LICENSE AND DEVELOPMENT AGREEMENT

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EXHIBIT 10.42

LICENSE AND DEVELOPMENT AGREEMENT

This License and Development Agreement (the "Agreement") is entered

into by and between INHIBITEX, INC., a Delaware corporation with its principal

place of business at 9005 Westside Parkway , Alpharetta, GA 30004 (hereinafter

"INX"), 3M COMPANY, a Delaware corporation whose address and principal place of

business is 3M Center, Saint Paul, Minnesota, U.S.A. 55144 ("3M"), and 3M

INNOVATIVE PROPERTIES COMPANY, a Delaware corporation whose address and

principal place of business is 3M Center, Saint Paul, Minnesota, U.S.A. 55144

("3M IPC").

RECITALS

3M has developed several proprietary platforms for diagnostic

applications, particularly in clinical and food safety applications.

3M has served as the prime contractor under Government Contract No.

DAAD13-03-C-0047 with a scope of work for development of one of the above

diagnostic platforms for detection of target microorganisms, including but not

limited to Staphylococcus aureus.

INX has substantial knowledge and expertise in and holds significant

intellectual property rights in MSCRAMM proteins (Microbial Surface Components

Recognizing Adhesive Matrix Molecules) as the result of licenses and assignments

including but not limited to those listed on EXHIBIT A, attached hereto.

The Parties entered in a Confidential Disclosure Agreement effective

September 1, 2004 ("CDA"), Agreement for Materials Transfer effective September

20, 2004 (First MTA"), Agreement for Materials Transfer effective October 10,

2004 amended October 20, 2004 ("Second MTA"), and a Feasibility Agreement

effective September 1, 2005 and amended effective April 28, 2006 and October 25,

2006 (Feasibility Agreement")(collectively "Prior Agreements").The parties

entered into these Prior Agreements to evaluate biological materials generated

using the MSCRAMM technology and determine their feasibility for use in 3M's

diagnostic platforms.

The parties desire to enter into a more extensive agreement whereby 3M

and 3MIPC obtain (1) a worldwide license under certain INX MSCRAMM technology

for the development and commercialization of diagnostic devices in clinical and

food safety applications as described below, and (2) the opportunity to

collaborate in the development of MSCRAMM technology for use in diagnostic

applications as described below.

In consideration of these premises and of the mutual promises set forth

below, the Parties to this Agreement agree as follows:

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY

ASTERISKS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF

1934, AS AMENDED.

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ARTICLE I

DEFINITIONS

For purposes of this Agreement, the terms defined in this Article shall have the

meaning specified and shall be applicable to both the singular and plural forms

wherever used in this Agreement.

1.1 "3M" means

(a) 3M Company; and

(b) any 3M Affiliate, where an Affiliate means any Person who or

Entity that in whatever country organized or resident,

directly or indirectly, is controlled by, or is under common

control with, or controls 3M and

(c) any Entity in which 3M or any Entity in which any individual

or Entity recited in the preceding sub-paragraph (b) directly

or indirectly has at least a forty percent (40%) ownership or

voting rights interest (whether through stock ownership, stock

power, voting proxy, or otherwise), or has the maximum

ownership interest it is permitted to have in the country

where such Entity exists.

For purposes of this Agreement, 3M IPC shall be considered to be an 3M

Affiliate.

1.2 "3M INVENTIONS" shall mean Inventions made or conceived solely by

employees or others acting on behalf of 3M under the terms of this Agreement.

1.3 "3M PATENT RIGHTS" shall mean patents and patent applications claiming

3M Inventions.

1.4 "510K" shall mean a 510k application or equivalent filed by or on

behalf of 3M with the FDA or an equivalent regulatory body outside the U.S. for

approval of manufacturing and sale of any Product.

1.5 "AGREEMENT" means this License and Development Agreement, any exhibits

hereto and any modification or amendment hereto made in the manner provided for

herein.

1.6 "BIOLOGICAL MATERIALS" shall mean biological materials including, but

not limited to, antibodies, cells, cell lines, media, DNA, RNA, polypeptides,

and proteins.

1.7 "CALENDAR QUARTER" means a three-month period ending March 31, June 30,

September 30 or December 31 of any year.

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1.8 "CLFA" means Biological Materials relating to the Staphylococcus aureus

gene designated clfA and any [ * * * ], as described in U.S. Patent No. [ * * *

] and [ * * * ], as described in U.S. Patent No. [ * * * ], and [ * * * ] as

described in U.S. Patent No. [ *** ] and U.S. Patent No.[ * * * ], that can [ *

* * ], or to [ * * * ] of the [ * * * ].

1.9 "CONFIDENTIAL INFORMATION" shall mean information or data described in

Article 6 below.

