PATENTAND 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

In consideration of rights granted by BOARD to LICENSEE under this AGREEMENT, LICENSEE agrees to pay UTMDACC the following:

 

(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 LICENSEE, its AFFILIATES and sublicensees for the three (3) preceding calendar months; and

 

(c)

the total quantities of LICENSED PRODUCTS produced by LICENSEE, its AFFILIATES and sublicensees; and

(d)

the total SALES by LICENSEE, its AFFILIATES and sublicensees; and

(e)

the calculation of NET SALES; and

(f)

the royalties so computed and due UTMDACC and/or minimum royalties; and

 

(g)

all consideration received from each sublicensee or assignee and payments due UTMDACC; and

(h)

all other amounts due UTMDACC herein.

4.3

During the term of this AGREEMENT and for one (1) year thereafter, LICENSEE agrees to keep complete and accurate records of its, its AFFILIATES' and its sublicensees' SALES and NET SALES in sufficient detail to enable the royalties and other payments due hereunder to be determined. LICENSEE agrees to permit UTMDACC or its representatives, at UTMDACC's expense, to periodically examine upon reasonable notice LICENSEE’s books, ledgers, and records during regular business hours for the purpose of and to the extent necessary to verify any report required under this AGREEMENT. If any amounts due UTMDACC are determined to have been underpaid in an amount equal to or greater than five percent (5%) of the total amount due during the period so examined, then LICENSEE will pay the cost of the examination plus accrued interest at the lesser of: (1) the highest allowable rate; or (2) the prime rate plus two percent.

4.4

Within thirty (30) calendar days following each anniversary of the EFFECTIVE DATE, LICENSEE will deliver to UTMDACC a written progress report as to LICENSEE's and any sublicensee’s efforts and accomplishments during the preceding year in diligently commercializing LICENSED SUBJECT MATTER in the LICENSED TERRITORY and LICENSEE's and sublicensees' commercialization plans for the upcoming year.

4.5

All amounts payable hereunder by LICENSEE will be paid in United States funds without deductions for taxes, assessments, fees, or charges of any kind.  Checks are to be made payable to The University of Texas M. D. Anderson Cancer Center, and sent by United States mail to Box 297402, Houston, Texas 77297, Attention: Grants and Contracts or by wire transfer to:

4.6

No payments due or royalty rates owed under this AGREEMENT will be reduced as the result of co-ownership of LICENSED SUBJECT MATTER by BOARD and another party, including, but not limited to, LICENSEE.

5.1

LICENSEE shall use best efforts to file an Investigational New Drug Application ("IND") with the FDA for a LICENSED PRODUCT containing liposomal curcumin within two (2) years of the EFFECTIVE DATE.

5.2

In addition to the consideration set forth in ARTICLE IV, LICENSEE shall provide funding for the completion of all preclinical studies necessary to file an IND on a LICENSED PRODUCT containing liposomal curcumin, and shall fund at least $250,000.00 towards such preclinical studies.  Of the $250,000 funding obligation, at least $100,000 shall be funded within six months of the EFFECTIVE DATE, and an aggregate total of at least $200,000 shall be funded within one year of the EFFECTIVE DATE.  

5.3

If LICENSEE desires to sponsor additional research for or related to the LICENSED SUBJECT MATTER, and particularly where LICENSEE receives payments for sponsored research pursuant to a sublicense under this AGREEMENT, LICENSEE (a) will notify UTMDACC in writing of all opportunities to conduct this sponsored research (including clinical trials, if applicable), (b) will solicit research and/or clinical proposals from UTMDACC for this purpose, and (c) will give good faith consideration to funding the proposals at UTMDACC.

6.1

If after consultation with LICENSEE both parties agree that a new patent application should be filed for LICENSED SUBJECT MATTER, UTMDACC will prepare and file appropriate patent applications, and LICENSEE will pay the reasonable cost of searching, preparing, filing, prosecuting and maintaining same.  If LICENSEE notifies UTMDACC that it does not intend to pay the cost of an application, or if LICENSEE does not respond or make an effort to agree with UTMDACC on the disposition of rights of the subject invention, then UTMDACC may file such application at its own expense and LICENSEE’s rights to such invention under this AGREEMENT shall terminate in their entirety.  UTMDACC will provide LICENSEE with a copy of the application for which LICENSEE has paid the cost of filing, as well as copies of any documents received or filed during prosecution thereof.  The parties agree that they share a common legal interest to get valid enforceable patents and that LICENSEE will keep all privileged information received pursuant to this Section confidential.

