Sample Business Contracts

Exclusive License Agreement - Iowa State University Research Foundation Inc. and eMerge Interactive Inc.

Sponsored Links

                           EXCLUSIVE LICENSE AGREEMENT

         THIS AGREEMENT made and entered into by and between IOWA STATE
UNIVERSITY RESEARCH FOUNDATION, INC., a nonprofit corporation of the state of
Iowa, having its principal office at Iowa State University, 310 Lab of
Mechanics, Ames, Iowa 50011, (hereinafter called "ISURF"), and eMERGE
Interactive, Inc., a corporation of the State of Florida , having its principal
office at 10315 102nd Terrace, Sebastian, Florida 32958, (hereinafter called

The effective date of this Agreement is the last date of signature below.


         WHEREAS, ISURF is Owner by assignment from Jacob Petrich and his
associate(s) of their Patent Rights (as later defined herein), in ISURF
Intellectual Property Disclosure and Record Docket Number 02314 and is titled
"Method and System for Detecting Fecal and Ingesta Contamination on the
Carcasses of Meat Animals During and After Slaughter Using Visible Light"
(hereinafter "Invention") ; and

         WHEREAS, ISURF has right to certain technical data and information
("Technology" as hereinafter defined); and

         WHEREAS, LICENSEE has entered into a Cooperative Research and
Development Agreement (CRADA) with the United States Department of
Agriculture/Agricultural Research Service (USDA/ARS;) to develop a prototype
instrument embodying Invention; and

         WHEREAS, ISURF desires to have Invention, Technology and Patent Rights
utilized in the public interest and is willing to grant a license thereunder;

         WHEREAS, Invention, Technology, and Patent Rights are jointly owned
with USDA and subject to a joint ownership agreement under which ISURF has the
right to exclusively license Invention, Technology and Patent Rights; and

         WHEREAS, LICENSEE has represented to ISURF, to induce ISURF to enter
into this Agreement, that LICENSEE is experienced in the development,
production, manufacture, marketing and sale of products comparable to the
Licensed Products (as later defined herein) and/or the use of the Licensed
Process(es) (as later defined herein) and that it shall commit itself to a
thorough, vigorous, commercially reasonable and diligent program of exploiting
the Patent Rights, Invention, and Technology so that public utilization shall
result therefrom; and
<PAGE>   2
         WHEREAS, LICENSEE desires to obtain a license in order to practice the
above referenced invention covered by Patent Rights, Invention and the
Technology in the Territory, and to manufacture, use and sell in the commercial
market the products made in accordance therewith; and

         WHEREAS, ISURF is desirous of granting such a license to LICENSEE in
accordance with the terms of this Agreement.

         NOW, THEREFORE, in consideration of the foregoing premises the parties
hereto agree as follows:

                                 I. DEFINITIONS

         As used in this Agreement, the following words and phrases shall have
the meanings ascribed to them in this section.

1.1      AFFILIATED COMPANY: Any company (1) in which LICENSEE has a controlling
         interest or (2) is under common control with LICENSEE by third party.

1.2      FIELD: meat and carcass inspection.

1.3      LICENSED PRODUCTS: Any product or part thereof which utilizes
         Technology or Invention and/or is covered in whole or in part by an
         issued, unexpired claim or a pending claim contained in Patent Rights
         or products made in accordance with or by means of Licensed Processes.

1.4      LICENSED PROCESSES: Any process which, but for the rights granted in
         this Agreement would infringe one or more of an issued, unexpired, or
         pending claim contained in the Patent Rights.

1.5      NET SALES: The amount billed or invoiced on sales of Licensed Products
         or products made with the use of Licensed Processes, whether in the
         form of rentals, leases, royalties, sales price, or otherwise,
         including all amounts paid for installation, maintenance and service,

         a)       Customary trade, quantity or cash discounts;

         b)       Amounts repaid or credited by reason of rejection or return;

         c)       To the extent separately stated on purchase orders, invoices
                  or other documents of sale, shipping charges, taxes levied on
                  and/or other governmental charges made as to production, sale,
                  transportation, delivery or use and paid by or on behalf of

<PAGE>   3
         Licensed Product given away, or transferred by any other method without
         charge or at a reduced rate, without prior consent of ISURF, will be
         considered sold at the average price at which LICENSEE, Affiliated
         Company, or sublicensee sells the Licensed Product. Licensed Products
         distributed without charge with prior consent of ISURF will not be
         considered sold.