1.10 "DETECTION PLATFORM" shall mean a given detection system comprising:

(1) a Licensed Product that includes a Biological Material which binds a Target;

(2) a mode of detection; (3) sample acquisition means; and (4) optionally

hardware. For purposes of clarity, the detection platforms are differentiated by

the mode of detection. For example, as of the Effective Date, 3M has [ * * * ]

1.11 "DEVELOPMENT COLLABORATION PLAN" shall mean a written document

describing a Development Collaboration Program to be performed by INX and 3M, as

approved in writing by the Development Committee from time to time, as described

in Article 5. The Development Collaboration Plan approved as of the Effective

Date is attached hereto as EXHIBIT B.

1.12 "DEVELOPMENT COLLABORATION PROGRAM" shall mean a program for the

development of Biological Materials for use in Licensed Products as described in

Article 5 below.

1.13 "DEVELOPMENT COMMITTEE" shall mean the development committee composed

of representatives of INX and 3M described in Article 5 below.

1.14 "EARNED ROYALTY" means the royalty paid or payable under Article 4 of

this Agreement on Licensed Product actually sold to an independent Third Party

by 3M or a permitted sublicensee.

1.15 "EFFECTIVE DATE" means the last signature date below.

1.16 "ENTITY" means any corporation, firm, partnership, proprietorship, or

other form of business organization.

1.17 "FDA" shall mean the United States Food and Drug Administration.

1.18 "FEASIBILITY AGREEMENT" shall mean the Feasibility Agreement between

INX and 3M dated September 1, 2005 and amended on April 28, 2006 and October 25,

2006.

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1.19 "FIELD" shall mean in vitro diagnostic devices containing Biological

Material for use in detection of Targets in [ * * * ] and in [ * * * ].

1.20 "FIRST COMMERCIAL SALE" shall mean the first bona fide sale of a

Licensed Product by 3M to an independent Third Party in any country.

1.21 "FIRST TARGET" means Staphylococcus aureus.

1.22 "INVENTIONS" shall mean all inventions, discoveries, improvements or

other technology, including Biological Materials, made or conceived during, and

in the course of, a Development Collaboration Program, whether made solely or

jointly by employees or others acting on behalf of 3M or INX or their

Affiliates.

1.23 "INX" means

(a) Inhibitex, Inc.; and

(b) any Affiliate of Inhibitex, Inc. where an Affiliate means any

Person who or Entity that in whatever country organized or resident, directly or

indirectly, is controlled by, or is under common control with, or controls INX;

and

(c) any Entity in which INX or any Entity in which any individual

or Entity recited in the preceding sub-paragraph (b) directly or indirectly has

at least a forty percent (40%) ownership or voting rights interest (whether

through stock ownership, stock power, voting proxy, or otherwise), or has the

maximum ownership interest it is permitted to have in the country where such

Entity exists.

1.24 "INX INVENTIONS" shall mean Inventions made or conceived solely by

employees or others acting on behalf of INX under the terms of this Agreement.

1.25 "INX KNOW HOW" shall mean all proprietary and confidential information

and data including, but not limited to, compositions, formulae, procedures,

protocols, techniques and results of experimentation and testing, and all

Biological Materials which are necessary or useful to practice any process or

method related to, or to develop, make, use or sell any Licensed Product in the

Field, including but not limited to any methods for manufacture or use of

Biological Materials in a Licensed Product, which INX owns or in which INX has

an interest, and which is in the possession of INX on the Effective Date of this

Agreement or thereafter, or which was disclosed to 3M in connection with the

Prior Agreements, all to the extent and only to the extent that INX has or

hereafter will have the right to grant licenses to 3M thereunder. The Parties

agree and acknowledge that the information described in EXHIBIT C comprises INX

Know-How relating to Biological Materials and their characteristics,

preparation, assay and use that has been transferred to 3M during the Prior

Agreements and licensed to 3MIPC hereunder.

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1.26 "INX PATENT RIGHTS" shall mean:

(a) the claims of the patent and patent applications listed in

EXHIBIT A hereto;

(b) all patent applications heretofore or hereafter filed or

having legal force in any country owned by or licensed to INX (and which INX has

the right to sublicense to 3M) or to which INX otherwise acquires sublicenseable

rights, which claim a composition (including but not limited to, Biological

Materials), method or process, which are necessary to practice any process or

method claimed in the patent and patent applications provided in Paragraph

1.19(a) in the Field or are necessary, to make, have made, have used, sell, have

sold, offer for sale, and import any Licensed Product, together with any and all

patents that have issued or in the future issue therefrom, including utility,

model and design patents and certificates of invention, and

(c) patents and patent applications claiming INX Inventions;

(d) patents and patent applications added under Paragraph 3.4; and

(e) all divisionals, continuations, continuations-in-part,

continued prosecution applications, requests for continued examination,

reissues, renewals and extensions of the patents and patent applications of

Sections 1.19 (a),(b), (c), (d) and this Section 1.19(e) and any foreign

counterparts to those patents and patent applications, to the extent and only to

the extent that INX has or hereafter will have the right to grant licenses and

sublicenses thereunder.

