedy the default or breach within
      ninety (90) days after
      receipt of written notice thereof from the other party, the party giving notice
      may, at its option and in addition
      to any other remedies which it may have at law or in equity, terminate this
      Agreement by sending
      written notice of termination in accordance with Section 10 to the defaulting
      party and the termination
      shall be effective as of the date of the receipt of the notice.

     

    5.3
      Termination of this Agreement by either party for any reason shall not affect
      the rights and obli-gations
      of the parties accrued prior to the effective date of termination of this
      Agreement, except insofar as
      Sponsor's breach of contract for failure to make payments under Section 4 shall
      cause Sponsor to forfeit
      its rights under Section 8 The rights and duties of Sections 6,8, 9 and 11
      of
      this Agreement shall survive termination

     

    SECTION
      6. PUBLICITY

     

    6.1
      Neither party to this Agreement may use the name or mark of the other nor the
      name(s) of the other's
      employees in news releases, publicity, advertising, or product promotion without
      the prior written permission
      of' the other.

     

    SECTION
      7. PUBLICATION

     

    7.1 Subject
      to confidentiality provisions, University and Sponsor shall have the right
      at
      its discretion to
      release non-proprietary information or to publish any material resulting from
      the Project The party proposing
      to publish will furnish a copy of any proposed publication to the other party
      for its review at least thirty (30) days in advance of submission for
      publication. University shall not publish any material or
      information designated by Sponsor, in its sole discretion, as confidential
      or
      proprietary Publication of specific
      results may be delayed for a limited period, not to exceed sixty (60) days,
      to
      protect any patentable
      subject matter and remove Sponsor Proprietary Information contained in the
      publication.

     

    
      
        
        

      

      
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    Sponsor
      agrees to limit disclosure of such copies to its employees solely for the
      puiposes of review and comment
      unless otherwise agreed in writing by University No unreasonable delay shall
      be
      imposed on the
      filing, defense or publication of any student thesis or dissertation University
      shall give Sponsor the option of being acknowledged in such publication for
      its
      sponsorship of the Project

     

    SECTION
      8. INTELLECTUAL PROPERTY

     

    8.1
      Any
      University Invention shall belong to University and any Sponsor Invention shall
      belong to Sponsor;
      provided however, subject to confidentiality provisions, University is hereby
      granted a royalty-free, nonexclusive and nontransferable right and license
      to
      Sponsor Inventions for non-commercial, educational and research purposes. Any
      Joint Invention shall belong to University and Sponsor, jointly University
      shall execute a non-disclosure agreement covering Inventions, as may be required
      by Sponsor

     

    8.2
      University will provide Sponsor with a written disclosure of any University
      Invention or Joint Invention
      promptly upon its being reported to the University by the Principal Investigator
      Sponsor1
      will
provide
      University with a written disclosure of any Sponsor Invention or Joint Invention
      promptly upon its
      being
      reported to Sponsor by a Sponsor investigator Sponsor shall execute a
      non-disclosure agreement
      covering Inventions, as may be required by the University; provided, that such
      non-disclosure agreement
      shall not impede the commercial use and exploitation of Invention licensed
      to
      Sponsor under this contract

     

    8.3
      University hereby giants to Sponsor an option to negotiate an exclusive license
      to a University Invention
      and University rights in a Joint Invention. The terms and conditions of the
      license shall be as set
      forth
      on the Exclusive License Agreement attached to this Agreement as Appendix
      C, except
      that the royalty
      to be paid University on a license for which Sponsor exercises its option shall
      be determined by the
      parties at the time of exercise The royalty shall be within the range of
      royalties set forth on Appendix
      C Each
      option shall be exercised as follows:

     

    (a)  Sponsor
      shall exercise its option to negotiate a license agreement for any such
      Inventions within
      sixty (60) days of Sponsor's receipt of University's written disclosure of
      the
      Invention to Sponsor
      by University.

     

    (b)  Sponsor
      shall exercise its option by executing the attached License Agreement,
      inserting Sponsor's
      offer as to the royalty amount and delivering it to University.

     

    (c)  Sponsor
      and University shall negotiate the royalty applicable to the license in good
      faith for a
      period
      that shall not exceed one hundred eighty (180) days from University's notice
      of
disclosure
      to Sponsor, or such other period of time agreeable to both patties,

     

    (d)  In
      the
      event that Sponsor and University fail to reach an agreement on the amount
      of
      the royalty
      during that period of time, the University shall have the right to dispose
      of
      the Invention, at
      its
      sole and exclusive discretion with no further obligation to
      Sponsor,

     

    SECTION
      .9. CONFIDENTIALITY

     

    91
      Each
      party shall be responsible for the protection of Confidential/Proprietary
      Information disclosed
      between the parties in the performance of the work described in Appendix A.
      A
      separate Confidentiality Agreement will be executed between the parties and
      incorporated into this Agreement through written modification to this
      Agreement.

     

    
      
        
        

      

      
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    SECTION
      10. NOTICES

     

    10
      1
      Notices, invoices, communications and payments shall be submitted to the offices
      identified
      below Contractual notices and communications hereunder shall be deemed made
      as
      of the
      date
      of mailing if given by overnight courier service or by registered, certified
      or
      first class mail,
      postage prepaid, and addressed to the party to receive such notice or
      communication at the address(es)
      given below, or such other address as may hereafter be designated by notice
      in
writing

     

    
      	Name:	 	Martin Keating 3DICON	 	 
	Address:	 	Corporation PO,
              Box 470941 Tulsa,
              OK 74147-	 	 
	City, State, ZIP Code:	 	0941
              (918)
              492-5082	 	 
	Phone/Fax:	 	mkauthor@aol.
              com	 	(918) 492-5367
	
              e-mail:

            	 	 	 	
            
	 	 	 	 	 
	 	 	
              John
                M O'Connor, Esq.

            	 	 
	with a simultaneous copy to	 	15 W. 6th Street, Suite 2700	 	 
	 	 	
              Tulsa,
                OK 74119-5423

              (919)587-0101

              joconnor@newtonoconnor.com 

            	 	 (918)587-0102
	 	 	 	 	 
	 	 	 	 	 
	Name: 	 	Martin Keating 	 	 
	Address:	 	3DICON Corporation 	 	 
	 	 	P., O Box 470941	 	 
	City, State, ZIP Code:	 	
              Tulsa, OK 7414 7-0941 

              (918) 492-5082 

            	 	 
	Phone/Fax:	 	
            	 	(918)
              492-5367
	
              e-mail:

            	 	mkautb.or@aol .com	 	 
	 	 	 	 	 
	with a simultaneous copy to	 	 	 	 
	 	 	
              Philip
                W Suomu 

              P.O..
                Box 191677 

              Dallas,
                TX 75219 

              tel.
                214-528-5244 

              cell
                214-675-7365 

              psuomu@rrisn.com

            	 	 

    

     

    
      
        
        

      

      
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          5 of
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                Name:
                  

              	 	
                Suzanne
                  Turek 

              	 	
                 

              
	
                Address: 

              	 	
                Post
                  Award Financial Services 

                731
                  Elm Avenue, Ste 134 :
                  

              	 	
                 

              
	
                City,
                  State, ZIP Code

              	 	
                Norman,
                  OK 73019

              	 	
                 

              
	
                Phone/Fax:

              	 	
                (405)
                  325-4979

              	 	
                (405)
                  325-0165  

              
	
                e-mail:

              	 	
                sturek@ou.edu

              	 	
                 

              

      

    

     

    
      	
              Name:
                

            	
               

            	
              Gayle
                Parker 

            	
               

            	
               

            
	
              Address: 

            	
               

            	
              Office
                of' Research Services 731 Elm Avenue, Ste 134 

            	
               

            	
               

            
	
              City,
                State, ZIP Code:

            	
               

            	
              Norman,
                OK 73019

            	
               

            	
               

            
	
              Phone/Fax:

            	
               

            	
              (405)
                325-6061

            	
               

            	
              (405)
                325-6029

            
	
              e-mail:

            	
               

            	
              gparker@ou.edu

            	
               

            	
               

            

    

     

    
      
        	
                Name:
                  

              	 	
                Dr,
                  James Sluss Ir, 

              	 	
                 

              
	
                Address:

              	 	
                School
                  of Electrical & Computer Engineering - CEC 219 202
                  W, Boyd Street

              	 	
                 

              
	
                City,
                  State, ZIP Code: 

              	 	
                Norman,
                  OK 73019

              	 	
                 

              
	
                Phone/Fax:

              	 	
                (918)
                  660-3254

              	 	
                (  
                   )

              
	
                e-mail: 

              	 	
                sluss@ou.edu

              	 	
                 

              

      

    

     

    SECTION
      11. GENERAL TERMS AND CONDITIONS

     

    11.1
      This
      Agreement may not be assigned by either party in whole or in part without the
      prior written permission of the non-assigning party.

     

    11.2
      This
      Agreement shall be governed by the laws of the State of Oklahoma, without giving
      force and effect to its choice of law provisions. Any legal action in connection
      with this Agreement shall be filed in a court of competent jurisdiction in
      the
      State of Okalahoma, to which jurisdiction and venue spponsor expressly
      agrees.

     

    11.3
      Should the parties to this Agreement be unable to resolve between themselves
      any
      dispute arising from any of the provisions within this Agreement, each party
      shall have recourse under the law, In the event
      that either party commences action in law or equity to enforce any provision
      of
      this Agreement, the losing
      party shall pay to the prevailing party, reasonable attorneys' fees and expert
      witness fees fixed by the court.

     

    11.4
      If
      any provision(s) of this Agreement shall be held invalid, illegal, or
      unenforceable, the validity, legality,
      and enforceability of the remaining provisions shall not in any way be affected
      or impaired thereby.

     

    
      
        
        

      

      
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      11.5
        This
        Agreement, including Appendices A, B and C, constitutes the entire agreement
        and
understanding
        between the parties and supersedes all prior and/or contemporaneous discussions,
        representations,
        or agreements, whether written or oral, of the parties relating to the work
        to
        be performed
        This Agreement may be extended, renewed or otherwise amended at any time,
        but
        only by the
        mutual written agreement of the parties.

       

      11.6  This
        Agreement may be executed in several counterparts, each of which shall be
        deemed
        the original,
        but all of which shall constitute one and the same instrument.

       

      11.7  The
        parties agree that this Agreement shall be binding upon their respective
        successors, assigns or transferees
        of any nature, if assignment and/or transfer is permitted in accordance with
        the
        terms of this Agreement.

       

      11.8  Sponsor
        agrees that it shall comply with the export control laws and regulations
        of the
        United States
        of
        America Sponsor shall be responsible for obtaining all information regarding
        such regulations that
        is
        necessary for Sponsor to comply with such regulations, Sponsor agrees that
        it
        will comply with all other applicable laws, orders and regulations relating
        to
        the use and/or transfer of deliverables specified in Appendix
        A and that it will not at any time take any action which would cause University
        to be in violation
        of any such laws, orders and regulations.

       

      11.9
        In
        the performance of all services hereunder, the parties shall be deemed to
        be and
        shall be independent
        contractors and, as such, neither shall be entitled to any benefits applicable
        to employees of the
        other. Neither party is authorized or empowered to act for the other for
        any
        purpose and shall not on behalf
        of
        the other enter into any contract, warranty, and/or representation as to
        any
        matter. Neither shall be
        bound
        by the acts or conduct of the other.

       

      11.10  Sponsor
        shall indemnify, defend, and hold University, its Regents, officers, agents,
        students, and employees
        harmless from and against liability for any and all claims, demands, damages,
        liabilities, fines, penalties,
        losses, expenses, costs, and fees of any nature (e.g., attorneys' fees)
        including, but not limited to, bodily injury, death, personal injury, illness,
        product liability, and property damage arising from Sponsor's use of information
        or materials received from University, by Sponsor or its officers, servants,
        agents, or of any third patty acting on behalf of or under authorization
        from
        Sponsor including without limitation, use of products,
        developed or made arising out of or in connection with this Agreement.
        University will give Sponsor
        notice of any claim it receives within ten (10) business days of receipt
        of a
        claim by University.

       

      11.11  University
        agrees to be responsible for its own negligent acts and omissions and those
        of
        its employees
        and agents in accordance with the Oklahoma Governmental Tort Claims Act,
        51 OS
        1991 151,
        et
        seq,,
        as
        amended.

       

      11.12  The
        parties recognize that Inventions or' other proprietary information may arise
        from research sponsored
        in whole or in part by governmental agencies and shall be governed by the
        provisions of applicable
        law.

       

      11.13  As
        applicable, the provisions of Executive Order 11246, as amended by EO 11375
        and
        EO 11141 and
        as
        supplemented in Department of Labor regulations (41 CFR Part 60 et seq )
        are
        incorporated into this
        Agreement and must be included in any subcontracts awarded involving this
        Agreement The parties represent
        that all services are provided without discrimination on the basis of race,
        color, religion, national
        origin, disability, sex, or veteran's status; they do not maintain nor provide
        for their employees any
        segregated facilities, nor will the parties permit their employees to perform
        their services at any location where segregated facilities are maintained.
        In
        addition, the parties agree to comply with Section 504
        of'
        the Rehabilitation Act and the Vietnam Era Veteran's Assistance Act of 1974,
        38
        US C §4212.

       

      
        
          
          

        

        
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      11.14
        The
        terms of this Agreement shall not be binding upon any of the parties hereto
        until it has been properly
        executed on behalf of each party to the Agreement in the spaces provided
        below.
        It is then effective
        as of the starting date of the period of performance.

