SOFTWARE LICENSE AGREEMENT BETWEEN POLYMEDIX, INC. AND THE TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA

BETWEEN

POLYMEDIX, INC.

AND

THE TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA

This Software License Agreement (this “Agreement”) is made on May 30, 2003 (the “Effective Date”), by and between The Trustees of the University of Pennsylvania, a Pennsylvania nonprofit corporation, with offices located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (“Penn”), and Polymedix, Inc., a Delaware corporation (“Licensee”), with its principal offices at 5 Radnor Corporate Center, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.

BACKGROUND

▇. ▇▇▇▇ owns or has rights to license certain software developed in the laboratories of Drs. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ of Penn’s School of Arts and Sciences, which software is used or useful in the practice of certain inventions being licensed by Penn to Licensee under a Patent License Agreement between them dated as of the date hereof (the “Patent License Agreement”);

B. Licensee desires to obtain license rights to use, copy, perform, display, distribute, modify and prepare derivative works based on such software, and a first option to negotiate with Penn to obtain a license to certain improvements and modifications directly related thereto; and

C. The exploitation of the software developed in the laboratories of Drs. ▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇ is in the best interest of Penn and is consistent with their educational and research missions and goals.

NOW, THEREFORE, in consideration of the promises and covenants contained in this Agreement and intending to be legally bound, the parties agree as follows:

1. DEFINITIONS

1.1 “Affiliate” means any legal entity directly or indirectly controlling, controlled by or under common control with Licensee that has executed (a) this Agreement or (b) a written joinder agreement, in a form satisfactory to Penn, agreeing to be bound by all of the terms and conditions of this Agreement as if such Affiliate were an original party to this Agreement. For purposes of this Agreement, “control” means the direct or indirect ownership of at least fifty percent (50%) of the outstanding voting securities of a legal entity, or the right to receive more than fifty percent (50%) of the profits or earnings of a legal entity, or the right to control the policy decisions of a legal entity, or the right to appoint a majority of its board of directors or the maximum percentage allowed by law in the country of the controlled entity.


	1.2 “Agreement” shall have the meaning given in the first paragraph hereof.

1.3 “Change of Control” means an assignment of the License, an exclusive sublicense of all of the intellectual property and any other rights granted to Licensee under this Agreement, a direct merger or other change in corporate structure where Licensee is not the surviving entity, a sale or transfer of the capital stock of Licensee representing more than fifty percent (50%) of the voting power of the stockholders of Licensee immediately prior to such sale, or an initial public offering of securities by Licensee. For clarity, a Change of Control shall not include a financing event in which Licensee may transfer more than fifty percent (50%) of the voting power of the stockholders to venture capital or other similar investors who do not exercise control over day-to-day operations of Licensee.

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	1.5 “Default” shall have the meaning given in Section 5.2.


	1.6 “Effective Date” shall have the meaning given in the first paragraph of this Agreement.


	1.7 “Indemnified Party” shall have the meaning given in Section 7.5.


	1.8 “Liability” and “Liabilities” shall have the meaning given in Section 7.5.


	1.9 “License” shall mean the license granted by Penn to Licensee pursuant to Section 2.1.


	1.10 “Licensee” shall have the meaning given in the first paragraph of this Agreement.


	1.11 “Patent License Agreement” shall have the meaning given in the recitals above.


	1.13 “Sublicense” shall have the meaning given in Section 2.4.1.


	1.14 “Sublicense Assignment” shall have the meaning given in Section 2.4.2.


	1.15 “Sublicensee” shall have the meaning given in Section 2.4.1.


	1.16 “Trigger Event” means any of the following:


		1.16.2 If proceedings under any law related to bankruptcy, insolvency, liquidation, or the reorganization, readjustment or the release of debtors are instituted or commenced by Licensee; or


		1.16.3 If any order for relief is entered relating to any of the proceedings described in Sections 1.16.1 or 1.16.2; or


		1.16.4 If Licensee shall call a meeting of its creditors with a view to arranging a composition or adjustment of its debts; or


		1.16.5 If Licensee shall by any act or failure to act indicate its consent to, approval of or acquiescence in any of the proceedings described in Sections 1.16.1, 1.16.2, 1.16.3 or 1.16.4.


		2.4.1 Licensee may sublicense the rights granted in this Agreement by written sublicense agreement which form shall (a) prohibit the sublicensee (“Sublicensee”) from further sublicensing, (b) require that the Sublicensee be subject to the applicable terms and conditions of the license granted to Licensee under this Agreement, and (c) to the extent separate license fees are paid for sublicense rights to the Penn Software, disclaim all consequential damages as to claims with respect to the Penn Software and limit liability to no more than the actual license fees paid by the Sublicense for such sublicense rights (each, a “Sublicense”).