1.27 "JOINT INVENTION" shall mean an Invention made or conceived jointly by

one or more employees or others acting on behalf of 3M and by one or more

employees or others acting on behalf of INX during and in the course of a

Development Collaboration Program or in the course of work done under the Prior

Agreements. The parties agree that Joint Inventions shall be owned jointly by

INX and 3M IPC in accordance with US law, whereby each joint owner shall have

the right to use, pledge, practice, license, assign and otherwise transfer and

enjoy its rights to and interests in joint inventions without permission of or

accounting to the other joint owner(s)), subject to the licenses granted in

Article 3 below.

1.28 "JOINT PATENT RIGHTS" shall mean:

(a) all claims of patents and patent applications having

legal force in any country which claim a Joint Invention, together with any and

all patents that issue therefrom, including utility, model and design patents

and certificates of invention, and

(b) all divisionals, continuations,

continuations-in-part, continued prosecution applications, requests for

continued examination, reissues, renewals, and extensions or additions to any

such patents and patent applications and any foreign counterparts to those

patents and patent applications.

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1.29 "LICENSED PRODUCT" shall mean the component of an in vitro diagnostic

device containing Biological Material for use within the Field, the manufacture,

use or sale of which, but for the license granted herein, would infringe at

least one Valid Claim of INX Patent Rights or Joint Patent Rights in any

country. For purposes of clarity, component means the [ * * * ] of the [ * * * ]

comprising [ * * * ] but does not include the [ * * * ] or [ * * * ]. In

addition, Licensed Product includes any Biological Material whose development or

manufacture used or uses INX Know How.

1.30 "NET SALES" shall mean the amount billed or invoiced on account of all

sales of Licensed Products to an independent Third Party by 3M or permitted

sublicensees in bona fide arms' length transactions where full consideration for

each sale of Licensed Product is reflected in the billed or invoiced price, less

the following deductions:

(a) trade and/or quantity discounts actually taken by the

customer, or allowances or credits to customers on account of government

regulations or price adjustments;

(b) any tax, excise, or other governmental charges upon or

measured by the production, sales, transportation, delivery or use of said

Licensed Products contained therein (Income taxes owed or paid by 3M shall not

be deducted from Net Sales.);

(c) transportation and insurance charges and discounts other than

those described above;

(d) amounts repaid or credited by reason of rejections, recall,

destruction or return or because of price rebates.

1.31 "PARTY" means INX; and/or 3M; and/or 3M IPC. An "Affiliate" of a

"Party" shall mean, as applicable, INX Affiliate or 3M Affiliate.

1.32 "PERSON" shall mean an individual, corporation, partnership, trust,

business trust, association, joint stock company, joint venture, pool,

syndicate, sole proprietorship, unincorporated organization, governmental

authority or any other form of Entity not specifically listed herein.

1.33 "PIVOTAL CLINICAL TRIAL" shall mean the enrollment of the first human

subject in the first clinical trial designed to generate data to be included in

an application for Regulatory Approval of a Licensed Product in any country.

1.34 "REGULATORY APPROVAL" shall mean, in any given country in which a

Licensed Product is or is to be manufactured, sold or distributed, the approval

of all government authorities necessary to permit the manufacture, sale or

distribution of the Licensed Product. In the United States, Regulatory Approval

may include, without limitation, 510k Approval.

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1.35 "ROYALTY YEAR" means the calendar year beginning with the first January

1 following the Effective Date, and each calendar year thereafter during the

term of this Agreement.

1.36 "TARGET" shall mean a given species and genus of microorganism detected

using Licensed Product. For example, [ * * * ] and [ * * * ] are two distinct

Targets.

1.37 "THIRD PARTY" shall mean a Person or Entity other than INX and 3M and

their respective Affiliates.

1.38 "VALID CLAIM" shall mean a claim of any pending application or any

issued and unexpired patent within the INX Patent Rights or Joint Patent Rights,

so long as such claim shall not have been disclaimed or shall not have been held

invalid in a final decision rendered by a tribunal of competent jurisdiction

from which no appeal has been or can be taken.

ARTICLE 2

REPRESENTATIONS, WARRANTIES AND COVENANTS

2.1 PATENT RIGHTS AND INX KNOW HOW. INX represents and warrants that

EXHIBIT A sets forth all patents and patent applications that are owned by,

controlled by, or licensed to INX and licensed or sublicensed to 3MIPC in the

Field as of the Effective Date. INX further represents and warrants that EXHIBIT

C sets forth INX Know-how that is owned by, controlled by, or licensed to INX

and licensed to 3M IPC pursuant to this Agreement as of the Effective Date

relating to Licensed Product.