       

      IN
        WITNESS WHEREOF, the parties have caused this Agreement to be executed in
        duplicate by their duly
        authorized representatives on the dates set forth below.

       

    

    

      
        	
                3DICON
                  CORPORATION

              	
                THE
                  BOARD OF REGENTS OF THE

              
	 	
                UNIVERSITY
                  OF OKLAHOMA

              
	 	 
	 	 
	
                BY:
                  Martin Keating

              	
                BY:
                  Susan Wyatt Sedwick

              
	 	 
	
                TITLE:
                  President

              	
                TITLE:
                  Associate Vice President for Research

              
	 	 
	
                DATE:
                  July 15, 2005

              	
                DATE:
                  7/13/05

              
	 	 
	
                READ
                  AND UNDERSTOOD:

              	 
	 	 
	
                BY:
                  James J. Sluss, Jr.

              	
                DATE:
                  7/17/05

              

      

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Appendix
      A

     

    Investigation
      of 3-Uimensional Display Technologies

     

    A
      Phase
      II Proposal to:

     

    3D
      Icon
      Corporation Attn:
      Martin Keating

    P.O.
      Box
      470941

    TuIsa,
      OK
      74147-0941

    Phone:
      918=492-5082

    FAX:
      918-492-5367

     

    Submitted
      by:

     

    James
      J
      Sluss, Jr., Piamode K Venna and Monte P Tull

    School
      of
      Electrical &
      Computer
      Engineering

    University
      of Oklahoma

     

    December
      2, 2004

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Introduction

     

    The
      University of Oklahoma - Tulsa and 3D Icon Corporation entered into a Sponsored
      Research
      Agreement on April 20,2004, to carry out a project entitled "Investigation
      of
      Emerging Digital Holography Technologies " The tasks for this "Phase I" project
      were:

     

    
      ·  Literature
        review to determine key leading edge research in relevant
        areas

    

     

    
      
        ·     
          Review
          of
          related commercial products to identify technological approaches and
potential
          competitors and/or partners

      

    

     

    
      ·  Preliminary
        patent review

    

     

    
      ·  Recommendations
        for product research and development directions

    

     

    Based
      on
      our performance of these tasks, we strongly believe that opportunities exist
      to
      carry out research and development activities that can lead to new intellectual
      property and
      technology, Thus, we are proposing the following "Phase II" project

     

    Phase
      II - Goals

     

    
      ·  To
        produce patentable and/or copyrightable intellectual property

    

     

    
      
        ·     
          To
          produce proof-of-concept technology that demonstrates the viability of
          the
intellectual
          property.

      

       

    

    
      ·  To
        assess
        opportunities for manufacturing technological products in
        Oklahoma,

    

     

    Phase
      II - Proposed Statement of Work

     

    Investigate
      magnetic nanospheres (MNs) for use as a projection media.

    

      ·  What
        is
        the most appropriate size?

    

     

    
      ·  Different
        sizes for different wavelengths?

    

     

    
      ·  What
        is
        the optimal density, i.e.., # of particles per unit volume?

    

     

    
      
        ·     
          What
          is
          the most effective means of controlling their distribution in an unbounded
          volumetric
          space?

      

       

    

    
      ·  Ate
        off-the-shelf MNs sufficient, or do we require custom MNs?

    

     

    Develop
      a control platform to actively distribute {MNs) in an unbounded volumetric
      space

     

    
      
        ·    
           Design
          and fabricate prototype hardware

      

    

     

    
      ·  Design
        and develop control software

    

     

    
      ·  Evaluate
        for manufacturability

    

     

    
      ·  Evaluate
        for reliability.

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Investigate
      the doping of MNs with fluorescent materials for light emission at different
      wavelengths,
      i.e., develop fluorescent MNs (FMNs)

     

    
      ·  Which
        dopants should be used?

    

     

    
      ·  What
        are
        the optimal dopant concentrations?

    

     

    
      ·  Can
        these
        FMNs be produced in-house?

    

    
       

      
        ·    
          If
          so, is there an opportunity for OU-3DIcon to develop a small-scale manufacturing
          facility and establish pre-eminence as a supplier?

      

    

     

    Evaluate
      other display medium technologies for potential strategic partner
      ships

     

    
      	
            	
              ·

            	
              If
                other technologies (e g,,, Fog Screen) can be obtained, evaluate
                their
                performance for the targeted
                application,

            

    

     

    Evaluate
      the most appropriate (from a cost-to-benefit standpoint) .solid-state light
      sources
      for projection applications

     

    
      ·  Brightness

    

     

    
      ·  Output
        wavelength - possibly matched to key absorption window of
        FMNs

    

     

    
      ·  Footprint
        (size)

    

     

    Investigate
      the use of TI's DLP technology to actively steer optical beams for 3D image
      formation.

     

    
      ·  Design
        and fabricate a proof-of-concept sub-system using DLP
        technology,

    

     

    
      ·       Design
        and fabricate hardware Design and develop control software

    

     

    Develop
      software for displaying ideal 3D images

     

    Investigate
      software interface issues with other image capture
      technologies.

     

    Phase
      II
      - Budget Justification

     

    The
      largest portion of the proposed 18-month budget will go toward personnel
      salaries and
      fringe benefits, Drs. Sluss and Tull are both budgeted for three summer months
      of full-time
      support, two each during the first summer and one each during the second
summer
      of
      the project Dr. Verma is budgeted for two half months of summer support,
one
      half-month per summer. A full-time research associate is budgeted to work with
      Drs. Sluss
      and
      Verma in Tulsa for 18 months, A half-time graduate research assistant is
budgeted
      to work with Dr. Tull in Norman for 18 months.

     

    We
      are
      budgeting $65k for equipment, plus $45k for materials and supplies, to fabricate
      and
      test
      a prototype display. We are budgeting $8k for travel, potentially to vendor
      sites and/or
      trade shows.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Phase
      II - Proposed Project Timeline

     

    
      	
              Tasks

            	
              1

            	
              2

            	
              3

            	
              4

            	
              5

            	
              6

            	
              7

            	
              8

            	
              9

            	
              10

            	
              11

            	
              12

            	
              13
                

            	
              14

            	
              15

            	
              16

            	
              17

            	
              18

            
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Procure
                DLP equipment

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Training

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Simulation
                (3-D coordinates)

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Programming/debugging

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              1-color
                control

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              2-color
                control

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              3-color
                control

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Investigate
                projection media

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Design
                control system

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Procure
                equipment

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Fabricate
                control system

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Integrate
                with DLP

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Construction
                of prototype

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Testing/performance
                analysis

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Intellectual
                property documentation

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Engineering
                documentation

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Appendix
      B    

    

       DETAIL
        BUDGET

    

    

      CUMULATIVE

    

     

    
      	
              A.
                SENIOR PERSONNEL

            	 	
              SPONSOR
                REQUEST

            	
               

            	
              OU

              COST
                SHARE

            	
               

            	
               

              TOTAL

            	 
	
              1.   
                 Principal
                Investigator 

              James
                J. Sluss, Jr.

            	 	
              
              

              $

            	
              
              

              32,986

            	 	 	 	 	
              
              

              $

            	
              
              

              32,986

            	 
	
              2.  
                 Co-Principal
                Investigator

              Pramode
                K. Verma

            	 	
              
              

              $

            	
              
              

              11,791

            	 	 	 	 	
              
              

              $

            	
              
              

              11,791

            	 
	
              3.  
                 Co-Principal
                Invesigator

              Monte
                P. Tull

            	 	
              
              

              $

            	
              
              

              23,150

            	 	 	 	 	
              
              

              $

            	
              
              

              23,150

            	 
	
              4.  

            	 	 	 	 	 	 	 	 	 	 
	
              5.  

            	 	 	 	 	 	 	 	 	 	 
	
              6. 
                 (
                 ) TOTAL SENIOR PERSONNEL (1-5)

            	 	
              $

            	
              67,927

            	 	 	 	 	
              $

            	
              67,927

            	 
	
              B.
                OTHER PERSONNEL

            	 	 	 	 	 	 	 	 	 	 
	
              1.
                (
                 ) POST DOCTORAL ASSOCIATES

            	 	 	 	 	 	 	 	 	 	 
	
              2.
                (
                1 ) OTHER PROFESSIONALS (TECHNICIAN, PROGRAMMER, ETC.) Hakki
                Refai

            	 	
              $

            	
              61,000

            	 	 	 	 	
              $

            	
              61,000

            	 
	
              3.
                (
                 ) PROJECT SECRETARIAL/CLERICAL

            	 	 	 	 	 	 	 	 	 	 
	
              4.
                (  ) GRADUATE STUDENTS Erik Petrick - Ph.D. Student @ .05 FTE x 18
                mos.

            	 	
              $

            	
              29,280

            	 	 	 	 	
              $

            	
              29,280

            	 
	
              5.
                (
                 ) UNDERGRADUATE STUDENTS

            	 	 	 	 	 	 	 	 	 	 
	
              6.
                (  ) OTHER

            	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                SALARIES AND WAGES (A+B)

            	 	
              $

            	
              158,207

            	 	 	 	 	
              $

            	
              158,207

            	 
	
              A.  FRINGE
                BENEFITS

            	 	
              $

            	
              49,167

            	 	 	 	 	
              $

            	
              49,167

            	 
	
              TOTAL
                SALARIES WAGES AND FRINGE BENEFITS (A+B+C)

            	 	
              $

            	
              207,374

            	 	 	 	 	
              $

            	
              207,374

            	 
	
              B.  PERMANENT
                EQUIPMENT

              DMD
                Discover Kit

              (2)  DMD
                boards

              High-speed
                PC

              Optical
                Mounting HW

            	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                PERMANENT EQUIPMENT

            	 	
              $

            	
              65,000

            	 	 	 	 	
              $

            	
              65,000

            	 
	
              E.
                TRAVEL** 1 DOMESTIC:

              2
                FOREIGN

            	 	
              $

            	
              8,000

            	 	 	 	 	
              $

            	
              8,000

            	 
	
              F.
                PARTICIPANT SUPPORT COSTS

              1.
                STIPENDS     3.
                SUBSISTENCE

              2.
                TRAVEL       4.
                OTHER

            	 	 	 	 	 	 	 	 	 	 
	
              G.
                OTHER DIRECT COSTS

            	 	 	 	 	 	 	 	 	 	 
	
              1
                MATERIALS AND SUPPLIES

            	 	
              $

            	
              45,000

            	 	 	 	 	
              $

            	
              45,000

            	 
	
              2.
                PUBLICATION COSTS/DOCUMENTATION DISSEMINATION

            	 	 	 	 	 	 	 	 	 	 
	
              3.
                CONSULTANT SERVICES

            	 	 	 	 	 	 	 	 	 	 
	
              4.
                COMPUTER (ADPE) SERVICES

            	 	 	 	 	 	 	 	 	 	 
	
              5.
                SUBCONTRACTS

            	 	 	 	 	 	 	 	 	 	 
	
              6.
                TUITION

            	 	
              $

            	
              3,230

            	 	
              $

            	
              6,139

            	 	
              $

            	
              9,370

            	 
	
              7.
                OTHER

            	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                OTHER DIRECT COSTS

            	 	
              $

            	
              28,320

            	 	
              $

            	
              6,139

            	 	
              $

            	
              54,370

            	 
	
              H.
                TOTAL DIRECT COSTS (A THROUGH G)

            	 	
              $

            	
              328,604

            	 	
              $

            	
              6,139

            	 	
              $

            	
              334,744

            	 
	
              I.
                INDIRECT COSTS:             Base
                =
                $260,374

            	 	
              
              

              $

            	
              
              

              124,980

            	 	 	 	 	
              
              

              $

            	
              
              

              124,980

            	 
	
              J.
                TOTAL
                PROJECT COSTS

            	 	
              $

            	
              453,584

            	 	
              $

            	
              6,139

            	 	 	 	 

    

     

    *Travel
      expenses will be reimbursed at federal rates, state rates or specified rates,
      as
      appropriate

     

    —
Revised
      (06/28/2002)

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Appendix
      C

     

    EXCLUSIVE
      PATENT LICENSE AGREEMENT

     

    FOR
      VALUABLE CONSIDERATION, this
      AGREEMENT is entered by and between the Board
      of
      Regents of the University of Oklahoma, a public corporation of the State of
      Oklahoma having
      offices in Norman, Oklahoma ("UNIVERSITY"), and 3DICON Corporation, a
      corporation of the
      State
      of Oklahoma, having offices at P., O Box 470941, Tulsa, OK 74147-0941
      ("LICENSEE"), effective
      as of _______ ("EFFECTIVE
      DATE"):

     

    ARTICLE
      1 -BACKGROUND

     

    1.1
      Except as specifically provided in this Agreement, UNIVERSITY is the owner
      of
      the entire light, title, and interest in the inventions described and claimed
      in
      the UNIVERSITY disclosure documents
      ("INVENTIONS"), patent applications or continuations and/or divisions thereof,
      foreign equivalent applications, and United States and/or foreign patents
      issuing on any of the foregoing, as well
      as
      all reissues and temporal extensions thereof (hereinafter collectively referred
      to as "PATENT RIGHTS") all as set forth in Exhibit
      A,
      attached hereto and incorporated herein, PATENT RIGHTS shall
      also include IMPROVEMENTS (defined hereafter) and as provided in Article
      8;
      and

     

    1.2
      WHEREAS, LICENSEE engaged UNIVERSITY to perform two sponsored research projects
      regarding
      the INVENTIONS pursuant to agreements numbered___ and
      _____ (the"SRAs");
      and

     

    1.3
      WHEREAS, LICENSEE and UNIVERSITY desire to enter this Agreement whereby
UNIVERSITY
      giants to LICENSEE an exclusive license to all commercial uses of the
INVENTIONS
      and PATENT RIGHTS; and

     

    1.4
      WHEREAS, UNIVERSITY and LICENSEE have taken the necessary actions to obtain
      authorization
      to enter this Agreement.

