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Exhibit 10.12
UIC
Intellectual Property Office
EXCLUSIVE LICENSE AGREEMENT
for UIC's
technology
Betulinic Acid as Anti-Melanoma (CN43)
Semi-Synthesis of Betulinic Acid and Derivatives (CQ15)
Use of Betulinic Acid for Cancer Treatment (CQ16)
Treatment and Prevention of Human Melanoma with Betulinic Acid
Derivatives (CQ17)
TABLE OF CONTENTS
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PREAMBLE
ARTICLES:
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I
DEFINITIONS
II
GRANT
III
DUE DILIGENCE
IV
PAYMENTS
V
REPORTS AND RECORDS
VI
PATENT PROSECUTION
VII
INFRINGEMENT
VIII
PRODUCT LIABILITY
IX
EXPORT CONTROLS
X
NON-USE OF NAMES
XI
ASSIGNMENTS
XII
TERMINATION
XIII
PAYMENTS, NOTICES AND OTHER COMMUNICATIONS
XIV
MISCELLANEOUS PROVISIONS
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UIC
Intellectual Property Office
This Agreement is entered into this second
day of December, 1999 ("Effective
Date") by and between THE BOARD OF TRUSTEES
OF THE UNIVERSITY OF ILLINOIS, a
body corporate and politic of the State of
Illinois through its Office of The
Vice Chancellor for Research, Intellectual
Property Office, 1737 West Polk
Street, Chicago, Illinois 60612 and on
behalf of the Chicago campus and units
reporting to it (hereinafter "UNIVERSITY")
and Advanced Life Sciences, a
corporation of the State of Illinois with
principal offices at 12305 S.
New Avenue, Suite E, Lemont, IL, 60439,
(hereinafter "LICENSEE").
WITNESSETH
WHEREAS, in the course of research
conducted under UNIVERSITY auspices, John M.
Pezzuto, Tapas K. DasGupta, Darrick S.H.L.
Kim, Mary Lou Schmidt, Konrad Marc
Kuzmanoff, and Lydia Ling-Indeck, of
UNIVERSITY, (the "INVENTOR(S)"), have
produced inventions entitled "Betulinic
Acid as Anti-Melanoma" (CN43), and/or,
"Semi-Synthesis of Betulinic Acid and
Derivatives" (CQ15), and/or, "Use of
Betulinic Acid for Cancer Treatment"
(CQ16), and/or, "Treatment and Prevention
of Human Melanoma with Betulinic Acid
Derivatives" (CQ17) (collectively called
the "INVENTION");
WHEREAS,
pursuant to assignments by the INVENTORS to UNIVERSITY of all
their right, title and interest in and to
the INVENTION and any patents
resulting therefrom, UNIVERSITY is the
owner of the INVENTION and the
corresponding Patent Rights, and has the
right to grant licenses under said
Patent Rights;
WHEREAS,
UNIVERSITY desires to have the Patent Rights utilized in the
public interest and is willing to grant a
license to its interest thereunder;
WHEREAS,
LICENSEE seeks to commercially develop the Patent Rights through
a
thorough, vigorous and diligent program of
exploiting the Patent Rights whereby
public utilization shall result therefrom;
and
NOW, THEREFORE,
in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree
as follows:
ARTICLE I - DEFINITIONS
For the purpose
of this Agreement, the following words and phrases shall
have the following meanings:
1.1 "LICENSEE" shall mean
Advanced Life Sciences.
1.2.
"Affiliate"
shall mean any person, firm, corporation or other
entity controlling, controlled by, or under
common control with a party hereto.
The term "control" wherever used throughout
this Agreement shall mean ownership,
directly or indirectly, of more than 50% of
the
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equity capital. Other than LICENSEE, any
corporation, company, partnership,
joint venture, firm, individual or other
entity which does not come within this
definition shall be a "Non-Affiliate".