2.2 VALIDITY OF PATENT RIGHTS. INX represents and warrants that as of the

Effective Date and to the best of its knowledge and belief the issued patents in

EXHIBIT A hereto are valid and enforceable, and that as of the Effective Date it

is not aware of any information that it believes would render such patents

invalid or unenforceable. INX further represents and warrants that as of the

Effective Date it has not received any notice that any issued patent in EXHIBIT

A is invalid or unenforceable.

2.3 NOTICE OF INFRINGEMENT OF PATENT RIGHTS. INX represents and warrants

that as of the Effective Date it has not received any written notice wherein a

product or process of a Third Party is alleged to infringe any issued patent in

EXHIBIT A hereto, and that as of the Effective Date INX has given no such

notice.

2.4 NOTICE OF THIRD PARTY INFRINGEMENT. INX represents and warrants that as

of the Effective Date it has not received any written notice from a Third Party

that a product or process in the INX Know-How is alleged to infringe the

intellectual property rights of a Third Party. INX makes no representation or

warranty that use of the INX Know How will not infringe intellectual property

rights of any Third Party. INX makes no representation or warranty that the

practice of inventions claimed in the INX Patent Rights will not infringe the

intellectual property rights of any Third Party.

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2.5 INFORMATION ACQUIRED SUBSEQUENT TO EFFECTIVE DATE. If, subsequent to

the Effective Date, INX receives or gives any written notice described in

sections 2.2, 2.3 or 2.4 above then INX shall promptly advise 3M IPC of such

notice.

2.6 AUTHORIZATION AND ENFORCEMENT OF OBLIGATIONS. As of the Effective Date

and during the term of this Agreement each Party represents and warrants that

it:

(a) has the corporate power and authority and the legal

right to enter into this Agreement and to perform its obligations hereunder, and

(b) has taken all necessary corporate action on its part

to authorize the execution and delivery of this Agreement and the performance of

its obligations hereunder. This Agreement has been duly executed and delivered

on behalf of such Party, and constitutes a legal, valid, binding obligation,

enforceable against such Party in accordance with its terms.

2.7 AUTHORITY TO GRANT. INX warrants that it has the authority and right to

convey to 3M the rights granted under this Agreement, including but not limited

to the rights set forth in Article 3.

2.8 CONSENTS. As of the Effective Date each Party represents and warrants

that all necessary consents, approvals, and authorizations of all governmental

authorities and other Persons required to be obtained by such Party in

connection with entering into this Agreement have been obtained except for those

the failure of which to obtain would not have a material adverse effect.

2.9 NO CONFLICT. As of the Effective Date and during the term of this

Agreement each Party represents and warrants that the execution and delivery of

this Agreement, including the grant of licenses or sublicenses hereunder, and

the performance of such Party's obligations hereunder:

(a) do not and will not conflict with or violate or

constitute a default of any requirement of applicable laws or regulations or

with any material contractual obligation of such Party.

2.10 TRANSFER OF MATERIALS. Each Party represents and warrants that the

Biological Materials, and any data and information associated with the

Biological Materials (hereinafter "Materials") delivered to the other Party

("Recipient")as part of the Development Collaboration Program will be in

substantially and reasonably in accordance with the Development Collaboration

Plan as agreed to by the Parties. Otherwise, EACH PARTY ACKNOWLEDGES THAT ANY

MATERIALS DELIVERED TO IT UNDER THIS AGREEMENT ARE EXPERIMENTAL IN NATURE.

Except for the limited representations and warranties provided in this Article

2.10, EACH SUPPLYING PARTY ("SUPPLIER") OF MATERIALS MAKES NO REPRESENTATIONS

AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT

TO THE MATERIALS. THERE ARE NO EXPRESS OR IMPLIED

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WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. THE SUPPLY OF

MATERIAL IS NOT A REPRESENTATION THAT USE OF THE MATERIALS WILL NOT INFRINGE ANY

PATENT, COPYRIGHT, TRADE SECRET, TRADEMARK OR OTHER RIGHTS OF THIRD PARTIES.

Each Recipient of Materials assumes all liability for damages which may arise

from the Recipient's use, storage, disposal or transfer of the Materials.

Supplier shall not be liable to the Recipient for any loss, claim, or demand

made by the Recipient, or made against the Recipient by any other party, due to

or arising from the use or transfer of the Material by the Recipient, except

when caused solely by the gross negligence or improper intentional acts of the

Supplier.

