Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT is entered into as of November 13, 2017 (“Commencement Date”), by and between Glenn Lurie (the “Executive”) and Synchronoss Technologies, Inc., a Delaware corporation (the “Company”).

 

Except as otherwise provided herein, defined terms are set forth in Section 10 below.

 

1.                                      Duties and Scope of Employment.

 

(a)                                 Position.  For the term of his employment under this Agreement (the “Employment”), the Company agrees to employ Executive in the position of Chief Executive Officer (“CEO”). Following the Commencement Date, Mr. Waldis, the former CEO will assist in the transition for up to 90 days (the “Transition Period”).  Executive shall report to the Company’s Board of Directors (the “Board”).   Executive’s principal workplace shall be in Bridgewater, New Jersey, unless otherwise agreed to by the Board.

 

(b)                                 Obligations to the Company.    During his Employment, Executive (i) shall devote substantially all of his full business efforts and time to the Company, (ii) shall not engage in any other employment, consulting or other business activity that would create a conflict of interest with the Company, (iii) shall not assist any person or entity in competing with the Company or in preparing to compete with the Company, (iv) shall comply with the Company’s policies and rules, as they may be in effect from time to time and (v) shall comply with the Proprietary Information and Inventions Agreement. This provision shall not restrict Executive’s ability to sit on non-profit boards and, subject to Board approval, at least one corporate board.

 

(c)                                  No Conflicting Obligations.  Executive represents and warrants to the Company that he is under no obligations or commitments, whether contractual or otherwise, that are inconsistent with his obligations under this Agreement.  Executive represents and warrants that he will not use or disclose, in connection with his Employment, any trade secrets or other proprietary information or intellectual property in which Executive or any other person has any right, title or interest and that his Employment will not infringe or violate the rights of any other person.  Executive represents and warrants to the Company that he has returned all property and confidential information belonging to any prior employer.

 

(d)                                 Indemnification/D&O Insurance.  To the maximum extent permitted by applicable law and the Company’s by-laws, the Company shall indemnify Executive for all acts and omissions by him and any action on his part while acting in such capacity, and for losses that arise from serving at the request of the Company or a subsidiary thereof as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.  Executive shall be covered by directors’ and officers’ liability insurance on a basis no less favorable than provided to directors and officers of the Company, including “tail” coverage.

 

(e)                                  Commencement Date. This Agreement shall govern the terms of Executive’s Employment effective as the Commencement Date through the Term (as defined in Section 5(a) below).

 

 

2.                                        Compensation

 

(a)                                 Salary.  The Company shall pay Executive as compensation for his services a base salary at a gross annual rate of not less than $750,000.00. Such salary shall be payable in accordance with the Company’s standard payroll procedures.  (The annual compensation specified in this Subsection (a), together with any increases in such compensation that the Company may grant from time to time, is referred to in this Agreement as “Base Salary.”)  The Board or its Compensation Committee shall review the Base Salary at least annually to determine whether to increase (but not decrease) the Base Salary in its discretion

 

(b)                                 Incentive Bonuses. Executive shall be eligible for an annual incentive bonus with a target amount equal to 120% of his Base Salary (the “Target Bonus”).  Executive’s bonus (if any) shall be awarded based on criteria established by the Board or its Compensation Committee.  Executive shall not be entitled to an incentive bonus for a fiscal year if he is not employed by the Company on the last day of the fiscal year for which such bonus is payable.  Any bonus for a fiscal year shall be paid within 21⁄2 months after the close of that fiscal year.   The determinations of the Board or its Compensation Committee with respect to such bonus shall be final and binding.

 

(c)                                  Equity Grants.

 

(i) New Hire Stock Grant.  Executive shall receive an initial stock grant with a target value of $5.4375 million (the “New Hire Stock Grant”). This New Hire Stock Grant will consist of one-third time-based Restricted Stock Awards (“RSAs”), one-third time-based Stock Options, and one-third Performance Shares based on performance criteria established by the Board.  The number of RSAs and target number of Performance Shares granted will be based on the stock price as of the date of the grant, and the number of Stock Options granted will be based on the Black Scholes value of the stock price as of the date of the grant. All of the foregoing is subject to the approval of the Board or its Compensation Committee. The RSAs shall vest one-third per year. One-fourth of the Stock Options shall vest after the first year, and 1/48th of the total Stock Options granted shall vest every month thereafter for three years. With respect to the Performance Shares, (i) one-half of the Performance Shares shall vest upon the approval of the Board or its Compensation Committee based upon whether the Company has met the required performance metrics for the 2018 performance period (i.e., March 2019) and (ii) the remaining 50% of the Performance Shares shall vest upon the approval of the Board or its Compensation Committee based upon whether the Company has met the required performance metrics for the 2019 performance period (i.e., March 2020).  The parameters of the 2018 and 2019 Company performance shall be determined by the Board or its Compensation Committee at the time the Company’s business plan for such period is determined.

 

(ii) Challenge Stock Grant.  Executive shall receive an equity grant of 1 million time-based shares in the form of a Stock Option as a challenge grant (the “Challenge Grant”), with the number of Stock Options granted being based on the Black Scholes value of the stock price as of the date of the grant and with an exercise price being the stock price as of the date of the grant. The Challenge Grant shall vest on the third anniversary of the issuance of the Challenge Grant and shall expire on the seventh anniversary of the date of the grant.

 

 

(iii) Annual Equity Grant.  In addition to the above equity grants, Executive shall receive an annual equity grant based on comparable equity awards provided to CEOs at Peer Group companies (as such term is defined in the Company’s annual proxy statement), which is expected to have a target value of between $5 million and $5.5 million per year.  The equity grant, including number of shares of restricted stock granted to the Executive will be based on the stock price as of the date of the grant.

 

3.                                      Paid Time Off and Employee Benefits.   During his Employment, Executive shall be eligible for paid time off in accordance with the Company’s paid time off policy, as it may be amended from time to time, with a minimum of 20 paid time off days per year (accruing for each year on the first day of such year), plus three floating holidays, and any United States Company- wide holidays; provided, however, Executive shall not be entitled to carry over any paid time off days from year to year.  During his Employment, Executive shall be eligible (i) to participate in the employee benefit plans maintained by the Company, subject in each case to the terms and conditions of the plan in question, and (ii) for those additional benefits described in the Fringe Benefits Summary letter from the Company to Executive, dated November 16, 2017 (the “Fringe Benefits Letter”).  To the extent the benefits described in the Fringe Benefits Letter are taxable to Executive, Executive shall receive a full tax gross-up payment from the Company with respect to such taxable benefit.

 

4.                                      Business Expenses.  During his Employment, Executive shall be authorized to incur necessary and reasonable travel, entertainment and other business expenses in connection with his duties hereunder.  Notwithstanding anything to the contrary herein, except to the extent any expense or reimbursement provided pursuant to this Agreement does not constitute a “deferral of compensation” within the meaning of Section 409A of the Code, (a) the amount of expenses eligible for reimbursement provided to Executive during any calendar year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided to Executive in any other calendar year, (b) the reimbursements for expenses for which Executive is entitled to be reimbursed shall be made on or before the last day of the calendar year following the calendar year in which the applicable expense is incurred and (c) the right to payment or reimbursement hereunder may not be liquidated or exchanged for any other benefit.

 

5.                                      Term of Employment.

 

(a)                                 Employment Term.  The Company hereby employs Executive to render services to the Company in the position and with the duties and responsibilities described in Section 1 for the period commencing on the Commencement Date and ending upon the earlier of (i) the date of Executive’s resignation from the Company or (ii) the date Executive’s Employment is terminated in accordance with Section 5(b) (the “Term”).

 

(b)                                 Termination of Employment.  The Company may terminate Executive’s Employment at any time and for any reason (or no reason), and with or without Cause, by giving Executive 30 days’ advance notice in writing. The Company may terminate the Executive’s employment for Cause only upon written notice to the Executive setting forth in reasonable detail the nature of the circumstances giving rise to Cause (the “Cause Notice”).  Executive may terminate his Employment by giving the Company 30 days’ advance notice in writing. The Company shall have the right at any time during such 30-day period, to relieve Executive of his offices, duties and responsibilities and place him on a paid leave-of-absence status, provided that during such notice period, Executive shall remain a full- time employee of the Company and shall continue to receive his then current salary compensation and other benefits as provided in this Agreement.

 

 

Executive’s Employment shall terminate automatically in the event of his death. The termination of Executive’s Employment shall not limit or otherwise affect his obligations under Section 7.

 

The Company may not amend the Cause Notice at any time prior to the Executive’s termination to add any additional allegations of “Cause”. In addition, If a court of competent jurisdiction later determines that the reason(s) set forth by the Company in the Cause Notice are improper or otherwise do not meet the definition of Cause set forth in this Section (the “Improper Cause Determination”), the damages to which Executive will be entitled shall be equal to at least the greater of (i) the damages flowing from the Improper Cause Determination, including, but not limited to, attorneys’ fees, costs, expenses, and prejudgment interest, or (ii) the amounts that would have been paid to Executive had Executive been terminated by the Company without Cause, plus attorneys’ fees, costs, expenses, and prejudgment interest ((i) and (ii) the “Minimum Damages Amount”).

 

(c)                                  Rights Upon Termination. Upon Executive’s termination of Employment for any reason, Executive shall be entitled to the compensation, benefits and reimbursements described in Sections 1, 2, 3, and 4 for the period preceding the effective date of such termination or otherwise accrued before such termination, including, but not limited to, any accrued, but unpaid bonus for the year preceding the year in which Executive is subject to an Involuntary Termination or termination due to death or disability.   Upon the termination of Executive’s Employment under certain circumstances, Executive may be entitled to additional severance pay benefits described in Sections 5(d), 5(e), and 6.  The payments under this Agreement shall fully discharge all responsibilities of the Company to Executive.  This Agreement shall terminate when all obligations of the parties hereunder have been satisfied.

 

(d)                                 Rights Upon Death. If Executive’s Employment ends due to death, (A) Executive’s estate shall be entitled to receive an amount equal to his target bonus for the fiscal year in which his death occurred (or, if greater, the bonus amount determined based on the applicable factors and actual performance for such fiscal year), (B) all stock options, shares of restricted stock (other than performance-related restricted stock), and other time-based equity awards granted by the Company and held by Executive at the time of his death (other than the Challenge Grant) shall accelerate and be fully vested, and (C) a pro rata portion of the Challenge Grant equal to 1 million shares times a fraction the numerator of which is the number of complete calendar months that have elapsed between the Commencement Date and the date Executive’s employment ends due to death, and the denominator of which is 36 shall accelerate and be fully vested.  All amounts under this Section 5(d) shall be paid no later than the date all regular employees are paid their bonuses, but in no event later than March 15th of the year following the year during which the Executive’s Employment ends due to death.

 

(e)                                  Rights Upon Permanent Disability.  If Executive’s Employment ends due to Permanent Disability and a Separation occurs, (I) Executive shall be entitled to receive (i) an amount equal to his Target Bonus for the fiscal year in which his Employment ended (or, if reasonably ascertainable and greater, the bonus amount determined based on the applicable factors and actual performance for such fiscal year), prorated based on the number of days he was employed by the Company during that fiscal year, and (ii) a lump sum amount equal to the product of (A) 24 and (B) the monthly amount the Company was paying on behalf of Executive and his eligible dependents with respect to the Company’s health insurance plans in which Executive and his eligible dependents were participants as of the date of Separation, and (II) (i) all stock options, shares of restricted stock (other than performance-related restricted stock) and other time-based equity awards granted by the Company and held by Executive (other than the Challenge Grant) shall accelerate and be 

 

 

fully vested as of the date of Executive’s Separation, and (ii) a pro rata portion of the Challenge Grant equal to 1 million shares times a fraction the numerator of which is the number of complete calendar months that have elapsed between the Commencement Date and the date Executive’s employment ends due to Disability, and the denominator of which is 36 shall accelerate and be fully vested. The amounts payable under this Section 5(e) shall be paid no later 50 days after Executive’s Separation, subject to Section 6(d).

