PATENT AND TECHNOLOGY LICENSE AGREEMENT

A.

BOARD owns certain PATENT RIGHTS and TECHNOLOGY RIGHTS related to LICENSED SUBJECT MATTER developed at UTMDACC.

B.

BOARD, through UTMDACC, desires to have the LICENSED SUBJECT MATTER developed in the LICENSED FIELD and used for the benefit of LICENSEE, BOARD, SYSTEM, UTMDACC, the inventor(s), and the public as outlined in BOARD’s Intellectual Property Policy.

C.

LICENSEE wishes to obtain a license from BOARD to practice LICENSED SUBJECT MATTER.

1.1

This AGREEMENT is effective as of the date written above ("EFFECTIVE DATE"), which is the date fully executed by all parties.

2.1

AFFILIATE means any business entity more than fifty percent (50%) owned by LICENSEE, any business entity which owns more than fifty percent (50%) of LICENSEE, or any business entity that is more than fifty percent (50%) owned by a business entity that owns more than fifty percent (50%) of LICENSEE.

2.2

LICENSED FIELD means human and animal use.

2.3

LICENSED PRODUCTS means any product or service sold by LICENSEE, its AFFILIATES or its sublicensees comprising LICENSED SUBJECT MATTER pursuant to this AGREEMENT.

2.4

LICENSED SUBJECT MATTER means inventions and discoveries covered by PATENT RIGHTS or TECHNOLOGY RIGHTS within the LICENSED FIELD.

2.5

LICENSED TERRITORY means worldwide.

2.6

NET SALES means the gross revenues received by LICENSEE, its AFFILIATES, or its sublicensees from a SALE less sales discounts actually granted, sales and/or use taxes actually paid, import and/or export duties actually paid, outbound transportation actually prepaid or allowed, and amounts actually allowed or credited due to returns (not exceeding the original billing or invoice amount), all as recorded by LICENSEE in LICENSEE’s official books and records in accordance with generally accepted accounting practices and consistent with LICENSEE’s published financial statements and/or regulatory filings with the United States Securities and Exchange Commission.  In the event of a SALE of a COMBINATION PRODUCT, the parties shall work together in good faith to determine what portion of resulting gross revenues shall be used for determining NET SALES based on the value added to the price of such COMBINATION PRODUCT by LICENSED SUBJECT MATTER relative to value added by other therapeutically active ingredients or other proprietary technology or information.  For purposes of this Section 2.6, the term "COMBINATION PRODUCT" means any LICENSED PRODUCT that contains at least one other therapeutically active ingredient or, in the case of a service, at least one other proprietary technology.

2.7

PATENT RIGHTS means BOARD's rights in the information or discoveries described in invention disclosures, or claimed in any patents and/or patent applications, whether domestic or foreign, as identified in Exhibit I attached hereto, and all divisionals, continuations, continuations-in-part (to the extent the claims of such continuations-in-part are entitled to claim priority to the aforesaid patents and/or patent applications identified in Exhibit I), reissues, reexaminations or extensions of the patents and/or patent applications identified in Exhibit I, and any letters patent, domestic or foreign that issue thereon.

2.8

PHASE 1 STUDY means: (a) that portion of the drug development and review process which provides for the initial introduction of an investigational new drug into human subjects, as more specifically defined by the rules and regulations of the FDA, including 21 C.F.R. § 312.21 or any future revisions or substitutes therefor; or (b) a similar clinical trial in any national jurisdiction other than the United States.

2.9

PHASE 2 STUDY means: (a) that portion of the drug development and review process which provides for early controlled clinical studies conducted to obtain preliminary data on the effectiveness of an investigational new drug for a particular indication, as more specifically defined by the rules and regulations of the FDA, including 21 C.F.R. § 312.21 or any future revisions or substitutes therefor; or (b) a similar clinical trial in any national jurisdiction other than the United States.

2.10

PHASE 3 STUDY means (a) that portion of the drug development and review process in which expanded clinical studies are conducted to gather the additional information about effectiveness and safety that is needed to evaluate the overall benefit-risk relationship of an investigational new drug, as more specifically defined by the rules and regulations of the FDA, including 21 C.F.R. § 312.21 or any future revisions or substitutes therefor; or (b) a similar clinical trial in any national jurisdiction other than the United States.