1.3 "Patent Rights" shall
mean all of the following UNIVERSITY
intellectual property:
(a) the United States
patent applications entitled " Method and
Composition for Selectively Inhibiting Melanoma Using Betulinic
Acid", filed in the United States Patent Office on March 3,
1995, and assigned Serial Number 08/407,756; "Methods of
Manufacturing Betulinic Acid", filed in the United States
Patent Office on March 27, 1997, and assigned Serial Number
08/826,217; "Method and Composition for Selectively Inhibiting
Melanoma Using Betulinic Acid", filed in the United States
Patent Office on May 16, 1997, and assigned Serial Number
08/858,011; "Method and Composition for Treating Cancers",
filed in the United States Patent Office on May 16, 1997, and
assigned Serial Number 08/857,413, and all foreign patent
applications based on this U.S. application;
(b) United States and
foreign patents issued from this application,
and divisionals and continuations of this application;
(c) claims of U.S. and
foreign continuation-in-part applications,
and of the resulting patents, which are directed to subject
matter specifically described in the U.S. patent applications
Serial Numbers as listed herein;
(d) any reissues or
re-examinations of patents described in (a),
(b), or (c), above.
1.4 A "Licensed Product"
shall mean any product or part thereof
developed by or on behalf of LICENSEE
which:
(a) is covered in
whole or in part by an issued, unexpired claim or
a pending claim contained in the Patent Rights in the country
in which any product is made, used or sold; or
(b) is manufactured by
using a process which is covered in whole or
in part by an issued, unexpired claim or a pending claim
contained in the Patent Rights in the country in which any such
process is used or in which any such product is used or sold.
1.5 A "Licensed Process"
shall mean any process which is covered in
whole or in part by an issued, unexpired
claim or a pending claim contained in
the Patent Rights in any country in which
such process is practiced.
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1.6 "Net Sales" shall mean
LICENSEE's or Affiliate's billings for sales
of Licensed Products or Licensed Processes
produced hereunder less the sum of
the following:
(a) discounts allowed
in amounts customary in the trade;
(b) sales, tariff
duties and/or use taxes directly imposed and with
reference to particular sales;
(c) outbound
transportation prepaid or allowed;
(d) amounts allowed or
credited on returns; and
(e) bad debts and
uncollectible receivables.
No deductions
shall be made for commissions paid to individuals whether
they be with independent sales agencies or
regularly employed by LICENSEE of
Affiliates and on its payroll, or for cost
of collections. Licensed Products
shall be considered "sold" when billed or
invoiced.
1.7 "Sublicense" shall
mean the right to make, use or sell Licensed
Products or Licensed Processes, other than
by outright sale to any non-Affiliate
(including any non-Affiliated
distributor).
1.8 "FIELD OF USE" shall
mean the use of the INVENTION in the field of
human therapeutics.
1.9 "TERRITORY" shall mean
the use of the INVENTION in the area of the
World.
ARTICLE II - GRANT
2.1 UNIVERSITY hereby
grants to LICENSEE an exclusive worldwide right
and license in the FIELD OF USE and in the
TERRITORY, including the right to
sublicense, to make, have made, use, lease
and sell products, processes and
other applications which is or are covered
by, embodied in, or derived from the
INVENTION, and/or the Patent Rights until
the end of the last to expire patent
of the Patent Rights or until this
Agreement shall be terminated, as hereinafter
provided, whichever occurs first, and
subject to the rights reserved or observed
in Section 2.2 below.
2.2 Notwithstanding any other
provisions of this Agreement, it is agreed
that UNIVERSITY shall retain the right to
practice the licensed Patent Rights
for its own non-commercial teaching and
research activities.
2.3 LICENSEE hereby agrees
that every sublicensing agreement to which it
shall be party and which shall relate to
the rights, privileges and license
granted hereunder shall contain a statement
describing the date upon which
LICENSEE'S exclusive rights, privileges and
license hereunder shall terminate.
2.4 LICENSEE agrees that
any sublicenses granted by it shall provide
that the obligations to UNIVERSITY of
Article III, Sections 3.1 and 3.2(c), V,
VII, VIII, IX, X, XII, and
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XIV of this Agreement shall be binding upon
the sublicensee as if it were a
party to this Agreement. LICENSEE further
agrees to attach copies of these
Articles to sublicense agreements.
2.5 LICENSEE agrees to
forward to UNIVERSITY a copy of any and all fully
executed sublicense agreements, and further
agrees to forward to UNIVERSITY
annually a copy of such reports received by
LICENSEE from its sublicensees
during the preceding twelve (12) month
period under the sublicenses as shall be
pertinent to a royalty accounting under
said sublicense agreements.
2.6 If LICENSEE receives
from sublicensees anything of value in lieu of
cash payments based upon payment
obligations of any sublicense under this
Agreement, LICENSEE shall pay UNIVERSITY
royalty income based on the fair market
value of such payment, unless UNIVERSITY
waives in writing such payment
obligation.