2.11 PRIOR AGREEMENTS. Each party represents and warrants that as of the

Effective Date it has complied with the material terms and conditions of the

Prior Agreements and is not in material breach of any Prior Agreement. Each

Party represents and warrants that to the best of its knowledge, it has

disclosed to the other Party any Inventions made or conceived during and in the

course of work under the Prior Agreements.

ARTICLE 3

GRANT

3.1 PATENT AND KNOW HOW RIGHTS. For the term of this Agreement as provided

in Article 10, INX hereby grants to 3MIPC a worldwide, exclusive (even as to

INX), royalty-bearing license in the Field, under the INX Patent Rights, the INX

ownership interest in Joint Patent Rights and Joint Inventions, INX Know-How and

INX Inventions to make, have made, have used, sell, have sold, offer for sale,

and import Licensed Products in the Field throughout the world. This grant

includes the right for 3MIPC to grant sublicenses to 3M Affiliates without

consent, either directly or through one or more intermediaries. This grant also

includes the right for 3MIPC to grant sublicenses to Third Parties with INX's

written consent, which consent shall not to be unreasonably withheld. This grant

also includes the right for any customers (ultimate or in privity or other) of

any sublicensee of 3MIPC to use and/or sell (for further use or resale) the

Licensed Products so made. 3M and its permitted sublicensees shall not make,

use, sell, market or promote Licensed Product for use outside the Field. Where

the INX Patent Rights are themselves licensed from a Third Party, 3M's license

takes the form of a sublicense. Notwithstanding the forgoing, the sublicense

granted to 3M under U.S. Patent No. [ * * * ] and U.S. Patent Application Serial

No. [ * * * ] titled "[ * * * ]" within the INX Patent Rights is a nonexclusive

license.

3.2 RESERVATION OF RIGHTS. Universita delgi Studi di Pavia, Regents of the

University of Minnesota, University of Illinois, Yale University, TAMUS, TCD and

BRI each retain an irrevocable, nonexclusive and nontransferable royalty-free

right to its respective

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licensed intellectual property for its own educational and non-commercial

research purposes. With respect to INX Patent Rights wherein TAMUS is the

primary licensor, the obligations to TAMUS of paragraphs 10.03 (warranty), 10.06

(representation regarding BRI), 10.07 (representation regarding University of

Texas), 12.02 (non-use of names) and 12.03 (trademarks) of the 2000 License

Agreement between INX and TAMUS shall be binding upon 3M as if 3M were a party

to that license. A copy of the TAMUS license is attached hereto as EXHIBIT E.

3.3 RESERVATION OF RIGHTS. Pursuant to 37 C.F.R. 401.14, the U.S.

Government shall have a nonexclusive, nontransferable, irrevocable, paid-up

license to practice or have practiced for or on behalf of the United States

certain INX Patent Rights throughout the world. To the extent any INX Patent

Rights claim inventions made all or in part with U.S. Government funding, such

INX Patent Rights may carry additional terms and restrictions imposed by the

U.S. Government.

3.4 RESERVATION OF RIGHTS. 3M has served as the prime contractor under

Government Contract No. DAAD13-03-C-0047 with a scope of work that encompassed

activities performed during the Prior Agreements. INX became a subcontractor

under Contract No. DAAD13-03-C-0047 and subject to certain Government Terms and

Conditions as negotiated between the Parties and set forth in the Prior

Agreements. As a result, the U.S. Government may have certain rights in 3M

Inventions relating to Materials (as defined in section 2.11 above) provided

pursuant to the Prior Agreements. 3M is actively pursuing Government contracts

from Government agencies that, if executed, may have an effective date within

the term of this Agreement and have a scope of work that encompasses the

activities outlined in a future Development Collaboration Program of this

Agreement. INX will use its reasonable commercial efforts to negotiate

appropriate terms with 3M so INX will be subject to terms and conditions

acceptable to the Government, 3M and INX, for any given future 3M Government

contract.

3.5 ADDITIONAL PATENT RIGHTS. Patents and patent applications not described

in sections 1.19 (a) through (d) of the INX Patent Rights which are licensed to

INX by a Third Party after the Effective Date or to which INX otherwise acquires

rights after the Effective Date during the term of this Agreement, and in which

INX has the right to grant licenses or sublicenses in the Field, shall be

disclosed to 3M in writing. For a period of one year from the date of disclosure

by INX, 3M shall have the right of first negotiation to obtain a license on

terms to be negotiated. Nothwithstanding the foregoing, U.S Patent Application

No. [ * * * ] titled "[ * * * ]" shall be automatically added to the INX Patents

Rights in EXHIBIT A and shall be licensed to 3MIPC under the terms and

conditions of this agreement in the event that after the Effective Date INX

acquires sublicenseable rights to this application from the University of

Illinois.