1.6      PATENT RIGHTS: All present and future United States patent
         applications, the inventions described and claimed therein, and any
         divisions, continuations, continuations-in-part to the extent the
         claims are directed to subject matter specifically described in
         Invention, patents issuing thereon or reissues thereof; and any and all
         foreign patents and patent applications corresponding thereto; which
         will be automatically incorporated in and added to the Agreement.

1.7      TERRITORY: worldwide.

1.8      TECHNOLOGY: Existing technical data and information provided to
         LICENSEE and pertaining to ISURF Docket No. 2314 or Patent Rights.

1.9      TERM.  as defined in Section 8.1

1.10     EXCLUSIVE LICENSE: A license under which ISURF shall not grant further
         licenses to a third party to use Technology and Patent Rights in the
         Field and within the Territory, subject to 2.6 and 2.7.

                                    II. GRANT

2.1      EXCLUSIVITY: ISURF hereby grants and LICENSEE hereby accepts subject to
         the terms and conditions hereof, an Exclusive License, in the Field and
         within the Territory, and to the extent not prohibited by other patents
         not owned by: ISURF, to make and have made, to use, sell, offer to
         sell, and import Licensed Products and products made with the use of
         Licensed Processes and to use Licensed Processes during the Term of
         this Agreement.

2.2      US MANUFACTURE: LICENSEE agrees that Licensed Products sold in the
         United States shall be manufactured substantially in the United States.

2.3      REASONABLE EFFORTS: LICENSEE shall use reasonable efforts to effect
         introduction of the Licensed Products into the commercial market as
         soon as practicable, consistent with sound and reasonable business
         practice and judgment, thereafter, until the expiration of this
         Agreement, LICENSEE shall make reasonable efforts to keep Licensed
         Products reasonably available to the public within the Territory.

<PAGE>   4
2.4      SUBLICENSE: LICENSEE shall have the right to sublicense for use any or
         all of the rights and privileges granted to LICENSEE in this Agreement
         subject to the following:

         a)       LICENSEE agrees that any such sublicense will contain
                  provisions which obligate the sublicensee to LICENSEE to at
                  least the same extent that LICENSEE is obligated to ISURF
                  under this Agreement;

         b)       LICENSEE agrees that any such sublicense will not be
                  transferable except to ISURF or LICENSEE;

         c)       LICENSEE agrees to inform ISURF of every fully executed
                  sublicense involving the Patent Rights and to provide a copy
                  of each such sublicense to ISURF upon the latter's request;

         d)       LICENSEE shall not receive from sublicensees anything of value
                  in lieu of cash payments in consideration for any sublicense
                  under this Agreement, without the express prior written
                  permission of ISURF.

         e)       In the event that after five (5) years from the Effective Date
                  of the Agreement, LICENSEE is unable or has no firm business
                  plan to introduce Licensed Product(s) into any region of the
                  exclusive Territory for use within the Field where ISURF can
                  demonstrate a genuine need for a Licensed Product exists and
                  LICENSEE is unwilling to grant sublicenses to third parties
                  which may reasonably satisfy such a need, ISURF may directly
                  license such third parties to use Patent Rights and Technology
                  only in said region of the Territory and for said specific use
                  and will provide LICENSEE with the names of any third party it
                  intends to license within twenty (20) days of signing a
                  license with such third party. ISURF shall not license such
                  third parties under terms more favorable than those granted to

2.5      RESEARCH AND PUBLICATION RIGHTS: ISURF retains rights to make and to
         use and to grant non-exclusive licenses to make and to use for research
         purposes only and to publish on the subject matter described in Patent
         Rights and Technology.

