ࡱ>  #` bjbj 8<dsss8Ns|st(ttttttt)++++++$jhҐOU~ttU~U~Ottd6ɃɃɃU~^tt)ɃU~)ɃɃ:Ո,]tt ጃOs~p =H RR#NR]R]twɃdyzmtttOOqXtttU~U~U~U~D6R=5R= EXCLUSIVE LICENSE AGREEMENT Re: Baylor BLG # __ Entitled _________ This Exclusive License Agreement (hereinafter called Agreement), to be effective as of the ___ day of ____, 2008 (hereinafter called "Agreement Date"), is by and between Baylor College of Medicine (hereinafter called BAYLOR), a Texas nonprofit corporation having its principal place of business at One Baylor Plaza, Houston, Texas 77030, and ___________________, a corporation organized under the laws of __________ and having a principal place of business at _____________________, and its Affiliates (hereinafter, collectively referred to as LICENSEE). WITNESSETH: WHEREAS, BAYLOR's mission is to advance human health through the integration of education, research, patient care and community service; and WHEREAS, BAYLOR is the owner of the Subject Technology and Patent Rights as defined below; and WHEREAS, BAYLOR is willing to grant a royalty bearing, worldwide, exclusive license to the Subject Technology and Patent Rights to LICENSEE on the terms set forth herein; and WHEREAS, LICENSEE desires to obtain said exclusive license under the Subject Technology and Patent Rights. NOW, THEREFORE, for and in consideration of the promises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto expressly agree as follows: 1. DEFINITIONS AS USED HEREIN 1.1 The term "Affiliates" shall mean any corporation, partnership, joint venture or other entity which LICENSEE, directly or indirectly, owns or controls by LICENSEEs ownership of at least fifty percent (50%) of the entitys common stock or other ownership. 1.2 The term "Confidential Information" shall mean any proprietary and secret ideas, proprietary technical information, know-how and proprietary commercial information or other similar proprietary information that are owned by BAYLOR. The term Confidential Information is further defined in Section 18 below. 1.3 The term Developers shall mean ________________________, employees of BAYLOR. 1.4 The term "Field" shall mean _________________________. 1.5 The term Legal Costs shall mean all legal fees and expenses, filing or maintenance fees, assessments and all other costs and expenses related to prosecuting, obtaining and maintaining patent protection on the Patent Rights in the United States and foreign countries. 1.6 The term "Licensed Product(s)" shall mean any product or process that incorporates, utilizes or is made with the use of the Subject Technology and/or Patent Rights. 1.7 The term Licensed Services(s) shall mean all services that are rendered with the use of the Subject Technology and/or Patent Rights. 1.8 The term "Net Sales" shall mean the gross amount of monies or cash equivalent or other consideration which is billed, invoiced or received (whichever occurs first) for sales, leases or other modes of transfer of Licensed Products or Licensed Services by LICENSEE or sublicensees, less: customary trade, quantity or cash discounts and rebates to the extent actually allowed and taken; amounts repaid or credited to customers by reason of rejections or returns made within six (6) months of the first sale or transfer of the relevant Licensed Product or Licensed Service; to the extent separately stated on purchase orders, invoices or other documents of sale, taxes and/or other governmental charges (except filing fees) which are actually paid by or on behalf of LICENSEE or sublicensees for the production, sale, transportation, delivery or use of a Licensed Product or Licensed Service; and reasonable charges for delivery or transportation of Licensed Products or Licensed Services to customers through the use of third party delivery or transportation services, if separately stated. The term "Net Sales" in the case of non-cash sales, shall mean the fair market value of all equivalent or other consideration received by LICENSEE or sublicensees for the sale, lease or transfer of Licensed Products or Licensed Services. 1.9 The term Party shall mean either LICENSEE or BAYLOR, and "Parties" shall mean LICENSEE and BAYLOR. 1.10 The term Patent Rights shall mean United States Patent Application Serial No. ________, entitled ____________________, filed ___________, the inventions described and claimed therein, and all other pending United States patent applications or parts thereof and any United States patent which issues from any such pending applications and any and all divisions, reissues, re-examinations, renewals, continuations, continuations-in-part to the extent the claims are directed to subject matter specifically described in the aforementioned patent application and are dominated by the claims of the existing Patent Rights, and extensions thereof, and all other counterpart, pending or issued patents in all other countries. Patent Rights shall specifically include the patents and/or patent applications identified in Appendix A. NOTE: List specific Subject Technology that will be sent to LICENSEE. 1.11 The term "Subject Technology" shall mean [the technology, cell lines, biological materials, compounds, methods, documents, materials, tests and all confidential information] developed as of the Agreement Date and supplied by BAYLOR (identified in Appendix B), together with any progeny, mutants or derivatives thereof supplied by BAYLOR or created by LICENSEE. NOTE: if license will include sublicense rights, include the following term. 1.12 The term "Sublicensing Revenue" shall mean all (i) cash, (ii) sublicensing fees and (iii) all other payments and the cash equivalent thereof, which are paid to LICENSEE by the sublicensees of its rights hereunder, but excluding the following payments: payments made in consideration for the issuance of equity or debt securities of LICENSEE to the extent not exceeding the fair market value thereof; that portion of payments for direct or fully burdened expenses (collectively not to exceed one hundred fifty percent (150%) of direct expenses) associated with research or development as calculated in accordance with GAAP, to the extent that such expenses are separately listed and part of the sublicense; royalties on sales of Licensed Products and Licensed Services by the sublicensee (payment for which has been otherwise provided in Paragraph 4.3 herein); and payments for supply of Licensed Products for use in clinical trials by or on behalf of, or for resale by, the sublicensee. 2. GRANT OF LICENSE 2.1 Subject to the reservations of rights set forth in Paragraph 2.2, BAYLOR hereby grants to LICENSEE an exclusive, worldwide, sublicensable license under the Patent Rights and Subject Technology, to make, have made, use, market, sell, offer to sell, lease and import Licensed Products, but not Licensed Services, in the Field. BAYLOR shall have the right to offer an exclusive or non-exclusive license(s) of the Subject Technology to market, sell and offer to sell Licensed Services. BAYLOR shall have the right to offer non-exclusive licenses of Subject Technology to commercial entities for internal research purposes. 