 

6.                                      Termination Benefits.

 

(a)                                 Preconditions.  Any other provision of this Agreement notwithstanding, Subsections (b) and (c) below shall not apply unless Executive:

 

(i)                                     Has executed (or, with respect to Section 5(d), the executor or his estate has executed) a general release of all claims Executive (or his executor or estate) may have against the Company or persons affiliated with the Company (substantially in the form attached hereto as Exhibit A) (the “Release”);

 

(ii)                                  Complies with Executive’s obligations under Section 7 of this Agreement;

 

(iii)                               Has returned all property of the Company in Executive’s possession; and

 

(iv)                              If requested by the Board, has resigned as a member of the Board and as a member of the boards of directors of all subsidiaries of the Company, to the extent applicable.

 

Executive must execute and return the Release within the period of time set forth in the Release (the “Release Deadline”).  The Release Deadline will in no event be later than 50 days after Executive’s Separation. If Executive fails to return the Release on or before the Release Deadline or if Executive revokes the Release, then Executive will not be entitled to the benefits described in this Section 6.

 

(b)                                 Severance Pay in the Absence of a Change in Control.  If, during the Term and not at a time described in subsection (c) below, Executive is subject to an Involuntary Termination, then the Company shall pay Executive a lump sum severance payment equal to (i) two times (A) his Base Salary in effect at the time of the termination of Employment plus, (B) his average annual bonus based on the actual amounts received in the immediately preceding two years, (ii) the product of (A) 24 and (B) the monthly amount the Company was paying on behalf of Executive and his eligible dependents with respect to the Company’s health insurance plans in which Executive and his eligible dependents were participants as of the date of Separation, and (iii) all stock options, shares of restricted stock, and other equity awards granted by the Company and held by Executive at the time of the Involuntary Termination shall be credited with an additional 12 months of vesting service as of the date of the Involuntary Termination; except that if the Involuntary Termination occurs prior to the third anniversary of the date of the Challenge Grant, then the number of Stock Options of the Challenge Grant which vest shall equal to the product of (i) the number of Stock Options of the Challenge Grant originally granted and (ii) a fraction equal to (A) the number of complete calendar months that have elapsed since the Commencement Date through the date of the Involuntary Termination and (B) 36.  Acceleration of performance vested restricted stock shall be determined based on the actual achievement of pro-rated performance goals through the date of Involuntary Termination.  In the event that Executive is subject to an Involuntary Termination under this Subsection (b) within two years after commencement of employment with the Company, then in lieu of using the average bonus received in the 

 

 

immediately preceding two years for the above calculation,  such calculation shall use his Target Bonus in the year of termination if such termination under this Subsection (b) occurs in the first year of employment with the Company and the actual bonus Executive received during the first year of employment with the Company if such termination under this Subsection (b) occurs in the second year of employment with the Company.  However, the amount of the severance payment under this Subsection (b) shall be reduced by the amount of any severance pay or pay in lieu of notice that Executive receives from the Company under a federal or state statute (including, without limitation, the Worker Adjustment and Retraining Notification Act).

 

(c)                                  Severance Pay in Connection with a Change in Control.  If, during the Term and within (i) 120 days prior to or (ii) 24 months following a Change in Control, Executive is subject to an Involuntary Termination, then (i) the Company shall pay Executive a lump sum severance payment equal to (x) 2.99 times his Base Salary in effect at the time of the termination of Employment plus two times Executive’s average bonus received in the immediately preceding two years, and (y) a lump sum amount equal to the product of (A) 24 and (B) the monthly amount the Company was paying on behalf of Executive and his eligible dependents with respect to the Company’s health insurance plans in which Executive and his eligible dependents were participants as of the date of Separation, and (ii) all stock options, shares of restricted stock (other than performance-related restricted stock that is tied to performance after the Change in Control), and other equity awards granted by the Company and held by Executive shall accelerate and be fully vested as of the date of the Involuntary Termination.  In the event that Executive is subject to an Involuntary Termination under this Subsection (c) within two years after commencement of employment with the Company, then in lieu of using the average bonus received in the immediately preceding two years for the above calculation, such calculation shall use his Target Bonus in the year of the Involuntary Termination if such termination under this Subsection (c) occurs in the first year of employment with the Company and the actual bonus Executive received during the first year of employment with the Company if such termination under this Subsection (c) occurs in the second year of employment with the Company.  However, the amount of the severance payment under this Subsection (c) shall be reduced by the amount of any severance pay or pay in lieu of notice that Executive receives from the Company under a federal or state statute (including, without limitation, the Worker Adjustment and Retraining Notification Act).

 

(d)                                 Commencement of Severance Payments.  Payment of the severance pay provided for under this Agreement will be made no later than the first regularly scheduled payroll date that occurs no later than the 50th day after the date of the Executive’s Separation, but only if Executive has complied with the release and other preconditions set forth in Subsection (a) (to the extent applicable). However, if the 50-day period described in Section 6(a) spans two calendar years, then the payment will be made on the first payroll date in the second calendar year following expiration of the applicable revocation period. In the event that Executive experiences an Involuntary Termination immediately at or after a Change in Control, the Company shall work with the surviving company to ensure that any payments due to Executive under subsection (c) above be paid by the surviving Company following the closing of the Change in Control. In addition, if at any time a Good Reason arises after the Change in Control and severance is due to Executive under subsection (c), the Company shall work with the surviving company to insure that any such payments due to Executive are paid promptly after such Good Reason arises.

 

(e)                                  Section 409A.   This Agreement shall be construed consistently with the intent that all payments hereunder shall be exempt from the requirements of Section 409A of the Code by reason of the “short-term” deferral exemption or a different exemption, and, if not possible with respect to 

 

 

any  payment, then the intent shall be that such payment shall comply with the requirements of Section 409A of the Code. Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement is to be treated as a right to a series of separate payments.  If the Company determines that Executive is a “specified employee” under Section 409A(a)(2)(B)(i) of the Code at the time of his Separation, then (i) payment of any “nonqualified deferred compensation” (within the meaning of Section 409A) that is payable to Executive upon Separation shall be delayed until the first business day following (A) expiration of the six-month period measured from Executive’s Separation, or (B) the date of Executive’s death, and (ii) the installments that otherwise would have been paid prior to such date will be paid in a lump sum when such payments commence.

 

(f) If Executive’s employment terminates for any reason entitling Executive to receive separation payments and/or benefits under this Section 6, then in no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under this Section, and such amount shall not be reduced regardless of whether Executive obtains other employment or becomes self-employed.

 

7.                                      Protective Covenants.

 

(a)                                 Non—Competition.  As one of the Company’s executive and management personnel and officer, Executive has acquired extensive and valuable knowledge and confidential information concerning the business of the Company, including certain trade secrets the Company wishes to protect. Executive further acknowledges that during his employment he will have access to and knowledge of Proprietary Information. To protect the Company’s Proprietary Information, and in consideration of this Agreement, Executive agrees that during his employment with the Company and for a period of twelve (12) months after the termination of Executive’s employment with the Company for any reason, whether under this Agreement or otherwise (the “Restricted Period”), he will not without the Company’s approval (which shall not be unreasonably withheld), directly or indirectly engage in (whether as an employee, consultant, proprietor, partner, director or otherwise), have any ownership interest in, or participate in the financing, operation, management or control of, any person, firm, corporation or business that engages in a Restricted Business in a Restricted Territory.  It is agreed that ownership of (i) no more than one percent (1%) of the outstanding voting stock of a publicly traded corporation or (ii) any stock he presently owns shall not constitute a violation of this Section.

 

(b)                                 Non-Solicitation and Non-Servicing.   During his employment with the Company and continuing for a period of twelve (12) months after termination of Executive’s employment with the Company for any reason, whether under this Agreement or otherwise, Executive shall not directly or indirectly, personally or through others,

 

(i)                              attempt in any manner to solicit, persuade or induce any Client of the Company to terminate, reduce or refrain from renewing or extending its contractual or other relationship with the Company in regard to the purchase or licensing of products or services manufactured, marketed, licensed or sold by the Company, or to become a Client of or enter into any contractual or other relationship with Executive or any other individual, person or entity in regard to the purchase or license of products or services similar or identical to those manufactured, marketed or sold by the Company; or

 

(ii)                           attempt in any manner to solicit, persuade or induce any individual, person or entity which is, or at any time during Executive’s employment with the Company was, a supplier 

 

 

of any product or service to the Company or vendor of the Company (whether as a distributor, agent, employee or otherwise) to terminate, reduce or refrain from renewing or extending his, her or its contractual or other relationship with the Company; provided, however, this subparagraph (ii) shall not apply with respect to (I) during the first six (6) months after Executive’s Separation, up to two service providers of the Company who report in to Executive’s organization, were recruited by Executive and had worked with Executive in prior employment, plus Executive’s administrative assistant, and (II) during the next six (6) month period thereafter, up to two service providers of the Company who report in to Executive’s organization, were recruited by Executive and had worked with Executive in prior employment; or

 

(iii)                        render to or for any Client any services of the type rendered by the Company; or

 

(iv)                       subject to the exceptions in subparagraph (ii) above, employ as an employee or retain as a consultant any person who is then, or at any time during the preceding twelve months was, an employee of or consultant to the Company (unless the Company had terminated the employment or engagement of such employee or exclusive consultant prior to the time of the alleged prohibited conduct), or persuade, induce or attempt to persuade any employee of or consultant to the Company to leave the employ of the Company or to breach any service arrangement with the Company.

 

(c)                                  Non-Disclosure.   Executive has entered into a Proprietary Information and Inventions Agreement with the Company, which is incorporated herein by reference.

 

(d)                                 Reasonable.    Executive agrees and acknowledges that the time limitation on the restrictions in this Section 7, combined with the geographic scope, is reasonable.  Executive also acknowledges and agrees that this provision is reasonably necessary for the protection of Proprietary Information, that through his Employment he shall receive adequate consideration for any loss of opportunity associated with the provisions herein, and that these provisions provide a reasonable way of protecting the Company’s business value which will be imparted to him. If any restriction set forth in this Section 7 is found by any court of competent jurisdiction to be unenforceable because it extends for too long a period of time or over too great a range of activities or in too broad a geographic area, it shall be interpreted to extend only over the maximum period of time, range of activities or geographic area as to which it may be enforceable.

 

8.                                      Successors.

 

(a)                                 Company’s Successors.  This Agreement shall be binding upon any successor (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets.  For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets which becomes bound by this Agreement.

 

(b)                                 Employee’s Successors. This Agreement and all rights of Executive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

 

9.                                      Taxes.

 

(a)                                 Withholding Taxes.   All payments made under this Agreement shall be subject to 

 

 

reduction to reflect applicable withholding and payroll taxes or other deductions required to be withheld by law.

 

(b)                                 Tax Advice.   Executive is encouraged to obtain his own tax advice regarding his compensation from the Company.  Executive agrees that the Company does not have a duty to design its compensation policies in a manner that minimizes Executive’s tax liabilities, and Executive shall not make any claim against the Company or the Board related to tax liabilities arising from Executive’s compensation.