     

    NOW
      THEREFORE, FOR VALUABLE
      CONSIDERATION,
      the
      receipt and sufficiency of
      which
      are acknowledged by the patties, UNIVERSITY and LICENSEE agree as
      follows:

     

    ARTICLE
      2 - DEFINITIONS

     

    Terms
      in
      this Agreement (other than names of parties and Article headings) which are
      set
      forth in upper case letters shall have the meanings established for such terms
      in the following paragraphs of
      this
      Article 2 unless expressly set forth elsewhere herein.

     

    2.1
      "ACCOUNTING PERIOD" shall mean each calendar quarter period ending March 31,
      June
      30,
      September 30, and December131
      of
      each calendar year

     

    2.2
      "FIELD" means the field of digital holography, including the capture of an
      image, the transmission
      of the image, and the projection or other recreation or display of the
      image.

     

    Deleted
      2.3

     

    
      
        
        

      

      
        Page
          1 of
          23

        
          

        

      

      
        
        

      

    

     

    2.4  "IMPROVEMENT(S)"
      means any modification by UNIVERSITY or .jointly by UNIVERSITY
      and LICENSEE of the LICENSED PRODUCT(S), provided such modified product,
if
      unlicensed, would infringe one or more claims covered under and/or included
      in
      PATENT RIGHTS;
      and further provided, IMPROVEMENTS made by UNIVERSITY as referred to in
      this

    Agreement
      are specifically limited to IMPROVEMENTS in the FIELD made by employees of
      the
UMVERSITY
      pursuant to a research agreement funded by LICENSEE, as long as UNIVERSITY
      first
      offered LICENSEE, and LICENSEE rejected, a right of first refusal on any SRA
      (or
      similar research
      contract) offered to UNIVERSITY relating thereto or an exclusive license
      covering the improvement,
      on the terms set forth in this Agreement

     

    2.5  "LICENSED
      PRODUCT(S)" shall mean any product or part thereof, the manufacture, use,
sale,
      offer to sell, importation, distribution, service or transfer of
      which:

     

    (a)  is
      covered by a valid claim of an issued, unexpired U S or1
      foreign
      patent(s) directed to
      the
      PATENT RIGHTS; or

     

    (b)  is
      covered by any claim prosecuted in a pending U.S or foreign patent application
      directed
      to the PATENT RIGHTS; or

     

    (c)  incorporates
      any INVENTIONS or IMPROVEMENTS; or

     

    (d)  incorporates
      any LICENSED TECHNOLOGY received from UNIVERSITY; or

     

    (e)  incorporates
      any joint TECHNOLOGY IMPROVEMENTS; or

     

    (f)  is
      derived from , includes or incorporates another LICENSED PRODUCT

     

    2.6 "LICENSED
      TECHNOLOGY" shall mean existing, technical information, pertinent to the
development
      of the INVENTIONS, owned by UNIVERSITY as of the EFFECTIVE DATE, that was
developed
      and/or invented by UNIVERSITY under, or in the course of performance of, the
      SRAs, and
      which
      the UNIVERSITY is contractually and legally free to transfer.

     

    2.7  "LICENSEE
      IMPROVEMENT" shall have the meaning set forth in Paragraph
      8,3,
      below.

     

    2.8  "MINIMUM
      ROYALTY" shall have the meaning set forth in Paragraph
      5.3,
      below.

     

    2.9
       -**"NET
      SELLING PRICE" shall mean, except as set for in Paragraph
      2.9.4,
      the
      amount LICENSEE
      billed or invoiced on sales, leases or other transfers of LICENSED PRODUCT(S),
      less sales
      taxes, shipping and/or insurance if these are separately itemized on the bill
      or
      invoice and collected
      by LICENSEE LICENSED PRODUCT(S) shall be deemed to be sold or leased when the
      LICENSEE
      invoices for such LICENSED PRODUCT(S); provided, that upon expiration of all
      PATENT
      RIGHTS covering LICENSED PRODUCT(S) or upon any termination of the last to
      expire patent
      and/or copyright, all shipments made on or prior to the day of such expiration
      or termination which
      have not been billed out prior thereto shall be considered as sold (and
      therefore subject to royalty) .

     

    
      
        
        

      

      
        Page
          2 of
          23

        
          

        

      

      
        
        

      

    

     

    29.1
      All
      taxes, fees or other payments of any matter or kind whatsoever imposed by any
      governmental
      authority in connection with the sale, lease or other disposition of LICENSED
      PRODUCT(S) or otherwise in connection with this Agreement shall be paid by
      LICENSEE

     

    29.2
      In
      no event shall the NET SELLING PRICE, as used to determine the PATENT
ROYALTY,
      be less than those charged to outside concerns buying similar merchandise in
      similar amounts and under similar conditions.

     

    29.3
      Where LICENSED PRODUCT(S) are not sold, but are otherwise disposed of other
      than
      for
      promotional purposes, the NET SELLING PRICE of such products for the purposes
      of
      computing royalties shall be the selling price at which LICENSED PRODUCT(S)
      of
similar
      kind and quality, sold in similar quantities, are then currently being offered
      for sale by LICENSEE
      or other manufacturers . Where such products are not currently sold or offered
      for
      sale
      by LICENSEE or other manufacturers, then the NET SELLING PRICE, for the
purpose
      of computing royalties, shall be LICENSEE'S cost of manufacture, determined
      by
LICENSEE'S
      customary accounting procedures, plus two hundred and fifty percent (250%)
      of
      the
      cost of manufacture.

     

    29.4
      If a
      LICENSED PRODUCT is sold in combination with an ACTIVE COMPONENT(s)
      not otherwise claimed in the PATENT RIGHTS and LICENSEE does not pay
      a
      royalty for such component that will result in a reduced royalty pursuant to
      Paragraph 5.4
      then
      the
      NET SELLING PRICE, for purposes of determining the ROYALTY on the LICENSED
      PRODUCT in the combination, will be calculated by multiplying the NET
SELLING
      PRICE of the combination by the fraction A/(A+B), where A is the invoice price
      of
      the
      LICENSED PRODUCT, if sold separately, and B is the total invoice price of any
      other ACTIVE
      COMPONENT(S) in the combination if sold separately, If the LICENSED PRODUCT
      and the ACTIVE COMPONENT(S) in the combination are not sold separately,
the
      NET
      SELLING PRICE, for' purposes of determining the ROYALTY on the LICENSED
PRODUCT,
      will be calculated by multiplying the NET SELLING PRICE of the combination
      by
      the
      fraction determined by mutual agreement of the parties, that reflects the
      relative contribution
      in value that the LICENSED PRODUCT contained in the combination makes to
the
      total
      value of such combination to the end user.

     

    2.10
      "ROYALTY" shall have the meaning set forth in Paragraph
      5.1.

     

    2.11
      "SUBLICENSE ROYALTY" shall have the meaning set forth in Paragraph
      5.2.

     

    2.12
      "TECHNOLOGY IMPROVEMENTS" means any modification or discovery or invention
      by
UNIVERSITY
      or jointly by UNIVERSITY and LICENSEE which is based on or derived from or
      uses
      or
      arises out of any LICENSED TECHNOLOGY TECHNOLOGY IMPROVEMENTS mayor may
      not
      be IMPROVEMENTS Provided, TECHNOLOGY IMPROVEMENTS made by UNIVERSITY
      as referred to in this Agreement are specifically limited to TECHNOLOGY
IMPROVEMENTS
      in the FIELD made by employees of UNIVERSITY or jointly by UNIVERSITY and
      LICENSEE,, In the event any TECHNOLOGY IMPROVEMENT also constitutes an IMPROVEMENT,
      as defined herein, the provisions herein relating to TECHNOLOGY IMPROVEMENTS
      shall control with respect to the ownership of such TECHNOLOGY IMPROVEMENTS
      and with respect to ownership and control over any patent applications covering
      any
      such
      TECHNOLOGY IMPROVEMENTS.

    
    

    
      
        
        

      

      
        Page
          3 of
          23

        
          

        

      

      
        
        

      

    

     

    2.13  "UNIVERSITY
      IMPROVEMENT" shall have the meaning set forth in Paragraphs
      2.4, above
      and
      8.2, below.

     

    ARTICLE
      3 - GRANT AND
      NONDISCLOSURE

     

    3.1 UNIVERSITY
      hereby giants to LICENSEE and LICENSEE accepts, subject to the terms and
conditions
      hereof, an exclusive license to exploit for all commercial purposes at all
      stages and in all manners, including without limitation, to make, manufacture,
      practice, develop, improve, enhance, market,
      use, service, sell, offer to sell, lease, import, export, distribute, sublicense
      or otherwise transfer
      anywhere and everywhere in the world LICENSED PRODUCT(S), PATENT RIGHTS,
      INVENTIONS, IMPROVEMENTS, TECHNOLOGY IMPROVEMENTS and LICENSED TECHNOLOGY
      (collectively, the "LICENSED RIGHTS") subject to LICENSEE'S obligations under
      state and federal law, including, but not limited to federal export control
      laws.

     

    3.2
       In
      granting this exclusive license, UNIVERSITY represents to LICENSEE that no
      rights hereby
      licensed have been or must or shall be granted to any third party, governmental
      entity or international
      organization by federal 01 state law or regulation or by any agreement to which
      UNIVERSITY
      is a party; and UNIVERSITY has no obligations regarding the licensed technology
      under
      agreements or otherwise with other sponsors of research.

     

    3.3
       The
      exclusive license granted in Paragraph
      3.1 is
      subject to a reserved, non-exclusive license
      in UNIVERSITY to use LICENSED PRODUCT(S) and/or the LICENSED TECHNOLOGY
for
      educational, research and public service purposes including, subject to
      confidentiality provisions in
      this
      Agreement, publication of research results to share PATENT RIGHTS and/or
      LICENSED TECHNOLOGY
      with other educational and non-profit institutions for non-commercial,
      educational and
      research purposes

     

    3.4 Except
      only to the extent, if any, necessarily inherent in the manufacture, marketing,
      sale, lease
      01
      other1
      transfer, including sublicensing of LICENSED PRODUCT(S) or' the sale, lease
      or
transfer
      of its rights under the license or the sale of LICENSEE, LICENSEE agrees not
      to
      publish, disclose
      or cause to be published or disclosed to others (in whole or in part), all
      or
      any portion of the PATENT
      RIGHTS and LICENSED TECHNOLOGY without first obtaining written permission of
      UNIVERSITY,
      which permission shall not be unreasonably withheld

     

    3.5
       As
      long
      as Pramode Verma, Ph.. D, or James Sluss, Jr.,, Ph D is employed by UNIVERSITY,
      it
      shall
      be conclusively presumed that any patentable invention conceived of by Pramode
      Verma, Ph D,
      or
      James Sluss, Ph, D was conceived of in his capacity as an employee of UNIVERSITY
      and shall
      be
      promptly disclosed to and exclusively owned by UNIVERSITY regardless of the
      circumstances
      surrounding the conception and/or reduction to practice, and shall be subject
      to
      this Agreement.

     

    
      
        
        

      

      
        Page
          4 of
          23

        
          

        

      

      
        
        

      

    

     

    3.6 Prior
      to
      entering into this Agreement, LICENSEE and UNIVERSITY entered into a
confidentiality
      agreement attached hereto as Exhibit B and made a part hereof Therein LICENSEE
      promised
      to keep certain information confidential in exchange for receiving a disclosure
      of such information
      from UNIVERSITY, Pursuant to that agreement, UNIVERSITY has disclosed and will
      disclose
      to LICENSEE all information in the possession, custody or control of UNIVERSITY
      or its agents
      or
      attorneys relating to the PATENT RIGHTS. Nothing in this Agreement shall be
      construed in
      any
      way for any reason to void or cancel that prior1
      confidentiality agreement, which remains in full
      force and effect; provided, that the terms of this Agreement shall control
      in
      the event of a conflict between the terms of this Agreement and the terms of
      the
      referenced confidentiality agreement,

     

    ARTICLE
      4 - SUBLICENSING

     

    4.1
      LICENSEE shall have the right to sublicense all or any part of the rights and
      licenses granted herein
      for such periods of time as LICENSEE deems in its best interest and sublicensees
      shall have the
      right
      to further sublicense the same, Any sublicense granted by LICENSEE or its
      sublicensee shall
      be
      subject to the terms and conditions of 'this Agreement and shall contain an
      express provision to
      that
      effect, No sublicense shall relieve LICENSEE of any of LICENSEE'S obligations
      under this Agreement
      unless UNIVERSITY consents in writing to such release.

     

    4.2
      At
      the time of granting any sublicense, LICENSEE shall provide UNIVERSITY a signed
      photocopy
      of LICENSEE'S written agreement with the sublicensee, and LICENSEE promptly
      shall upon
      request by UNIVERSITY furnish UNIVERSITY with copies of all accounting and
      notices between
      LICENSEE and such sublicensee during the entire life of the
      sublicense.

