License Agreement

This Agreement is made and entered into between individuals Dr. Waldemar Gottardi, Hoher Weg 13, A-6020 Innsbruck, Austria, and Dr. Markus Nagl, Hintermetzentaler 4, A-6094 Axams, Austria (“LICENSORS”) and Pathogenics, Inc., a Delaware Corporation (“LICENSEE”), having offices at 99 Derby Street, Suite 200, Hingham, MA 02043.

Whereas, LICENSORS are the owners of the entire right, title and interest in the Patents and/or Patent Applications described in Exhibit A attached hereto, and the Technology described and/or claimed therein; and

Whereas, LICENSORS are the owners of joint and several rights, titles and interests in the Patents and/or Patent Applications described in Exhibit A, and have been contractually appointed by all the other owners to dispose of the entire right, title and interest in the Patents and/or Patent Applications, and the Technology described and/or claimed therein, as described in separate Inventor Revenue Sharing Contracts in Exhibit B attached hereto; and

Whereas, LICENSEE is desirous of obtaining an exclusive worldwide license in order to practice the above referenced Technology covered by said Patent Rights and to manufacture, have manufactured, use and sell in the commercial market the products made in accordance therewith; and

Whereas, LICENSORS are desirous of granting such a license to LICENSEE in accordance with the terms of this Agreement.

Now, therefore, in consideration of the foregoing and the mutual agreements contained herein, the parties agree as follows:

1.1   “Patent Rights” shall mean (i) the Patents and Patent Applications described in Exhibit A attached hereto, the Technology described and/or claimed therein, and any substitutions of patents and patent applications, divisions of patents and patent applications, continuations of patents and patent applications, continuations-in-part of patents and patent applications, patents issuing thereon or reissues or re-examinations

thereof and any and all patents and patent applications corresponding thereto; (ii) all patents and patent applications to the extent assigned to LICENSORS and to the extent LICENSORS are able, under their obligations to third parties, to grant rights to LICENSEE and on which Inventors are a named inventor, the Technology described and/or claimed therein and any substitutions, divisions, continuations, continuations-in-part, patents issuing thereon or reissues or re-examinations thereof, which relate to the design, development and/or manufacture of any products incorporating the Technology and any and all patents and patent applications corresponding thereto; (iii) all patents and patent applications to the extent assigned to LICENSORS and to the extent LICENSORS are able, under their obligations to third parties, to grant rights to LICENSEE and on which Inventors are a named inventor, the Technology described and/or claimed therein and any substitutions divisions, continuations, continuations-in-part, patents issuing thereon or reissues or re-examinations thereof which relate to any improvements in the Technology and any and all patents and patent applications corresponding thereto. The patents and patent applications corresponding thereto referred to in (i), (ii) and (iii) above, when filed or issued, will be automatically incorporated in and added to this Agreement and shall periodically be added to Exhibit A attached to this Agreement and made a part hereof; provided, however, that failure to periodically add such patents and/or patent applications thereto shall not be considered to exclude such patents and/or patent applications from the meaning of “Patent Rights.”

1.2   “Licensed Processes” shall mean all technologies, methods, formulas, plans or processes and any improvements thereof, relating to or which are covered in whole or in part by any claim contained in the Patent Rights.

1.3   “Licensed Products” shall mean products or components thereof claimed in Patent Rights or products or components thereof made in accordance with or by means of any Licensed Process.

1.4   “Gross Sales” shall mean the amount billed or invoiced on sales of Licensed Products or Licensed Processes.

1.5   “Affiliates” shall mean any company, corporation, or business of which LICENSEE owns or controls at least fifty percent (50%) of the voting stock or which owns or controls at least fifty percent (50%) of the voting stock of LICENSEE.

1.6   “Field” shall mean all potential fields of use of the Patent Rights, the Licensed Products, and the Licensed Processes.

1.7   “Sublicensee” shall mean an entity which LICENSEE has granted (a) the right to manufacture and market the Licensed Products, (b) the right to practice the Licensed Processes, or (c) the right to sublicense the Licensed Processes to others.

1.8   “Technology” shall mean any novel therapeutic use or formulation of N-Chlorotaruine or combination thereof and any of its derivatives or analogs.

1.9   “Sublicense Payments” shall mean any payments received by LICENSEE from sublicenses of rights granted by LICENSORS to LICENSEE under Section 2.1 of this Agreement, as consideration for the grant of such sublicenses, including without limitation, license fees, milestone payments, license maintenance fees, and royalty payments based on sales of Licensed Products or use of Licensed Processes by such sublicense, but excluding amounts received by LICENSEE (i) in connection with or as a result of amounts or payments to fund or reimburse LICENSEE’s research and development in connection with the Technology, (ii) in connection with or as a result of amounts or payments to fund or reimburse LICENSEE’s patent expenses in connection with the Technology, or (iii) ) in connection with or as a result of amounts or payments made as consideration for a sublicensee’s purchase of securities of LICENSEE.