 

(c)                                  Parachute Taxes.  Notwithstanding anything in this Agreement to the contrary, if it shall be determined that any payment or distribution by the Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (“Total Payments”) to be made to Executive would otherwise exceed the amount (the “Safe Harbor Amount”) that could be received by Executive without the imposition of an excise tax under Section 4999 of Code, then the Total Payments shall be reduced to the Safe Harbor Amount if (and only if) the Safe Harbor Amount (net of applicable taxes) is greater than the net amount payable to Executive after taking into account any excise tax imposed under section 4999 of the Code on the Total Payments.  All determinations to be made under this subparagraph (c) shall be made by a public accounting firm selected by the Company before the date of the Change in Control (the “Accounting Firm”).  In determining whether such Benefit Limit is exceeded, the Accounting Firm shall make a reasonable determination of the value to be assigned to the restrictive covenants in effect for Executive pursuant to Section 7 of this Agreement, and the amount of his potential parachute payment under Section 280G of the Code shall be reduced by the value of those restrictive covenants and all other permissible adjustments to the extent consistent with Section 280G of the Code and the regulations thereunder. To the extent a reduction to the Total Payments is required to be made in accordance with this subparagraph (c), such reduction and/or cancellation of acceleration of equity awards shall occur in the order that provides the maximum economic benefit to Executive. In the event that acceleration of equity awards is to be reduced, such acceleration of vesting also shall be canceled in the order that provides the maximum economic benefit to Executive.  Notwithstanding the foregoing, any reduction shall be made in a manner consistent with the requirements of section 409A of the Code and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero.  All of the fees and expenses of the Accounting Firm in performing the determinations referred to in this subparagraph (c) shall be borne solely by the Company.

 

10.                               Definitions.

 

(a)                                 Cause.  For all purposes under this Agreement, “Cause” shall mean:

 

(i)                                     An intentional and unauthorized use or disclosure by Executive of the Company’s confidential information or trade secrets, which use or disclosure causes material harm to the Company;

 

(ii)                                  A material breach by Executive of any material agreement between Executive and the Company;

 

(iii)                               A material failure by Executive to comply with the Company’s written policies or rules which causes material harm to the Company;

 

 

(iv)                              Executive’s conviction of, indictment for, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any State thereof;

 

(v)                                 Executive’s gross negligence or willful misconduct which causes material harm to the Company;

 

(vi)                              A continued failure by Executive to perform reasonably assigned duties after receiving written notification of such failure from the Board (other than by reason of Executive’s physical or mental illness, incapacity or disability); or

 

(vii)                           A failure by Executive to cooperate in good faith with a governmental or internal investigation of the Company or its directors, officers or employees, if the Company has requested in writing Executive’s cooperation, and Executive has not cooperated in good faith within 5 business days.

 

With respect to subparagraphs (ii), (iii), (v), or (vi), the Company shall not have the right to terminate Executive for Cause if Executive cures the breach or failure within 30 days of the Company’s written notice to Executive of such breach or failure.

 

(b)                                 Change in Control.  For all purposes under this Agreement, “Change in Control” shall mean the occurrence of:

 

(i)                                     The acquisition, by a person or persons acting as a group, of the Company’s stock that, together with other stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the Company;

 

(ii)                                  The acquisition, during a 12-month period ending on the date of the most recent acquisition, by a person or persons acting as a group, of 30% or more of the total voting power of the Company;

 

(iii)                               The replacement of a majority of the members of the Board, during any 12-month period, by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of such appointment or election; or

 

(iv)                              The acquisition, during a 12-month period ending on the date of the most recent acquisition, by a person or persons acting as a group, of the Company’s assets having a total gross fair market value (determined without regard to any liabilities associated with such assets) of 80% or more of the total gross fair market value of all of the assets of the Company (determined without regard to any liabilities associated with such assets) immediately prior to such acquisition or acquisitions.

 

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur unless such transaction also qualifies as an event under Treas. Reg. §1.409A-3(i)(5)(v) (change in the ownership of a corporation), Treas. Reg. §1.409A-3(i)(5)(vi) (change in the effective control of a corporation), or Treas. Reg. §1.409A-3(i)(5)(vii) (change in the ownership of a substantial portion of a corporation’s assets).

 

(c)                                  Client.  For all purposes under this Agreement, “Client” shall mean (i) anyone who is a client of the Company as of, or at any time during the one-year period immediately preceding, the termination of Executive’s employment, but only if Executive had a direct relationship with, 

 

 

supervisory responsibility for or otherwise were involved with such client during Executive’s employment with the Company and (ii) any prospective client to whom the Company made a new business presentation (or similar offering of services) at any time during the one-year period immediately preceding, or six-month period immediately following, Executive’s employment termination (but only if initial discussions between the Company and such prospective client relating to the rendering of services occurred prior to the termination date, and only if Executive participated in or supervised such presentation and/or its preparation or the discussions leading up to it).

 

(d)                                 Code.  For all purposes under this Agreement, “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(e)                                  Company. For all purposes under this Agreement, “Company” shall include Synchronoss Technologies, Inc. and all of its subsidiaries and affiliates.

 

(f)                                     Good Reason.  For all purposes under this Agreement, “Good Reason” shall mean:

 

(i)                                      material diminution in Executive’s authorities, duties or responsibilities;

 

(ii)                                  relocation of Executive’s principal workplace that results in an increase to Executive’s commute by more than 50 miles;

 

(iii)                               a material reduction in the kind or level of incentive compensation or employee benefits to which Executive is entitled immediately prior to such reduction with the result that Executive’s overall compensation and benefits package is materially reduced, unless such reduction occurs solely as a result of a reduction in the kind or level of employee benefits of employees that applies for all employees of the Company or

 

(iv)                              a material breach by the Company of this Agreement.

 

A condition shall not be considered “Good Reason” unless Executive gives the Company written notice of such condition within 90 days after Executive has knowledge of such condition and the Company fails to remedy such condition (or in the case of (iv), remedy such breach) within 30 days after receiving Executive’s written notice. In addition, Executive’s resignation must occur no later than 12 months after Executive has knowledge of such condition.

 

(g)                                  Involuntary Termination.   For all purposes under this Agreement, “Involuntary Termination” shall mean either (i) the Company terminates Executive’s Employment with the Company for a reason other than death, Cause or Permanent Disability and a Separation occurs, or (ii) Executive resigns his Employment for Good Reason and a Separation occurs.

 

(h)                                 Permanent Disability.  For all purposes under this Agreement, “Permanent Disability” shall mean, in the reasonable determination by the Compensation Committee, Executive’s inability to perform the essential functions of Executive’s position, with or without reasonable accommodation, for a period of at least 180 consecutive days because of a physical or mental impairment.

 

(i)                                     Proprietary Information.   For all purposes under this Agreement, “Proprietary Information” shall mean any and all confidential and/or proprietary knowledge, data or information of the Company.  By way of illustration but not limitation, Proprietary Information includes (i) trade secrets, inventions, mask works, ideas, processes, formulas, source and object 

 

 

codes, data, programs, other works of authorship, know-how, improvements, discoveries, developments, designs and techniques; and (ii) information regarding plans for research, development, new products, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and customers; and (iii) information regarding the skills and compensation of other employees of the Company.

 

(j)                                    Restricted Business.  For all purposes under this Agreement, “Restricted Business” shall mean the design, development, marketing or sales of software, or any other process, system, product, or service marketed, sold or under development by the Company (and as of the date of Executive’s termination of employment, is expected to reach market before the end of the Restricted Period) at the time Executive’s employment with the Company ends, whether during or after the Term.

 

(k)                                 Restricted Territory. For all purposes under this Agreement, “Restricted Territory” shall mean any state, county, or locality in the United States or around the world in which the Company conducts business.

 

(l)                                       Separation.  For all purposes under this Employment Agreement, “Separation” means a “separation from service,” as defined in the regulations under Section 409A of the Code.

 

(m)                             Solicit.  For all purposes under this Agreement, “solicit” shall mean (i) active solicitation of any Client or Company employee (but not general marketing of a product, service or open position not targeted at such employee); (ii) the provision of information regarding any Client or Company employee to any third party where such information could be useful to such third party in attempting to obtain business from such Client or attempting to hire any such Company employee; (iii) participation in any meetings, discussions, or other communications with any third party regarding any Client or Company employee where the purpose or effect of such meeting, discussion or communication is to obtain business from such Client or employ such Company employee; and (iv) any other passive use of information about any Client or Company employee which has the purpose or effect of assisting a third party or causing harm to the business of the Company.

 

11.                               Miscellaneous Provisions.

 

(a)                                 Notice. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered, when delivered by FedEx with delivery charges prepaid, or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of Executive, mailed notices shall be addressed to him at the home address that he most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary.

 

(b)                                 Modifications and Waivers.  No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive).  No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

 

(c)                                  Whole Agreement.  This Agreement, the Fringe Benefits Letter, and the Proprietary 

 

 

Information and Inventions Agreement supersede and replace any prior agreements, representations or understandings (whether oral or written and whether express or implied) between Executive and the Company and constitute the complete agreement between Executive and the Company regarding the subject matter set forth herein; provided that nothing in this Agreement shall supersede an express promise made by the Company in Executive’s offer letter.

 

(d)                                 Choice of Law and Severability. This Agreement shall be interpreted in accordance with the laws of the State of New Jersey (except their provisions governing the choice of law).  If any provision of this Agreement becomes or is deemed invalid, illegal or unenforceable in any applicable jurisdiction by reason of the scope, extent or duration of its coverage, then such provision shall be deemed amended to the minimum extent necessary to conform to applicable law so as to be valid and enforceable or, if such provision cannot be so amended without materially altering the intention of the parties, then such provision shall be stricken and the remainder of this Agreement shall continue in full force and effect.  If any provision of this Agreement is rendered illegal by any present or future statute, law, ordinance or regulation (collectively the “Law”), then such provision shall be curtailed or limited only to the minimum extent necessary to bring such provision into compliance with the Law.  All the other terms and provisions of this Agreement shall continue in full force and effect without impairment or limitation.

 

(e)                                  No Assignment.  This Agreement and all rights and obligations of Executive hereunder are personal to Executive and may not be transferred or assigned by Executive at any time.  The Company may assign its rights under this Agreement to any entity that assumes the Company’s obligations hereunder in connection with any sale or transfer of all or a substantial portion of the Company’s assets to such entity.

 

(f)                                     Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

(g)                                  Survival. The rights and obligations of the parties under the provisions of this Agreement (including without limitation Section 7) shall survive, and remain binding and enforceable, notwithstanding the termination of this Agreement, the termination of Executive’s Employment hereunder or otherwise, to the extent necessary to preserve the intended benefits of such provision.

 

(h)                                 Attorneys’ Fees.  If Executive’s employment is terminated for any reason, the Company shall reimburse Executive’s attorneys’ fees incurred in connection with the negotiation and preparation of any separation and release agreement up to a maximum of $20,000.00.  The Company shall also reimburse Executive’s attorneys’ fees incurred in connection with the negotiation and preparation of this Agreement up to a maximum of $20,000.00.

 

 

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written.

 

 

	
 
    	
/s/ Glenn Lurie
    
	
 
    	
Glenn   Lurie
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SYNCHRONOSS   TECHNOLOGIES, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Stephen G. Waldis
    
	
 
    	
 
    	
Stephen   G. Waldis
    
	
 
    	
 
    	
Chief   Executive OfficerExhibit 10.1

 

BioSolar, Inc. has requested that portions of this document
be accorded confidential treatment pursuant to Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended.