     

    4.3
      In
      the event the rights and licenses granted herein are terminated in accordance
      with this Agreement,
      LICENSEE immediately shall assign to UNIVERSITY any and all sublicenses and
      sublicensees
      immediately shall begin paying all monies or other consideration due LICENSEE
      under the
      sublicense to UNIVERSITY upon notice to such sublicensees from UNIVERSITY and
      LICENSEE
      shall include a provision to this effect in any sublicense granted by
      LICENSEE.

     

    4.4
      If
      LICENSEE grants a sublicense to any third party owned, in whole or in part,
      by
LICENSEE,
      or owned, in whole or in part, by an entity which owns LICENSEE, in whole or
      in
      part, then
      any
      such sublicense shall be on terms such that UNIVERSITY receives the ROYALTY,
      as
provided
      in Article 5 below, or the SUBLICENSE ROYALTY, whichever is
      greater.

     

    ARTICLE
      5 - ROYALTIES AND PAYMENT

     

    5.1 Except
      as
      set forth in Paragraph 5.5, LICENSEE shall pay, within thirty (30) days of
      the
      end of
      each
      ACCOUNTING PERIOD in which LICENSEE receives a payment on which a royalty is
      due
during
      each license year this Agreement is in effect, to UNIVERSITY a patent royalty
      ("ROYALTY")
      equal to [the parties shall negotiate in good faith the royally in the range
      between one-half
      and
      three]
      percent
      (.5% - 3%) of the NET SELLING PRICE of all LICENSED PRODUCT(S).

     

    
      
        
        

      

      
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    5.2 LICENSEE
      shall pay, within thirty (30) days of the end of each ACCOUNTING PERIOD in
      which
      LICENSEE receives a payment on which a royalty is due during each license year
      this Agreement is in effect, to UNIVERSITY a royalty ("SUBLICENSE ROYALTY")
      equal to [the patties
      shall negotiate in good faith the royalty in the range between twenty-five
      and fifty] percent
      (25%
      -
      50%) of LICENSEE'S GROSS RECEIPTS from the sale, lease or other transfer by
      LICENSEE'S
      sublicensee of LICENSED PRODUCT(S) during the first two years of the sublicense
      and
      thereafter equal to [the paities shall negotiate in good faith the royalty
      in
      the range between twenty
      and
      twenty-five]
      percent
      (20% - 25%) of LICENSEE'S GROSS RECEIPTS from the sale, lease
      or
      other transfer by LICENSEE'S sublicensee of LICENSED PRODUCT(S); provided that,
      LICENSEE
      shall not pay both a ROYALTY and a SUBLICENSEE ROYALTY from the sale, lease
      or
      other
      transfer of the same LICENSED PRODUCT.

     

    5.3
       In
      the
      event the sum of all ROYALTIES plus all expenses paid by LICENSEE under
Paragraph
      10,2 hereof during any year of the term of this License does not equal Two
      Thousand, Five
      Hundred Dollars ($2,500), LICENSEE shall, within thirty (30) days following
      the
      end of such license year, pay to UNIVERSITY an amount which is the difference
      between the amounts paid by LICENSEE
      and Two Thousand, Five Hundred Dollars ($2,500) The first "license year" shall
      commence on the EFFECTIVE DATE and conclude on the fist anniversary of the
      EFFECTIVE DATE.

     

    5.4
      In
      the event that, (a) once LICENSED PRODUCT(S) have been produced and sold, leased
      or otherwise
      transferred for value by or for LICENSEE or one or more SUBLICENSEES for a
      continuous
      period of not less than two years; and (b) the sale, lease or other transfer
      of
      LICENSED PRODUCT(S)
      shall cease for a continuous period of not less than twelve consecutive calendar
      months during the term of this Agreement for reasons under LICENSEE'S direct
      control; and (c) LICENSEE
      shall have received consideration in exchange for such cessation: and (d) no
      royalties other
      than the minimum annual royalty referenced in paragraph 53 above have been
      received by UNIVERSITY
      during such cessation, then LICENSEE shall pay to UNIVERSITY a ROYALTY
equal
      to
      fifteen percent (15%) of the amount received by LICENSEE in exchange
      for1
      such
      cessation in
      full
      satisfaction of all obligations of LICENSEE due UNIVERSITY for the balance
      of
      the term of this
      Agreement In the event that, upon the occurrence of the conditions listed in
      this Paragraph
      5.4(a)
      through (d), and while the LICENSED PRODUCT still maintains, in the opinion
      of
LICENSEE,
      commercial marketability, LICENSEE does not receive any amount of money in
      exchange for such cessation, then LICENSEE shall pay to UNIVERSITY a ROYALTY
      equal to $350,000.00
      in full satisfaction of all obligations of LICENSEE due UNIVERSITY for the
      balance of
      the
      term of this Agreement.

     

    5.5
      Notwithstanding the foregoing, if LICENSEE (and/or appertaining sublicensees,
      as
      the case may
      be)
      must obtain from any third party any licenses and/or sublicenses for patent
      rights in order to practice
      the PATENT RIGHTS or in order to develop, make, have made, use, import, offer
      for sale, sell,
      lease, import, export or provide LICENSED PRODUCTS, and/or if any claim is
      made
      against LICENSEE
      and/or its sublicensees alleging that the practice of the PATENT RIGHTS
      infringes any third
      party patent, then the ROYALTY payable by LICENSEE and/or its sublicensees
      under
Paragraph 5.1
      (or
Paragraph
      5.2,
      as the
      case may be) shall be reduced to an amount determined by multiplying
      the ROYALTY amount by a fraction, the numerator of which is the ROYALTY
payment
      (prior to any reduction) and the denominator of which is the sum of: (a) the
      ROYALTY payment
      (prior to any reduction) and (b) the other royalties and/or payments incurred
      by
      LICENSEE and/or
      sublicensees.

    
       

      
        
        

      

      
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    5.6  In
      the
      event all issued patents included in PATENT RIGHTS licensed hereunder expire,
      LICENSEE
      no longer shall be obligated to pay ROYALTIES Further, if UNIVERSITY does not
      obtain
      an
      issued United States patent containing claims covering aspects of the LICENSED
      PRODUCT(S)
      within five (5) years from the EFFECTIVE DATE of this Agreement, then

    LICENSEE
      shall not owe ROYALTIES thereafter to UNTVERSITY unless and until UNTVERSITY
      receives
      an issued United States patent containing claims covering the LICENSED
      PRODUCT(S).

     

    5.7  All
      payments due hereunder are expressed in and shall be paid in United States
      of
      America Currency.

     

    5.8 LICENSEE
      shall pay simple interest on any amounts not paid when due hereunder at two
      (2)
points
      above the minimum APR (Applicable Federal Rate) for mid-term loans, as published
      by the IRS
      for
      the month in which the amount was due. Such interest shall be calculated on
      the
      unpaid principal
      balance thereof from the first date on which the payment of such monies was
      due
      through the
      date
      of actual payment.

     

    ARTICLE
      6 - ROYALTY REPORTS

     

    6.1 Upon
      the
      first sale, lease or other transfer for consideration of LICENSED PRODUCT(S)
      by
either
      LICENSEE or any sublicensee (whichever shall occur first), LICENSEE shall
      promptly provide UNIVERSITY with written notice thereof To enable UNTVERSITY
      to
      verify royalty amounts
      due it pursuant to this Agreement, thereafter, LICENSEE shall render to
      UNIVERSITY, with
      each
      of its royalty payments hereunder, a written report separately setting forth
      the
      number of LICENSED
      PRODUCT(S) sold, leased or otherwise transferred by LICENSEE and any
      sublicensee, the
      exchange rates used, and the Net Selling Price billed or invoiced by LICENSEE
      in
      connection with
      the
      sale, lease or other transfer of any LICENSED PRODUCT(S) during the preceding
      ACCOUNTING
      PERIOD and upon which royalty payments are payable as provided in Article
      5
      All
such
      reports shall be certified by a knowledgeable officer of LICENSEE to be correct,
      to the best of the
      officer's subjective knowledge, If no sales, leases or other transfers
      for1
      consideration of LICENSED
      PRODUCTS have been made during any ACCOUNTING PERIOD which commences
after
      the
      first ROYALTY was paid, then a statement to this effect shall be submitted
      to
UNIVERSITY
      in accordance with reporting requirements of this Agreement

     

    6.2 LICENSEE
      shall submit a written report to UNIVERSITY, within twenty (20) days after
      the
date
      of
      any termination of this Agreement, stating the number of LICENSED PRODUCT(S)
      sold, leased
      or' otherwise transferred by LICENSEE and any sublicensee, the exchange rates
      used, and the Net Selling Price billed or invoiced by LICENSEE in connection
      with the sale, lease or other transfer of
      any
      LICENSED PRODUCT(S) not previously due or reported to UNIVERSITY.

    
       

      
        
        

      

      
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    ARTICLE
      7 - ACCOUNTING AND CONFIDENTIALITY OF FINANCIAL
      RECORDS

     

    7.1  LICENSEE
      shall utilize its best efforts to maintain accurate records of LICENSED
PRODUCTS
      sold, leased or otherwise transferred hereunder, in a central location,
      sufficient to enable
      UNIVERSITY to determine the monies payable to UNIVERSITY by LICENSEE under
      the
terms
      of
      this Agreement, Such records shall be retained for at least five (5) years
      following the ACCOUNTING
      PERIOD for which said records are required to be made LICENSEE shall make
such
      records available for inspection by UNIVERSITY and/or individuals authorized
      by
UNIVERSITY
      upon reasonable notice at any reasonable time during normal business hours
      to
      the extent
      necessary for UNIVERSITY to determine payments due under the terms of this
      AGREEMENT,
      but not for more than one three week period during any calendar year. LICENSEE
      shall
      permit UNIVERSITY or individuals authorized by UNIVERSITY to copy all or
      portions of such
      records at UNIVERSITY'S expense

     

    7.2  UNIVERSITY
      agrees that such records, and the information UNIVERSITY obtains from
LICENSEE
      therefrom or related thereto, are proprietary property of LICENSEE and are
      confidential, UNIVERSITY
      agrees that neither it nor its employees or agents shall disclose such records
      or information
      to any person or entity for1
      any
      reason or use such records or information for any purpose other
      than UNIVERSITY'S determination of the payments due hereunder or as required
      to
      be disclosed
      by operation of law, The violation of the terms of this Article 1,2
      shall
      cause irreparable harm
      to
      LICENSEE which harm cannot be remedied by money damages and that LICENSEE shall
      be
      entitled to injunctive relief in the event of an alleged breach of this
      provision without placing a bond
      or
      other security and without proving the likelihood of success on the merits
      of
      any underlying claim.
      The covenants of this Article 7,2 shall survive the termination of this
      Agreement

     

    7.3 
      In the
      event such examination discloses a deficiency in the monies paid to UNIVERSITY,
      LICENSEE
      immediately shall pay to UNIVERSITY such deficiency, together with interest
      thereon as
      provided in this Agreement and, in addition, shall reimburse UNIVERSITY for
      the
      reasonable cost
      of
      such examination if: (a) such examination and (b) any subsequent examination
      conducted by LICENSEE
      both show an underpayment in excess often percent ( 1 0%) of the amounts
      actually due for
      the
      ACCOUNTING PERIOD in question

     

    7.4 LICENSEE
      shall pay interest on any amounts payable pursuant to Paragraph
      7.2,
      at two
      (2) points
      above the minimum APR for mid-term loans, as published by the IRS for the month
      in which the
      amount was due, rather than the rate set forth in Paragraph
      5.7.
      Such
      interest shall be calculated from
      the
      dates on which the payment of such monies are due through the date of actual
      payment.

     

    ARTICLE
      8 - IMPROVEMENTS

     

    8.1  UNIVERSITY
      and LICENSEE each shall disclose to the other any IMPROVEMENT (patentable
      or non-patentable and or copyrightable or non-copyrightable); provided,
      UNIVERSITY and
      LICENSEE shall maintain the confidentiality of each other's IMPROVEMENTS that
      are disclosed
      in writing, marked "CONFIDENTIAL" and not made public byway of 'a written
      document

     

    8.2  Subject
      to Paragraph 8.9, IMPROVEMENTS (patentable and non-patentable and/or
      copyrightable or non-copyrightable) in the LICENSED PRODUCT and TECHNOLOGY
IMPROVEMENTS
      (patentable and non-patentable and/oi copyrightable or non-copyrightable) made
      solely
      by
      UNIVERSITY shall be owned by UNIVERSITY and shall come under and be subject
      to
the
      terms
      of this Agreement with no increase 01 decrease in the royalty rate payable
      to
      UNIVERSITY hereunder.

     

    
      
        
        

      

      
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    8.3 IMPROVEMENTS
      (patentable and non-patentable and/or copyrightable or non-copyrightable)
in
      the
      LICENSED PRODUCT and TECHNOLOGY IMPROVEMENTS (patentable and non-patentable
      and/or copyrightable or non-copyrightable) made solely by LICENSEE, or by
      LICENSEE jointly
      with others not including UNIVERSITY, shall be owned by LICENSEE and shall
      not
      come under
      or
      be subject to the terms of this Agreement and no royalty or fee shall payable
      to
UNIVERSITY
      in connection therewith.