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ARTICLE 4

COMPENSATION

4.1 OVERVIEW OF COMPENSATION. In consideration of the patent and know how

licenses granted in Article 3 and INX's contributions to the Development

Collaboration described in Article 5 herein, 3M agrees to make (1) the license

fee payments as set forth in Article 4.2, (2) the milestone payments as set

forth below in this Article 4.3; and (3) the earned royalty payments as set

forth below in this Article 4.4.

4.2 LICENSE FEES.

4.2.1 UP FRONT LICENSE FEE. A nonrefundable upfront license fee payment of

one million seven hundred fifty thousand dollars ($1,750,000) shall be made by

3M to INX within sixty (60) days of the Effective Date of this Agreement. This

4.2.1 up front license fee is consideration for the license grant of Article 3

with respect to the First Target.

4.2.2 DEFERRED LICENSE FEE. A deferred license fee payment of one million two

hundred fifty thousand dollars ($1,250,000) shall be made within sixty (60) days

of the one year anniversary of the Effective Date of this Agreement as

consideration for the license grant of Article 3 with respect to all Targets

(other than First Target). This deferred payment will be made unless 3M and/or

3MIPC terminate the Agreement for cause under Article 10.5 effective before the

one year anniversary of the Effective Date. Otherwise this obligation to pay the

deferred licensee fee shall survive early termination of this Agreement by 3M or

3MIPC under Article 10.2.

4.3 MILESTONE PAYMENTS. Milestone payments will be made as follows:

1) A single milestone payment of [ * * * ] within sixty (60) days

of First Commercial Sale of Licensed Product for the First Target in any

country; and

2) A single milestone payment of [ * * * ] within sixty (60) days

of the First Commercial Sale of Licensed Product for the First Target where the

Licensed Product is part of a point-of-care Detection Platform (i.e., a product

for which CLIA is waived under Section 353 of the Public Health Service (PHS)

Act (42 U.S.C. 263a), as amended by the Clinical Laboratory Improvement

Amendments of 1988 (CLIA), and implementing regulations of 42 CFR part 493); and

3) A milestone payment to be negotiated between the Parties of up

[ * * * ] per Target within sixty (60) days of the Regulatory Approval in any

country of a Licensed Product for each Target (other than First Target). Only

one single payment is due under this section 4.3 (3) for each Target (other than

First Target), regardless of the number of different Detection Platforms in

which the Licensed Product is used.

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4.4 EARNED ROYALTIES. 3M IPC shall pay INX an Earned Royalty on sales of

Licensed Products beginning upon the First Commercial Sale in any country. A

single Earned Royalty shall be due on the sale of each Licensed Product without

regard to the number of Valid Claims in the INX Patent Rights that would be

infringed by the manufacture, use or sale of the Licensed Product absent the

license granted herein and without regard to the number of sublicenses hereunder

implicated by the manufacture, use or sale of the Licensed Product. Further, a

single Earned Royalty shall be due on the sale of each Licensed Product even

though for example it is made in a country where there is a Valid Claim in the

INX Patent Rights that would be infringed by its manufacture, and it is

thereafter sold in a country where there is also a Valid Claim in the INX Patent

Rights that would be infringed by its sale.

4.4.1 An Earned Royalty shall become due upon the sale of a Licensed Product

in a country if the manufacture, use or sale of it would infringe at least one

Valid Claim of INX Patent Rights in the country where it is manufactured, used

or sold. For any Licensed Product subject to payment of an Earned Royalty by

virtue of a Valid Claim in a pending application only, the Earned Royalty shall

only be due and payable for the first five years following the priority filing

date of such patent application.

4.4.2 For any sale of Licensed Product anywhere worldwide when no Valid Claim

of INX Patent Rights anywhere covers its manufacture, use or sale, an Earned

Royalty shall nevertheless become due upon the sale of such Licensed Product if

the Licensed Product contains ClfA (as defined in Article 1.8), or if the

manufacture or use of the Licensed Product includes ClfA. The Earned Royalty

payable under this Article 4.4.2 shall only be due until expiration of U.S.

Patent No. [ * * * ]. After expiration of U.S. Patent [ * * * ], the license

grant to 3M of INX Know-how received under this Agreement shall be considered a

paid-up license and no further Earned Royalties for Licensed Product shall be

due based solely on INX Know-how. Notwithstanding the foregoing, no Earned

Royalty shall be due under this Article 4.4.2 on sales made in any country in

which 3M can show that it is suffering competitive harm due to a lack of INX

Patent Rights in that country for the Licensed Product sold in that country. For

so long as such harm persists, no Earned Royalties shall be due to INX for sales

of such Licensed Product in such country. This section 4.4.2 shall not apply to

the sale of Licensed Product manufactured, used or sold where a Valid Claim

within the INX Patent Right subsists; rather, section 4.4.1 would apply. For

example, this section 4.2.2 shall not apply to sales of Licensed Product

manufactured in a country where a Valid Claim within the INX Patent Right

subsists and would be infringed by the manufacture of such Licensed Product even

if such Licensed Product is sold in a country where no INX Patent Rights subsist

which would be infringed by the sale of such Licensed Product.