 

 

EXCLUSIVE LICENSE AGREEMENT

between

North Carolina Agricultural and Technical
State University

and

BioSolar Inc.

 

This Exclusive License Agreement (“Agreement”)
is entered into this 25th day of September, 2017 (the “Effective Date”)
between North Carolina Agricultural and Technical State University having an address at 1601 East Market Street, Greensboro, North
Carolina, 27411 (“University”), and BioSolar, Inc., a corporation organized and existing under the laws of the
State of Nevada, having its place of business at 27936 Lost
Canyon Road, Suite 202, Santa Clarita, CA 91387 (“Licensee”).

 

RECITALS

 

Developing, producing, and marketing BioSolar’s
own lithium-ion batteries based on the Silicon Iron Lithium Nanocomposite for Lithium Ion Batteries is an extremely high risk proposition.
The lithium ion battery market is already saturated with large players with strong financial backings, mostly from Japan, South
Korea, and China. Therefore, BioSolar intends to focus its efforts on further developing Silicon Iron Lithium Nanocomposite material
technology that may significantly improve existing and upcoming lithium-ion batteries based on silicon anode materials. BioSolar
would like to work with silicon anode material providers to improve their battery performance using the additive portion of the
technology licensed from University.

 

WITNESSETH

 

WHEREAS, University owns and controls a
valuable invention known as “Silicon Iron Lithium Nanocomposite for Lithium Ion Batteries” (the “Invention”),
University file JSNN0018 0117, and as generally disclosed the provisional patent application
U.S. Serial No. 62/473,772: entitled "Silicon Iron Lithium Nanocomposite for Lithium Ion Batteries” filed 3/20/2017;
and

 

WHEREAS, the Invention was developed by
Dr. Sungjin Cho (“Inventor”) while an employee of University; and

 

WHEREAS, University exclusively owns all
right, title and interest in the Invention and the Patent Rights; and

 

WHEREAS, University desires to license
its rights in the Invention, including its Patent Rights, in a manner that will benefit the public and best facilitate the distribution
of useful products and the utilization of new processes; and

 

WHEREAS, Licensee desires to obtain a license
to use the Invention and Patent Rights as herein provided and commits to using its commercially reasonable efforts to develop and
commercialize products and processes based upon or embodying said Invention and Patent Rights under the terms and conditions set
forth herein.

 

    	CONFIDENTIAL Exclusive License: NC A&T / BioSolar	Page 1

     

    

 

NOW, THEREFORE, in consideration of the
premises and mutual promises and covenants contained in this Agreement and for good and valuable consideration, it is agreed by
and between University and Licensee as follows:

 

ARTICLE 1: DEFINITIONS

 

1.1 “Affiliate”
means every entity, which directly or indirectly, or through one or more intermediaries, controls, is controlled by, or is under
common control with Licensee. An entity is deemed to be in control of another corporation or entity if (a) it owns or directly
or indirectly controls at least 51% of the voting stock of the other corporation or (b) in the absence of ownership of at least
51% of the voting stock of a corporation, or in the case of a non-corporate entity, if it possesses directly or indirectly, the
power to direct or cause the direction of the management and policies of such entity.

 

1.2 “Asset Sale” shall
have the meaning set forth in Section 1.12.

 

1.3 “Combination
Product” means any product comprised of a combination of (i) a Licensed Product and (ii) any component(s), device(s),
or other technology(ies) for which rights are not included in the license granted under this Agreement but, with respect to the
item(s) in (ii), which may each or collectively form the basis for a separately saleable product (an “Independent Subproduct”).

 

1.4 “Confidential
Information” means any information disclosed by one party to the other party which is identified as confidential at the
time of disclosure, including information consisting of data, research results, technology, software, materials, patents, copyrighted
works, know-how, business or product plans, or marketing, sales or other financial information; Progress Reports and Royalty Reports.

 

1.5 “Existing
Patent Rights” means Patent Rights as of the Effective Date listed in Appendix A, which shall be amended from
time to time to indicate the then current Patent Rights.

 

1.6 “Independent
Subproduct” shall have the meaning set forth in Section 1.3.

 

1.7 “Initial
Public Offering” means the effective date of a registration statement for the first sale of Licensee’s common stock
in a firm commitment underwritten public offering registered under the Securities Act of 1933, as amended.

 

1.8 “Licensed Field”
means, and is limited to, the practice of the Patent Rights for lithium ion batteries.

 

1.9 “Licensed
Product Data” means data, including experimental data, owned or controlled by Licensee relating to a given Licensed Product
and which is generated following the Effective Date.

 

1.10 “Licensed
Products” means any method or process, composition, product, or component part which uses, practices or incorporates
one or more of the valid Claims of the Patent Rights.

 

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1.11 “Licensed Territory”
means world-wide.

 

1.12 “Liquidation
Event” means a (i) a merger, share exchange or other reorganization (“Merger”), (ii) the sale
by one or more stockholders of a majority of the voting power of the Licensee (“Stock Sale”) or (iii) a sale
of all or substantially all of the assets of the Licensee (or that portion of its assets related to the subject matter of this
Agreement) (“Asset Sale”) in which for (i), (ii), and (iii) above, the stockholders of the Licensee prior to
such transaction do not own a majority of the voting power of the acquiring, surviving or successor entity, as the case may be.
Notwithstanding the foregoing, a Liquidation Event shall not include a bona fide financing transaction in which voting control
of the Licensee transfers to one or more persons or entities who acquire shares of Licensee capital stock from Licensee in exchange
for either an investment in Licensee or the cancellation of indebtedness owed by Licensee, or a combination thereof.

 

1.13 “Merger”
shall have the meaning set forth in Section 1.12.

 

1.14 “Net
Sales” means the total gross amount invoiced by Licensee or Affiliates for the sale of Licensed Products sold by Licensee
or Affiliates to third parties less (a) sales taxes or other taxes (other than income taxes), (b) shipping and insurance charges,
(c) actual allowances, rebates, credits, or refunds for returned or defective goods, (d) trade, quantity, and other discounts,
retroactive price reductions, or other allowances actually allowed or granted from the billed amount and taken, (e) rebates, credits,
and chargeback payments (or the equivalent thereof) granted for products using the Invention to wholesalers, or to federal, state/provincial,
local and other governments, including their agencies, purchasers, and/or reimbursers, or to trade customers, and (f) any import
or export duties, tariffs, or similar charges incurred with respect to the import or export of Licensed Products into or out of
any country in the Licensed Territory. Licensed Products will be considered sold when paid for. Notwithstanding the foregoing,
Net Sales shall not include, and shall be deemed zero with respect to, (i) the distribution of reasonable quantities of promotional
samples of Licensed Products, (ii) Licensed Products provided for research purposes or charitable or compassionate use purposes,
or (iii) Licensed Products provided to a Sublicensee under an agreement in which Licensee (or an Affiliate) shall be receiving
royalties or other consideration upon which Licensee must pay certain amounts to University under Section 3.6.

 

In the case of discounts on “bundles”
of separate products or services which include Licensed Products, Licensee or Affiliates may discount the bona fide list
price of a Licensed Product by the average percentage discount of all products of Licensee and/or Affiliates in a particular “bundle”,
calculated as follows:

 

Average percentage discount on
a particular “bundle” = [1 - (X/Y)] x 100];

 

where X equals the total discounted
price of a particular “bundle” of products, and Y equals the sum of the undiscounted bona fide list prices of
each unit of every product in such “bundle”. Licensee (or Affiliates) shall provide University documentation reasonably
supporting such average discount with respect to each “bundle.” If a Licensed Product in a “bundle” is
not sold separately, and no bona fide list price exists for such Licensed Product, Licensee and University shall negotiate
in good faith a reasonable imputed list price for such Licensed Product and Net Sales with respect thereto shall be based on such
imputed list price.

 

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1.15 “Patent
Rights” means (i) any United States, foreign or international patents and/or patent applications covering the Invention
(or its use or manufacture) owned or controlled by University as of the Effective Date or during the term of this Agreement, including,
without limitation the Existing Patent Rights, (ii) any continuations, continuations-in-part, divisionals, provisionals, continued
prosecution applications, substitutions, extensions and term restorations, registrations, confirmations, re-examinations, renewals,
or reissues of any of the foregoing, and (iii) any foreign counterpart of any of the foregoing, provided that, to the extent any
continuations-in-part claim technology that is patentably distinct from the subject matter described in, claimed by, or enabled
by the Existing Patent Rights, such continuations-in-part shall only be included in Patent Rights to the extent University has
the right to provide such rights to Licensee.

 

1.16 “Progress
Report” means a written report summarizing Licensee’s material technical and other efforts made towards first commercial
sale for all Licensed Products under development. Such reports shall include, without limitation, reasonably detailed summaries
of (i) development and commercialization of Licensed Products, (ii) collaborations with third parties and sublicensing efforts
relevant to Licensed Products, (iii) progress toward completing milestones described in Appendix B, (iv) key management
changes, (vi) summary of any payments due under Article 3, and (vii) any other company information which may materially impact
Licensee’s ability to develop Licensed Product.

 

1.17 “Royalty
Report” means a written report detailing the number, description, aggregate selling prices, and Net Sales of Licensed
Products (and a listing of the pertinent Patent Rights where the Licensed Product is comprised of a subset of the Patent Rights)
sold or otherwise disposed of in each calendar quarter upon which royalty is payable, the amount of Sublicensing Royalty Revenue
received during each calendar quarter, and the royalty payment amounts due under Sections 3.4 and 3.6.

 

1.18 “Stock Sale” shall
have the meaning set forth in Section 1.12.

 

1.19 “Sublicensee”
means any third party to whom rights are granted by Licensee (or an Affiliate) with respect to the Patent Rights. “Sublicensee”
shall also include any third party to whom such rights are granted through further sublicense by a Sublicensee.

 

1.20 “Sublicensing
Revenue” means any consideration actually received by Licensee or an Affiliate from a third party as consideration for
the grant of rights to Patent Rights (net of any tax or similar withholding obligations imposed by any tax or other government
authority(ies) that are not recovered by Licensee). Sublicensing Revenue includes, but is not limited to, upfront fees, license
maintenance fees, and milestone payments, or other payments, including the fair market value of any non-cash consideration, received
by Licensee in consideration for any rights granted to Patent Rights under a sublicense agreement, and excludes (i) Sublicensing
Royalty Revenue, (ii) purchases of equity or debt of Licensee or any Affiliate, (iii) fair market value payments made in connection
with research and development agreements, joint ventures, partnerships or collaboration agreements where Licensee or an Affiliate
is obligated to perform research and development of any Licensed Product(s), (iv) the grant to Licensee of intellectual property
rights related to the technology described in the Patent Rights, and (v) other payments made by a Sublicensee as consideration
for Licensee’s or an Affiliate’s performance of services or provision of goods, provided such services or goods are
not Licensed Products or, if such services or goods are Licensed Products, (a) the provision of such services or goods results
in Net Sales pursuant to which a royalty is payable under Section 3.4 or (b) the provision of such services or goods constitutes
one or more of the following: (1) the distribution of reasonable quantities of promotional samples of Licensed Products or (2) the
provision of Licensed Products for research purposes or charitable or compassionate use purposes.