2.6      SPONSOR RIGHTS: The granting and acceptance of this Agreement is
         subject to ISURF's obligations under federal research funding subject
         to United States Public Law 96-517, and Public Law 98-620, as amended,
         wherein the US Federal Government has a royalty-free license to
         practice, the inventions which are the subject of this License
         Agreement. Any right granted in this Agreement greater than that
         permitted under Public Law 96-517 or Public Law 98-620 shall be subject
         to modification as may be required to conform to the provisions of that

<PAGE>   5
                               III. CONSIDERATIONS

3.1      LICENSE FEE AND ROYALTY: In consideration for the license granted to it
         hereunder, LICENSEE will pay to ISURF:

         a)       a non-refundable license issue fee in the sum of $10,000.00
                  upon execution of this Agreement.

         b)       during the term of this Agreement a royalty of six percent
                  (6%) of Net Sales of all Licensed Products used or sold by
                  and/or for LICENSEE, its Affiliated Companies, and its

         c)       in the case of sublicenses, LICENSEE shall also pay to ISURF
                  fifty percent (50%) of non-royalty sublicense income (e.g.,
                  license issue fees, license maintenance fees, etc.).

3.2      Licensed Product will be considered sold when billed out or invoiced.

3.3      On sales between LICENSEE and its Affiliated Companies or sublicensees
         for resale, the royalty shall be paid on the resale.

3.4      MINIMUM ROYALTIES: ISURF shall have the right to terminate this license
         in the event that LICENSEE does not pay to ISURF the following
         nonrefundable minimum royalties which are creditable against running

         December 31 of 2000                                      $1000.00
         December 31 of 2001                                      $3000.00
         December 31 of 2002                                      $5000.00
         and each year thereafter.

3.5      This duty to pay royalties under 3.1 shall expire with the
         last-to-expire Patent Rights on a country by country basis. If no
         Patent Rights exist in a country, this duty to pay royalties shall
         expire 10 years after the first commercial sale in that country.

3.6      In the event that LICENSEE develops a combination product(s), which
         shall mean a product sold by LICENSEE, its Affiliated Company(ies), or
         Sublicensees, that contains a Licensed Product plus other non-Licensed
         Product component(s) that (i) can be sold separately by LICENSEE
         without infringing, contributing to the infringement of, or dependent
         upon Patent Rights; and (ii) adds value to the final product being sold
         by the LICENSEE, ISURF will consider renegotiating royalties for the
         combination product(s).

<PAGE>   6

4.1      FIRST SALE AND PRODUCT NAMES: LICENSEE shall report to ISURF the date
         of first sale of LICENSED PRODUCTS (or results of LICENSED PROCESSES)
         in each country where products are sold within thirty (30) days of
         occurrence. LICENSEE shall report to ISURF the specific product name(s)
         or trade name(s) of each and every product(s) sold by LICENSEE using
         licensed Invention and/or Technology.

4.2      SEMI-ANNUAL REPORTS: LICENSEE, within sixty (60) days after June 30,
         and December 31, of each year, shall deliver to ISURF true and accurate
         reports, giving such particulars of the business conducted by LICENSEE,
         its Affiliated Companies, and its sublicensees during the preceding six
         month period under this Agreement as shall be pertinent to a royalty
         accounting hereunder. These shall include at least the following;

         a)       number of Licensed Products manufactured and sold by LICENSEE,
                  its Affiliated Companies, and all sublicensees;

         b)       total billings for Licensed Products sold by LICENSEE, its
                  Affiliated Companies, and all sublicensees;

         c)       accounting for all Licensed Processes and Technology used or
                  sold by LICENSEE, its Affiliated Companies, and all

         d)       deductions applicable as provided in Paragraph (1.5);

         e)       total royalties due;

         f)       names and addresses of all sublicensees of LICENSEE; and

         g)       if no royalties are due, LICENSEE shall so report.

4.3      MINIMUMS: If royalties for any calendar year do not meet or exceed the
         minimum royalties established in Section 3.4, LICENSEE shall include
         the balance of the minimum royalty with the payment for the period
         ending December 31.