4.4.3 The Earned Royalty rate shall be [ * * * ] percent ([ * * * ]%) of Net

Sales of Licensed Products sold for sales of Licensed Products totaling up to [

* * * ] worldwide per Royalty Year per Detection Platform. Thereafter, the

Earned Royalty rate shall be [ * * * ] percent ([ * * * ]%) of the Net Sales of

Licensed Products sold for sales of Licensed Products over [ * * * ] worldwide

per Royalty Year per Detection Platform. No Earned Royalty shall be payable with

respect to the sale of any Licensed Product purchased by

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3M from INX or any INX Affiliate. 3M IPC shall make Earned Royalty payments to

INX on all Net Sales made by 3M's sublicensees as if such Net Sales were made by

3M. For any Licensed Product subject to payment of Earned Royalty only by virtue

of Joint Patent Rights, the Earned Royalty shall be calculated at one-half of

the rate set forth in this Article 4.4.3.

4.4.4 In the event that a license under one or more Third Party patents (not

part of the INX Patent Rights) is required by 3M to use an INX Biological

Material covered by at least one Valid Claim in the INX Patent Rights, then the

Earned Royalty owed to INX for Licensed Product shall be reduced by the royalty

3M actually pays to such Third Party up to an aggregate maximum fifty percent

(50%) reduction in the Earned Royalty rate payable to INX.

4.4.5 INX acknowledges that the sublicenses granted to 3M IPC under this

Agreement are a significant portion of the financial value associated with this

Agreement. As such, at least three (3) months prior to first Commercial Sale of

Licensed Product (as described in a written notice to INX from 3M referencing

this paragraph of this Agreement) on any Detection Platform, INX shall use

reasonable commercial efforts to obtain written confirmation from the primary

licensor that the sublicense to 3M shall continue in the event of termination of

INX's primary license for any reason. Further, INX shall use commercially

reasonable efforts to maintain the primary license in the INX Patent Rights

containing a Valid Claim that covers the manufacture, use or sale of such

Licensed Product described in the notice from 3M. In the event one or more INX

Patent Rights are eliminated from Exhibit A as a result of termination of a

primary license in the INX Patent Rights for any reason, and if a royalty had

been due on such terminated INX Patent Rights, and if 3M obtains a license

directly from the primary licensor for such terminated INX Patent Rights, then

the Earned Royalty due INX under this Article 4.4 (if any) shall be reduced by

the royalty rate that would have been due and payable by INX to the primary

licensor for covered Licensed Products under the primary license if the primary

license had not been terminated.

4.5 REPORTS AND PAYMENTS. The Earned Royalty shall be paid quarterly

starting with the end of the Calendar Quarter following the First Commercial

Sale and shall be made not more than two (2) months following the end of each

Calendar Quarter. 3M IPC shall furnish INX with a written report setting forth

the Net Sales of Licensed Products upon which a royalty is payable under this

Article 4.5 during each Calendar Quarter and the computation of the royalties

payable with respect thereto. Each report shall be accompanied by the amount due

in U.S. Dollars, less any taxes that 3M is required to withhold for the account

of INX pursuant to applicable governmental agencies in respect to royalties

payable to INX for that Calendar Quarter. The receipt for such withheld taxes

shall be provided to INX at INX's request. Each report and any accompanying

payment shall be sent in the manner provided to the address specified for INX

according to Article 13 (Notices). Payment of any royalties due to INX Licensors

by virtue of 3M's sublicense shall be the sole responsibility of INX.

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4.6 CURRENCY CONVERSIONS. Royalty payments shall first be calculated in the

currency of the country in which sales took place and then directly converted to

U.S. Dollars using the average of the exchange rates applicable on the date of

payment used by 3M for financial accounting purposes in accordance with

generally accepted accounting principles.

4.6.1 If by reason of any restrictive exchange laws or regulations, 3M shall

be unable to convert to U.S. dollars amounts equivalent to the Earned Royalty

payable by 3M hereunder in respect of Licensed Products sold for funds other

than U.S. dollars, 3M shall notify INX promptly with an explanation of the

circumstances. In such event, all royalties due hereunder in respect of the

transaction so restricted (or the balance thereof due hereunder and not paid in

funds other than U.S. dollars as hereinafter provided) shall be deferred and

paid in U.S. dollars as soon as reasonably possible after, and to the extent

that such restrictive exchange laws or regulations are lifted so as to permit

such conversion to U.S. dollars, of which lifting 3M shall promptly notify INX.