 

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1.21 “Sublicensing
Royalty Revenue” means sales-based royalties, sales milestone payments, other payments calculated on the basis of sales,
and minimum sales royalties actually received by Licensee or its Affiliate from a third party as consideration for the grant of
rights to Patent Rights (net of any tax or similar withholding obligations imposed by any tax or other government authority(ies)
that are not reasonably recoverable by Licensee).

 

1.22 “Third
Party Royalties” means any royalties Licensee owes to one or more third parties pursuant to one or more licenses to intellectual
property rights entered into by Licensee to avoid infringement of such rights by the practice of the Patent Rights in the manufacture,
use, or sale of any Licensed Product, or to avoid infringement-related litigation with respect to the practice of the Patent Rights,
as determined by Licensee in its reasonable discretion.

 

1.23. “University
Improvement” means any advancement, further development or improvement of a Licensed Product or the Patent Rights; provided
that: (a) the practice of such invention would necessarily infringe at least one claim within the Patent Rights in the Licensed
Field, (b) improvements are limited to those for which Sungjin Cho, Ph.D. (i) is listed as the inventor or co-inventor and
(ii) provides notice to the University’s Office of Technology Transfer; and (c) an undivided interest in such invention and
related patent rights is solely owned or controlled by the University (i.e., such invention is not subject to any rights of any
third party).

 

1.24 “Valid
Claim” means a claim of any pending patent application included in the Patent Rights or a claim in an issued, unexpired
patent included in the Patent Rights that has not been dedicated to the public, disclaimed, abandoned, or held invalid or unenforceable
by a court or other body of competent jurisdiction from which no further appeal can be taken, and that has not been explicitly
disclaimed, or admitted by University in writing to be invalid or unenforceable or of a scope not covering Licensed Products through
reissue, disclaimer or otherwise.

 

1.25 Other
Definitional Provisions.

 

(i) The words “hereof”,
“herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement, and section, schedule and exhibit references are to this Agreement
unless otherwise specified. The meaning of defined terms shall be equally applicable to the singular and plural forms of the defined
terms. The term “including” is not limiting and means “including without limitation”.

 

(ii) In the computation of periods
of time from a specified date to a later specified date, the word “from” means “from and including”; the
words “to” and “until” each mean “to but excluding,” and the word “through” means
“to and including.”

 

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(iii) References to agreements
and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only
to the extent such amendments and other modifications are not prohibited by the terms of this Agreement.

 

(iv) References to statutes or
regulations are to be construed as including all statutory and regulatory provisions consolidating, amending or replacing the statute
or regulation.

 

(v) The captions and headings
of this Agreement are for convenience of reference only and shall not affect the construction of this Agreement.

 

1.26 “Licensee
Improvement” means any advancement, further development or improvement of a Licensed Product or the Patent Rights;
provided that: (a) the practice of such invention would necessarily infringe at least one claim within the Patent Rights in
the Licensed Field, (b) the improvement(s) are a product of efforts and resources which Licensee, either individually or in
collaboration with third party(ies), has substantially, if not entirely, contributed. Licensee shall provide notice to
the University’s Office of Technology Transfer of such improvement(s); and (c) Licensee shall hold an undivided
interest in such improvement(s), with the invention and related patent rights, so, improved, being owned or controlled by the
Licensee together with such third party(ies) whom Licensee identifies as collaborator(s) in that regard. Licensee shall be
entitled to continue to utilize and otherwise exploit such improvements as a part of the license grant for the term of this
Agreement.

 

ARTICLE 2: GRANT OF LICENSE

 

2.1 Grant to Licensee. University
hereby grants to Licensee and Affiliates to the extent of the Licensed Territory an exclusive license under the Patent Rights to
make, use, sell, have made, have sold, offer for sale and import Licensed Products in the Licensed Field, with the right to sublicense
as set forth in Article 6, subject to all the terms and conditions of this Agreement.

 

2.2 Reservation of University Rights.
University reserves the rights to practice under the Patent Rights for its own internal research, public service, teaching and
educational purposes, without payment of royalties, provided that the exercise of such reserved rights by University shall not
be subject to any intellectual property rights granted to any commercial third party, such approval not to be unreasonably withheld.
University shall also retain the rights: (i) to make, use and provide Licensed Products to other academic and nonprofit research
institutions for their own internal research, public service, teaching and educational purposes and (ii) to allow other academic
and nonprofit research institutions to use Patent Rights for educational and research purposes, provided that University shall
require of such third parties that the use of such Licensed Products or practice of the Patent Rights shall not be subject to any
intellectual property rights granted to any commercial third party.

 

2.3 No
Implied Rights. Licensee shall obtain no implied license rights to the Patent Rights. Any rights not expressly granted to Licensee
shall be retained by University.

 

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ARTICLE 3: CONSIDERATION

 

3.1 Upfront
Payment. Within thirty (30) days after the Effective Date, Licensee shall pay to University a one-time, non-refundable license
fee in the sum of Fifteen Thousand Dollars (US $15,000.00).

 

3.2 Patent
Expenses Incurred Prior to the Effective Date. Licensee shall reimburse University for all reasonable, documented patent expenses
associated with the preparation, filing, prosecuting, issuance and maintenance of the Existing Patent Rights incurred by University
prior to the Effective Date (the “Reimbursement Amount”). Specifically, the Licensee shall reimburse the University
One Hundred and Thirty Dollars (US $130)

 

3.3 Patent
Expenses Incurred On and After the Effective Date. As of the Effective Date and during the term of this Agreement, Licensee
shall bear the costs of preparation, filing, prosecution, issuance and maintenance of all patent applications and patents within
the Patent Rights as set forth in Section 8. Said amounts for on-going patent expenses shall be paid to University within sixty
(60) days of Licensee’s receipt of an invoice from University; such invoices shall be sent to Licensee on a quarterly basis.
After that date, an interest of 6% per year will be applied to all patent costs that have not been reimbursed. Notwithstanding
the foregoing, if University grants any third party (other than governmental or nonprofit entities as provided for in Section 2.2)
a license to any patent or patent application included within the Patent Rights, Licensee’s obligation to bear ongoing patent
costs shall be reduced by a pro rata amount, based on the number of University licensees having rights with respect to such
patent or patent application (e.g. if University has granted rights to a total of two parties with respect to a particular patent
or patent application (including Licensee), Licensee shall only be obligated to reimburse University with respect to 50% of the
relevant patent costs).

 

3.4  Earned Royalty. During
the term of this Agreement, Licensee shall pay University a royalty of [***] on the Net Sales for Licensed Products sold
by Licensee or Affiliates to third parties. Such payments shall be due within thirty (30) days after each anniversary of the Effective
Date following the first commercial sale of a Licensed Product in the Licensed Territory in the Licensed Field.

 

If this license is converted to a non-exclusive
license and if other non-exclusive licenses are granted having the same terms and conditions as the converted non-exclusive license,
then the above royalty rate will not exceed the royalty rate being paid by other licensees during the term of the non-exclusive
license. On sales between Licensee and Affiliates for resale, the royalty shall be paid on the resale.

 

3.5 Minimum
Royalty Fee. Licensee shall pay a Minimum Royalty Fee to the University in the amount of [***] per year to be paid no later
than 30 days after each anniversary of the Effective Date. After the first commercial sale of a Licensed Product, the aforementioned
Minimum Royalty Fees owed to University after such first commercial sale of Licensed Product
shall be creditable towards payments owed to University pursuant to Section 3.4 (Earned Royalty), Section 3.6(i) (Sublicensing
Revenue), and Section 3.6(ii) (Sublicensing Royalty Revenue) in any given year.

 

3.6 Sublicense Fees. In respect
to sublicenses granted by Licensee under Article 6,

 

(i) Licensee shall pay
University, within thirty (30) days of receipt by Licensee, [***] of any Sublicensing Revenue.

 

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(ii) Licensee shall
pay to University an amount equal to [***] of Sublicensing Royalty Revenue provided that, notwithstanding the foregoing, the total
payment due University under this Section 3.6(ii) with respect to Sublicensing Royalty Revenue received from a Sublicensee during
any particular time period shall not, in any event, exceed an amount equal to the royalties that would have been due to University
with respect to the Licensed Products sold by such Sublicensee generating such Sublicensing Royalty Revenue had Licensee itself
sold such Licensed Products, based on such Sublicensee’s net sales of such Licensed Products (determined in a manner substantially
similar to the manner in which Net Sales are determined under this Agreement for Licensee’s sales of Licensed Products) and
calculated in a manner consistent with Sections 3.4, 3.7, 3.8, and 3.9. Any such payments shall be made concurrently with the submission
of Royalty Reports as set forth in Section 4.2.

 

Licensee shall not sell or transfer to
a third party Licensee’s interest in all or a portion of any future Sublicensing Revenue and/or Sublicensing Royalty Revenue
under such sublicense agreement(s) in exchange for a single cash payment or series of cash payments (the “Exchange Consideration”)
without the prior written approval of University, such approval not to be unreasonably withheld. In the event that University approves
such sale or transfer, (a) the portion of any Exchange Consideration reasonably allocated by Licensee to the value of its interest
in such future Sublicensing Revenue shall be treated as Sublicensing Revenue for purposes of this Section 3.6 and (b) the portion
of any such Exchange Consideration reasonably allocated by Licensee to the value of its interest in such future Sublicensing Royalty
Revenue shall be treated as Sublicensing Royalty Revenue for purposes of this Section 3.6. For the avoidance of doubt, to the extent
Exchange Consideration has been allocated to the value of Licensee’s interest in future Sublicensing Revenue or Sublicensing
Royalty Revenue, any such Sublicensing Revenue or Sublicensing Royalty Revenue shall thereafter not be included within the definitions
of Sublicensing Revenue or Sublicensing Royalty Revenue originally established in Article 1.

 

3.7 Royalty
Stacking. In the event that Licensee is required to pay Third Party Royalties, then Licensee may deduct an amount equal to
fifty percent (50%) of any Third Party Royalties from any royalty amounts due University hereunder, provided that in no event shall
the royalties otherwise due University be less than fifty percent (50%) of the royalties that would be payable to University absent
the effects of this Section 3.7. In the event that University does not own all right, title, and interest in the Patent Rights,
and Licensee obtains, by license(s), assignment(s), or otherwise, rights to any third party(ies)’ interest(s) in such patent
applications or patents, any amounts paid by Licensee to such third party(ies) to obtain any rights in any third party interest(s)
in such Patent Rights shall be treated as Third Party Royalties.

 

3.8 Combination
Product. If a Licensed Product is sold as part of a Combination Product, Net Sales shall be calculated by multiplying Net Sales
for such Combination Product by the fraction A/(A+B) where A is the invoice price of the Licensed Product when sold separately,
and B is the aggregate invoice price of the Independent Subproduct(s) in the combination when sold separately. If either the Licensed
Product or the Independent Subproduct(s) is (are) not at that time sold separately, than the allocation of Net Sales shall be commercially
reasonable and determined by good faith negotiation between University and Licensee, based on the relative value of the Licensed
Product and Independent Subproduct(s), consistent with the formula provided above.

 

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3.9 Compulsory
Licensing. Should a compulsory license be granted, or be the subject of a possible grant, by Licensee or an Affiliate to a
third party under the applicable laws, rules, regulations, guidelines, or other directives of any governmental or supranational
agency in the Licensed Territory under the Patent Rights, Licensee shall notify University, including any material information
concerning such compulsory license, and the running royalty rates payable under Section 3.4 for sales of Licensed Products in such
country will be adjusted to equal any lower royalty rate granted to such third party for such country with respect to the sales
of such Licensed Products therein (the “Compulsory Royalty”).

