EVALUATION LICENSE AGREEMENT

This agreement ("Agreement") is made by and between Neoprobe Corporation, a Delaware corporation having an address at 425 Metro North Place North, Suite 300, Dublin, Ohio 43017-1367 ("LICENSEE") and The Regents of the University of California, a California corporation having its statewide administrative offices at 1111 Franklin Street, Oakland, California 94607-5200 ("UNIVERSITY"), represented by its San Diego campus having an address at University of California, San Diego, Technology Transfer & Intellectual Property Services, Mail Code 0910, 9500 Gilman Drive, La Jolla, California 92093-0910 ("UCSD").

This Agreement is effective on March 31, 2005 ("Effective Date").

WHEREAS , the inventions disclosed in UCSD Disclosure Docket No. SD1998-088 and titled “MACROMOLECULAR CARRIER FOR DRUG AND DIAGNOSTIC AGENT DELIVERY“ ("Invention"), were made in the course of research at UCSD by Dr. David Vera (hereinafter, the "Inventor") and are covered by Patent Rights as defined below;

WHEREAS , the research was sponsored in part by the Government of the United States of America and as a consequence this license is subject to overriding obligations to the Federal Government under 35 U.S.C. §§ 200-212 and applicable regulations;

WHEREAS , the Inventors are employees of UCSD, and they are obligated to assign all of their right, title and interest in the Invention to UNIVERSITY;

WHEREAS , UNIVERSITY is desirous that the Invention be developed and utilized to the fullest possible extent so that its benefits can be enjoyed by the general public;

WHEREAS , LICENSEE is desirous of obtaining certain rights from UNIVERSITY for commercial development, use, and sale of the Invention, and the UNIVERSITY is willing to grant such rights; and

WHEREAS , LICENSEE understands that UNIVERSITY may publish or otherwise disseminate information concerning the Invention at any time and that LICENSEE is paying consideration thereunder for its early access to the Invention, not continued secrecy therein.

NOW, THEREFORE , the parties agree:

The terms, as defined herein, shall have the same meanings in both their singular and plural forms.

2.1  License. Subject to the limitations set forth in this Agreement and Sponsor's Rights, UNIVERSITY hereby grants to LICENSEE, and LICENSEE hereby accepts, a limited license under Patent Rights to make and use Licensed Products and to practice Licensed Methods, in the Field within the Territory and during the Term for the sole purpose of evaluating LICENSEE'S interest in negotiating a commercial license under Patent Rights. The sale of Licensed Products or Licensed Methods is strictly prohibited.

The limited license granted herein is exclusive for Patent Rights in the Field.

2.2 Sublicense.  

(a) The limited license granted in Paragraph 2.1 includes the right of LICENSEE to grant limited Sublicenses to third parties during the Term but only for as long the license is exclusive.

(b) With respect to Sublicense granted pursuant to Paragraph 2.2(a), LICENSEE shall:

(i) not receive, or agree to receive, anything of value in lieu of cash as consideration from a third party under a Sublicense granted pursuant to Paragraph 2.2(a) without the express written consent of UNIVERSITY;

(ii) to the extent applicable, include all of the rights of and obligations due to UNIVERSITY (and, if applicable, the Sponsor's Rights) and contained in this Agreement;

(iii) promptly provide UNIVERSITY with a copy of each Sublicense issued; and

(iv) collect and guarantee payment of all payments due, directly or indirectly, to UNIVERSITY from Sublicensees and summarize and deliver all reports due, directly or indirectly, to UNIVERSITY from Sublicensees.

(c) Upon termination of this Agreement for any reason, UNIVERSITY, at its sole discretion, shall determine whether LICENSEE shall cancel or assign to UNIVERSITY any and all Sublicenses.

2.3 Reservation of Rights. UNIVERSITY reserves the right to:

(a) use the Invention and Patent Rights for educational and research purposes;

(b) publish or otherwise disseminate any information about the Invention at any time; and

(c) allow other nonprofit institutions to use Invention and Patent Rights for educational and research purposes.

3.1 Fees. The parties hereto understand that the fees payable by LICENSEE to UNIVERSITY under this Agreement are partial consideration for the license granted herein to LICENSEE under Patent Rights. LICENSEE shall pay UNIVERSITY:

(a) an evaluation license fee of Thirty-Six Thousand Dollars (US$36,000), within thirty (30) days after the Effective Date;

(b) evaluation license maintenance fees of Nine Thousand Dollars (US$9,000) payable on the first year anniversary of the Effective Date, Nine Thousand Dollars (US$9,000) payable on the eighteen-month anniversary of the Effective Date, and Eighteen Thousand Dollars (US$18,000) payable prior to termination;

(c)   [*]% of all Sublicense fees received by LICENSEE from its Sublicensees received by LICENSEE;

All fees payments specified in Paragraphs 3.1(a) through 3.1(c) above shall be paid by LICENSEE pursuant to Paragraph 4.3 and shall be delivered by LICENSEE to UNIVERSITY as noted in Paragraph 10.1.

3.2 Patent Costs. LICENSEE shall reimburse UNIVERSITY all future (on or after the Effective Date) Patent Costs incurred in the Territory within thirty (30) days following the date an itemized invoice is sent from UNIVERSITY to LICENSEE.

3.3 Due Diligence.

    (a) LICENSEE shall :

(i) provide UNIVERSITY progress reports on its evaluation of the Licensed Products as specified in 4.1.

    (b) If LICENSEE fails to perform any of its obligations specified in Paragraphs 3.3(a), then UNIVERSITY shall have the right and option to either terminate this Agreement or change LICENSEE's exclusive license to a nonexclusive license. This right, if exercised by UNIVERSITY, supersedes the rights granted in Article 2.

    (i) Beginning six months after Effective Date, LICENSEE shall report to UNIVERSITY progress covering LICENSEE's and Sublicensee’s activities for the preceding six months to develop and test all Licensed Products. Such semi-annual reports shall be due within sixty days of the reporting period and include a summary of work completed, summary of work in progress, current schedule of anticipated events or milestones, plans for introduction of Licensed Products, and summary of resources (dollar value) spent in the reporting period.

4.2 [reserved]

4.3 Payments .

(a) All fees and reimbursements due UNIVERSITY shall be paid in United States dollars and all checks shall be made payable to "The Regents of the University of California", referencing UNIVERSITY's taxpayer identification number, 95-6006144, and sent to UNIVERSITY according to Paragraph 10.1 (Correspondence).

(b) In the event that any patent or patent claim within Patent Rights is held invalid in a final decision by a patent office from which no appeal or additional patent prosecution has been or can be taken, or by a court of competent jurisdiction and last resort and from which no appeal has or can be taken, all obligation to pay fees based solely on that patent or claim or any claim patentably indistinct therefrom shall cease as of the date of such final decision. LICENSEE shall not, however, be relieved from paying any fees that accrued before the date of such final decision, that are based on another patent or claim not involved in such final decision.