     

    8.4 IMPROVEMENTS
      (patentable and non-patentable and/oi copyrightable or non-copyiightable)
in
      the
      LICENSED PRODUCT or TECHNOLOGY IMPROVEMENTS (patentable and non-patentable
      and/or copyrightable or non-copyrightable) made by UNIVERSITY and LICENSEE
      jointly
      shall be owned by UNIVERSITY and LICENSEE jointly and shall come under and
      be
      subject to
      the
      terms of this Agreement with no increase or decrease in the royalty rates
      payable to UNIVERSITY
      hereunder, Not less than thirty (30) days before UNIVERSITY engages, or enters
      a
      contract to engage, in research or product development in the Field alone or
      with persons or entities other than LICENSEE during the term of this Agreement
      and for a period of three years thereafter, UNIVERSITY
      shall notify LICENSEE of the proposed research, product development or contact
      and
      LICENSEE shall have the option to sponsor the research or product development
      or
      to enter the contract
      on terms equivalent to those offered to the other person or entity. In the
      event
      an IMPROVEMENT
      is developed by UNIVERSITY, alone or with others, during the term of this
Agreement
      and for a period of three year's thereafter, LICENSEE shall have the option
      to
      license the same
      under the terms of this Agreement.

     

    8.5 UNIVERSITY
      may or may not file any patent application(s) in the United States Patent and
      Trademark Office and/or in any foreign country covering any aspect of any
      UNIVERSITY IMPROVEMENT
      and/or any TECHNOLOGY IMPROVEMENT made by UNIVERSITY in the sole
      and
      exclusive discretion of UNIVERSITY and at UNIVERSITY'S expense; provided that
      LICENSEE
      shall have the option to file any patent application(s) in the United States
      Patent and Trademark
      Office and/or in any foreign country relating thereto, if UNIVERSITY elects
      not
      to so file, and UNIVERSITY shall cooperate fully in LICENSEE'S application
      process. UNIVERSITY shall
      own
      and shall have full control over the filing, prosecution, issuance and/or
      maintenance of any and
      all
      UNIVERSITY IMPROVEMENT patent applications regardless of who pays the expenses;
      provided
      that LICENSEE shall have the option to perform any such services in the event
      UNIVERSITY
      fails or neglects to do so.

     

    8.6
      LICENSEE may or may not file any patent application in the United States Patent
      and Trademark
      Office and/or1
      in any
      foreign country covering any aspect of any LICENSEE IMPROVEMENT
      in the sole and exclusive discretion of LICENSEE and at LICENSEE'S expense
      LICENSEE
      shall own and shall have full control over the filing, prosecution, issuance
      and/or maintenance
      of any and all LICENSEE IMPROVEMENT patent applications.

     

    
      
        
        

      

      
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    8.7 UNIVERSITY
      and LICENSEE shall confer with respect to the filing of any patent application(s)
      in the United States Patent and Trademark Office and/or in any foreign country
      covering
      any aspect of any IMPROVEMENT and/or any TECHNOLOGY IMPROVEMENT made
by
      LICENSEE and UNIVERSITY jointly and/or any TECHNOLOGY IMPROVEMENT made
solely
      by
      LICENSEE The party who pays for the filing, prosecution and maintenance of
      any
      such IMPROVEMENT
      patent application shall control the filing, prosecution, issuance and/or
maintenance
      of same.

     

    8.8 UNIVERSITY
      and LICENSEE each agree to keep the other fully informed with respect to all
      their
      respective IMPROVEMENT and/or TECHNOLOGY IMPROVEMENT patent applications,
including
      but not by way of limitation, providing copies (subject to reasonable
      requirements of confidentiality)
      of all pertinent documents, and UNIVERSITY and LICENSEE each agree to
cooperate
      with the other in prosecution of any and all such applications.

     

    8.9 In
      the
      event LICENSEE employs any employee of UNIVERSITY as an employee of or
consultant
      to LICENSEE from time-to-time, any IMPROVEMENT and/or any TECHNOLOGY
      IMPROVEMENT made by such UNIVERSITY employee, alone or with others,
      in his capacity as a consultant to or employee of LICENSEE, shall be exclusively
      owned
      by
      UNIVERSITY regardless of the circumstances surrounding the conception and/or
      reduction
      to practice and such IMPROVEMENTS shall come under and be subject to the
terms
      of
      this Agreement without any increase or1
      decrease
      in royalty rates payable to UNIVERSITY
      hereunder.

     

    ARTICLE
      9-DUE DILIGENCE

     

    9.1
       LICENSEE
      agrees to conduct a thorough, vigorous and diligent program to commercially
      exploit
      the PATENT RIGHTS and LICENSED TECHNOLOGY so that public use shall result
therefrom.
      Accordingly, LICENSEE shall exercise its best efforts to effect introduction
      and
acceptance
      of LICENSED PRODUCT(S) into the commercial market as soon as commercially
reasonable.

     

    ARTICLE
      10 - PROSECUTION AND MAINTENANCE OF PATENTS

     

    10.1
       UNIVERSITY
      shall apply for, prosecute, maintain, and own all PATENT RIGHTS in the
United
      States and foreign countries; provided however, LICENSEE shall have reasonable
      opportunities
      to designate countries in which it desires UNIVERSITY to file, at LICENSEE'S
      expense,
      patent applications and to otherwise advise UNIVERSITY. UNIVERSITY may file
      any
      patent application not so designated by LICENSEE, at UNIVERSITY'S expense and
      LICENSEE shall have the option to reimburse UNIVERSITY for such expense and
      shall thereupon have the rights
      and obligations with respect thereto as are set forth in this Agreement,
      LICENSEE shall cooperate
      with UNIVERSITY in applying for, prosecuting and maintaining said PATENT RIGHTS
      and
      UNIVERSITY shall inform LICENSEE thereabout in a timely manner

     

    10.2
      Except for those applications and/or inventions which LICENSEE elects not to
      file or pay for and
      UNIVERSITY elects to file and pay for as set forth in Paragraph
      9.1,
      LICENSEE shall pay all fees
      and
      expenses, including without limitation attorney fees, incurred by UNIVERSITY
      in
connection
      with the filing, prosecution, issuance and/or maintenance of any United States
      or foreign patent
      applications included in the PATENT RIGHTS, whether such fees and costs were
      incurred before or after the EFFECTIVE DATE of this Agreement. Upon execution
      of
      this Agreement, LICENSEE
      shall reimburse UNIVERSITY for all reasonable expenses UNIVERSITY has incurred
      for
      the
      preparation, filing, prosecution and maintenance of PATENT RIGHTS, Thereafter,
      UNIVERSITY
      shall submit an invoice to LICENSEE documenting the patent-related costs
      incurred but unpaid to date in each such invoice LICENSEE shall be pay such
      invoice within thirty (30) days of
      receipt. All applications for which LICENSEE pays all part of the related
      expenses shall additionally
      come under this license agreement.

     

    
      
        
        

      

      
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    ARTICLE
      11 - PROSECUTION OF INFRINGERS AND DEFENSE OF ACTIONS

     

    11.1
      Except as set forth in Paragraph 10,1.2, with respect to any PATENT RIGHTS
      that
      are 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 patent Both parties agree
      to promptly notify
      the other of each infringement of such patents of which a party is or becomes
      aware. Before LICENSEE
      commences an action with respect to any infringement of such patents, LICENSEE
      shall seek
      and
      consider1
      the
      views of UNIVERSITY.

     

    11.1.1 If
      LICENSEE elects to commence an action as described above, UNIVERSITY may,
at
      its
      sole and exclusive discretion, elect but is not required to join as a party
      in
      that action Regardless
      of whether UNIVERSITY elects to join as a party, UNIVERSITY shall reasonably
      cooperate with LICENSEE in connection with any such action.

     

    11.1.2
      If
      UNIVERSITY elects to pay one-half of the costs of prosecuting or defending
      the
action,
      including without limitation the reasonable attorneys' fees incurred, therein
      by
LICENSEE,
      whether or not UNIVERSITY is joined as a party, UNIVERSITY may jointly
control
      the action with LICENSEE.

     

    11.2 
      If
      LICENSEE elects to prosecute or defend an action as described above, and
      UNIVERSITY does
      not
      pay its one-half share of the costs, including attorneys' fees, LICENSEE may
      deduct from its
      royalty payments to UNIVERSITY with respect to the patent(s) subject to suit,
      50% of LICENSEE'S
      reasonable, documented, out-of-pocket expenses and costs of such action,
      including reasonable attorneys' fees paid to outside counsel. If LICENSEE'S
      expenses and costs exceed the amount
      of
      royalties deducted by LICENSEE for the particular calendar year in question,
      LICENSEE may
      to
      that extent reduce the royalties due to UNIVERSITY from LICENSEE in' succeeding
      calendar
      years LICENSEE may so deduct until LICENSEE shall have recovered its reasonable,
      documented, out-of-pocket expenses and costs of such action, including
      reasonable attorneys' fees paid
      to
      outside counsel.

     

    11.3 No
      settlement, consent judgment or other voluntary final disposition of the suit
      which results in
      a
      judgment against UNIVERSITY may be entered without the prior written consent
      of
UNIVERSITY,
      which consent shall not be unreasonably withheld.

    
       

      
        
        

      

      
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    11.4  Recoveries
      or reimbursements from actions referenced in this Article
      10
      shall
      first be applied to
      reimburse LICENSEE and then UNIVERSITY for their litigation costs not deducted
      from loyalties
      and then to reimburse UNIVERSITY for royalties deducted by LICENSEE pursuant
      to
Paragraph
      10,2 Any remaining recoveries 01 reimbursements, including without limitation
      any enhanced
      damages awarded by the courts, shall be shared equally by LICENSEE and
      UNIVERSITY.

     

    11.5  If
      LICENSEE elects not to exercise its right to prosecute an infringement of the
      PATENT RIGHTS
      pursuant to this Article 10, IJNIVERSITY may do so at its own expense,
      controlling such action
      and any recoveries or reimbursements shall be applied in accordance with
Paragraph
      10.4,
      except
      that UNIVERSITY shall be reimbursed first and LICENSEE second LICENSEE shall
      cooperate
      fully with UNIVERSITY in connection with any such action.

     

    11.6
       If
      a
      declaratory judgment action is brought naming LICENSEE as a defendant and
      alleging invalidity
      of any of the PATENT RIGHTS, UNIVERSITY may elect but is not required to take
      over the
      sole
      defense of the action at its own expense. LICENSEE shall cooperate fully with
      UNIVERSITY
      in connection with any such action,

     

    11.7
       If
      LICENSEE commences an action and UNIVERSITY is a legally indispensable party,
      UNIVERSITY
      shall have the right to irrevocably assign to LICENSEE all of UNIVERSITY'S
      right, title
      and
      interest in each patent/patent application covering aspects of the LICENSED
      PRODUCTS owned
      by
      UNIVERSITY and the subject of such action (subject to obligations to the
      government and others
      having rights in such patent/patent application). Upon such assignment, any
      action by LICENSEE on that patent/patent application shall thereafter be brought
      or continue without UNIVERSITY
      as a party, Notwithstanding any such assignment and regardless of its status
      as
      an indispensable party, UNIVERSITY shall cooperate with LICENSEE in connection
      with any such action, Furthermore, if any patent/patent application is assigned
      to LICENSEE by UNIVERSITY pursuant to this Paragraph 10.7, such assignment
      shall
      require LICENSEE to continue to meet all of its obligations under this Agreement
      as if the assigned patent or patent applications were still licensed
      to LICENSEE and owned by UNIVERSITY, If this license is terminated thereafter
      for any reason,
      then the patent(s) assigned pursuant to this Paragraph
      10.7
      shall be
      assigned to UNIVERSITY
      by LICENSEE.

     

    ARTICLE
      12 - WARRANTY DISCLAIMERS: DISGORGEMENT

     

    12.1
      UNIVERSITY MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF
      ANY
      KIND, EITHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION:

     

    (a)  that
      the
      manufacture, use, sale and/or other disposition of LICENSED PRODUCT(S)
will
      be
      free from infringement of any patents or copyrights owned by third parties;
      will
      have any
      value
      or will be commercially successful to LICENSEE; will work; will be efficacious;
      OR
      THAT
      THE LICENSED PRODUCT(S) IS MERCHANTABLE OR WILL BE FIT AND/OR
      BE
      USEFUL FOR ANY PARTICULAR PURPOSE; or

     

    (b)  that
      any
      licensed patent is valid, or that the use of PATENT RIGHTS and/or LICENSED
      TECHNOLOGY in connection with the manufacture, use, sale, offer to sell,
import,
      distribution or other disposal of LICENSED PRODUCT(S) does not infringe upon
      any
      patent or other rights not vested in UNIVERSITY.

     

    
      
        
        

      

      
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          23

        
          

        

      

      
        
        

      

    

     

    12.2 Nothing
      in this Agreement shall be construed as a representation or warranty on the
      part
      of UNIVERSITY
      as to the scope of any PATENT RIGHTS 01 any patent that may issue
      therefrom.

     

    12.3
       UNIVERSITY
      may furnish information related to the PATENT RIGHTS and/or LICENSED
TECHNOLOGY
      to LICENSEE, but neither UNIVERSITY nor anyone acting on behalf of UNIVERSITY
      shall be liable for damages arising out of or resulting from anything made
      available to LICENSEE
      pursuant to this Agreement or the use thereof UNIVERSITY shall have no
responsibility
      for the ability of LICENSEE to use such information, the quality or performance
      of the LICENSED
      PRODUCT(S) produced therefrom by LICENSEE, or its sublicensees, or the claims
      of
      third parties arising from the use of such information UNIVERSITY shall have
      no
      responsibility for the
      usefulness of such information, the quality or performance of the LICENSED
      PRODUCT(S) produced
      therefiom by LICENSEE, its sublicensees, permitted assignees, or the claims
      of
      third parties arising from the use of such information.