 

3.10 Payment.
All fees, royalties, and other payments due to University under this Agreement shall be made in United States Dollars. If any currency
conversion shall be required in connection with the payment of royalties hereunder, such conversion shall be made using the exchange
rate published in the Wall Street Journal on the last business day of the calendar quarterly reporting period to which such royalty
payments relate. If payments are made by check, check shall be made to “North Carolina Agricultural and Technical State University,
Division of Research and Economic Development” at the University address pursuant to Section 13.6. All incoming checks shall
specify “Office of Technology Transfer and NC A&T Ref. No. JSNN0018 0117. Instructions for wire or electronic funds transfer
will be provided upon request of Licensee.

 

3.11 Late
Payment. In the event royalty payments or fees are not received by University when due, Licensee shall pay to University default
interest on such unpaid amount at a rate equal to interest and charges at the lower of (a) the then-current prime lending rate
as published by the American East Coast edition of the Wall Street Journal or (b) the maximum rate of interest allowed by law on
the total royalties or fees overdue.

 

3.12 Default
Payment. In the event of default in payment of any payment owing to University under the terms of this Agreement, a
"cure" period not to exceed 60 days will commence. If it becomes necessary for University
to undertake legal action to collect said payment, each party is responsible for legal expenses in
connection therewith.

 

ARTICLE 4: REPORTS AND RECORDS

 

4.1 Licensee
shall submit a Progress Report on or before March 15th of each calendar year after the Effective Date and continuing throughout
the life of this Agreement. Progress Reports are subject to the confidentiality obligations of Article 12.

 

4.2 Licensee
shall submit Royalty Reports beginning the quarter during which the first commercial sale of Licensed Product is made and continuing
throughout the term of this Agreement according to the following schedule:

 

	Reporting
    Quarter	 	Report
    Due Date
	1st
    Quarter (January, February, March)	 	May
    15th
	2nd
    Quarter(April, May, June)	 	August
    15th
	3rd
    Quarter (July, August, September)	 	November
    15th
	4th
    Quarter (October, November, December)	 	February
    15th (following calendar year)

 

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4.3 Licensee
shall keep complete, true and accurate books of account and records for the purpose of showing the derivation of all amounts payable
to University under this Agreement. Such books and records shall be kept at Licensee’s principal place of business during
the term of this Agreement and for three (3) years from the date of the last sale of Licensed Product, and shall be open at all
reasonable times for inspection by a representative of University for the purpose of verifying Licensee’s royalty statements
or Licensee’s compliance in other respects with this Agreement, but in no event no more than once per calendar year. The
University representative shall be obliged to treat as confidential all relevant matters.

 

4.4 Inspections
made under Section 4.3 shall be at the expense of University, unless an underpayment to University under this Agreement exceeding
the greater of (i) Five Thousand Dollars ($5,000) or (ii) five percent (5%) of the amount properly due with respect to the audited
period is discovered in the course of any such inspection, whereupon all reasonable, documented costs relating thereto shall be
paid by Licensee. Licensee shall promptly pay to University the full amount of any such underpayment, together with interest thereon
as specified in Section 3.11.

 

ARTICLE 5: DUE DILIGENCE

 

5.1 Licensee
shall use commercially reasonable efforts to develop and commercialize Licensed Products in the Licensed Territory, which shall
include production of Licensed Products for testing and development, governmental approval where applicable, and sale. The acts
of Affiliates, Sublicensees, and third party contractors shall be deemed the acts of Licensee for purposes of satisfying this Section
5.1.

 

5.2 Licensee shall strive to achieve the
milestones set forth in Appendix B, attached hereto and incorporated herein, on the time frames indicated therein. The
parties acknowledge that the dates or timelines outlined or established for the achievement of such milestones assume that Licensed
Products do not encounter delays for reasons outside of Licensee’s reasonable control. Licensee and University shall negotiate
in good faith the extension of these dates in the event any matters outside of Licensee’s reasonable control adversely affect
achievement of any stated milestones by the dates or timelines outlined or established therefor. University’s sole and exclusive
remedy with respect to Licensee’s breach of this Article 5 shall be its right to evaluate the license for termination of
this Agreement in accordance with Section 7.3.

 

ARTICLE 6: SUBLICENSING 

 

6.1 Licensee
may sublicense any and all rights licensed hereunder, with such rights including the right to permit Sublicensees to further sublicense
such rights. Licensee shall notify University in writing and provide University with a copy of each sublicense agreement entered
into by Licensee granting Sublicensee rights to any and all rights licensed hereunder and each amendment thereto within thirty
(30) days after their execution.

 

6.2 Licensee
shall not grant sublicenses to the rights granted hereunder for no consideration or solely in exchange for the grant to Licensee
of intellectual property rights unrelated to the technology described in the Patent Rights.

 

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6.3  Licensee
shall require that any agreement granting a third party rights to the Patent Rights:

 

(i) be consistent with the terms,
conditions and limitations of this Agreement;

 

(ii) contain an acknowledgment
by the Sublicensee of University’s disclaimer of warranty and limitation on University’s liability substantially similar
to those provided by Sections 10.1 and 10.3 below;

 

(iii) shall require Sublicensee
to indemnify University with respect to such Sublicensee’s exercise of its rights under the Patent Rights in a manner substantially
similar to the manner in which Licensee has agreed to indemnify University under Section 11.2;

 

(iv) comply with Sections 2.2,
13.11 and 13.12 of this Agreement.

 

If any sublicense agreement granting
any rights to the Patent Rights does not comport with above requirements, then that agreement shall be invalid and unenforceable.

 

6.4  University
agrees that, to the extent (i) provided for in each sublicense granted under this Agreement and (ii) if such sublicense does not
impose any obligations on University in excess of those imposed on University herein, all sublicenses granted with respect to the
rights granted under this Agreement shall survive termination of this Agreement and will automatically be assigned to University
upon such termination, in order to provide for the applicable Sublicensee’s continued enjoyment of its rights thereunder.

 

6.5  Licensee
shall be responsible to University for the performance of its Sublicensees under each sublicense agreement granting rights to any
Patent Rights.

 

ARTICLE 7: TERM AND TERMINATION

 

7.1  Unless
earlier terminated in accordance with this Agreement, the term of this Agreement shall commence on the Effective Date and shall
expire on a country-by-country and Licensed Product-by-Licensed Product basis, at the expiration of the last to expire Valid Claim
included in the Patent Rights covering a particular Licensed Product in a particular country.

 

7.2  University may, by written notice to Licensee, terminate
this Agreement during any April after the one year anniversary of the Effective Date, if Licensee, its Affiliates, Sublicensees,
or any contractors of any of the foregoing have not practiced the Invention during the calendar year which precedes such April.

 

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7.3  It
is expressly agreed that, notwithstanding the provisions of any other paragraph of this Agreement, if Licensee should materially
breach this Agreement and fail to cure any such breach within sixty (60) days of receipt of written notice from University describing
such breach, University has the right to terminate this Agreement. A material breach is a material violation of or material failure
to keep or perform any covenant, condition, or undertaking of this Agreement, including, but not limited to Licensee’s:

 

(i) failure to deliver to University
any payment at the time or times that such payment is due to University under this Agreement;

 

(ii) failure to provide Progress
Reports and Royalty Reports as set forth in Article 4;

 

(iii) failure to meet or achieve
performance milestones as set forth in Appendix B or amendments thereto, which have been agreed to in writing by both Parties;

 

(iv) execution of a sublicense
that fails to comport with Section 6.3;

 

(v) failure to possess and failure
to maintain insurance as set forth in Section 11.3; or

 

(vi) failure to comply with the
requirements of Section 3.1.

 

7.4  Licensee
may terminate this Agreement at any time upon giving written notice of not less than thirty (30) days to University.

 

7.5  Upon
termination of this Agreement (in whole or in part):

 

(i) Licensee shall provide University
with a written inventory of all Licensed Products in the possession or under the control of Licensee (including any in the process
of manufacture). Except with respect to termination for uncured material breach pursuant to Section 7.3, Licensee shall have the
privilege of disposing of the inventory of such Licensed Products within a period of one hundred and eighty (180) days of such
termination upon conditions most favorable to University that Licensee can reasonably obtain.

 

(ii) Licensee shall also have
the right to complete performance of all contracts requiring use of Patent Rights for sale of Licensed Products (except in the
case of termination for uncured material breach pursuant to Section 7.3) or Licensed Products within and beyond said period of
one hundred and eighty (180) days, provided that Licensee’s right to continue performance under any such contract shall not
exceed one year. All Licensed Products in the possession or under the control of Licensee (including any in the process of manufacture)
which are not disposed of as provided above shall, to the extent permitted by applicable law, be delivered to University or otherwise
disposed of in compliance with all applicable laws, in University’s reasonable discretion, and at Licensee’s sole expense.

 

(iii) A copy of all Licensed Product
Data must be provided to University within forty-five (45) days of such termination. All Licensed Product Data shall remain the
Confidential Information of Licensee, subject to the protections of Article 12. Licensee shall, subject to any rights any Sublicensees
or other third parties may have with respect to any of the foregoing that survive such termination, grant to University a right
for University to access and to refer to all Licensed Product Data, and to provide a copy thereof to potential licensees of University
(under conditions of confidentiality consistent with Article 12), solely for use in University’s efforts to license the Patent
Rights to any third party; University shall not be entitled to license, grant, or transfer to any third party any rights in such
Licensed Product Data. In the event University agrees in writing to material economic terms with a third party concerning the grant
of a license to such third party under the Patent Rights formerly licensed to Licensee hereunder, University shall provide written
notice thereof to Licensee and Licensee shall enter into good faith negotiations with such third party concerning the granting
of rights to, or transfer of title in, the Licensed Product Data to such third party on commercially reasonable terms, subject
to any rights any Sublicensees or other third parties may have with respect to any of the foregoing that survive termination of
this Agreement.

 

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7.6  Any
termination or cancellation under any provision of this Agreement shall not relieve Licensee of its obligation to pay any royalty
or other fees (including attorney’s fees pursuant to Section 8.1 below) due to University at the time of such termination
or cancellation.

 

ARTICLE 8: PATENT PROSECUTION AND MAINTENANCE

 

8.1
 Patent Filings, Prosecution and Maintenance. Patent filings and prosecution of the Patent Rights shall be by counsel
of University’s choosing and shall be in the name of University. University shall keep Licensee advised as to the prosecution
of such applications by promptly forwarding to Licensee copies of all official correspondence, (including, but not limited to,
applications, Office Actions, responses, etc.) relating thereto. Licensee shall have the right,
and University shall provide Licensee a reasonable opportunity, to comment and advise University as to the conduct of such prosecution
and maintenance, provided, however, that University shall have the right to make the final decisions for all matters associated
with such prosecution and patent maintenance.

 

8.2  Foreign Applications.
Regarding prosecution and maintenance of foreign patent applications of the Patent Rights, Licensee shall designate in writing
that country or those countries, if any, in which Licensee desires such corresponding patent application(s) to be filed. All such
applications shall be in University’s name. 