7.1

LICENSEE, at its expense, must enforce any patent exclusively licensed hereunder against infringement by third parties and is entitled to retain recovery from such enforcement.  After reimbursement of LICENSEE’s reasonable legal costs and expenses related to such recovery, LICENSEE agrees to pay UTMDACC either:  (a) the royalty detailed in Section 4.1(d) for any monetary recovery that is for sales of LICENSED PRODUCTS lost due to the infringement and related punitive damages; or (b) fifty percent (50%) of reasonable royalties awarded and related punitive damages in any monetary recovery in which the award is for reasonable royalties. LICENSEE must notify UTMDACC in writing of any potential infringement within thirty (30) calendar days of knowledge thereof.  If LICENSEE does not file suit against or enter into a sublicense with a substantial infringer within six (6) months of knowledge thereof, then BOARD or UTMDACC may, at its sole discretion, enforce any patent licensed hereunder on behalf of itself and LICENSEE, with UTMDACC retaining all recoveries from such enforcement, and/or reduce the license granted hereunder to non-exclusive.

7.2

In any suit or dispute involving an infringer, the parties agree to cooperate fully with each other.  At the request and expense of the party bringing suit, the other party will permit access during regular business hours, to all relevant personnel, records, papers, information, samples, specimens, and the like in its possession.

8.1

LICENSEE agrees that all packaging containing individual LICENSED PRODUCT(S), documentation therefor, and, when possible, actual LICENSED PRODUCT(S) sold by LICENSEE, AFFILIATES, and/or sublicensees of LICENSEE will be permanently and legibly marked with the number of any applicable patent(s) licensed hereunder in accordance with each country's patent laws, including Title 35, United States Code.

9.2

In no event shall BOARD, SYSTEM or UTMDACC be liable for any indirect, special, consequential or punitive damages (including, without limitation, damages for loss of profits or expected savings or other economic losses, or for injury to persons or property) arising out of, or in connection with, this AGREEMENT or its subject matter, regardless of whether BOARD, SYSTEM or UTMDACC knows or should know of the possibility of such damages.

9.4

LICENSEE shall provide UTMDACC with written evidence of such insurance within thirty (30) calendar days of its procurement.  Additionally, LICENSEE shall provide UTMDACC with written notice of at least fifteen (15) calendar days prior to the cancellation, non-renewal or material change in such insurance.

9.5

LICENSEE shall maintain such commercial general liability insurance beyond the expiration or termination of this AGREEMENT during: (i) the period that any LICENSED SUBJECT MATTER developed pursuant to this AGREEMENT is being commercially distributed or sold by LICENSEE, an AFFILIATE or by a sublicensee or agent of LICENSEE; and (ii) the two (2) year period immediately after such period.

10.1

LICENSEE will not use the name of (or the name of any employee of) UTMDACC, SYSTEM or BOARD in any advertising, promotional or sales literature, on its Web site, or for the purpose of raising capital without the advance express written consent of BOARD secured through:

11.1

UTMDACC and LICENSEE each agree that all information contained in documents marked "confidential" and forwarded to one by the other (i) are to be received in strict confidence, (ii) are to be used only for the purposes of this AGREEMENT, and (iii) will not be disclosed by the recipient party (except as required by law or court order), its agents or employees without the prior written consent of the disclosing party, except to the extent that the recipient party can establish by competent written proof that such information:

 

(a)

was in the public domain at the time of disclosure; or

 

(b)

later became part of the public domain through no act or omission of the recipient party, its employees, agents, successors or assigns; or

 

(c)

was lawfully disclosed to the recipient party by a third party having the right to disclose it; or

 

(d)

was already known by the recipient party at the time of disclosure; or

 

(e)

was independently developed by the recipient party without use of the disclosing party’s confidential information; or

 

(f)

is required by law or regulation to be disclosed.

11.2

Each party’s obligation of confidence hereunder will be fulfilled by using at least the same degree of care with the disclosing party's confidential information as it uses to protect its own confidential information, but always at least a reasonable degree of care. This obligation will exist while this AGREEMENT is in force and for a period of three (3) years thereafter.

11.3

UTMDACC reserves the right to publish the general scientific findings from research related to LICENSED SUBJECT MATTER, with due regard to the protection of LICENSEE’s confidential information.  UTMDACC will submit the manuscript of any proposed publication to LICENSEE at least thirty (30) calendar days before publication, and LICENSEE shall have the right to review and comment upon the publication in order to protect LICENSEE’s confidential information. Upon LICENSEE’s request, publication may be delayed up to sixty (60) additional calendar days to enable LICENSEE to secure adequate intellectual property protection of LICENSEE’s confidential information that would otherwise be affected by the publication.