2.2 The grant in Section 2.1 shall be further subject to, restricted by and non-exclusive with respect to: (i) the making or use of the Subject Technology and Patent Rights by BAYLOR for non-commercial research, patient care, teaching and other educationally related purposes; (ii) the making or use of the Subject Technology and Patent Rights by the Developers for non-commercial research purposes at academic or research institutions; (iii) any non-exclusive license of the Subject Technology and/or Patent Rights that BAYLOR grants to other academic or research institutions for non-commercial research purposes; (iv) the making or use of the Subject Technology and Patent Rights by academic and research institutions for non-commercial research purposes; and (v) any non exclusive license of the Subject Technology and/or Patent Rights that BAYLOR is required by law or regulation to grant to the United States of America or to a foreign state pursuant to an existing or future treaty with the United States of America. 2.3 Government Reservation. Rights under this Agreement are subject to rights required to be granted to the Government of the United States of America pursuant to 35 USC Section 200-212, including a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States the subject inventions throughout the world. 3. MARKETING EFFORTS LICENSEE shall use reasonable efforts, as defined herein, to effect assiduously the introduction of Licensed Products into the commercial market as soon as practicable. Such efforts shall include, but not be limited to: [List Diligence Milestones including the one below] the production of the Licensed Products and the marketing and support of the Licensed Products with at least the same diligence as LICENSEE employs and to at least the same level that LICENSEE achieves for comparable products and services marketed by LICENSEE. 4.1 As partial consideration for the rights conveyed by BAYLOR under this Agreement, LICENSEE shall pay BAYLOR a license fee of ___________ ($XX,XXX). Such payment shall be delivered to BAYLOR concurrent with the execution of this Agreement (except if the invoice language is included per Paragraph 4.10). 4.2 In addition to the foregoing license execution fee, LICENSEE shall reimburse BAYLOR for all Legal Costs incurred prior to execution of this Agreement. Such payment shall be due within thirty (30) days of receipt of invoice from BAYLOR. As provided for in Paragraph 9.1 herein, LICENSEE will be responsible for all Legal Costs incurred after the Agreement Date. 4.3 In addition to the foregoing, LICENSEE shall pay BAYLOR a royalty of ____ percent (X%) of Net Sales. Collectively the royalty payments that are the subject of this Paragraph 4.3 are termed Royalties for purposes of this Agreement and shall be payable as provided in Section 5. 4.4 In the event that the Royalties paid in any calendar year do not reach the minimum amount set out below for such year, LICENSEE shall pay an additional amount with the payment due for the period ending December 31 of such year, so that the total amount paid for such year shall reach such minimum amount: Year One $ Year Two $ Year Three $ Year Four $ Year Five and after $ 4.5 LICENSEE shall also pay BAYLOR the following milestone payments set forth below: [List Milestone Payments] LICENSEE shall notify BAYLOR in writing within thirty (30) days upon the achievement of each milestone, such notice to be accompanied by payment of the appropriate milestone payment. Milestones are to be paid regardless of whether LICENSEE or LICENSEEs sublicensee attains such milestone. Each such milestone shall be paid per indication for up to ___ (__) indications. 4.6 Should LICENSEE fail to make any payment whatsoever due and payable to BAYLOR hereunder, BAYLOR may, at its sole option, terminate this Agreement as provided in Section 10. Note: If licensee has sublicense rights, include the following paragraph: 4.7 In the event LICENSEE sublicenses the Subject Technology and Patent Rights under this Agreement, LICENSEE agrees to pay to BAYLOR ____ percent (XX%)of all Sublicensing Revenue received by LICENSEE. Note: If licensee has requested a royalty stacking clause, include the following paragraph: 4.8 If LICENSEE pays royalties to a third party for patents necessary to the manufacture, use or sale of a Licensed Product(s), then LICENSEE may credit fifty percent (50%) of the third party royalties paid against the Royalties otherwise due to BAYLOR for the Net Sales under Paragraph 4.2 above; provided, however that the Royalties paid to BAYLOR for the Net Sales shall not be less than fifty percent (50%) of those otherwise due under Paragraph 4.2 above. Such reduction of Royalties allowed hereunder shall apply on an annual basis with no carryover of third party royalty balance from one calendar year to the following calendar year. Note: If licensee has requested a combination product clause, include the following paragraph: 4.9 When LICENSEE uses royalty-bearing or patented components licensed by third parties to LICENSEE and not licensed by BAYLOR hereunder (Extrinsic Licensed Product) to form a product that is a combination of Licensed Products and Extrinsic Licensed Product (Combination Product), the Royalties payable by LICENSEE to BAYLOR shall be based upon a ratio equaling the following: (A/A+B) x (the actual Net Sales of the Combination Product) where A is the Net Sales price of the Licensed Product and B is the sum of the Net Sales prices of all Extrinsic Licensed Products, subject to the following: (i) if the Licensed Product and Extrinsic Licensed Product components are not sold separately (and thus Net Sales are not available), A in the formula shall be LICENSEEs collective manufacturing costs for such Licensed Product used in the Combination Product and B shall be LICENSEEs manufacturing cost for such Extrinsic Licensed Product used in the Combination Product; (ii) the manufacturing cost of each included product manufactured by LICENSEE shall be the sum of LICENSEEs costs of direct labor and materials, but shall not include LICENSEEs factory overhead, selling and marketing costs, research and development costs or general and administrative expenses; and (iii) in the event LICENSEE shall purchase Licensed Product or Extrinsic Licensed Product instead of manufacturing same, LICENSEEs net costs for the amount of Licensed Product used in the Combination product shall be included in the formula as A, and LICENSEEs net costs for the amount of Extrinsic Licensed Product used in the Combination Product shall be included in the formula as B. In no event shall the Royalties due for a Combination Product be less than twenty five