 

8.3  Abandonment.
By written notification to University at least thirty (30) days in advance of any filing or response deadline, or fee due date,
Licensee may elect not to have a patent application filed in any particular country or not to pay expenses associated with prosecuting
or maintaining any patent application or patent, provided that Licensee pays for all costs incurred up to University’s receipt
of such notification. Failure to provide any notification shall be considered by University to be Licensee’s notice that
it expressly wishes to support any particular patent(s) or patent application(s). Upon notice that Licensee elects not to have
a patent application filed or patent maintained in any particular country, or not to pay expenses associated with prosecuting or
maintaining any patent application or patent, University may at its sole discretion file, prosecute, or maintain such patent applications
or patents at its own expense and for its own benefit, and any rights or license granted hereunder held by Licensee, Affiliates,
or Sublicensee(s) to such patent application(s) or patent(s) shall terminate and the parties shall amend Appendix A to reflect
the then current Patent Rights.

 

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8.4 All Improvements conceived or reduced
to practice solely by a party during the term of this Agreement shall be the exclusive property of such party. In the case of a
University Improvement, University shall provide to Licensee a 6 (six) month option, commencing with the notice of such Improvement,
at Licensee’s sole selection for (i) a non-exclusive, royalty-free non-transferable, non-commercial research license for
internal use or (ii) a royalty bearing, limited term exclusive license for University Improvements.

 

ARTICLE 9: INFRINGEMENT

 

9.1  If
any third-party claims patent infringement against Licensee, as result of Licensee’s use of the Patent Rights, then Licensee
shall promptly notify University thereof in writing, setting forth the facts of such claim in reasonable detail. As between the
parties to this Agreement, Licensee shall have the first and primary right and responsibility at its own expense to defend and
control the defense of any such claim against Licensee, by counsel of its own choice. Licensee shall be free to enter into a settlement,
consent judgment, or other voluntary disposition of any such claim, provided that any settlement, consent judgment or other voluntary
disposition of any such claim which (i) materially limits the scope, validity, or enforceability of patents included in the Patent
Rights or (ii) admits fault or wrongdoing on the part of University must be approved by University, such approval, if warranted,
not being unreasonably withheld. Licensee’s request for such approval shall include complete copies of final settlement documents,
a detailed summary of such settlement, and any other information material to such settlement. University shall provide Licensee
notice of its approval or denial within fifteen (15) business days of any request for such approval by Licensee, provided that

 

(i) in the event University wishes
to deny such approval, such notice shall include a detailed written description of University’s reasonable objections to
the proposed settlement, consent judgment, or other voluntary disposition, and

 

(ii) University shall be deemed
to have approved of such proposed settlement, consent judgment, or other voluntary disposition in the event it fails to provide
such notice within such fifteen (15) day period in accordance herewith. Any amounts paid to any third party as damages or other
compensation with respect to infringement of a third parties rights shall be treated as third party royalties that Licensee shall
be entitled to deduct from royalties due University in accordance with Section 3.7. Subject to the policies of the Board of Governors
of the University of North Carolina, University agrees to cooperate with Licensee in any reasonable manner deemed by Licensee to
be necessary in defending any such action. Licensee shall reimburse University for any reasonable, documented out of pocket expenses
incurred in providing such assistance.

 

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9.2  In
the event that any Patent Rights licensed to Licensee are infringed by a third party, Licensee shall have the first and primary
right, but not the obligation, to institute, prosecute and control any action or proceeding with respect to such infringement,
by counsel of its choice, including any declaratory judgment action arising from such infringement. Licensee shall be free to enter
into a settlement, consent judgment, or other voluntary disposition with respect to any such action, provided that any settlement,
consent judgment or other voluntary disposition thereof which: (i) materially limits the scope, validity, or enforceability of
patents included in the Patent Rights or (ii) admits fault or wrongdoing on the part of University must be approved by University,
such approval, if warranted, not to be unreasonably withheld. Licensee’s request for such approval shall include complete
copies of final settlement documents, a detailed summary of such settlement, and any other information material to such settlement.
University shall provide Licensee notice of its approval or denial within fifteen (15) business days of any request for such approval
by Licensee, provided that (i) in the event University wishes to deny such approval, such notice shall include a detailed written
description of University’s reasonable objections to the proposed settlement, consent judgment, or other voluntary disposition
and (ii) University shall be deemed to have approved of such proposed settlement, consent judgment, or other voluntary disposition
in the event it fails to provide such notice within such fifteen (15) day period in accordance herewith. If Licensee recovers monetary
damages in the form of lost profits from a third party infringer as a remedy for the infringement of Patent Rights licensed hereunder,
then Licensee shall first apply such recovery to the costs and expenses incurred in obtaining or negotiating for such recovery
(including attorneys’ fees), and pay to University the royalties on the remaining portion of such lost profits at the rate
specified in Section 3.4. If Licensee recovers monetary damages in the form of a reasonable royalty as a remedy for the infringement
of Patent Rights, then, after applying such royalty to the recovery of the costs and expenses incurred in obtaining or negotiating
for such royalty (including attorneys’ fees), the remaining amount of any such royalty shall be treated as Sublicensing Royalty
Revenue in accordance with Section 3.6.

 

9.3  If
Licensee elects not to enforce any patent within the Patent Rights, then Licensee shall notify University in writing within six
(6) months of receiving notice that an infringement exists. University may, at its own expense and control, following the earlier
of (i) such notice from Licensee or (ii) the expiration of such six (6) month period without Licensee electing to take any action
with respect to such alleged or actual infringement, take steps to defend or enforce any patent within the Patent Rights and recover,
for its own account, any damages, awards or settlements resulting therefrom.

 

9.4  Notwithstanding
the foregoing, and in University’s sole discretion, University shall be entitled to participate through counsel of its own
choosing in any legal action involving the Invention and Patent Rights. Nothing in the foregoing Sections shall be construed in
any way which would limit the authority of the Attorney General of North Carolina.

 

ARTICLE 10: REPRESENTATIONS
and warranties; Limation of liability

 

10.1  University
makes no representations or warranties:

 

(i) that any patent will issue
on the Invention, or

 

(ii) of the validity of any patent
included in the Patent Rights or that practice under such patents shall be free of infringement.

 

10.2  University
represents and warrants that to its knowledge as of Effective Date:

 

(i) the entire right, title, and
interest in the patent applications and patents comprising the Existing Patent Rights have been assigned to University free and
clear of all liens, claims and encumbrances of any inventor or any nongovernmental third party;

 

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(ii) that University has all requisite
power and authority to grant the licenses contained in this Agreement under said Existing Patent Rights;

 

(iii) University has not entered
into any agreements with any third party with respect to the Existing Patent Rights, the technology claimed therein, or Inventions;

 

(iv) University’s execution
and performance of this Agreement will not result in a breach of any other contract to which it is, or will become, a party; and

 

(v) University has not received
any notification, and does not possess any information reasonably indicating, that the Existing Patent Rights are invalid or that
the exercise by Licensee of the rights granted hereunder will infringe on any patent or other proprietary right of any third party.

 

(vii) University has not received
any notification, and does not possess any information reasonably indicating, that any third party has infringed on the Existing
Patent Rights or otherwise engaged in the development or reduction to practice of the Existing Patent Rights.

 

10.3 UNIVERSITY
DISCLAIMS ALL WARRANTIES WITH REGARD TO PRODUCT(S) AND SERVICE(S) LICENSED UNDER THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO,
ALL WARRANTIES, EXPRESSED OR IMPLIED, OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE.

 

NOTWITHSTANDING ANY OTHER PROVISION OF
THIS AGREEMENT, UNIVERSITY ADDITIONALLY DISCLAIMS ALL OBLIGATIONS AND LIABILITIES ON THE PART OF UNIVERSITY AND INVENTORS, FOR
DAMAGES, INCLUDING, BUT NOT LIMITED TO, DIRECT, INDIRECT, SPECIAL, CONSEQUENTIAL, EXEMPLARY, AND PUNITIVE DAMAGES, ATTORNEYS’
AND EXPERTS’ FEES, AND COURT COSTS (EVEN IF UNIVERSITY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, FEES OR COSTS),
ARISING OUT OF OR IN CONNECTION WITH LICENSEE’S, AFFILIATES, AND SUBLICENSEES’ MANUFACTURE, USE, OR SALE OF THE PRODUCT(S)
AND SERVICE(S) LICENSED UNDER THIS AGREEMENT, EXCEPT TO THE EXTENT SUCH DAMAGES OR OTHER LIABILITIES RESULT FROM THE UNIVERSITY’S
OR ITS EMPLOYEES’INTENTIONAL MISCONDUCT. LICENSEE, ITS AFFILIATE(S), AND SUBLICENSEE(S) ASSUME ALL RESPONSIBILITY AND LIABILITY
FOR LOSS OR DAMAGE CAUSED BY A PRODUCT AND/OR SERVICE MANUFACTURED, USED, OR SOLD BY LICENSEE, ITS SUBLICENSEE(S), AND AFFILIATE(S)
WHICH IS A LICENSED PRODUCT(S) AS DEFINED IN THIS AGREEMENT, EXCEPT TO THE EXTENT SUCH DAMAGES OR OTHER LIABILITIES RESULT FROM
THE UNIVERSITY’S OR ITS EMPLOYEES’ INTENTIONAL MISCONDUCT.

 

10.4  EXCEPT
WITH RESPECT TO BREACHES OF SECTION 12 AND THE INDEMNIFICATION PROVIDED UNDER SECTION 11, NEITHER PARTY SHALL BE ENTITLED TO RECOVER
FROM THE OTHER PARTY ANY INDIRECT, CONSEQUENTIAL, SPECIAL, EXEMPLARY, OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT.

 

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ARTICLE 11: INDEMNIFICATION

 

11.1  In
exercising its rights under this Agreement, Licensee shall comply with the requirements of any and all applicable laws, regulations,
rules and orders of any governmental body having jurisdiction over the exercise of rights under this Agreement. Licensee further
agrees to indemnify and hold University harmless from and against any costs, expenses, attorney's fees, citation, fine, penalty
and liability of every kind and nature which might be imposed by reason of any asserted or established violation by Licensee, Affiliates,
or Sublicensees of any such laws, order, rules and/or regulations.

 

11.2  Licensee
agrees to indemnify, hold harmless and defend University, its officers, employees, and agents, against any and all claims, suits,
losses, damages, costs, fees, and expenses asserted by third parties, both government and private, resulting from or arising out
of (i) Licensee’s breach of this Agreement, (ii) Licensee’s failure to comply with any applicable laws, rules
or regulations, or (iii) the exercise of Licensee’s rights under this Agreement, provided such losses do not result from
the University’s or its employees’ gross negligence, intentional misconduct, breach of this Agreement, or failure to
comply with any applicable laws, rules, or regulations.

 

11.3 Licensee is required to maintain in
force at its sole cost and expense, with reputable insurance companies, general liability insurance and products liability insurance
coverage in an amount reasonably sufficient to protect against liability under Sections 11.1 and 11.2 above upon production and
first shipment of product to customers.

 

11.4 LICENSEE’S
OBLIGATIONS TO COMPLY WITH U.S. EXPORT CONTROL LAWS AND REGULATIONS ARE INDEPENDENT OF AND SURVIVE THE TERMINATION OF THIS AGREEMENT.
Licensee agrees to indemnify and hold University harmless from and against any liability (including fines or legal fees) incurred
by violations of export control laws and regulations by Licensee, Affiliates, or its Sublicensees with respect to Licensed Products.