4.4      ROYALTY PAYMENT: Simultaneously with the delivery of each such
         accounting, LICENSEE shall make disbursements in United States
         currency, drawn on a United States bank, of the royalties due for the
         period covered by such report. Conversion of foreign currency to US
         dollars shall be made at the conversion rate existing in the United
         States (as reported in the Wall Street journal) on the last working day
         of each royalty period. Such payments shall be without deduction of
         exchange, collection or other charges.

<PAGE>   7
4.5      LATE PAYMENT: Late payments shall be subject to an interest charge of
         one and one-half percent (1.50 %) per month.

4.6      RECORDS: LICENSEE shall keep, and shall require its Affiliated
         Companies and sublicensees to keep, accurate and correct records of
         LICENSED PRODUCTS made, used or sold under this Agreement, appropriate
         to determine the amount of royalties due hereunder to ISURF. Such
         records shall be retained for at least five (5) years following a given
         reporting period. They shall be available during normal business hours
         for inspection at the expense of ISURF by ISURF's Internal Audit
         department or by a Certified Public Accountant selected by ISURF for
         the sole purpose of verifying reports and payments hereunder. Such
         accountant shall not disclose to ISURF any information other than
         information relating to accuracy of reports and payments made under
         this Agreement.

         In the event that any such inspection shows an under reporting and
         underpayment in excess of five percent (5%) for any twelve (12) month
         period, then LICENSEE shall pay the cost of such examination as well as
         any additional sum that would have been payable to ISURF had the
         LICENSEE reported correctly, plus interest.

4.7      Financial Statement: On or before the ninetieth (90th) day following
         the close of LICENSEE's fiscal year, upon request by ISURF LICENSEE
         shall provide ISURF with LICENSEE's certified financial statements for
         the preceding fiscal year including, at minimum, a Balance Sheet and an
         Operating Statement.

4.8      Confidentiality: All such reports shall be maintained in confidence by
         ISURF, except as required by law, including Public Law 96-517 and


         responsibility for the preparation, filing, prosecution and maintenance
         of any and all future patent applications and patents included in
         Patent Rights.

         LICENSEE shall reimburse ISURF for all patent prosecution and
         maintenance costs of the Patent Rights, which are reported to it by
         USDA/ARS, plus a 15% administration fee, whether such fees and costs
         were incurred before or after the date of this Agreement. Amounts will
         be payable 30 days from date of ISURF's invoice. In country(ies) where
         LICENSEE elects not to reimburse ISURF for such fees and costs,
         LICENSEE shall have no residual license or patent rights to Invention
         in said country(ies).

<PAGE>   8
                                VI. INFRINGEMENT

6.1      NOTIFICATION: LICENSEE shall inform ISURF promptly in writing upon
         learning of any alleged infringement of the Patent rights by a third
         Party and of any available evidence thereof.

6.2      ENFORCEMENT BY ISURF: During the term of this Agreement, ISURF shall
         have the right, but shall not be obligated, to prosecute at its own
         expense all infringements of the Patent Rights and, in furtherance of
         such right, LICENSEE hereby agrees that ISURF may include LICENSEE as a
         party plaintiff in any such suit, without expense to LICENSEE. The
         total cost of any such infringement action commenced or defended solely
         by ISURF shall be borne by ISURF and ISURF shall keep any recovery or
         damages for past infringement derived therefrom.

6.3      ENFORCEMENT BY LICENSEE: If within six(6) months after having been
         notified of any alleged infringement, ISURF shall have been
         unsuccessful in persuading the alleged infringer to desist and shall
         not have brought and shall not be diligently prosecuting an
         infringement action, or if ISURF shall notify LICENSEE at any time
         prior thereto of its intention not to bring suit against any alleged
         infringer (in the Territory for the Field), then, and in those events
         only, LICENSEE shall have the right, but not be obligated, to prosecute
         at its own expense any infringement of the Patent Rights (in the
         Territory for the Field), and LICENSEE may, for such purposes, use the
         name of ISURF as party plaintiff; provided, however, that such right to
         bring such an infringement action shall remain in effect only for so
         long as the license granted herein remains effective. No settlement,
         consent judgment or other voluntary final disposition of the suit may
         be entered into without the consent of ISURF, such consent shall not
         unreasonably be withheld. LICENSEE shall indemnify ISURF against any
         order for costs that may be made against ISURF in such proceedings.