percent (25%) of those otherwise due under Paragraph 4.3 above. Note: If LICENSEE requires an invoice, use this language: 4.10 Any amounts payable to BAYLOR hereunder shall be made in full within thirty (30) days after receipt by LICENSEE of an invoice covering such payment. The Parties understand and agree that one (1) invoice will be sent to LICENSEE by BAYLOR for each fee due. The invoice shall be in the form in Appendix ___. Any additional fees, such as taxes, wire or transfer fees, will not be included in the invoice, but payment of such fees shall remain the responsibility of LICENSEE and shall not be deducted from the payment due BAYLOR. Subsequent invoices, if requested by LICENSEE, shall be subject to an administrative fee of five hundred dollars ($500), in addition to the original payment due to BAYLOR plus any interest charges incurred due to delays in payment, if applicable. The calculation and payment of such interest payments shall not be invoiced and shall be the sole responsibility of the LICENSEE. Invoices shall be sent via facsimile to the address listed in Paragraph 15.2. If LICENSEE requires an original invoice, such invoice shall be sent via overnight courier using LICENSEEs courier ________ (Name Courier) account number _____. 5. REPORTING 5.1 No later than sixty (60) days after December 31 of each calendar year, LICENSEE shall provide to BAYLOR a written annual progress report describing progress on research and development, regulatory approvals, manufacturing, sublicensing, marketing and sales during the most recent twelve (12) month period ending December 31 and plans for the forthcoming year (Annual Progress Report). If multiple technologies are covered by the license granted hereunder, the progress report shall provide the information set forth above for each technology. As part of the Annual Progress Report, or as a timely supplement thereto, LICENSEE shall also provide any reasonable additional data BAYLOR requires to evaluate LICENSEEs or its sublicensee performance. 5.2 LICENSEE shall notify BAYLOR the date on which LICENSEE and the sublicensees make a first sale of Licensed Products in each country in which it occurs within thirty (30) days of occurrence. 5.3 LICENSEE shall submit to BAYLOR within thirty (30) days after March 31, June 30, September 30 and December 31, a royalty report setting forth for such calendar quarter at least the following information: (i) the number of Licensed Products sold by LICENSEE and sublicensees in each country; (ii) total billings for such Licensed Products; (iii) the gross amount of monies or cash equivalent or other consideration which is received for sales, leases, licenses or other modes of transfer of Licensed Products by LICENSEE; (iv) the identity of that consideration which is received instead of money for sales, leases, licenses or other modes of transfer of Licensed Products by LICENSEE; (v) deductions from the gross amount which LICENSEE believes is applicable to determine the Net Sales thereof; (vi) the third party royalty payments for which LICENSEE is seeking a credit under Paragraph 4.8; (vii) the amount of Sublicensing Revenue received by LICENSEE; (viii) the amount of Royalties due thereon, or, if no Royalties are due to BAYLOR for any reporting period, the statement that no Royalties are due; and (ix) the amount of other payments due BAYLOR, including but not limited to, milestone payments, minimum royalty payments and maintenance fee payments. The royalty report shall be certified as correct by an officer of LICENSEE. After termination or expiration of this Agreement, LICENSEE will continue to submit royalty reports and payments to BAYLOR until all Licensed Products made, used, marketed, leased or imported under the Agreement have been sold. 5.4 LICENSEE shall pay to BAYLOR with each such royalty report the amount of Royalties and other payments due with respect to such calendar quarter. If multiple technologies are covered by the license granted hereunder, LICENSEE shall specify which Subject Technology and Patent Rights are utilized for each Licensed Product included in the royalty report by citing the applicable BLG number listed on the front page of the Agreement. 5.5 All payments due hereunder are payable by check or wire transfer in United States dollars and shall be deemed received when the complete payment is credited to BAYLORs bank account. Until all funds are received by BAYLOR, the payment by LICENSEE is not considered to be complete. For sales of Licensed Products in currencies other than the United States, LICENSEE shall use exchange rates published in The Wall Street Journal on the last business day of the calendar quarter that such payment is due. No transfer, exchange, collection or other charges, including any wire transfer fees, shall be deducted from such payments. 5.6 Late payments shall be subject to a charge of one and one-half percent (1.5%) per month, the interest being compounded annually, or two hundred fifty dollars ($250.00), whichever is greater. LICENSEE shall calculate the correct late payment charge, and shall add it to each such late payment. Said late payment charge and the payment and acceptance thereof shall not negate or waive the right of BAYLOR to seek any other remedy, legal or equitable, to which it may be entitled because of the delinquency of any payment. LICENSEE shall indemnify BAYLOR for all attorneys fees and costs BAYLOR incurs in obtaining a full payment of that which is owed to BAYLOR. 5.7 If payments are sent by check, they shall be sent to the address listed in Paragraph 15.1. If payments are sent by wire transfer, they shall be sent using the wiring instructions sent by BAYLOR. 5.8 In the event of acquisition, merger, change of corporate name, or change of make-up, organization, or identity, LICENSEE shall notify BAYLOR in writing within thirty (30) days of such event. 5.9 If LICENSEE or sublicensee does not qualify as a "small entity" as provided by the United States Patent and Trademark Office, LICENSEE must notify BAYLOR immediately. 6. TRANSFER OF SUBJECT TECHNOLOGY 6.1 Upon receipt of the license fee described in Paragraph 4.1, BAYLOR shall, within thirty (30) days thereof, provide LICENSEE with reasonable quantities of the Subject Technology. 6.2 Such Subject Technology shall be sent to the address below, via ____ overnight courier using LICENSEEs courier account number _____. Company Scientist Company Name Address City, State, Zip Phone _____________ E-Mail _____________ 7. USE/PROVISION OF LICENSED PRODUCTS TO CONTRIBUTORS LICENSEE shall, throughout the term of this Agreement, provide to the Developers reasonable quantities of Licensed Products free of charge. 