     

    12.4 Nothing
      in this Agreement shall be construed as a representation, warranty or obligation
      on the
      part
      of UNIVERSITY to provide any technical information or assistance of any nature
      or kind whatsoever
      for' any reason, except only to the extent as might be specifically provided
      herein.

     

    12.5 LICENSEE
      and its sublicensees shall make no statements, representations or warranties
      whatsoever
      to any third parties that are inconsistent with the provisions of this
Article
      11.5 LICENSEE
      shall include the terms of this Article 11 in any sublicense granted or
      permitted assignment
      made by LICENSEE.

     

    12.6 Despite
      any term or limitation in this Agreement to the contrary, in the event LICENSEE
      is ordered
      by a court or arbitrator to pay damages to any person or entity as a consequence
      of a successful
      challenge to a PATENT RIGHT and/or LICENSED TECHNOLOGY and/or LICENSED
PRODUCT
      and such order is not appealed 01 is affirmed, LICENSEE shall be entitled to
      repayment from
      UNIVERSITY of
      the
      ROYALTIES paid by LICENSEE to UNIVERSITY relating to the sale, lease
      01
      other transfer of LICENSED PRODUCT(S) or LICENSED TECHNOLOGY using the
challenged
      rights or interests.

     

    ARTICLE
      13 - RIGHT TO ENTER

     

    13.1  UNIVERSITY
      represents that UNIVERSITY has the right and authority to enter into this
Agreement;
      to grant the rights and licenses granted herein; and to bind UNIVERSITY to
      the
      teims and
      obligations set forth herein.

     

    13.2  LICENSEE
      represents and warrants that LICENSEE has the right and authority to enter
      into
this
      Agreement; to grant the rights granted herein; and to bind LICENSEE to the
      terms
      and obligations
      set forth herein.

     

    
      
        
        

      

      
        Page
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          23

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      14 - COMPLIANCE WITH LAWS

     

    14.1
      LICENSEE and UNIVERSITY agree to comply with all applicable laws and regulations
      relating
      to the performance of their respective obligations hereunder.

     

    14.2 Without
      narrowing the broad application of Article 13,1, it is understood and
      acknowledged that
      the
      transfer of certain commodities and technical data is subject to United States
      laws and regulations
      controlling the export of such commodities and technical data including, without
      limitation,
      the International Traffic in Arms Regulations (ITAR) and all Export
      Administration Regulations
      of the United States Department of Commerce These laws and regulations, among
      other things,
      may prohibit or require a license for' the export of certain types of technical
      data to certain specified
      countries, LICENSEE hereby agree and by entering into this Agreement give
      written assurance
      it will comply with all United States and foreign laws and regulations
      controlling the export
      of
      commodities and technical data, that it will be solely responsible for any
      violation of any such
      laws
      and regulations by LICENSEE, and that it will indemnify, defend and hold
      UNIVERSITY harmless
      from any liability in the event of any legal action of any nature occasioned
      by
      such violation.

     

    14.3  UNIVERSITY
      represents to LICENSEE that the PATENT RIGHTS were not developed, in
whole
      or
      in part, with federal assistance, and that US, Code, Title 35, Chapter 18,
      Patent
      Rights in Inventions,
      Made with Federal Assistance, (as
      may
      be amended or supplemented) and related regulations
      do not apply to the PATENT RIGHTS or other rights licensed by UNIVERSITY
hereunder.

     

    ARTICLE
      15 - LIABILITY

     

    15.1 Subject
      to the provisions in Paragraph 11,6, LICENSEE shall indemnify, defend and
      forever hold
      UNIVERSITY, its current and former Regents, officers, and employees, harmless
      from and against
      liability for any and all claims, demands, damages, losses, costs and expenses
      (e g.., attorneys' fees),
      fines, penalties and judgments of any kind or nature whatsoever (collectively
      "Damages"), including without limitation, Damages for bodily injury, death,
      personal injury, illness, property damage
      and/or products liability directly or indirectly arising out of, resulting
      from
      or in any way connected with (i) the non-UNIVERSITY use of LICENSED PRODUCT(S)
      and/or PATENT RIGHTS
      and/or LICENSED TECHNOLOGY, (ii) the non-UNIVERSITY development, manufacture,
      sale, offer to sell, import, distribution, sublicensing, transfer or other
      disposition, advertising
      and promotion of LICENSED PRODUCT(S) and/or PATENT RIGHTS and/or LICENSED
      TECHNOLOGY, (iii) the non-UNIVERSITY operation of LICENSEE'S business
and/or
      otherwise relating to LICENSEE'S performance under this Agreement or that of
      its
customers,
      distributors, sublicensees, or other transferees, and (iv) any breach of any
      obligation, covenant, representation and/or warranty of LICENSEE hereunder,
      LICENSEE shall promptly notify
      UNIVERSITY of any such claim,

     

    15.2
      The
      liability of UNIVERSITY for breach of this Agreement shall not, in the
      aggregate, exceed
      LICENSEE' S payments under this Agreement.

     

    
      
        
        

      

      
        Page
          14 of
          23

        
          

        

      

      
        
        

      

    

     

    15.3 LICENSEE
      shall insert into all of its sublicenses, provisions making this Article 14
      expressly applicable
      to its sublicensees.

     

    15.4
      TO
      THE EXTENT PERMITTED BY STATE LAW, NEITHER UNIVERSITY NOR LICENSEE
      OR ANY SUBLICENSEE SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT,
      SPECIAL, INCIDENTAL AND/OR CONSEQUENTIAL DAMAGES, WHETHER ARISING
      IN TOP.T, CONTRACT, PRODUCT LIABILITY, BREACH OF STATUTORY DUTY OR
      OTHERWISE, UNDER ANY CIRCUMSTANCES EVEN IF ONE PARTY HAS NOTIFIED THE
      OTHER
      PARTY OF THE POSSIBILITY OF ANY SUCH DAMAGES.

     

    ARTICLE
      16 - INSURANCE

     

    16.1
       Without
      limiting LICENSEE'S indemnity obligations under, Paragraph 14.1, LICENSEE
shall
      purchase and maintain in effect commercial general liability insurance in
      amounts not less than One
      Million Dollars ($1,000,000.00) per incident and Three Million Dollars
      ($3,000,000.00) annual aggregate
      and naming the UNIVERSITY as an additional insured, Such insurance shall provide
      (i) product
      liability coverage coveting all claims with respect to LICENSED PRODUCT(S)
      and
      (ii) broad
      form contractual liability coverage for LICENSEE'S indemnification under this
      Agreement Such policy(s) shall be written by such company(s) as UNTVERSITY
      shall
      approve and shall be licensed
      to do business in Oklahoma, Any carrier' providing coverage shall have a minimum
      "Best" rating
      of
      "A-, VII."

     

    16.2  LICENSEE
      shall furnish a certificate of such insurance to UNIVERSITY on or before the
      date
      of
      first sale, lease or other transfer of LICENSED PRODUCT(S) (and annually
      thereafter) Certificates
      must: provide for thirty (30) days' advance written notice to UNIVERSITY of
      any
cancellation,
      non-renewal or material change in such insurance; state that IMTVERSITY has
      been
endorsed
      as an additional Insured under the policy(s); and include a provision that
      the
      coverage will be
      primary to and will not participate with, nor will be excess over any valid
      and
      collectable insurance
      or program of self-insurance carried or maintained by UNIVERSITY., Upon request
      by IJNIVERSITY,
      LICENSEE shall provide a full and complete copy of any and all insurance
      policies required
      under this Agreement and/or a certified accounting of any and all claims made
      and/or paid against
      each and all such policies of insurance. 

     

    16.3  LICENSEE
      shall maintain such commercial general liability insurance during the period
      that any
      product, process, or service, relating to or developed pursuant to this
      Agreement is being sold, leased
      or
      otherwise transferred by LICENSEE 01 by a sublicensee and for a reasonable
      period of time thereafter
      which in no event shall be less than five (5) years.

     

    ARTICLE
      17 - PUBLICATION

     

    Subject
      to confidentiality provisions and except to the extent LICENSEE is required
      by
      securities laws
      to
      make certain disclosures, UNIVERSITY and LICENSEE shall each have the right
      at
      its discretion
      to release non-proprietary information or to publish any material resulting
      from
      the Project.,
      The party proposing to publish will furnish a copy of any proposed publication
      to the other party for its review at least thirty (30) days in advance of
      submission for publication UNIVERSITY shall
      not
      publish any material or information designated by LICENSEE, in its sole
      discretion, as confidential
      or proprietary Publication of specific results maybe delayed for a limited
      period, not to exceed sixty (60) days, to protect any patentable subject matter
      and remove LICENSEE Proprietary Information
      contained in the publication No unreasonable delay shall be imposed on the
      filing, defense
      or publication of any student thesis or dissertation. UNIVERSITY shall give
      LICENSEE the option
      of
      being acknowledged in such publication for its sponsorship of the
      Project.

     

    
      
        
        

      

      
        Page
          15 of
          23

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      18 - USE OF NAMES AND LOGOS

     

    Each
      party specifically agrees that no public use of whatever nature will be made
      of
      the name, employees,
      trademarks, or any logo of the other party without the express, prior written
      permission of
      such
      party, such permission to be given or withheld in the sole and exclusive
      discretion of the such
      party.

     

    ARTICLE
      19 - TERMINATION

     

    19.1  This
      LICENSE may be terminated at any time by mutual written agreement of the
      parties.

     

    19.2  hi
      the
      event of default of this LICENSE or any other agreement between the parties,
      the
nondefaulting
      party may terminate this Agreement as follows:

     

    (a)  The
      nondefaulting party shall give the defaulting party notice that sets forth
      a
      detailed statement
      of the default.

     

    (b)  The
      defaulting party shall have a cure period of thirty (30) days from the effective
      date
      of
      notice in which to cute the default.

     

    (c)  If
      the
      default is not cured within the cure period, the nondefaulting party may
terminate
      the rights and licenses granted in this Agreement and/or terminate any other
      agreement
      between the nondefaulting party and the defaulting party by sending notice
      of
termination
      to the defaulting party.

     

    19.3  Termination
      of the rights and licenses granted in this Agreement for any cause shall not
      release
      LICENSEE from the obligation to pay ROYALTIES on monies received by LICENSEE
      on
or
      before
      the date of termination.

     

    19.4 In
      the
      event the rights and licenses granted to LICENSEE by the terms of this Agreement
      are terminated
      for any reason , LICENSEE shall execute any and all instruments the UNIVERSITY
      deems
      necessary and desirable, if any, to re-vest said rights and licenses in
      UNTVERS1TY Furthermore,
      LICENSEE immediately shall cease making, using, selling or otherwise disposing
      of any
      product or service based on, in whole or in part, or incorporating, in whole
      or
      in part, or using, in whole
      or
      in part, any PATENT RIGHTS or LICENSED TECHNOLOGY, including without
limitation
      products or services based on LICENSED PRODUCTS, and LICENSEE immediately
shall
      cease making, using, selling or otherwise disposing of any LICENSED PRODUCT(S)
      In the event
      the
      termination is disputed by LICENSEE, then the actions called for in this
      Paragraph 19.4 shall
      not
      be required unless and until the dispute is resolved in favour of UNIVERSITY
      by
      the parties.

     

    
      
        
        

      

      
        Page
          16 of
          23

        
          

        

      

      
        
        

      

    

     

    19.5
      The
      termination of this Agreement and/or the termination of the rights and licenses
      granted in this
      Agreement or words of similar import means only that the rights and licenses
      granted in Article
      3
      (Grant
      and Disclosure), Article
      4
      (Sublicensing), and the provisions of Article 10 (Prosecution and
      Maintenance of Patents) are terminated, and all other provisions of this
      Agreement shall survive any
      such
      termination; provided, the provisions of Article
      5
      (Royalties and Payment), Article
      6 (Royalty
      Reports) and Article
      7
      (Accounting) shall survive only with respect to any monies or' other
consideration
      accrued or accruable prior to termination and reports required thereby; and
      provided further
      and as set forth therein, the provisions of Article
      8
      shall
      survive only to the extent necessary: (i)
      to
      effect LICENSEE'S disclosure and confidentiality requirements under Paragraphs 8.1
      and
8.8;
      (ii) to
      effect joint ownership in IMPROVEMENTS made by LICENSEE and UNIVERSITY jointly
      and to preserve the options and rights granted LICENSEE under Paragraph 8.4
      prior to or after
      termination; (iii) to effect ownership in UNIVERSITY in TECHNOLOGY IMPROVEMENTS
      made
      by
      LICENSEE and UNIVERSITY jointly under Paragraph
      8.5
      prior to
      or after termination as provided
      in that section; and, (iv) to effect the rights and licenses in UNIVERSITY
      to
      LICENSEE IMPROVEMENTS
      pursuant to and as provided in Paragraph
      8.7.

     

    ARTICLE
      20 - MARKING

     

    LICENSEE
      agrees to mark all LICENSED PRODUCT(S) sold or otherwise disposed of by it
      under
the
      license granted in this Agreement with the word "Patent No. __ " if patent(s)
      has/have issued and "Patent Pending" during the period of pending claims and
      to
      so require its sublicensees.