2.11

REGULATORY APPROVAL means the FDA approval necessary for the SALE of a LICENSED PRODUCT in the United States.

2.12

SALE or SOLD means the transfer or disposition of a LICENSED PRODUCT for value to a party other than LICENSEE, an AFFILIATE or a ROYALTY-FREE PRACTITIONER.  As used herein, "ROYALTY-FREE PRACTITIONER" means UTMDACC and Dr. Razelle Kurzrock, M.D. ("PHYSICIAN INVENTOR"), and any partner or associate who practices medicine with the PHYSICIAN INVENTOR, but with respect to such partner or associate, only for such time as they are engaged in a bona fide medical practice with the PHYSICIAN INVENTOR.

2.13

TECHNOLOGY RIGHTS means BOARD's rights in any technical information, know-how, processes, procedures, compositions, devices, methods, formulae, protocols, techniques, software, designs, drawings or data created by the inventor(s) listed in Exhibit I at UTMDACC before the EFFECTIVE DATE, which are not claimed in PATENT RIGHTS but that are necessary for practicing PATENT RIGHTS.

3.1

BOARD, through UTMDACC, hereby grants to LICENSEE a royalty-bearing, exclusive license under LICENSED SUBJECT MATTER to manufacture, have manufactured, use, import, offer to sell and/or sell LICENSED PRODUCTS within LICENSED TERRITORY for use within LICENSED FIELD. This grant is subject to Sections 14.2 and 14.3 hereinbelow, the payment by LICENSEE to UTMDACC of all consideration as provided herein, the timely payment of all amounts due under any related sponsored research agreement between UTMDACC and LICENSEE in effect during this AGREEMENT, and is further subject to the following rights retained by BOARD and UTMDACC to:

(a)

Publish the general scientific findings from research related to LICENSED SUBJECT MATTER, subject to the terms of ARTICLE XI–Confidential Information and Publication; and

(b)

Use LICENSED SUBJECT MATTER for non-commercial research, non-commercial patient care, teaching and other educationally-related purposes.  Use of LICENSED SUBJECT MATTER in clinical trials and other research involving patients shall be considered non-commercial research or non-commercial patient care provided that BOARD and UTMDACC do not sell such LICENSED SUBJECT MATTER to said patients.

3.2

LICENSEE may extend the license granted herein to any AFFILIATE provided that the AFFILIATE consents in writing to be bound by this AGREEMENT to the same extent as LICENSEE.  LICENSEE agrees to deliver such contract to UTMDACC within thirty (30) calendar days following execution thereof.

3.3

LICENSEE may grant sublicenses under LICENSED SUBJECT MATTER consistent with the terms of this AGREEMENT provided that LICENSEE is responsible for its sublicensees relevant to this AGREEMENT, and for diligently collecting all amounts due LICENSEE from sublicensees. If a sublicensee pursuant hereto becomes bankrupt, insolvent or is placed in the hands of a receiver or trustee, LICENSEE, to the extent allowed under applicable law and in a timely manner, agrees to use its best reasonable efforts to collect all consideration owed to LICENSEE and to have the sublicense agreement confirmed or rejected by a court of proper jurisdiction.

3.4

LICENSEE must deliver to UTMDACC a true and correct copy of each sublicense granted by LICENSEE, and any modification or termination thereof, within thirty (30) calendar days after execution, modification, or termination.

3.5

If this AGREEMENT is terminated pursuant to ARTICLE XIII-Term and Termination, BOARD and UTMDACC agree to accept as successors to LICENSEE, existing sublicensees in good standing at the date of termination provided that each such sublicensee consents in writing to be bound by all of the terms and conditions of this AGREEMENT.