8. RECORDS AND INSPECTION LICENSEE shall maintain or cause to be maintained a true and correct set of records pertaining to the use of the Subject Technology and Patent Rights licensed hereunder and the information by which the Net Sales and the Royalties were calculated under this Agreement. During the Term of this Agreement as defined below and for a period of two (2) years thereafter, LICENSEE agrees to permit an accountant selected and paid by BAYLOR and reasonably acceptable to LICENSEE to have access during ordinary business hours to such records as are maintained by LICENSEE as may be necessary, in the opinion of such accountant, to determine the correctness of any report submitted and/or payment made under this Agreement. In the event that the audit reveals an underpayment of Royalties by more than five percent (5%) for the period being audited, the cost of the audit shall be paid by LICENSEE. If the underpayment is less than five percent (5%) but more than two percent (2%) for the period being audited, LICENSEE and BAYLOR shall each pay fifty percent (50%) of the cost of the audit. Such accountant shall maintain in confidence, and shall not disclose to BAYLOR, any information concerning LICENSEE or its operations or properties other than information directly relating to the correctness of such reports and payments. LICENSEE shall indemnify BAYLOR for all attorneys fees and costs BAYLOR incurs in obtaining access to conduct the audit and collecting, when applicable, for the cost of the audit and any underpaid amounts and interest. Note : If license has sublicense rights, insert the following paragraph : 9. SUBLICENSES All sublicenses granted by LICENSEE of its rights hereunder shall be subject to the terms of this Agreement. LICENSEE shall be responsible for its sublicensees and shall not grant any rights which are inconsistent with the rights granted to and obligations of LICENSEE hereunder. Any act or omission of a sublicensee which would be a breach of this Agreement if performed by LICENSEE shall be deemed to be a breach by LICENSEE of this Agreement. Each sublicense agreement granted by LICENSEE shall include an audit right by BAYLOR of the same scope as provided in Section 8 hereof with respect to LICENSEE. No such sublicense agreement shall contain any provision which would cause it to extend beyond the Term of this Agreement as defined below (except with respect to those terms and conditions which are specifically identified as surviving the termination or expiration of the Agreement). LICENSEE shall give BAYLOR prompt notification of the identity and address of each sublicensee with whom it concludes a sublicense agreement and shall supply BAYLOR with a copy of each such sublicense agreement. 10. PATENTS AND INFRINGEMENT 10.1 For the Term of this Agreement as defined below, BAYLOR shall be responsible for filing, prosecuting and maintaining all patent applications and patents included in the Patent Rights, and LICENSEE agrees to pay all Legal Costs. BAYLOR shall instruct its patent counsel to invoice LICENSEE directly for all such Legal Costs. LICENSEE agrees to pay all such invoices within thirty (30) days of receipt. 10.2 In the event that LICENSEE decides not to pay for the costs associated with either: (i) the prosecution of the Patent Rights to issuance or (ii) maintenance of any United States or foreign issued patent on the Patent Rights, LICENSEE shall timely notify BAYLOR in writing thereof. LICENSEEs right under this Agreement to practice the invention under this patent shall immediately terminate upon the giving of such notice. If LICENSEE fails to notify BAYLOR in sufficient time for BAYLOR to assume said costs prior to the abandonment or expiration of any Patent Rights, LICENSEE shall be considered in default of this Agreement. 10.3 BAYLOR agrees to keep LICENSEE fully informed, at LICENSEEs expense, of all prosecutions and other actions pursuant to this Section 10, including submitting to LICENSEE copies of all official actions and responses thereto. Notwithstanding the foregoing or LICENSEE's obligations of payment in section 10.1 hereof, BAYLOR shall select all outside counsel for prosecution of the Patent Rights and such counsel shall represent BAYLOR in such prosecution. 10.4 BAYLOR agrees to reasonably cooperate with LICENSEE to whatever extent is reasonably necessary to provide LICENSEE the full benefit of the license granted herein. 10.5 During the Term of this Agreement as defined below, each Party shall promptly inform the other of any suspected infringement of any claims in the Patent Rights or the misuse, misappropriation, theft or breach of confidence of other proprietary rights in the Subject Technology and/or Patent Rights by a third party, and with respect to such activities as are suspected. Any action or proceeding against such third party shall be instituted as following: (i) BAYLOR and LICENSEE may agree to jointly institute an action for infringement, misuse, misappropriation, theft or breach of confidence of the proprietary rights against such third party. Such joint action shall be brought in the names of both BAYLOR and LICENSEE. If BAYLOR or LICENSEE decides to jointly prosecute an action or proceeding after it has been instituted by one Party, the action shall be continued in the name or names they both agree is expedient for efficient prosecution of such action. LICENSEE and BAYLOR shall agree to the manner in which they shall exercise control over any joint action or proceeding, providing however that if they cannot agree BAYLOR shall have the right to unilaterally decide on control. In such joint action or proceeding, the out-of-pocket costs shall be borne equally, and any recovery or settlement shall be shared equally. (ii) If LICENSEE does not agree to participate in a joint action or proceeding then BAYLOR shall have the right, but not the obligation, to institute an action for infringement, misuse, misappropriation, theft or breach of confidence of the proprietary rights against such third party. If BAYLOR elects to institute action, it does so at its own cost. If BAYLOR fails to bring such an action or proceeding within a period of three (3) months after receiving notice or otherwise having knowledge of such infringement, then LICENSEE shall have the right, but not the obligation, to prosecute the same at its own expense. Should either BAYLOR or LICENSEE commence action under the provisions of this Paragraph 10.5 and thereafter elect to abandon the same, it shall give timely notice to the other Party who may, if it so desires, continue prosecution of such action or proceeding. All recoveries, whether by judgment, award, decree or settlement, from infringement or misuse of Subject Technology and/or Patent Rights shall be apportioned as follows: (a) the Party bringing the action or proceeding shall first recover an amount equal the costs and expenses incurred by such Party directly related to the prosecution of such action or proceeding, (b) the Party cooperating in such action or proceeding shall then recover costs and expenses incurred by such Party directly related to its cooperation in the prosecution of such action or proceeding and (c) the remainder shall be divided equally between LICENSEE and BAYLOR. 