6.4      EXPENSE AND RECOVERY: In the event that LICENSEE shall undertake the
         enforcement and/or defense of the Patent Rights by litigation, LICENSEE
         may withhold up to fifty percent (50%) of the payments otherwise
         thereafter due ISURF under Article IV hereunder and apply the same
         toward reimbursement of up to half of LICENSEE's expenses, including
         reasonable attorneys' fees, in connection therewith. Any recovery of
         damages by LICENSEE for each such suit shall be applied first in
         satisfaction of any unreimbursed expenses and legal fees of LICENSEE
         relating to such suit, and next toward reimbursement of ISURF for any
         payments under Article IV past due or withheld and applied pursuant to
         this Article VI. The balance remaining from any such recovery shall be
         divided equally between LICENSEE and ISURF.

6.5      DEFENSE OF INVALIDITY OF PATENT RIGHTS: In the event that a declaratory
         judgment action alleging invalidity or noninfringement of any of the
         Patent Rights shall be brought against LICENSEE, ISURF, at its option,
         shall have the right, within thirty (30) days

<PAGE>   9
         after commencement of such action, to intervene and take over the sole
         defense of the action at its own expense.

6.6      COOPERATION: In any infringement suit as either party may institute to
         enforce the Patent Rights pursuant to this Agreement, the other party
         hereto shall, at the request and expense of the party initiating such
         suit, cooperate in all respects and, to the extent practicable, have
         its employees testify when requested and make available relevant
         record, papers, information, samples, specimens, and the like.

6.7      SUBLICENSE: LICENSEE during the exclusive period of the Agreement,
         shall have the sole right in accordance with the terms and conditions
         herein to sublicense to tiny alleged infringer (in the Territory for
         the Field) for future use of the Patent Rights. Any up-front fees as
         part of such a sublicense shall be shared equally between LICENSEE and
         ISURF; other royalties shall be treated per Article IV.


7.1      INDEMNIFICATION: LICENSEE shall at all times during the term of this
         Agreement indemnify, defend and hold ISURF, its trustees, officers,
         employees and affiliates, and USDA/ARS harmless against all claims,
         proceedings, demands, liabilities and expenses arising out of any
         damage or injury to property or person and resulting from the

         a)       production, manufacture, sale, distribution, use, lease,
                  consumption or advertisement of the Licensed Products, any
                  Licensed Processes, and/or other products incorporating or
                  made using Technology, or

         b)       the utilization of any Technology or Patent Rights granted
                  hereunder, by LICENSEE, its sublicensees, customers or
                  distributors of LICENSEE or its sublicensees, or other users
                  of Licensed Products, Licensed Processes and/or other products
                  incorporating or made using Technology.

7.2      INSURANCE: LICENSEE shall maintain reasonable levels of product
         liability insurance as soon as it has commercialized Licensed Products,
         Licensed Processes, or any other product incorporating or made using
         Technology. ISURF has the right to require such insurance certificates
         to be made available for ISURF's inspection.


         a)       ISURF and USDA/ARS shall not be liable to LICENSEE or its
                  sublicensees for any direct, indirect, special, incidental,
                  exemplary, consequential or any other damages arising from
                  utilization of the Technology or Patent Rights granted
                  hereunder by LICENSEE or its sublicensees.

<PAGE>   10
         b)       ISURF and USDA/ARS shall not be liable to LICENSEE, or its
                  sublicensees, customers or distributors of LICENSEE or its
                  sublicensees, or end users, for any direct, indirect, special,
                  incidental, exemplary, consequential or any other damages
                  arising from such parties' production manufacture, sale,
                  distribution, use, lease, consumption or advertisement of
                  Licensed Products, any Licensed Processes, or other products
                  incorporating or made using Technology.