		2.4.2 Within thirty (30) days after Licensee enters into any Sublicense: (a) Licensee must deliver to Penn a complete copy of the Sublicense (after redacting any confidential information that is not reasonably relevant to Penn’s administration of this Agreement) written in the English language (Penn’s receipt of the Sublicense shall not constitute an approval of the Sublicense or a waiver of any of Penn’s rights or Licensee’s obligations under this Agreement); (b) an executed assignment and security agreement in form acceptable to Penn (each, a “Sublicense Royalty Assignment”) granting Penn, as security for the payment of Licensee’s obligations hereunder, an assignment of and security interest in any royalties, fees or other proceeds generated by such Sublicense, exercisable upon occurrence and during the continuance of a Default under Section 5.2; and (c) such executed forms of UCC-1 and UCC-3 or other documents as may be necessary to perfect Penn’s interest in such Sublicense Royalty Assignment. In addition to any rights or remedies provided for under this Agreement, Penn shall have all of the rights and remedies of a secured party under the Uniform Commercial Code. Upon request, Licensee shall execute all such documents as are reasonably necessary to evidence and perfect in any jurisdiction Penn’s interest in and to such Sublicense Royalty Assignment. If Licensee fails to execute such documents in a timely manner, Licensee hereby grants Penn, effective during the period during which this Agreement or any Sublicense is in effect, an irrevocable power of attorney to execute in the name of Licensee all such documents as are reasonably necessary to evidence and perfect in any jurisdiction Penn’s interest in and to such Sublicensee Royalty Assignment. Penn hereby agrees that its assignment of and security interest in such royalties, fees and other proceeds shall be subordinated to any security interest and/or assignment that Licensee may grant to any lender to Licensee, and Penn shall execute and deliver any such documents as may be reasonably requested by Licensee to confirm and document the foregoing. Upon satisfaction of Licensee’s payment obligations hereunder, Penn shall execute such UCC termination statements with respect to the Sublicensee Royalty Assignment as Licensee shall reasonably request.


		2.4.3 In the event of the continuance of a Default under Section 5.2 hereunder, all payments then or thereafter due to Licensee or its Affiliates from each Sublicensee shall, upon notice from Penn to any such Sublicensee, become owed directly to Penn for the account of Licensee or its Affiliate; provided that Penn shall remit to Licensee or its Affiliate the amount by which such payments in the aggregate exceed the total amount owed by Licensee to Penn.


		2.5.1 In the event that software is developed in the Penn labs of Drs. ▇▇▇▇▇, ▇▇▇▇▇▇▇ or ▇▇▇▇▇ that is a modification, improvement or enhancement to the Penn Software, Penn shall notify Licensee within 45 days after becoming aware of such development. Licensee shall within 30 days notify Penn that Licensee desires to obtain a license to such software. If Licensee so elects, then Penn and Licensee shall promptly thereafter negotiate in good faith for Licensee to take a license such software under terms substantially the same as those set forth herein; provided, however, that no additional consideration shall be payable to Penn in connection therewith. Notwithstanding the foregoing sentence, Penn reserves the right to renegotiate in good faith the consideration payable to Penn as it pertains to such software as may be required to protect Penn’s tax exempt status under the provisions of the Tax Reform Act of 1986.


		2.5.2 Penn shall not be obligated to license any software to Licensee under this Section 2.5 to the extent it is obligated to license such software to another party by reason of a sponsored research agreement entered into with such other party; provided, however, that Penn shall in good faith negotiate with Licensee for Licensee to sponsor any research that is specifically directed towards the development of software that is a modification or improvement to the Penn Software for a period of at least 150 days prior to entering into any such sponsored research agreement with another party. Any such sponsored research agreement with Penn that is specifically directed towards the development of software covered by this Section 2.5 shall require the payment of no more than “nominal” consideration to Penn.


		2.5.3 If the parties are unable to agree on the terms of a license and Penn subsequently licenses any such software to a third party, Penn shall promptly reimburse Licensee for all costs and expenses that Licensee has paid to Penn in connection with the filing and prosecution of any copyright or other registrations with respect to such software.


		2.5.4 The rights described in this Section will expire as to any software developed (as determined based on invention disclosure submissions to Penn) after the fifth anniversary of the Effective Date, or the date of a Change of Control, whichever occurs sooner.


	3.1 License Fees. In consideration of the License, Licensee shall pay to Penn an one-time license fee of One Thousand Dollars ($1000.00).


	3.2 Currency, Place of Payment, Interest, Payment of Expenses.

SOFTWARE LICENSE AGREEMENT BETWEEN POLYMEDIX, INC. AND THE TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA

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		3.2.1 All dollar amounts referred to in this Agreement are expressed in United States dollars. All payments to Penn under this Agreement shall be made in United States dollars by check payable to “The Trustees of the University of Pennsylvania.”


		3.2.2 Amounts that are not paid when due shall accrue interest from the due date until paid, at a rate equal to one and one-half percent (1.5%) per month or part thereof (or the maximum allowed by law, if less).


		4.1.1 Information that is known to Licensee or any Sublicensee or Affiliate, or independently developed by Licensee or any Sublicensee or Affiliate, prior to the time of disclosure, in each case, to the extent evidenced by written records promptly disclosed to Penn upon receipt of the Confidential Information;


		4.1.2 Information disclosed to Licensee or any Sublicensee or Affiliate, by a third party that has a right to make such disclosure;


		4.1.3 Information that becomes patented, published or otherwise part of the public domain as a result of acts by Penn, acts of Licensee or any Sublicensee or Affiliate that have been approved by Penn, such approval not to be unreasonably withheld, or acts of a third person obtaining such information as a matter of right;


		4.1.5 Information that is required to be disclosed by law, rule, regulation or order of a United States governmental authority or agency (including the SEC), or a court of competent jurisdiction; provided that Licensee shall use reasonable efforts to obtain confidential treatment of such information by such authority, agency or court;


		4.1.6 Information that is disclosed to accountants, banks or other financing sources (or their advisors) or in connection with a merger, acquisition, strategic alliance or securities offering, subject to a nondisclosure and confidentiality agreement.


	5.1 Term. This Agreement, unless sooner terminated as provided in this Agreement, shall expire upon the termination (but not expiration) of the Patent License Agreement.


	5.2 Termination by Penn. Penn may terminate this Agreement on written notice to Licensee if any of the following events of default (“Default”) occur:


		5.2.1 Licensee is more than sixty (60) days late in paying to Penn any undisputed amounts due under this Agreement and Licensee does not pay Penn in full within thirty (30) days of written notice thereof;