2.1   LICENSORS hereby grant to LICENSEE and LICENSEE accepts, subject to the terms and conditions hereof, a worldwide exclusive (event against LICENSORS) license in the Field, under the Patent Rights, to make and have made, to use and have used, to sell and have sold, to distribute and have distributed, and to market and have marketed the Licensed Products, and to practice the Licensed Processes, for the life of the Patent Rights. Such license shall include the right to grant sublicenses, upon which the LICENSORS are consulted. LICENSORS agree they will not assign, encumber, grant a license to and/or permit a lien to exist upon, the Patent Rights in any territory for any Field to or by any third party and will not themselves practice the Patent Rights other than for their own non-commercial research purposes. Licensors agree, on behalf of themselves, their successors and any other person or entity who or which may claim a right in or under the Patent Rights, that any purported transfer or encumbrance of rights shall be null and void and of no effect.

2.2   LICENSORS hereby grant to LICENSEE the right to extend the licenses granted in paragraph 2.1 to one or more Affiliates, subject to the terms and conditions hereof.

2.3   LICENSORS hereby represent and warrant to LICENSEE that LICENSORS are the sole owners of the Patent Rights as reflected on Exhibit A on the date hereof, no person or entity has or will have any rights of any kind with respect to such Patent Rights except for the rights of LICENSEE pursuant to this Agreement, and accordingly, LICENSORS have full legal right to grant to LICENSEE the license provided for herein, and such grant does not and will not violate or conflict with the rights of any person or entity.

3.1   LICENSEE shall pay to LICENSORS jointly and severally, during the term of the license of paragraph 2.1, a total royalty of four percent (4%) of the Gross Sales of all Licensed Products sold by LICENSEE and its Affiliates. LICENSEE shall pay to LICENSORS jointly and severally, during the term of the license of paragraph 2.1, a total of twenty percent (20%) of the Sublicense Payments which LICENSEE and its Affiliates receive from Sublicensees for sublicenses of the Licensed Products or Licensed Processes. No multiple payments shall be due because the sale or sublicense of any Licensed Product or Licensed Process is described in more than one sentence of this section 3.1. In the event of any such overlap, the sentence which most accurately describes the relevant transaction at issue shall prevail. On Gross Sales or sublicenses between LICENSEE and its Affiliates, royalties shall be payable only on the resale or resublicense by such Affiliate. In the event of a use or sale of Licensed Products or Licensed Processes solely for clinical testing or research and development purposes for which LICENSEE receives no revenue, the no royalty shall be due or payable to LICENSORS.

3.2   As further consideration for the license and other rights granted to LICENSEE hereunder, (a) LICENSEE shall pay to LICENSORS jointly and severally a one-time patent issue fee of One Hundred Thousand Dollars ($100,000) payable in cash or registered stock of the Licensee upon the first-time issuance of the first patent of each patent family for a licensed Product or Licensed Process, [a patent family comprises all patents concerning the same invention and originating from the sake priority application] (b) LICENSEE shall pay to LICENSORS jointly and severally a one-time milestone payment of Two Hundred and Fifty Thousand Dollars ($250,000) payable in cash or registered stock of the LICENSEE upon successful completion of a Phase III clinical trial for each licensed Product or Licensed Process, and (c) LICENSEE shall pay to LICENSORS jointly and severally a one-time milestone payment of One Million Dollars ($1,000,000) payable in cash or registered stock of the Licensee upon receiving new drug approval for each Licensed Product or Licensed Process. In the event LICENSEE enters into a sublicense with a Third Party or Third Parties under Section 2.1 of this Agreement and ceases the manufacture and sale of the Licensed Product, then as of the effective date of the sublicense LICENSEE’s obligation to pay LICENSORS any royalty or milestone payments under Article 3 herein shall terminate and, in lieu thereof, LICENSORS shall be entitled jointly and severally to twenty percent (20%) of Sublicense Payments received by LICENSEE.

4.1   LICENSEE shall report to LICENSORS the date of first sale of Licensed Products (or results of Licensed Processes) in each country within thirty (30) day of occurrence.

4.2   LICENSEE shall provide LICENSORS within sixty (60) days after each of the calendar half-years ending June 30 and December 31, reports setting forth, for the preceding six (6) -month period, the amount of Licensed Products sold by LICENSEE and its Affiliates in each country, the Gross Sales thereof, the amount of Sublicensee royalties received by LICENSEE and its Affiliates and the amount of royalty due to LICENSORS with respect to the foregoing. With each such royalty report, LICENSEE shall include the payment of the royalty due. Such report shall include a detailed listing of all Gross Sales, sublicensee income, or royalties as specified herein. No written report shall be required for any reporting period prior to the first royalty payment. Written reports shall be required for each reporting period after the first royalty payment. All royalties due hereunder shall be payable in United States dollars. Conversion of foreign currency to U.S. dollars shall be made at the conversion rate existing in the United States, as quoted in The Wall Street Journal , three (3) days prior to the date that such royalty payments by LICENSEE was due to LICENSOR. Payments which are more than thirty (30) days past due and which are not the subject of a good faith controversy between the parties hereto shall be subject to an interest charge of one percent (1%) per month.

4.3   LICENSORS agree that at all times, both during the term and after the termination of this Agreement, they will keep in confidence and trust all information provided to it hereunder by LICENSEE or provided to them by any third party pursuant to Section 5.1 hereof (the “Proprietary Information”), and it will not use or disclose any Proprietary Information or anything directly relating to such Proprietary Information without the written consent of the LICENSEE. LICENSORS acknowledge that the Proprietary Information constitutes a unique and valuable asset of the LICENSEE, which is secret and confidential and which will be communicated to LICENSORS in confidence and that any disclosure or other use of the