         USDA/ARS represent and warrant that Iowa State University and USDA/ARS
         inventor(s) have assigned to ISURF his/her(their) entire right, title
         and interest in the patent applications or patents comprising the
         Patent Rights and that ISURF has the authority to issue licenses under
         said Patent Rights. ISURF does not warrant the validity or
         enforceability of the Patent Right, pending or issued now or in the
         future, licensed hereunder and makes no representations or warranties
         whatsoever with regard to the scope of the Patent Rights or Technology,
         or that such Patent Rights or Technology may be exploited by LICENSEE,
         an Affiliated Company, or sublicensee without infringing other patents.
         Nothing in this Agreement shall be construed as a representation made
         or warranty given by ISURF that the practice by LICENSEE, an Affiliated
         Company or sublicensee of the license granted hereunder will not
         infringe the patent rights of a third party.


                           VIII. TERM AND TERMINATION

8.1      TERM: Unless terminated earlier as provided herein, the Term of this
         Agreement shall commence on the Effective Date and expire on expiration
         of the last duty to pay royalties under 3.5.

8.2      TERMINATION BY ISURF: ISURF shall have the right and option of
         terminating this Agreement upon written notice to LICENSEE in the
         following events: If LICENSEE

         a)       fails to make any payment whatsoever due and payable to ISURF
                  hereunder, ISURF shall have the right to terminate this
                  Agreement effective on forty-five (45) days' notice, unless
                  LICENSEE shall make all such payments to ISURF plus interest
                  within said period. Upon the expiration of the forty-five (45)
                  day period, if LICENSEE shall not have made all such payments
                  to ISURF, the rights, privileges and license granted hereunder
                  shall automatically terminate; or

<PAGE>   11
         b)       shall be in default in the performance of any obligations
                  under this Agreement (other than as provided in 8.2 (a) above
                  which shall take precedence over any other default), and if
                  the default has not been remedied within ninety (90) days
                  after the date of notice in writing of such default, the
                  nature of which is contained in said notice, ISURF may
                  terminate this Agreement immediately by written notice, or

         c)       is declared insolvent or bankrupt by a court of competent
                  jurisdiction, or a voluntary petition of bankruptcy Is filed
                  in any court of competent jurisdiction, or LICENSEE shall make
                  or execute an assignment for the benefit of creditors, ISURF
                  shall then have the right and option to terminate this
                  Agreement and the rights and obligations hereunder forthwith
                  by notice in writing to LICENSEE.

8.3      TERMINATION BY LICENSEE: LICENSEE shall have the right to terminate
         this Agreement at anytime upon a ninety (90) day written notice to

8.4      TERMINATION OF SUBLICENSES: Any sublicenses granted by LICENSEE under
         this Agreement shall provide for termination or assignment to ISURF, at
         the option of ISURF, of LICENSEE's interest therein upon termination of
         this agreement.

8.5      ROYALTIES AT TERMINATION: Any termination of this Agreement and the
         rights and obligations hereunder shall not release LICENSEE from the
         payment of any earned royalties accrued or expense reimbursement
         accrued and unpaid up to the date of such termination. Upon termination
         a final report shall be submitted and any royalty payments and
         unreimbursed patent expenses due ISURF become immediately payable.

8.6      OBLIGATIONS CONTINUE: Upon termination of this Agreement for any
         reason, nothing herein shall be construed to release either party from
         any obligation that matured prior to the effective date of such


9.1      Advertising and Public Announcements: LICENSEE shall not use or publish
         or circulate any printed advertising matter containing a reference to
         Iowa State University or USDA/ARS or the names of personnel either of
         Iowa State University, USDA/ARS or of ISURF. Advertising material which
         identifies publications, by citations in customary form, shall not,
         however, be deemed to contain such a reference to Iowa State
         University, USDA/ARS, ISURF, or personnel of Iowa State University,
         USDA/ARS or ISURF. Authorization is hereby given to LICENSEE in
         connection with Licensed Product to state in advertising matter that
         the Licensed Product is exclusively licensed from ISURF, or that the
         licensed Invention was developed by inventors at Iowa State University.

<PAGE>   12
         ISURF retains the right to disclose to the public the transfer of this
         technology and the existence of this license with the LICENSEE.

9.2      ISU PUBLICATIONS: LICENSEE is authorized to use complete reprints of
         publications by Iowa State University, relating to the Invention,
         Technology, or Patent Rights.