10.6 Neither BAYLOR nor LICENSEE shall settle any action covered by Paragraph 10.5 without first obtaining the consent of the other Party, which consent will not be unreasonably withheld. 10.7 BAYLOR shall not be liable for any losses incurred as the result of an action for infringement brought against LICENSEE as the result of LICENSEEs exercise of any right granted under this Agreement. The decision to defend or not defend shall be in LICENSEEs sole discretion. 11. TERM AND EXPIRATION Unless sooner terminated as otherwise provided in Section 12, the license to employ Patent Rights and Subject Technology granted herein as part of Section 2 shall expire on a country-by-country basis, on the later of (i) the date of expiration of the last of the Patent Rights to expire or (ii) in the event no patents included within the Patent Rights issue in such country, the first date following the tenth (10th) anniversary of the first commercial sale of Licensed Products by LICENSEE in such country (Term). After such expiration, but not termination, LICENSEE shall have a perpetual, paid-in-full (i.e., royalty free) license in such country. 12. TERMINATION 12.1 In the event of default or failure by LICENSEE to perform any of the terms, covenants or provisions of this Agreement, LICENSEE shall have thirty (30) days after the giving of written notice of such default by BAYLOR to correct such default. If such default is not corrected within the said thirty (30) day period, BAYLOR shall have the right, at its option, to cancel and terminate this Agreement. The failure of BAYLOR to exercise such right of termination, for non-payment of Royalties/ fees or otherwise, shall not be deemed to be a waiver of any right BAYLOR might have, nor shall such failure preclude BAYLOR from exercising or enforcing said right upon any subsequent failure by LICENSEE. 12.2 BAYLOR shall have the right, at its option, to cancel and terminate this Agreement in the event that LICENSEE shall (i) become involved in insolvency, dissolution, bankruptcy or receivership proceedings affecting the operation of its business or (ii) make an assignment of all or substantially all of its assets for the benefit of creditors, or in the event that (iii) a receiver or trustee is appointed for LICENSEE and LICENSEE shall, after the expiration of thirty (30) days following any of the events enumerated above, have been unable to secure a dismissal, stay or other suspension of such proceedings. 12.3 LICENSEE shall have the right in its sole discretion to terminate this Agreement upon sixty (60) days written notice to BAYLOR. 12.4 In the event of termination of this Agreement, all rights to the Subject Technology and Patent Rights shall revert to BAYLOR. At the date of any termination of this Agreement, LICENSEE shall immediately cease using any of the Subject Technology and Patent Rights and LICENSEE shall immediately destroy the Subject Technology and send to BAYLOR a written affirmation of such destruction signed by an officer of LICENSEE; provided, however, that LICENSEE may sell any Licensed Products actually in the possession of LICENSEE on the date of termination, provided that LICENSEE continues to submit royalty reports to BAYLOR and pays to BAYLOR the Royalties on all such sales in accordance with Paragraph 4.3 with respect thereto and otherwise complying with the terms of this Agreement. 12.5 LICENSEE shall provide, in all sublicenses granted by it under this Agreement, that LICENSEEs interest in such sublicenses shall, at BAYLORs option, terminate or be assigned to BAYLOR upon termination of this Agreement. 12.6 In the event this Agreement is terminated pursuant to this Section 12, or expires as provided for in Section 11, BAYLOR is under no obligation to refund any payments made by LICENSEE to BAYLOR prior to the effective date of such termination or expiration. 12.7 No termination of this Agreement shall constitute a termination or a waiver of any rights of either Party against the other Party accruing at or prior to the time of such termination. The obligations of Sections 4, 5, 8, 12, 15, 16, 17, 18 and 19 shall survive termination of this Agreement. 13. ASSIGNABILITY Without the prior written approval of BAYLOR, which will not be unreasonably withheld, neither this Agreement nor the rights granted hereunder shall be transferred or assigned in whole or in part by LICENSEE to any person or entity whether voluntarily or involuntarily, by operation of law or otherwise. Notwithstanding the foregoing, LICENSEE may assign this Agreement and its rights and obligations hereunder without BAYLORs consent, (i) in connection with the transfer or sale of all or substantially all of its assets or the business of LICENSEE to which this Agreement relates or (ii) to any Affiliate; so long as LICENSEE gives BAYLOR prompt notice of such action and the successor entity or Affiliate, as the case may be, acknowledges its consent and agreement to the terms of this Agreement in writing before such assignment; and so long as such action is not entered into solely to satisfy creditors of LICENSEE. This Agreement shall be binding upon and shall inure to the benefit of the respective successors, legal representatives and assignees of each of the Parties. 14. GOVERNMENTAL COMPLIANCE 14.1 LICENSEE shall at all times during the Term of this Agreement and for so long as it shall use the Subject Technology and/or Patent Rights or sell Licensed Products comply and cause its sublicensees to comply with all laws that may control the import, export, manufacture, use, sale, marketing, distribution and other commercial exploitation of the Subject Technology, Patent Rights, Licensed Products or any other activity undertaken pursuant to this Agreement. 14.2 LICENSEE agrees that Licensed Products leased or sold in the United States shall be manufactured substantially in the United States. 