     

    ARTICLE
      21 - NOTICES

     

    21.1
      All
      notices, requests, demands and other communications required or permitted to
      be
delivered
      hereunder shall be in writing, Such notices, requests, demands and other
      communications shall
      be
      deemed to have been given three business days after being deposited in the
      United States mail, postage prepaid, certified or registered mail, return
      receipt requested, addressed as follows:

    

      
        	
                UNIVERSITY:

              	
                Office
                  of Technology Development

              
	 	
                The
                  University of Oklahoma One

              
	 	
                Partners
                  Place, Suite 1510 350

              
	 	
                David
                  L Boren Blvd Norman,

              
	 	
                OK
                  73072-7264 (405)
                  325-3800

              
	 	 
	 	 
	
                with
                  a copy to

              	 

      

    

     

     

    
      
        
        

      

      
        Page
          17 of
          23

        
          

        

      

      
        
        

      

    

    

    

      
        	
                LICENSEE:

              	
                Matin
                  Keating

              
	 	
                3DICON
                  Corporation

              
	 	
                P.,
                  O,. Box 470941

              
	 	
                Tulsa,
                  OK 74147-0941

              
	 	
                (918)
                  492-5082

              
	 	
                mkauthor
                  @aol.com

              
	 	 
	
                with
                  a copy to:

              	
                John
                  MO' Connoi

              
	 	
                15
                  W, 6th
                  Street Suite 2700

              
	 	
                Tulsa,
                  OK 74119

              
	 	
                Fax
                  no,: (918)587-0102

              
	 	
                joconnor@newtonoconnor.com,

              

      

    

     

    21.2
       Written
      notice shall be effective as of the date of receipt, if a business day, or
      otherwise on the
      next
      business day thereafter, Further, either party may change its address for notice
      by giving the other
      party written notice of the new address

     

    ARTICLE
      22 - GENERAL MATTERS

     

    22.1
      Choice
      of Law.
      THE
      CONSTRUCTION, INTERPRETATION AND ENFORCEMENT
      OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
      OKLAHOMA.

     

    22.2
      Injunctive
      Relief.
      ANY
      LAWSUIT OR REQUEST FOR IN.TUNCTIVE RELIEF IN CONNECTION
      WITH THIS AGREEMENT SHALL BE FILED IN A COURT OF COMPETENT JURISDICTION IN
      THE
      STATE OF OKLAHOMA, TO WHICH JURISDICTION
      AND VENUE THE PARTIES EXPRESSLY AGREE.

     

    22.3
       The
      parties agree that this Agreement shall be binding upon their respective
      successors, assigns
      or transferees of any and every nature, if assignment and/or transfer is
      permitted by the e specific
      terms of this Agreement.

     

    22.4 If
      any
      part of this Agreement is ever ruled to be invalid, illegal, or unenforceable
      by
      a court or ther
      body
      of competent jurisdiction, the remainder of this Agreement shall continue in
      full force and effect
      and shall be deemed modified to the minimum extent necessary to make it
      enforceable; Provided
      however:

     

    (a)  The
      effect of the ruling in question shall be strictly limited to the jurisdiction
      of the body
      making the ruling; and,

     

    (b)  If
      the
      ruling in question is subsequently overruled or obviated by Legislative,
      judicial or
      other
      action, the severed provision(s) of this Agreement shall be returned to furl
      force and effectiveness

     

    
      22.5 Entire
        Agreement.
        This
        Agreement, along with the SRAs and the confidentiality agreement
        referenced in Paragraph
        3.6,
        constitute the entire agreement of the parties with respect to the subject
        matter hereof and replaces and supersedes all prior agreements, understandings
        and negotiations of the parties, whether written or oral. The parties each
        represent that no promises, representations or inducements have been made
        by the
        other party with respect to the subject matter of this Agreement except as
        specifically and expressly set forth herein or in the SRAs or the
        confidentiality agreement. This Agreement may not be changed, altered, modified
        or amended except by an agreement in writing identified as an amendment hereto
        and signed by LICENSEE and UNIVERSITY.

       

      
        
          
          

        

        
          Page
            18 of
            23

          
            

          

        

        
          
          

        

      

    

     

    22.6 Waiver.
      No
      waiver shall be deemed to be made by any party of any right under this Agreement
      unless the waiver is in writing signed by that party. Each waiver, if any,
      shall
      be a waiver only with respect to the specific instance involved. No waiver
      shall
      impair the rights of the waiving party or the obligations of the other party
      in
      any other respect at any other time.

     

    22.7
      Execution.
      The
      terms of this Agreement shall be binding upon either of the parties until it
      has
      been properly executed on behalf of each party to the Agreement in the spaces
      provided below. It is then effective as of the EFFECTIVE DATE. This Agreement
      may be executed in several counterparts, each of which shall be deemed the
      original, but all of which shall constitute one and the same instrument.
      Further, the parties may sign a telefaxed copy of this Agreement and any such
      telefaxed copy shall be deemed to be an original and no objection shall be
      made
      to the introduction into evidence of any telefaxed copy on the grounds related
      to the telefaxed copy not being an original. Executed originals shall be
      forwarded to the other parties promptly.

     

    22.8 No
      Partnership, Joint Venture or Agency.
      Nothing
      in this Agreement shall be construed to make either party the legal
      representative, agent, partner or joint venturer of the other party, nor shall
      either party have the right or authority to assume, create or incur any
      liability or any obligation of any kind, either express or implied, in the
      name
      of or on behalf of the other party.

     

    22.9 Attorneys’
      Fees and Costs.
      In the
      event an action is brought by a party to this Agreement seeking to enforce
      any
      provision hereof, the prevailing party in such action shall be entitled to
      recover its reasonable attorneys’ fees and costs, including fees paid to expert
      witnesses, from the other party in such action.

     

    WHEREFOR,
      the parties have signed this Agreement as provided below.

     

    
      	
              THE
                BOARD OF REGENTS OF THE 

            	 	LICENSEE
	
              UNIVERSITY
                OF OKLAHOMA

            	
            
	 
 	 
 	 
 
	By:	By:  	
            
	
              
                

              

              W.
                Arthur Porter, Ph.D., University Vice

            	
              

            
	President
              for
              Technology Development	Name: 
	 	
              
                

              
Title: 
	 	
              
                
 

            
	Date:	Date: 	 
	
              
                
 

            	
              
 

    

     

    

    
      
        
        

      

      
        Page
          19 of
          23

        
          

        

      

      
        
        

      

    

     

    ADDENDUM

     

    Dr
______ acknowledges
      that he/she has been given a copy of the foregoing Agreement, has read
      and
      understands it and that he/she desires the UNIVERSITY to enter into said
      Agreement. Dr., ______ acknowledges
      his/her duties to abet the transfer of the LICENSED TECHNOLOGY to LICENSEE
      and agrees to co-operate and do all things reasonably necessary to effect the
      purposes for which
      this Agreement was entered into between the parties.

    
       

      
        	ACKNOWLEDGED
                AND
                AGREED:	 	
              
	 
 	 
 	 
 
	By:	By:  	
              
	
                
                  

                

              	
                

              
	 	 
	Date:	Date: 	 
	
                 

              	 

      

       

    

    EXHIBIT
      A

     

    LICENSED
      PATENT RIGHTS

     

    
      
        
        

      

      
        Page
          20 of
          23

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

     

    CONFIDENTIALITY
      AGREEMENT

     

    This
      Agreement is entered into by and between __________________ ,
      maintaining its corporate
      office at __________________ ,
      referred to as ("COMPANY"), and the Board of Regents
      of the University of Oklahoma by and through The Office of Technology
      Development, maintaining
      its office at 660 Parrington Oval, Evans Hall, Room 201, Norman, Oklahoma,
      73019-0628,
      referred to as ("UNTVERSITY"), effective on the date when executed by the last
      patty hereto to
      sign
      below.

     

    WTTNESSETH

     

    WHEREAS,
      UNIVERSITY possesses certain valuable and confidential information and data
      relating
      to ________________________ ("INFORMATION");
      and 

     

    WHEREAS,
      such INFORMATION is considered by UNIVERSITY to be confidential and to
      constitute a valuable asset; and 

     

    WHEREAS,
      UNIVERSITY is willing to disclose such information to COMPANY for the purpose
      of
evaluating
      said INFORMATION to determine its
      interest
      in licensing said INFORMATION,

     

    NOWTHEREFORE,
      the parties agree as follows:

     

    
      	
            	1.	
              After
                execution of this Agreement, UNIVERSITY shall disclose to COMPANY
                certain
                INFORMATION
                and COMPANY shall accept and hold such INFORMATION in confidence
                for five (5) years from the effective date of this Agreement. All
                INFORMATION
                shall be labeled "CGNFIDENTIAL", or if communicated orally, confirmed
                in writing within thirty (30) days of such oral communication as
                being
                "CONFIDENTIAL.''

            

    

     

    
      	
            	2.	
              Without
                prior written consent of UNIVERSITY, COMPANY shall neither disclose
                to any
                third party not permit any third party to have access to any INFORMATION
                nor use such INFORMATION
                for any purpose other than as set forth in tins Agreement COMPANY
                shall
                disclose INFORMATION only to those of' its employees who have a need
                to
                know for the
                purposes stated above and shall require from those employees obligations
                of confidentiality,
                non-disclosure and non-use consistent
                herewith.

            

    

     

    
      	
            	3.	
              The
                aforementioned confidentiality obligations assumed by COMPANY shall
                not
                apply to any
                INFORMATION that COMPANY can clearly demonstrate fells within any
                of the
                following
                categories:

            

    

     

     

    
      
        
        

      

      
        Page
          21 of
          23

        
          

        

      

      
        
        

      

    

     

     

    
      
        	
              	(a)	
                Information
                  which was in the public domain prior to disclosure by the UNIVERSITY
                  or which subsequently conies into the public domain through no
                  Emit of COMPANY, in either case as evidenced by documents which
                  were
                  generally published prior to such disclosure;
                  or,

              

      

    

     

    
      
        
          
            	
                  	
                    (b)

                  	
                    Information that COMPANY
                      can demonstrate
                      by means of presently existing prior
                      written records to have been already known or within COMPANY'S
                      legitimate
                      possession; or

                  

          

        

         

      

    

    
      
        	
              	
                (c)

              	
                Information
                  received in good faith by COMPANY from a third party that was lawfully
                  in possession of the information and had the unrestricted light
                  to
                  disclose
                  the same; or,

              

      

    

     

    
      
        	
              	(d)	
                Information
                  that COMPANY can demonstrate by means of written records to have
                  been independently developed by the COMPANY without the aid, application
                  or use of the UNIVERSITY'S confidential information by person(s)
                  who have not had access to the UNIVERSITY'S
                  confidential

              

      

    

    information;
      or,

    
      	
            	(e)	
              Information
                that is required to be disclosed by operation of
                law.

            

    

     

    
      
        	
              	4.	
                For
                  purposes of keeping INFORMATION confidential, COMPANY shall use
                  efforts at
                  least commensurate
                  with those employed by COMPANY for the protection of its own confidential
                  information.

              

      

    

     

    
      
        	
              	5.	
                UNIVERSITY
                  does not make any representation or warranty regarding the accuracy
                  or
                  completeness
                  of the INFORMATION.

              

      

    

     

    
      	
            	6.	
              Except
                as specifically provided in tins Agreement, no license or any oilier
                right
                to use the INFORMATION
                is granted,. The disclosure of INFORMATION by UNIVERSITY to COMPANY
                shall not result in any obligation on the part of either party to
                enter
                into any further
                agreement relating to the INFORMATION or to undertake any other obligation
                not set
                forth in a written agreement signed by both
                parties.

            

    

     

    
      	
            	7.	
              INFORMATION
                furnished by UNIVERSITY to COMPANY shall remain UNIVERSITY'S property
                unless otherwise agreed as provided herein, and any documents furnished
                to
                COMPANY
                by UNIVERSITY or any excerpts, notes or copies made therefrom containing
                such
                INFORMATION shall be promptly returned to UNIVERSITY within one hundred
                and twenty (120) days from the effective date of this Agreement or
                within
                any extension period granted
                in writing by UNIVERSITY

            

    

     

    
      	
            	8.	
              Neither
                party shall be entitled to assign its
                rights
                hereunder without the express written consent
                of the other party.

            

    

     

    
      	
            	9.	
              This
                Agreement contains the entire understanding between the parties with
                respect to the matters
                contemplated herein and supersedes all previous written and oral
                negotiations, commitments,
                and understandings. This Agreement cannot be altered or otherwise
                amended
                except
                pursuant to an instrument in wilting signed by each of the patties
                and
                making reference
                to this Agreement. This Agreement shall inure to the benefit of and
                be
                binding upon
                the parties and their agents, successors, employees and permitted
                assigns.
                

            

    

     

    
      
        
        

      

      
        Page
          22 of
          23

        
          

        

      

      
        
        

      

    

     

    
      	
            	10.	
              A
                valid waiver of any term or condition of this Agreement must be in
                writing
                and shall not be
                deemed or construed to be a waiver of' such term or condition for
                the
                future, or of any subsequent
                breach.

            

    

     

    
      
        	
              	11.	
                If
                  any court of competent jurisdiction holds any part of this Agreement
                  to be
                  invalid or unenforceable,
                  such holding shall in no way affect the validity of the remainder
                  of this
                  Agreement.