4.1

(a)

All reasonable out-of-pocket expenses incurred by UTMDACC in filing, prosecuting, enforcing and maintaining PATENT RIGHTS, and all such future expenses incurred by UTMDACC, for so long as, and in such countries as this AGREEMENT remains in effect. UTMDACC will invoice LICENSEE after the AGREEMENT has been fully executed by all parties for expenses incurred as of that time and on a quarterly basis thereafter.  The invoiced amounts will be due and payable by LICENSEE within thirty (30) calendar days of invoice; and

(b)

A nonrefundable license documentation fee in the amount of fifteen thousand dollars ($15,000). This fee will not reduce the amount of any other payment provided for in this ARTICLE IV, and is due and payable within thirty (30) calendar days after the AGREEMENT has been fully executed by all parties and LICENSEE has received an invoice for the amount from UTMDACC; and

(c)

Nonrefundable Annual Maintenance Fees and Minimum Annual Royalties due and payable according to the following schedule:

(1)

An Annual Maintenance Fee of ten thousand dollars ($10,000), due and payable within thirty (30) calendar days of the first anniversary of the EFFECTIVE DATE and every anniversary occurring thereafter until: (i) the seventh anniversary of the EFFECTIVE DATE; (ii) the first SALE; or (iii) issuance of a patent for any PATENT RIGHTS ("PATENT"), whichever comes first; and

(2)

An Annual Maintenance Fee of thirty thousand dollars ($30,000), due and payable within thirty (30) calendar days of the seventh  anniversary of the EFFECTIVE DATE and every anniversary occurring thereafter until the first SALE, subject to Sections 4.1(c)(3)-(4), below;

(3)

Subject to Section 4.1(c)(4), below, if a PATENT issues prior to the first SALE or the seventh anniversary of the EFFECTIVE DATE, the Annual Maintenance Fee shall be increased from ten thousand dollars ($10,000) to fifteen thousand dollars ($15,000) per year, due and payable on the anniversary of the EFFECTIVE DATE immediately following issuance of the PATENT and every anniversary occurring thereafter until: (i) the first SALE; or (ii) the seventh anniversary of the EFFECTIVE DATE, whichever comes first;

(4)

Notwithstanding any provision in Sections 4.1(c)(1)-(3) to the contrary, upon the first SALE, the Annual Maintenance Fee shall be converted to a Minimum Annual Royalty of  seventy-five thousand dollars ($75,000), due and payable within thirty (30) calendar days of the anniversary of the EFFECTIVE DATE immediately following the first SALE, and every anniversary occurring thereafter;

(5)

Running royalties accrued under Section 4.1(d) and paid to UTMDACC during the one year period preceding an anniversary of the EFFECTIVE DATE may be credited against the Minimum Annual Royalty due on that anniversary date; and

(d)

A running royalty as follows:

(1)

two and one half percent (2.5%) of NET SALES less than $250 million for LICENSED PRODUCTS covered by an issued patent;

(2)

three percent (3%) of NET SALES equal to or greater than $250 million for LICENSED PRODUCTS covered by an issued patent; and

(3)

one and one half percent (1.5%) of NET SALES of LICENSED PRODUCTS not covered by an issued patent.

(e)

The following one-time milestone payments, regardless of whether the milestone is achieved by LICENSEE, a sublicensee or AFFILIATE, or, in the case of milestone 4.1(e)(5), by any of the foregoing, BOARD and/or UTMDACC

(f)

The following percentages of all non-royalty consideration received by LICENSEE from any sublicensee pursuant to Sections 3.3 and 3.4 hereinabove, including but not limited to, up-front payments, marketing, distribution, franchise, option, license, or documentation fees, research and development money, bonus and milestone payments and equity securities:

(g)

This AGREEMENT may be assigned in accordance with the provisions of Section 12.1 subject to the payment to UTMDACC of a one hundred thousand dollar ($100,000) assignment fee prior to the assignment. In the event the assignment fee is not paid prior to the assignment, said assignment shall be void.

4.2

Unless otherwise provided, all such payments are payable quarterly within thirty (30) days after finalization of the financial statements for the quarters ended March 31, June 30, September 30, and December 31 of each year during the term of this AGREEMENT or within sixty (60) days after March 31, June 30, September 30, and December 31 of each year during the term of this AGREEMENT (whichever is earlier), at which time LICENSEE will also deliver to UTMDACC a true and accurate report, giving such particulars of the business conducted by LICENSEE, its AFFILIATES and its sublicensees, if any exist, during the preceding three (3) calendar months under this AGREEMENT as necessary for UTMDACC to account for LICENSEE's payments hereunder.  This report will include pertinent data, including, but not limited to:

(a)

the accounting methodologies used to account for and calculate the items included in the report and any differences in such accounting methodologies used by LICENSEE, its AFFILIATES and sublicensees  since the previous report; and

(b)

a list of LICENSED PRODUCTS produced by LICENS