14.3 Export Control Regulations. The Subject Technology is subject to, and LICENSEE agrees to comply in all respects with, U.S. law including but not limited to U.S. export controls under the Export Administration Regulations (15 C.F.R. Part 734 et seq.) and U.S. economic sanctions and embargoes codified in 31 C.F.R. Chapter V. LICENSEE agrees that LICENSEE bears sole responsibility for understanding and complying with current U.S. trade controls laws and regulations as applicable to its activities subject to this Agreement. Without limitation on the general agreement to comply set forth in the first sentence of this Paragraph 14.3, LICENSEE agrees not to sell any goods, services, or technologies subject to this Agreement, or to release or disclose or re-export the same: (i) to any destination prohibited by U.S. law, including any destination subject to U.S. economic embargo; (ii) to any end-user prohibited by U.S. law, including any person or entity listed on the U.S. government's Specially Designated Nationals list, Denied Parties List, Debarred Persons List, Unverified List, or Entities List; (iii) to any foreign national in the U.S. or abroad without prior license if required; or (iv) to any user, for any use, or to any destination without prior license if required. Furthermore, LICENSEE agrees that any transfer of Patent Rights from BAYLOR to LICENSEE under this Agreement is subject to U.S. export license authorization as may be required under U.S. law. [ADD HIGHLIGHTED PHRASE IF APPLICABLE] 15. ARBITRATION 15.1 Amicable Resolution. The Parties shall attempt to settle any controversy between them amicably. To this end, a senior executive from each Party shall consult and negotiate to reach a solution. The Parties agree that the period of amicable resolution shall toll any otherwise applicable statute of limitations. However, nothing in this clause shall preclude any Party from commencing mediation if said negotiations do not result in a signed written settlement agreement within thirty (30) days after written notice that these amicable resolution negotiations have commenced. 15.2. Mediation. If a controversy arises out of or relates to this Agreement, or the breach thereof, and if the controversy cannot be settled through amicable resolution, the Parties agree to try in good faith to settle the controversy by mediation before resorting to final and binding arbitration. The Party seeking mediation shall propose five mediators, each of whom shall be a lawyer licensed to practice by the state of Texas, having practiced actively in the field of commercial law for at least fifteen (15) years, to the other Party who shall select the mediator from the list. The Parties shall split the cost of the mediator equally. The Parties agree that the period of mediation shall toll any otherwise applicable statute of limitations. However, nothing in this clause shall preclude any Party from commencing arbitration if said negotiations do not result in a signed written settlement agreement within sixty (60) days after written notice that amicable resolution negotiations have commenced. 15.3 Arbitration. Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof, including claims for tortious interference or other tortious or statutory claims arising before, during or after termination, providing only that such claim touches upon matters covered by this Agreement shall be finally settled by arbitration administered by the American Arbitration Association pursuant to the Commercial Arbitration Rules in force at the time of the commencement of the arbitration, except as modified by the specific provisions of this Agreement. It is the specific intent of the Parties that this arbitration provision is intended to be the broadest form allowed by law. 15.4 Parties to Arbitration. This agreement to arbitrate is intended to be binding upon the signatories hereto, their principals, successors, assigns, subsidiaries and affiliates. This agreement to arbitrate is also intended to include any disputes, controversy or claims against any Party's employees, agents, representatives, or outside legal counsel arising out of or relating to matters covered by this Agreement or any agreement in which this Agreement is incorporated. 15.5 Consolidation Permitted. The Parties expressly agree that any court with jurisdiction may order the consolidation of any arbitrable controversy under this Agreement with any related arbitrable controversy not arising under this Agreement, as the court may deem necessary in the interests of justice or efficiency or on such other grounds as the court may deem appropriate. 15.6 Entry of Judgment. The Parties agree that a final judgment on the arbitration award may be entered by any court having jurisdiction thereof. 15.7 Appointing Arbitrators. The American Arbitration Association shall appoint the arbitrator(s) from its Large, Complex Claims Panel. If such appointment cannot be made from the Large, Complex Claims Panel, then from its Commercial Panel. The Parties hereby agree to and acquiesce in any appointment of an arbitrator or arbitrators that may be made by such appointing authority. 15.8 Qualifications of the Arbitrator(s). The arbitrator(s) must be a lawyer, having practiced actively in the field of commercial law for at least fifteen (15) years. 15.9 Governing Substantive Law. The arbitrator(s) shall determine the rights and obligations of the Parties according to the substantive laws of the State of Texas (excluding conflicts of law principles) as though acting as a court of the State of Texas. 15.10 Governing Arbitration Law. The law applicable to the validity of the arbitration clause, the conduct of the arbitration, including any resort to a court for provisional remedies, the enforcement of any award and any other question of arbitration law or procedure shall be the Federal Arbitration Act. 15.11 Governing Convention. The Parties elect to have the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958 (instead of the Inter-American New York Convention on International Commercial Arbitration of August 15, 1990) govern any and all disputes that may be the subject of arbitration pursuant to this Agreement. 15.12 Preliminary Issues of Law. The arbitrator(s) shall hear and determine any preliminary issue of law asserted by a Party to be dispositive of any claim, in whole or part, in the manner of a court hearing a motion to dismiss for failure to state a claim or for summary judgment, pursuant to such terms and procedures as the arbitrator(s) deems appropriate. 15.13 Confidentiality. The Parties and the arbitrator(s) shall treat all aspects of the arbitration proceedings, including without limitation discovery, testimony and other evidence, briefs and the award, as strictly confidential. Further, except as may be required by law, neither Party nor the arbitrator(s) may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both Parties. 15.14 Place of Arbitration. The seat of arbitration shall be Houston, Texas, USA. 15.15 Language. The arbitration shall be conducted in the English language. All submissions shall be made in English or with an English translation. Witnesses may provide testimony in a language other than English, provided that a simultaneous English translation is provided. Each Party shall bear its own translation costs. 15.16 Punitive Damages Prohibited. The Parties hereby waive any claim to any damages in the nature of punitive, exemplary, or statutory damages in excess of compensatory damages, or any form of damages in excess of compensatory damages, and the arbitrator(s) is/are specially divested of any power to award any damages in the nature of punitive, exemplary, or statutory damages in excess of compensatory damages, or any form of damages in excess of compensatory damages. 