 

ARTICLE 12: CONFIDENTIALITY; PUBLICATION

 

12.1 University Confidential Information:
University may, from time to time, disclose its Confidential Information to Licensee. Licensee shall not disclose University’s
Confidential Information to any third party except as follows:

 

(i) to its Affiliates, Sublicensees,
and any employees, officers, directors, contractors, or other agents or representatives of Licensee or any of the foregoing for
purposes related to the exercise of the rights granted under this Agreement; or

 

(ii) under conditions of confidentiality
to prospective or actual investors, lenders, acquirors, sublicensees, strategic partners, and investment bankers in connection
with its financing, acquisition, licensing, development, commercialization, and stockholder relations activities; or

 

(iii) with the prior written consent
of University,

 

provided that, Licensee requires such recipients
of University’s Confidential Information to protect the confidentiality of such Confidential Information. Licensee may also
disclose University’s Confidential Information as it reasonably deems necessary or advisable in connection with the prosecution,
maintenance, defense and enforcement of the Patent Rights or in connection with the pursuit or maintenance of regulatory or marketing
approvals for, or commercialization of, Licensed Products.

 

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12.2 Disclosures to University: Licensee,
through its employees or other agents, may disclose its Confidential Information to University. It is understood that University’s
agreement under this Agreement is subject to the provisions of NC Public Records Act., G.S. Chapter 132. University shall:

 

(i) not disclose such Confidential
Information to any third party,

 

(ii) treat such information with
the same degree of care as it treats its own confidential information, which shall be no less than reasonable, and

 

(iii) only use such information
for purposes of enforcing its rights under this Agreement.

 

12.3 Limits on Confidential Information:
Confidential Information under this Agreement shall not include information:

 

(i) which at the time of disclosure
is in the public domain;

 

(ii) after disclosure, becomes
part of the public domain by publication or otherwise, except by the breach of this Agreement by either party;

 

(iii) was (a) in the recipient
party’s possession in documentary form at the time of disclosure or (b) independently developed by or for the recipient party
by any person or persons who had no knowledge or benefit of the other party’s Confidential Information, as evidenced by written
documentation; or

 

(iv) a party received without
obligation of confidentiality or limitation on use from a third party who had the lawful right to disclose such information and
who did not obtain such information under an obligation of confidentiality to either party.

 

Confidential Information disclosed under
this Agreement shall not be deemed to be within the foregoing exceptions merely because such information is embraced by more general
information in the public domain or in the possession of a party. In addition, any combination of features shall not be deemed
to be within the foregoing exceptions merely because individual features are in the public domain or in the party’s possession,
but only if the combination itself and its principle of operation are in the public domain or in the party’s possession.

 

12.4 Notwithstanding any other provision
of this Agreement, disclosure by a recipient party of the other party’s Confidential Information shall not be precluded if
such disclosure:

 

(i) is in response to a valid
order of a court or to another governmental body of the United States or any political subdivision thereof; or

 

(ii) is required by law or regulation;

 

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provided, however, that, in either case,
the party required to make such disclosures shall (1) have made reasonable effort to give prompt notice to the other party to permit
it to seek a protective order or grant of confidentiality, (2) cooperate with the other party’s efforts to seek confidential
or protective treatment of such information, as reasonably requested by the other party, and (3) minimize the extent of any such
disclosure.

 

12.5 University shall be free to publish
the results of its research and educational activities as it sees fit, provided that prior to any publication of any particular
technology claimed, described, or enabled in the Patent Rights:

 

(i) University shall provide Licensee
with a manuscript of any proposed paper or an abstract of any proposed presentation describing such technology at least thirty
(30) days prior to its submission for publication or presentation and

 

(ii) as reasonably requested by
Licensee, University shall (a) delete from such publication any of Licensee’s Confidential Information, (b) delay the submission
of such publication or presentation for an additional period of up to fifteen (15) days in order to allow Licensee to pursue patent
protection for any of its intellectual property described therein, or (c) instruct its patent counsel to make such patent filings
or conduct the prosecution of the patents and patent applications included in the Patent Rights as appropriate prior to publication
or presentation of such material to prevent the loss of any rights granted under this Agreement. After any publication of any particular
technology claimed, described, or enabled in the Patent Rights, University shall have no further obligations under this Section
12.5 with respect to the publication of such technology.

 

ARTICLE 13. MISCELLANEOUS

 

13.1 This Agreement is binding upon and
shall inure to the benefit of University, its successors and assigns. However, this Agreement shall be personal to Licensee, and
it is not assignable by Licensee to any other person or entity without the prior written consent of University, such consent to
be in University’s sole discretion. Notwithstanding the foregoing, Licensee shall be permitted to assign this Agreement and
its rights and obligations hereunder without University’s consent:

 

(i) to any Affiliate; or

 

(ii) in connection with any sale
of substantially all of Licensee’s assets or business (or that portion of its assets or business related to the subject matter
of this Agreement), merger, acquisition, consolidation, reorganization, or other similar transaction, provided that Licensee shall
not be released of its obligations existing at the time of such assignment.

 

13.2 It is agreed that no waiver by either
party hereto of any breach or default of any of the covenants or agreements herein set forth shall be deemed a waiver as to any
subsequent and/or similar breach or default.

 

    	CONFIDENTIAL Exclusive License: NC A&T / BioSolar	Page 19

     

    

 

13.3 No party shall, without prior written
consent of the other party, use the name or any trademark or trade name owned by the other party, or owned by an affiliate or parent
corporation of the other party, in any publication, publicity, advertising, or otherwise, except that Licensee may identify University
as licensor of the Patent Rights and Licensed Products and University may identify Licensee as exclusive licensee of Patent Rights.
It is understood that University’s agreement under this Section is subject to the provisions of N.C. Public Records Act,
G.S. Chapter 132.

 

13.4 Notwithstanding Section 13.3 above,
University may disclose the existence of this Agreement and non-confidential information regarding the status of Licensee’s
commercialization of License Products in a press release, on-line, or otherwise, and on the website of the Office of Technology
Transfer throughout the life of this Agreement with the prior written approval of the Licensee, such approval not to be unreasonably
withheld. Further, the parties agree to cooperate with each other in preparing, reviewing and approving such disclosures, Licensee’s
approval for each disclosure not to be unreasonably withheld.

 

13.5 Neither party hereto is an agent of
the other for any purpose.

 

13.6 Any notice required or permitted to
be given to the parties hereto shall be in writing and deemed to have been properly given if delivered in person or mailed by first-class
mail to the other party at the appropriate address as set forth below. Other addresses may be designated in writing by the parties
during the term of this Agreement.

 

	UNIVERSITY	 	LICENSEE
	For All Matters:	 	For All Matters:
	Director, Office of Technology Transfer	 	Chief Executive Officer
	Division of Research and Economic Development	 	 
	 	 	 
	North Carolina Agricultural and Technical State University	 	BioSolar, Inc.
	Fort IRC Building 4th Floor	 	Suite 202
	
        1601 East Market Street

        Greensboro, NC 27411
	 	
        27936 Lost Canyon Rd.

        Santa Clarita, CA 91387

 

13.7 This Agreement shall be interpreted
and construed in accordance with the laws of the State of North Carolina. The State and Federal Courts of North Carolina shall
have exclusive jurisdiction to hear any legal action arising out of this Agreement.

 

13.8 In the event that a court of competent
jurisdiction holds any provision of this Agreement to be invalid, such holding shall have no effect on the remaining provisions
of this Agreement, and they shall continue in full force and effect.

 

13.9 The provisions of Sections 3.10, 3.11,
3.12, 4.2, 4.3, 4.4, 6.4, 7.5, 7.6, 10.3, and 10.4 and Articles 1, 9 (with respect to any infringement occurring prior to termination
or expiration), 11, 12, and 13 shall survive the expiration or termination of this Agreement.

 

13.10 Anything contained in this Agreement
to the contrary notwithstanding, the obligations of the Licensee shall be subject to all laws, and present and future regulations,
of any government having jurisdiction over the Licensee, and to orders, regulations, directions, or requests of any such government.
Licensee shall undertake to comply with and be solely responsible for complying with such laws applicable to Licensee.

 

    	CONFIDENTIAL Exclusive License: NC A&T / BioSolar	Page 20

     

    

 

13.11 Exports of Licensed Products may
be subject to U.S. export control laws and regulations, including, without limitation, the Export Administration Regulations (15
CFR 730-774) and the International Traffic in Arms Regulations (22 CFR 120-130), and may be subject to export or import regulations
in countries other than the United States. Licensee assumes all obligations and responsibility for assuring that use of the Licensed
Products is in compliance with all applicable export control laws and regulations. Further, Licensee agrees to require Sublicensees
to comply with said obligations and responsibility.

 

13.12 Licensee shall, and agrees to require
Sublicensees to, comply with any patent marking requirements of the intellectual property laws of the applicable countries in the
Licensed Territory to the extent any failure to do so would materially and adversely affect the Licensed Product, the Patent Rights,
or either party’s ability to avail itself of all potential remedies for any infringement of the Patent Rights.

 

13.13 Licensee shall be solely responsible
for the payment of any and all taxes, fees, duties and other payments incurred in relation to its manufacture, use and sale of
the systems and methods covered by the Patent Rights or Licensed Products. Licensee shall, as between the parties, be responsible
for applying for and obtaining any approvals, authorizations, or validations necessary to effectuate the terms of this Agreement
under the laws of the appropriate national laws of each of the countries in the Licensed Territory.

 

13.14 If any one or more of the provisions
of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction, the provision shall be considered
severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The parties shall make a good faith
effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated
by the parties when entering into this Agreement may be realized.

 

13.15 It is understood and agreed between
University and Licensee that this writing constitutes the entire agreement, both written and oral, between the parties, and that
all prior agreements respecting the subject matter hereof, either written or oral, expressed or implied, shall be abrogated, cancelled,
and are null and void and of no effect, except that any confidential information disclosed pursuant to the Confidentiality Agreement
dated August 16, 2016, shall be deemed to be Confidential Information disclosed pursuant to this Agreement.

 

[Signature Page to Follow]

 

The remainder of this Page is intentionally
left blank.

 

    	CONFIDENTIAL Exclusive License: NC A&T / BioSolar	Page 21

     

    

 

IN WITNESS WHEREOF, both University and
Licensee have executed this Agreement, in duplicate originals, by the duly authorized respective officers as of the Effective Date.
Inventors have likewise indicated their acceptance of the terms hereof as of the Effective Date by signing below.

 

	Agreed and Accepted: 	 	Agreed and Accepted:
	 	 	 
	BioSolar	 	 	North Carolina A&T State University
	 	 	 	 
	Signature:	/s/ David Lee	 	Signature:	/s/ Barry L. Burks
	Printed:	Dr. David Lee	 	Printed:	Dr. Barry L. Burks
	Title: 	Chief Executive Officer	 	Title:   	Vice Chancellor for Research and Economic Development
	Date:	_________	 	Date:	_________

 

I agree to be abide by the terms of this
agreement

 

	By:	/s/ Sungjin Cho       	 

Inventor: Dr. Sungjin Cho

 

Date: _______________________

 

    	CONFIDENTIAL Exclusive License: NC A&T / BioSolar	Page 22

     

    

 

APPENDIX A

 

PATENT RIGHTS

 

		☐	Provisional Patent Application U.S. Serial No. 62/473,772:

Entitled " Silicon
Iron Lithium Nanocomposite for Lithium Ion Batteries”

Filed: 3/20/2017

 

 

 

    	CONFIDENTIAL Exclusive License: NC A&T / BioSolar	Page 23

     

    

 

APPENDIX B

 

Summarized below is BioSolar’s current view on the timeline
of its engineering development efforts and potential revenue generation opportunities:

 

[***]

 

 

 

 

	CONFIDENTIAL Exclusive License: NC A&T / BioSolar	Page 24

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