12.1

Except in connection with the sale of substantially all of LICENSEE's assets to a third party, this AGREEMENT may not be assigned by LICENSEE without the prior written consent of UTMDACC, which will not be unreasonably withheld.

13.1

Subject to Sections 13.3 and 13.4 hereinbelow, the term of this AGREEMENT is from the EFFECTIVE DATE to the full end of the term or terms for which PATENT RIGHTS have not expired, or if only TECHNOLOGY RIGHTS are licensed and no PATENT RIGHTS are applicable, for a term of fifteen (15) years. If no PATENT has issued and a LICENSED PRODUCT receives REGULATORY APPROVAL prior to the end of the term set forth in this Section 13.1, and the AGREEMENT has not otherwise terminated or expired, then the term shall be automatically extended until fifteen (15) years past regulatory approval of the LICENSED PRODUCT.

13.2

Any time after the third anniversary of the EFFECTIVE DATE, BOARD or UTMDACC have the right to terminate this license in any national political jurisdiction within the LICENSED TERRITORY if LICENSEE, within ninety (90) calendar days after receiving written notice from UTMDACC of the intended termination, fails to provide written evidence satisfactory to UTMDACC that LICENSEE or its sublicensee(s) has commercialized or is actively and effectively attempting to commercialize a licensed invention in such jurisdiction(s).  The following definitions apply to Section 13.2: (a) "commercialized" means having SALES in such jurisdiction; and (b) "actively and effectively attempting to commercialize" means having an ongoing and active research, development, manufacturing, marketing or sales program as appropriate, directed toward obtaining regulatory approval, and/or production and/or SALES in any jurisdiction.

13.3

Subject to any rights herein which survive termination, this AGREEMENT will earlier terminate in its entirety:

 

(a)

automatically, if LICENSEE becomes bankrupt or insolvent and/or if the business of LICENSEE shall be placed in the hands of a receiver, assignee, or trustee, whether by voluntary act of LICENSEE or otherwise; or

 

(b)

upon thirty (30) calendar days written notice from UTMDACC, if LICENSEE breaches or defaults on the payment or report obligations of ARTICLE IV, or use of name obligations of ARTICLE X, unless, before the end of the such thirty (30)-calendar day notice period, LICENSEE has cured the default or breach to UTMDACC’s satisfaction, and so notifies UTMDACC, stating the manner of the cure; or

 

(c)

upon thirty (30) calendar days written notice from UTMDACC, if LICENSEE fails to fund completion of preclinical studies or file an IND, as provided in ARTICLE V, unless, before the end of the such thirty (30)-calendar day notice period, LICENSEE has cured the default or breach to UTMDACC’s satisfaction, and so notifies UTMDACC, stating the manner of the cure; or

 

(d)

upon ninety (90) calendar days written notice from UTMDACC if LICENSEE breaches or defaults on any other obligation under this AGREEMENT, unless, before the end of the such ninety (90) calendar-day notice period, LICENSEE has cured the default or breach to UTMDACC’s satisfaction and so notifies UTMDACC, stating the manner of the cure; or

 

(e)

at any time by mutual written agreement between LICENSEE and UTMDACC upon one hundred eighty (180) calendar days written notice to all parties and subject to any terms herein which survive termination; or

 

(f)

if Section 13.2 is invoked.

13.4

Upon termination of this AGREEMENT:

 

(a)

nothing herein will be construed to release either party of any obligation maturing prior to the effective date of the termination; and

 

(b)

LICENSEE covenants and agrees to be bound by the provisions of ARTICLES IX (Indemnification and Insurance), X (Use of Board and UTMDACC’s Name) and XI (Confidential Information and Publication) of this AGREEMENT; and

 

(c)

LICENSEE may, for a period of one year after the effective date of the termination, sell all LICENSED PRODUCTS and parts therefor that it has on hand at the date of termination, if LICENSEE pays the earned royalty thereon and any other amounts due pursuant to ARTICLE IV of this AGREEMENT; and

 

(d)

Subject to Section 13.4(c), LICENSEE agrees to cease and desist any use and all SALE of the LICENSED SUBJECT MATTER and LICENSED PRODUCTS upon termination of this AGREEMENT.

14.1

Except for the rights, if any, of the Government of the United States of America as set forth below, BOARD represents and warrants its belief that (a) it is the owner of the entire right, title, and interest in and to LICENSED SUBJECT MATTER, (b) it has the sole right to grant licenses thereunder, and (c) it has not knowingly granted licenses thereunder to any other entity that would restrict rights granted hereunder except as stated herein.