              

      

    

     

    
      	
            	12.	
              A
                facsimile signature by any party to this Agreement shall be deemed
                sufficient to indicate acceptance
                of the terms and obligations of the
                same.

            

    

     

    
      	
            	13.	
              The
                validity and effect of 'this Agreement shall be governed, construed,
                and
                enforced in accordance
                with the laws of the State of Oklahoma, United States of America,
                without
                regard
                or giving force and effect to the principles of conflicts of laws
                of
                Oklahoma or any other
                state, Any action to interpret or enforce this agreement shall be
                brought
                in the District Court
                for Cleveland County, Oklahoma or the United States District Court
                for the
                Western District
                of Oklahoma, as appropriate.

            

    

     

    
      	
            	14.	
              The
                undersigned warrant and represent that they are duly authorized to
                execute
                this Agreement
                and legally bind their respective parties to its terms and conditions
                and
                when fully
                executed this Agreement constitutes the legal, valid, and binding
                obligation of me parties.

            

    

     

    WHEREFOEE,
      the parties hereto have caused this Agreement to be executed by their duly
      authorized
      representatives as of the date first written above.

     

    
      	COMPANY	 	THE
              BOARD OF
              REGENTS OF THEUNIVERSITY
              OF
              OKLAHOMA
	 	 	 
	 By:
              .„  	 	 	 By: 	
            
	 	
              

              Dan
                G. Davis

              Executive
                Director

            	 	 	
              

            
	 Title:	_____________: _____________	 	Title:
	Office
              of Technology Development
	 	 	 	 	 
	 Date:	______________ 	 	 Date: 	 _____________

    

     

     

    
      
        
        

      

      
        Page
          23 of
          23SPONSORED
        RESEARCH AGREEMENT FY06-

      ORA3-06
        MODIFICATION NO, 1

       

      The
        Sponsored Research Agreement (hereinafter referred to as "SRA Agreement")
        dated
        July 15, 2005, between the Board of Regents of the University of Oklahoma,
        an
        education agency of the State of Oklahoma, (hereinafter referred
        to as "University") and 3DICON Corporation, an Oklahoma corporation with
        principal offices at P O Box
        470941, Tulsa, Oklahoma 74147-0941, (hereinafter referred to as "Sponsor")
        is
        hereby amended as follows:

       

      SECTION
        4. COSTS, BILLINGS AND OTHER SUPPORT

       

      4.1
        Unless this Agreement or the Project is terminated before the expiration
        of the
        Period of Performance,
        for the services, reports, and other items to be delivered hereunder Sponsor
        shall pay University
        a fixed price in the amount of Four Hundred Fifty-Three Thousand Five Hundred
        Eighty-Four
        Dollars and 00/00 cents ($453,584.00) without interest, as follows: upon
        execution of this contract,
        Sponsor shall pay University Five Hundred Dollars and 00/00 cents ($500 00);
        on
        or before November
        10, 2005, Sponsor shall pay University Seventy-Five Thousand and Ninety-Seven
        Dollars and
        33/00
        cents ($75,097.33); on or before January 15, 2006, Sponsor shall pay University
        Seventy-Five Thousand
        Five Hundred Ninety-Seven Dollars and 33/00 cents ($75,597.33); on or before
        April 15, 2006, Sponsor shall pay University Seventy-Five Thousand Five Hundred
        Ninety-Seven Dollars and 33/00
        cents ($75,597.33); on or before July 15, 2006, Sponsor shall pay University
        the
        balance of Two Hundred
        Twenty-Six Thousand Seven Hundred Ninety-Two Dollars and 01/00 cents
        ($226,792.01). The University
        agrees to incur expenses primarily in accordance with the cost estimate included
        in Appendix B ("Budget"), which by reference is made a part hereof for all
        purposes, If Sponsor terminates
        this Agreement prior to the expiration of the Period of Performance, it shall
        pay all amounts due
        and
        owing the University through the date of termination including all
        non-cancelable commitments for
        equipment; provided, that any equipment Sponsor has financed as of the date
        of
        termination shall be transferred
        to Sponsor

       

      SECTION
        9. CONFIDENTIALITY

       

      9,1
        A
        separate confidentiality agreement has been executed between the parties
        and
        incorporated into
        this
        Agreement and attached to this Modification as Exhibit A.

       

      Except
        as
        amended by this Modification, all other terms and conditions of the SRA
        Agreement remain unchanged.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      Parties
        have agreed by mutual consent to the modifications listed above and have
        so
        indicated through the execution of this agreement. 

       

      
        	3DICON
                CORPORATION	 	 	THE
                BOARD OF REGENTS OF THE UNIVRSITY OF OKLAHOMA
	 	 	 	 
	BY:
 Martin
                Keating    	 	 	
                BY:
                  Andrea Deaton

              
	 	 	 	 
	TITLE: President	 	 	TITLE: Director, Office
                of
                Research Services
	 	 	 	 
	DATE:
                Nov. 1,
                2005    	 	 	DATE:
                10/27/05
	 	 	 	 
	READ AND UNDERSTOOD;	 	 	 
	 	 	 	 
	
                By:
                  James J. Sluss, Jr.

              	 	 	 

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A 

      CONFIDENTIALITY
        AND RESTRICTED USE AGREEMENT

       

      THIS
        AGREEMENT is entered by the Board of Regents of the University of' Oklahoma,
        an
        educational agency of the State of Oklahoma (hereinafter referenced as
        "University") and 3Dicon
        Corporation, an Oklahoma corporation with principal offices at P.O Box 470941,
        Tulsa, Oklahoma
        74147-0941 (hereinafter referenced as "Sponsor"), to be effective on the
        date
        when executed by the last party to sign this Agreement.

       

      WITNESSETH:

       

      WHEREAS,
        the
        Parties possess certain valuable and confidential information, data,
knowledge,
        know-how, practices, processes, and other information relating to the Project
        referenced
        in Section 15 of the SRA Agreement entered by the parties to be effective
        on
September
        29, 2005, (hereinafter collectively referenced as "INFORMATION");
        and

       

      WHEREAS,
        such
        INFORMATION is considered by the Parties to be confidential and to constitute
        valuable assets; and

       

      WHEREAS,
        the
        Parties are willing to disclose such INFORMATION to each other for the
        purpose of allowing the parties to perform their respective obligations and
        exercise their rights
        under said SRA Agreement.

       

      NOW
        THEREFORE, the
        Parties agree as follows:

       

      
        	1.	
                After
                  execution of this Agreement, the Parties shall mutually disclose
                  to each
                  other certain
                  INFORMATION and the Parties shall accept and hold such INFORMATION
                  in
                  the
                  strictest confidence All INFORMATION shall be labelled "CONFIDENTIAL",
                  or
                  if
                  communicated orally, confirmed in writing within thirty (30) days
                  of such
                  oral communication
                  as being "CONFIDENTIAL."

              

      

       

      
        	2.	
                Without
                  prior written consent, the Parties shall neither disclose to any
                  third
                  party nor permit
                  any thud party to have access to any INFORMATION, nor use such
                  INFORMATION
                  for any purpose other than as set forth in this Agreement or in
                  the
                  SRA
                  Agreement.

              

      

       

      
        	3.	
                Each
                  Party shall disclose INFORMATION only to those of its employees
                  who have a
                  need to know for the purposes stated above and shall require from
                  those
                  employees written
                  agreements of confidentiality, non-disclosure and non-use consistent
                  herewith, Such
                  agreements shall be available for inspection by the other party
                  upon
                  request. The agreements
                  shall expressly provide that the restrictions therein remain in
                  effect
                  even after
                  the cessation of the employee's employment with one of the
                  parties.

              

      

       

      
        
          
          

        

        
          Page
            1
            of  3

          
            

          

        

        
          
          

        

      

       

      
        	4.	
                The
                  aforementioned confidentiality obligations assumed by the Parties
                  shall
                  not apply to any INFORMATION that the Parties can clearly demonstrate
                  falls within any of the following
                  categories:

              

      

       

      	(a)  	
              Information
                which was in the public domain prior to disclosure by the Parties,
                as
                evidenced by documents which were generally published prior to such
                disclosure; or,

            

       

      	(b)  	
              Information
                that a party can demonstrate by means of written records generated
                before the parties commenced negotiations of the first SRA
                executed
                  by them was already known by the party;
                  or

              

            

      	 	 

      	(c)  	
              Information
                that the Patties can demonstrate by means of written records to
                have been independently developed by the Parties without the aid,
                application
                or use of the Parties' confidential information, by person(s) who
                have not had access to the Parties' confidential information;
                or

            

       

      
        
          	
                	(d)	
                  Information
                    that is required to be disclosed by operation of
                    law

                

        

      

       

      
        	5.	
                For
                  purposes of keeping INFORMATION confidential, the Parties shall
                  use
                  efforts at least
                  commensurate with those employed by the Parties for the protection
                  of
                  their own confidential
                  and highly valuable
                  information,

              

      

       

      
        	6.	
                The
                  Parties do not make any representation or warranty regarding the
                  accuracy
                  or completeness
                  of the INFORMATION

              

      

       

      
        	7.	
                Except
                  as specifically provided in this Agreement, no license or any other
                  right
                  to use the
                  INFORMATION is granted The disclosure of INFORMATION by the Parties
                  to
                  each
                  other shall not result in any obligation on the part of either
                  party to
                  enter into any further
                  agreement relating to the INFORMATION or to undertake any other
                  obligation
                  not
                  set forth in a written agreement signed by both
                  parties

              

      

       

      
        	8.	
                INFORMATION
                  furnished by the Parties to each other shall remain the property
                  of the
                  party
                  providing the information unless otherwise agreed as provided herein,
                  and
                  any documents
                  furnished by the Patties to each other or any excerpts, notes or
                  copies
                  made therefrom
                  containing such INFORMATION shall be promptly returned to the party
                  providing the excerpts, notes or copies made therefrom, within
                  thirty days
                  from the date of
                  the requested return of such INFORMATION by the party which provided
                  the
                  same or
                  within any extension period granted in writing by the
                  Parties..

              

      

       

      
        	9.	
                Neither
                  party shall be entitled to assign its rights or obligations hereunder
                  without the express
                  written consent of the other party,

              

      

       

      
        	10.	
                Sponsor
                  has agreed to comply with the export control laws and regulations
                  of the
                  United States
                  of America in accordance with Section 11.8 of the SRA Agreement
                  University
                  additionally
                  agrees to comply with the provisions of Section 11.8 of the SRA
                  Agreement.
                  Disclosing Party shall provide the Receiving Party with sufficient
                  and
                  appropriate information (including export control classification
                  number
                  (ECCNs)) to allow
                  the Receiving Party to properly comply with the
                  regulations,

              

      

       

      
        
          
          

        

        
          Page 2
            of 3

          
            

          

        

        
          
          

        

      

       

      
        	11	
                This
                  Agreement contains the entire understanding between the parties
                  with
                  respect to the matters
                  contemplated herein and supersedes all previous written and oral
                  negotiations, commitments,
                  and understandings This Agreement cannot be altered or otherwise
                  amended
                  except pursuant to an instrument in writing signed by each of the
                  patties
                  and making
                  reference to this Agreement. This Agreement shall inure to the
                  benefit of
                  and be binding
                  upon the parties and their agents, successors, employees and permitted
                  assigns

              

      

       

      
        	12	
                A
                  valid waiver of any term or condition of this Agreement must be
                  in writing
                  and shall not
                  be deemed or construed to be a waiver of such term or condition
                  for the
                  future, or of any
                  subsequent breach. 

              

      

       

      
        	13	
                If
                  any court of competent jurisdiction holds any part of this Agreement
                  to be
                  invalid or unenforceable,
                  such holding shall in no way affect the validity of the remainder
                  of this
                  Agreement.

              

      

       

      
        	14	
                A
                  facsimile signature by any party to this Agreement shall be deemed
                  sufficient to indicate
                  acceptance of' the terms and obligations of' the
                  same.

              

      

       

      
        	15	
                The
                  validity and effect of this Agreement shall be governed, construed,
                  and
                  enforced in accordance
                  with the laws of the State of Oklahoma, United States of America,
                  without
                  regard or giving force and effect to the principles of conflicts
                  of laws
                  of Oklahoma or any
                  other state. Any action to interpret or enforce this agreement
                  shall be
                  brought in Oklahoma,

              

      

       

      
        	16	
                The
                  undersigned warrant and represent that they are duly authorized
                  to execute
                  this Agreement
                  and legally bind their respective parties to its terms and conditions
                  and
                  when fully
                  executed this Agreement constitutes the legal, valid, and binding
                  obligation of the parties

              

      

       

      WHEREPORE,
        the parties hereto have caused this Agreement to be executed by their duly
        authorized representatives as of the date first written above.

      
        	 	 	 	 	 	 
	 	3DICON
                CORPORATION 	 	
                THE
                  BOARD OF REGENTS OF THE

                UNIVERSITY
                  OF OKLAHOMA

              	 
	 	 
 	 	 
 	 
 	 
	 		 	  		 
	 	
              	 	 	
              	 
	 	Date: Nov.
                1, 2005	 	 	
                Executive
                  Director, Office

                of
                  Technology
                  Development

                Date:
                  10/12/05

              	
                 

              
	 	 	 	 	 	 
	 	 	
              	 
	 	 	
              	 

      

       

      
        
          
          

        

        
          Page 3
            of 3

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