15.17 Costs. The Party prevailing on substantially all of its claims shall be entitled to recover its costs, including attorneys' fees, for the arbitration proceedings, as well as for any ancillary proceeding, including a proceeding to compel or enjoin arbitration, to request interim measures or to confirm or set aside an award. 15.18 Survival. The provisions of this Section 15 shall survive expiration or termination of this Agreement. 16. ADDRESSES 16.1 All payments shall be made payable to Baylor College of Medicine and shall be sent to the lockbox address below, and shall reference the applicable BLG numbers listed on the front page of the Agreement BAYLOR Tax ID #: 74-1613878 Baylor College of Medicine Licensing Group P.O. Box 203710 Houston, TX 77216-3710 Telephone No. 713-798-6821 Facsimile No. 713-798-1252 E-Mail  HYPERLINK "mailto:ota@bcm.tmc.edu" blg@bcm.tmc.edu 16.2 For questions about payments, BAYLOR can contact LICENSEE at the address below: Title Name Address Telephone No. _______ Facsimile No. _______ E-Mail _______ 16.3 All notices, reports or other communication pursuant to this Agreement shall be sent to such Party via (i) United States Postal Service postage prepaid, (ii) overnight courier, or (iii) facsimile transmission, addressed to it at its address set forth below or as it shall designate by written notice given to the other Party. Notice shall be sufficiently made, or given and received (a) on the date of mailing or (b) when a facsimile printer reflects transmission. In the case of BAYLOR: Patrick Turley Associate General Counsel Baylor College of Medicine One Baylor Plaza, BCM210-600D Houston, TX 77030 Telephone No. 713-798-6821 Facsimile No. 713-798-1252 E-Mail  HYPERLINK "mailto:ota@bcm.tmc.edu" blg@bcm.tmc.edu In the case of LICENSEE: Title Name Address Telephone No. _______ Facsimile No. _______ E-Mail _______ 16.4 Each such report, notice or other communication shall include the applicable BLG numbers listed on the front page of the Agreement. 17. INDEMNITY, INSURANCE & WARRANTIES 17.1 Indemnity. (i) Each Party shall notify the other of any claim, lawsuit or other proceeding related to the Subject Technology and PATENT RIGHTS. LICENSEE agrees that it will defend, indemnify and hold harmless BAYLOR, its faculty members, scientists, researchers, employees, students, officers, trustees and agents and each of them (the Indemnified Parties), from and against any and all claims, causes of action, lawsuits or other proceedings (the bAYLOR Claims) filed or otherwise instituted against any of the Indemnified Parties related directly or indirectly to or arising out of the design, process, manufacture or use by any person or party of the Subject Technology, PATENT RIGHTS, Licensed Products or any other embodiment of the Subject Technology and patent rights even though such bAYLOR Claims and the costs (including, but not limited to, the payment of all reasonable attorneys' fees and costs of litigation or other defense) related thereto result in whole or in part from the negligence of any of the Indemnified Parties or are based upon doctrines of strict liability or product liability; provided, however, that such indemnity shall not apply to any bAYLOR Claims arising from the gross negligence or intentional misconduct of any Indemnified Party. LICENSEE will also assume responsibility for all costs and expenses related to such bAYLOR Claims for which it is obligated to indemnify the Indemnified Parties pursuant to this Paragraph 17.1, including, but not limited to, the payment of all reasonable attorneys' fees and costs of litigation or other defense. (ii) licensee further agrees not to settle any Claim against an IndemniFIED Party without the IndemniFIED Partys written consent which consent shall not be unreasonably withheld. licensee further agrees to keep THE IndemniFIED Parties fully apprised of the baylor claims. 17.2 Insurance. (i) LICENSEE shall for so long as LICENSEE manufactures, uses or sells any Licensed Product(s), maintain in full force and effect policies of (a) worker's compensation insurance within statutory limits, (b) employers' liability insurance with limits of not less than one million dollars ($1,000,000) per occurrence, (c) general liability insurance (with Broad Form General Liability endorsement) with limits of not less than twenty million dollars ($20,000,000) per occurrence with an annual aggregate of forty million dollars ($40,000,000) and (d) products liability insurance, with limits of not less than twenty million dollars ($20,000,000) per occurrence with an annual aggregate of forty million dollars ($40,000000). (ii) Such coverage(s) shall be purchased from a carrier or carriers having an A. M. Best rating of at least A- (A minus) and shall name BAYLOR as an additional insured. LICENSEE shall provide to BAYLOR copies of certificates of insurance within thirty (30) days after execution of this Agreement. Upon request by BAYLOR, LICENSEE shall provide to BAYLOR copies of said policies of insurance. It is the intention of the Parties hereto that LICENSEE shall, throughout the Term of this Agreement, continuously and without interruption, maintain in force the required insurance coverages set forth in this Paragraph 17.2. Failure of LICENSEE to comply with this requirement shall constitute a default of LICENSEE allowing BAYLOR, at its option, to immediately terminate this Agreement. (iii) BAYLOR reserves the right to request additional policies of insurance where appropriate and reasonable in light of LICENSEEs business operations and availability of coverage. 17.3 Disclaimer of Warranty. BAYLOR makes no warranties or representations, express or implied, including, but not limited to, warranties of fitness or merchantability, regarding OR WITH RESPECT TO the SUBJECT TECHNOLOGY, patent rights or Licensed Products and BAYLOR makes no warranties or representations, express or implied, of the patentability of the Subject Technology, patent rights or licensed PRODUCTS or of the enforceability of any patents issuing thereupon, if any, or that the Subject Technology, patent rights OR LICENSED PRODUCTS ARE OR SHALL BE free from infringement of any patent or other rights OF THIRD PARTIES. Nothing in this Agreement shall be construed as conferring by implication, estoppel or otherwise any license or rights under any patents of BAYLOR other than the Patent Rights, regardless of whether such patents are dominant or subordinate to the Patent Rights. 