14.2

LICENSEE understands that the LICENSED SUBJECT MATTER may have been developed under a funding agreement with the Government of the United States of America ("Government") and, if so, that the Government may have certain rights relative thereto.  This AGREEMENT is explicitly made subject to the Government's rights under any such agreement and any applicable law or regulation.  To the extent that there is a conflict between any such agreement, applicable law or regulation and this AGREEMENT, the terms of such Government agreement, applicable law or regulation shall prevail.  LICENSEE agrees that LICENSED PRODUCTS used or SOLD in the United States will be manufactured substantially in the United States, unless a written waiver is obtained in advance from the GOVERNMENT.

14.3

LICENSEE understands and agrees that BOARD and UTMDACC, by this AGREEMENT, make no representation as to the operability or fitness for any use, safety, efficacy, approvability by regulatory authorities, time and cost of development, patentability, and/or breadth of the LICENSED SUBJECT MATTER. BOARD and UTMDACC, by this AGREEMENT, also make no representation as to whether any patent covered by PATENT RIGHTS is valid or as to whether there are any patents now held, or which will be held, by others or by BOARD or UTMDACC in the LICENSED FIELD, nor do BOARD and UTMDACC make any representation that the inventions contained in PATENT RIGHTS do not infringe any other patents now held or that will be held by others or by BOARD.

14.4

LICENSEE, by execution hereof, acknowledges, covenants and agrees that LICENSEE has not been induced in any way by BOARD, SYSTEM, UTMDACC or employees thereof to enter into this AGREEMENT, and further warrants and represents that (a) LICENSEE has conducted sufficient due diligence with respect to all items and issues pertaining to this AGREEMENT; and (b) LICENSEE has adequate knowledge and expertise, or has used knowledgeable and expert consultants, to adequately conduct such due diligence, and agrees to accept all risks inherent herein.

15.1

This AGREEMENT constitutes the entire and only agreement between the parties for LICENSED SUBJECT MATTER and all other prior negotiations, representations, agreements and understandings are superseded hereby.  No agreements altering or supplementing the terms hereof will be made except by a written document signed by both parties.

15.2

Any notice required by this AGREEMENT must be given by prepaid, first class, certified mail, return receipt requested, and addressed in the case of UTMDACC to:

15.3

LICENSEE must comply with all applicable federal, state and local laws and regulations in connection with its activities pursuant to this AGREEMENT. LICENSEE acknowledges that the LICENSED SUBJECT MATTER is subject to U. S. export control jurisdiction.  LICENSEE agrees to comply with all applicable international and national laws that apply to the LICENSED SUBJECT MATTER, including U.S. Export Administration Regulations, as well as end-user, end-use, and destination restrictions applied by the United States.

15.4

This AGREEMENT will be construed and enforced in accordance with the laws of the United States of America and of the State of Texas, without regard to its conflict of law provisions.  The Texas State Courts of Harris County, Texas (or, if there is exclusive federal jurisdiction, the United States District Court for the Southern District of Texas) shall have exclusive jurisdiction and venue over any dispute arising out of this AGREEMENT, and LICENSEE consents to the jurisdiction of such courts; however, nothing in this AGREEMENT shall be deemed as a waiver by BOARD, SYSTEM or UTMDACC of its sovereign immunity.

15.5

Any dispute or controversy arising out of or relating to this AGREEMENT, its construction or its actual or alleged breach will be decided by mediation.  If the mediation does not result in a resolution of such dispute or controversy, it will be finally decided by an appropriate method of alternate dispute resolution, including without limitation, arbitration, conducted in the city of Houston, Harris County, Texas, in accordance with the applicable, then-current procedures of the American Arbitration Association.  The arbitration panel will include members knowledgeable in the evaluation of the LICENSED SUBJECT MATTER.  Judgment upon the award rendered may be entered in the highest court or forum having jurisdiction, state or federal.  The provisions of this Section 15.5 will not apply to decisions on the validity of patent claims or to any dispute or controversy as to which any treaty or law prohibits such arbitration.  The decision of the arbitration must be sanctioned by a court of law having jurisdiction to be binding upon and enforceable by the parties.

15.6

Failure of BOARD or UTMDACC to enforce a right under this AGREEMENT will not act as a waiver of right or the ability to later assert that right relative to the particular situation involved.

15.7

Headings included herein are for convenience only and will not be used to construe this AGREEMENT.

15.8

If any part of this AGREEMENT is for any reason found to be unenforceable, all other parts nevertheless will remain enforceable.