9.3      ISURF REVIEW: LICENSEE agrees to send copies of all such advertising
         matter to ISURF immediately after first publication.

                               X. CONFIDENTIALITY

10.1     CONFIDENTIAL INFORMATION: LICENSEE hereby agrees not to disclose to
         third parties information which relates to the Invention, Technology,
         Patent Rights, which information is not yet published in an issued
         patent. LICENSEE agrees to take the same degree of care as it does with
         its own confidential information to maintain the information secret and
         confidential and not to use the same except to the extent that:

         a)       information at the time it was disclosed by ISURF was in the
                  general public knowledge;

         b)       information after being disclosed by ISURF is published or
                  otherwise disseminated to the public other than through
                  LICENSEE's unauthorized disclosures;

         c)       information can be shown to have been in LICENSEE's possession
                  by documentation existing at the time the information was
                  disclosed by ISURF,

         d)       information can be shown by documentation to have been
                  received in good faith by LICENSEE independently from a third
                  party; and

         e)       information can be shown by documentation to have been
                  independently developed by LICENSEE.

         LICENSEE also agrees to exercise all reasonable precautions to prevent
         the use of data, research, findings and/or concepts in ongoing and
         future research and business developments, and to use the information
         only for the purpose stated in this Agreement.

         In any dispute with respect to the exceptions in subparagraphs a)
         through e), the burden of proof will be on LICENSEE and such proof
         shall be by clear and convincing evidence.

                                   XI. GENERAL

<PAGE>   13
11.1     GOVERNING LAW: This Agreement shall be governed by and construed in
         accordance with the laws of the State of Iowa.

11.2     COMPLIANCE WITH LAW: LICENSEE agrees to comply with all applicable laws
         and regulations. In particular, it is understood and acknowledged that
         the transfer of certain commodities and technical data is subject to
         United States laws and regulations controlling the export of such
         commodities and technical data, including all Export Administration
         Regulations of the United States Department of Commerce. These laws and
         regulations among other things, prohibit or require a license for the
         export of certain types of technical data to certain specified
         countries. LICENSEE hereby agrees and gives written assurance that
           it will comply with all United States laws and regulations
         controlling the export of commodities and technical data, that it will
         be solely responsible for any violation of such by LICENSEE or its
         Affiliated Companies or sublicensees, and that it will defend and hold
         ISURF harmless in the event of any legal action of any nature
         occasioned by such violation.

11.3     ASSIGNMENT: This agreement may not be assigned. In the event of
         successors in interest to LICENSEE'S business, through merger or asset
         purchase for example, ISURF agrees to consider making appropriate and
         necessary amendments to this provision.

11.4     ENTIRE AGREEMENT: This Agreement contains the entire agreement between
         the parties hereto and supersedes all prior agreements with respect to
         the subject matter thereof.

11.5     NOTICES: Any notice required or permitted to be given under this
         Agreement shall be deemed to have been sufficiently given if a written
         notice is mailed by certified mail, postage prepaid, addressed to the
         party to be notified at its address as may later be furnished in
         writing to the notified party, and providing that the party to be
         notified is also promptly advised by telephone of the sending and
         content of said written notice. Completion of these steps constitutes
         receipt of notice, upon which time said notice is effective.

11.6     MODIFICATION: Any modification of this agreement to be effective must
         be in writing and signed by both parties.


<PAGE>   14
11.7     SEVERABILITY: If one or more of the provisions of this Agreement shall
         be held to be invalid, illegal or unenforceable in any respect, the
         validity, legality and enforceability of the remaining provisions shall
         not in any way be affected or impaired thereby. The invalid or
         unenforceable part or provisions shall be replaced with a provision
         which accomplishes, to the extent possible, the original business
         purpose of such part or provisions in a valid enforceable manner.

11.8     MARKING: LICENSEE agrees to mark all Licensed Products sold in all
         countries with all applicable patent numbers and other marks in such a
         manner as to conform with the patent laws and practice of the country
         of manufacture or sale.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers.


Kenneth Kirkland, Ph. D,
Executive Director


                                      Date    8/3/99
[signature of an authorized officer]

Printed Name: T. Michael Janney