18. CONFIDENTIALITY 18.1 Scope. LICENSEE shall not, directly or indirectly, divulge or reveal to any person or entity the Confidential Information of BAYLOR without BAYLORs prior written consent or use such Confidential Information except as permitted hereunder. LICENSEE shall maintain the Subject Technology and Patent Rights in strictest confidence and use the same only in accordance with this Agreement. Employees, agents or subcontractors of LICENSEE shall be given access to the Confidential Information only on a legitimate need to know basis and after agreeing to be bound in writing to not divulge or reveal the Confidential Information. The public disclosure with the permission of BAYLOR of any one component of that which was identified as or constituted the Confidential Information of BAYLOR shall not prevent the other components from retaining their status as Confidential Information and the property of BAYLOR. Confidential Information shall include any and all information that is produced or results from the disclosure of Confidential Information by BAYLOR to LICENSEE and its sublicensees during the course of the relationship that is the subject of this Agreement. 18.2 Exclusion. Such obligation of confidentiality shall not apply to information which LICENSEE can demonstrate: (i) was at the time of disclosure in the public domain; (ii) has come into the public domain after disclosure through no fault of LICENSEE; (iii) was known to LICENSEE prior to disclosure thereof by BAYLOR; (iv) was lawfully disclosed to LICENSEE by a third party which was not under an obligation of confidence to BAYLOR with respect thereto; (v) LICENSEE was compelled to disclose by law or legal process; or (vi) was approved for public release by prior written permission of BAYLOR. 18.3 Court Order. LICENSEE may make disclosures of Confidential Information required by a Court Order, provided LICENSEE first gives a timely opportunity to BAYLOR to participate in the proceeding to the extent that the proceeding permits such participation. 19. ADDITIONAL PROVISIONS 19.1 Use of BAYLOR Name. LICENSEE agrees that it shall not use in any way the name of "Baylor College of Medicine" or any logotypes or symbols associated with BAYLOR or the names of any of the scientists or other researchers at BAYLOR without the prior written consent of BAYLOR. 19.2 Marking of Licensed Products. To the extent commercially feasible and consistent with prevailing business practices, LICENSEE shall mark, and shall cause its sublicensees to mark, all Licensed Products that are manufactured or sold under this Agreement with the number of each issued patent under the Patent Rights that applies to such Licensed Product. 19.3 BAYLOR's Disclaimers. Neither BAYLOR, nor any of its faculty members, scientists, researchers, employees, students, officers, trustees or agents assume any responsibility for the manufacture, product specifications, sale or use of the Subject Technology, Patent Rights or Licensed Products which are manufactured by or sold by LICENSEE. 19.4 Independent Contractors. The Parties hereby acknowledge and agree that each is an independent contractor and that neither Party shall be considered to be the agent, representative, master or servant of the other Party for any purpose whatsoever, and that neither Party has any authority to enter into a contract, to assume any obligation or to give warranties or representations on behalf of the other Party. Nothing in this relationship shall be construed to create a relationship of joint venture, partnership, fiduciary or other similar relationship between the Parties. 19.5 Non-Waiver. The parties covenant and agree that if a Party fails or neglects for any reason to take advantage of any of the terms provided for the termination of this Agreement or if a Party, having the right to declare this Agreement terminated, shall fail to do so, any such failure or neglect by such Party shall not be a waiver or be deemed or be construed to be a waiver of any cause for the termination of this Agreement subsequently arising, or as a waiver of any of the terms, covenants or conditions of this Agreement or of the performance thereof. None of the terms, covenants and conditions of this Agreement may be waived by a Party except by its written consent. 19.6 Reformation. The Parties hereby agree that neither Party intends to violate any public policy, statutory or common law, rule, regulation, treaty or decision of any government agency or executive body thereof of any country or community or association of countries, and that if any word, sentence, paragraph or clause or combination thereof of this Agreement is found, by a court or executive body with judicial powers having jurisdiction over this Agreement or any of the Parties hereto, in a final, unappealable order to be in violation of any such provision in any country or community or association of countries, such words, sentences, paragraphs or clauses or combination shall be inoperative in such country or community or association of countries, and the remainder of this Agreement shall remain binding upon the Parties hereto. In lieu of such inoperative words, sentences, paragraphs or clauses, or combination of clauses, there will be added automatically as part of this Agreement, a valid, enforceable and operative provision as close to the original language as may be possible which preserves the economic benefits to the Parties. 19.7 Force Majeure. No liability hereunder shall result to a Party by reason of delay in performance caused by force majeure, that is circumstances beyond the reasonable control of the Party, including, without limitation, acts of God, fire, flood, war, terrorism, civil unrest, labor unrest, or shortage of or inability to obtain material or equipment. 19.8 Entire Agreement. The terms and conditions herein constitute the entire agreement between the Parties and shall supersede all previous agreements, either oral or written, between the Parties hereto with respect to the subject matter hereof. No agreement of understanding bearing on this Agreement shall be binding upon either Party hereto unless it shall be in writing and signed by the duly authorized officer or representative of each of the Parties and shall expressly refer to this Agreement. IN WITNESS WHEREOF, the Parties hereto have executed and delivered this Agreement in multiple originals by their duly authorized officers and representatives on the respective dates shown below, but effective as of the Agreement Date. LICENSEE BAYLOR COLLEGE OF MEDICINE Name: ____________________ Name: ______________________ Cyndi M. Baily Title: _____________________ Title: Senior Vice President & General Counsel Date: _____________________ Date: _______________________ 1/3/08 LICENSEE BLG # Appendix A Patent Rights Law Firm Ref. No. BCM Ref. No.Title and Patent Number (if issued)CountryDeveloper(s)Appln. No.Filing Date and Issue Date AssignmentPriority Information BLG USABCM Appendix B Subject Technology List the technology, cell lines, biological materials, compounds, methods, documents, materials, tests and confidential information to sent by BAYLOR to LICENSEE.     Draft. For Discussion Purposes Only. 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