2.7 The license granted
hereunder shall not be construed to confer any
rights upon LICENSEE by implication,
estoppel or otherwise as to any technology
not included in the Patent Rights.
ARTICLE III - DUE DILIGENCE
3.1 LICENSEE and its
sublicensees shall use their best efforts to bring
Licensed Products or Licensed Processes to
market through a thorough, vigorous
and diligent program for exploitation of
the Patent Rights.
3.2 In addition, LICENSEE
shall adhere to the following milestones:
(a) LICENSEE shall
deliver to UNIVERSITY, within six months of the
date of execution of this Agreement, its detailed business,
research and development plan including relevant schedules of
capital investments needed to implement the plan, financial,
equipment and facility plans, number and kind of personnel and
time planned for each phase of development of the Patents
Rights for a three year period. Similar reports shall be
provided to UNIVERSITY annually to relay update and status
information on LICENSEE's business, research and development
progress, including projections of activity anticipated for the
next reporting year.
(b) LICENSEE shall be
responsible for diligently and promptly
taking all reasonable steps to secure all required and/or
necessary governmental approvals to sell, exploit, or market
any and all Licensed Products. LICENSEE shall advise
UNIVERSITY, through annual reports to be provided after
December 31 of each year pursuant to Section 5.2 below, of its
program of development for and status of obtaining said
approvals. In the event UNIVERSITY, after full examination of
each such report,
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determines that the LICENSEE is not taking reasonable steps to
secure all required and/or necessary governmental approvals as
specified above, UNIVERSITY shall notify LICENSEE. If LICENSEE
fails to so satisfy UNIVERSITY, then UNIVERSITY shall give
notice of same and may terminate this Agreement pursuant to
Section 12.3 below.
(c) LICENSEE shall
initiate at its expense, Phase I clinical trials
within three months of the approval of an Investigational New
Drug application (IND) by the U.S. Food and Drug Administration
(FDA).
3.3 LICENSEE's failure to
perform in accordance with Sections 3.1 and
3.2 above shall be grounds for UNIVERSITY
to terminate this Agreement pursuant
to Section 12.3 below.
ARTICLE IV - PAYMENTS
4.1 For the rights,
privileges and licenses granted hereunder, LICENSEE
shall pay to the UNIVERSITY, in the manner
hereinafter provided, until the end
of the last to expire patent of the Patent
Rights or until this Agreement shall
be terminated, as hereinafter provided,
whichever occurs first:
(a) a nonrefundable
license issue fee of Fifteen Thousand Dollars
($15,000), payable immediately upon signing this Agreement;
(b) a royalty in an
amount equal to six percent (6%) of the Net
Sales by LICENSEE or any Affiliate of the Licensed Products or
Licensed Processes;
(c) a royalty of six
percent (6%) of Net Sales made by Sublicensee
and twenty percent (20%) of all income, other than Net Sales
based income, paid by Sublicensee to LICENSEE;
(d) milestone payments
as follows: (i) Ten Thousand Dollars ($
10,000) upon the filing of an IND; (ii) Twenty Five Thousand
($25,000) upon the filing of a New Drug Application (NDA) from
the FDA for each Licensed Product for which LICENSEE receives a
NDA; (iii) One Hundred Thousand Dollars ($100,000) upon receipt
of a NDA from the Food and Drug Administration for each
Licensed Product for which LICENSEE receives a NDA; and
(e) during the term of
this agreement, LICENSEE agrees to pay
UNIVERSITY annual Minimum Royalty Payments, starting after the
first sale of LICENSED PRODUCTS in the amount of Five Thousand
Dollars ($5,000) per Royalty Year.
(f) LICENSEE shall
reimburse UNIVERSITY for patent costs pursuant
to ARTICLE VI, section 6.3, herein.
4.2 No multiple royalties
shall be payable because any Licensed Product,
its manufacture, use, lease or sale are or
shall be covered by more than one of
the Patent Rights
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patent applications or Patent Rights
patents licensed under this Agreement, or
to be covered in more than one subsection
of Section 4.1 hereof.
4.3 Royalty payments shall
be paid in United States dollars in Chicago,
Illinois, or at such other place as
UNIVERSITY may reasonably designate
consistent with applicable laws and
regulations. If any currency conversion
shall be required in connection with the
payment of royalties hereunder, such
conversion shall be made by using the
exchange ra