At its option INX shall meanwhile have the right to request the payment (to it

or to a nominee), and upon such request, 3M shall pay, or cause to be paid, all

such amounts (or such portions thereof as are specified by INX) in funds, other

than U.S. dollars, designated by INX and legally available to INX under such

then existing restrictive exchange laws or regulations; provided however, that

the provisions of this section 4.7.1 shall only apply to amounts totaling more

than ten thousand United States dollars per Calendar Quarter.

4.7 RECORDS. 3MIPC shall keep accurate records in sufficient detail to

enable Earned Royalties payable hereunder to be determined and shall, upon

written notice by INX to 3M IPC, permit such records to be inspected (but only

to the extent necessary to verify whether Earned Royalties are due and the

amount of Earned Royalty payable hereunder) once annually during normal business

hours by a certified public accountant or firm of certified public accountants

reasonably acceptable to 3M IPC and appointed by INX at INX's expense. The

accountants making such inspection shall report to INX only the amount of Earned

Royalty due and payable and shall be bound by the provisions of Article V. If

the difference between Earned Royalties reported by 3M and that reported by the

independent accountants exceeds five percent in a given Royalty Year, then 3M

shall reimburse INX for the expense of the audit for that Calendar Year.

Regardless of the amount of the shortfall, 3M shall pay to INX the full amount

of Earned Royalties owed. Records inspected under this Article 4.8 shall be

retained by 3M until INX and 3M IPC have agreed upon the amount of Earned

Royalty payable thereon. Except as aforesaid, 3M shall not be required to retain

any records longer than three (3) years after the end of the Calendar Quarter in

which such records were prepared.

4.8 LICENSED PRODUCT DISPUTE

4.8.1 The provisions of Article 11 notwithstanding, in the event of any

dispute between the Parties as to whether or not a product sold by 3M or 3M

Affiliates is (a) a Licensed Product for which an Earned Royalty is due or (b)

subject to payment of Earned Royalty only by virtue of Joint Patent Rights, 3M

IPC shall have the right to submit the dispute to

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binding arbitration by a patent attorney acceptable to both Parties. The

arbitrator will determine whether the product sold falls within the scope of at

least one Valid Claim of the INX Patent Rights or Joint Patent Rights, including

but not limited to consideration of issues such as the validity of patent claims

and the scope of the claims under the doctrine of equivalents. 3M IPC shall not

be entitled to withhold Earned Royalties in dispute during the pendency of such

arbitration. Each Party shall bear its own expenses associated with such

arbitration and the Parties shall share equally the fees and expenses of the

arbitrator. The arbitrator's findings shall be considered Confidential

Information and attorney client privileged information of both Parties to the

extent permitted by law. The findings shall apply only to the specific product

considered by the arbitrator; shall have no precedential value; and shall not be

used in any subsequent arbitration nor be admissible in any litigation

4.8.2 In the event the product in dispute is determined not to be a Licensed

Product, then 3M IPC shall receive a credit for the Earned Royalties paid during

the pendency of the arbitration, creditable against Earned Royalties payable

pursuant to this Agreement.

ARTICLE 5

DEVELOPMENT COLLABORATION AND COMPENSATION

5.1 DEVELOPMENT COLLABORATION PROGRAM. From the Effective Date and in

accordance with the terms of this Agreement, INX and 3M agree to perform, or

have performed, the Development Collaboration Program as approved and agreed to

by the Joint Development Committee ("JDC"); provided, however, that the

obligations of INX to perform such work shall be limited by the development and

support fees paid by 3M pursuant to Article 5.2. No obligation to transfer

Materials or information continues beyond the expiration or termination of the

Development Collaboration Program.

5.2 ANNUAL DEVELOPMENT SUPPORT FEES. For a period of two years beginning

with the first Calendar Quarter after the Effective Date of this agreement, 3M

shall make a minimum development support fee payment of [ * * * ] per twelve

month period, payable at the rate of [ * * * ] at the start of each Calendar

Quarter. To the extent that the parties have agreed to a Development

Collaboration Plan as set forth below and documented in EXHIBIT B, the

development support payments shall be applied to affect the Development

Collaboration Plan. The Parties intend that this level of funding support [ * *

* ] of INX personnel and transfer of any Materials related to performance of the

Development Collaboration Plan. In addition to the foregoing minimum development

support payments, 3M shall have the right but no obligation to request, at least

ninety days prior to the start of each twelve month period, that additional

development support at INX be funded by 3M. Any such increase in the development

support fees shall be made only by prior written agreement of the Parties.

5.3 DEVELOPMENT COMMITTEE ROLE, DECISIONS. The JDC shall write the

Development Collaboration Plan, determine and monitor the Development

Collaboration Program, including making recommendations regarding the

performance of the

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Development Collaboration Plan and generally on the conduct of research and

development u