Exhibit 10.11
 
PUBLIC HEALTH SERVICE
 
PATENT LICENSE AGREEMENT – EXCLUSIVE
 
COVER PAGE
 
For PHS internal use only:
 
License Number:

License Application Number: A-286-2006
 
Serial Number(s) of Licensed Patent(s) or Patent Application(s):
 
 
I.
U.S. Provisional Patent Application No. 60/771,163, filed February 6, 2006,
entitled “Use of Phosphatases To Treat Glioblastomas” (HHS Ref. No.
E-123-2006/0-US-01);

 
 
II.
U.S. Provisional Patent Application No. 60/797,201, filed May 2, 2006, entitled
“Use of Phosphatases To Treat Glioblastomas” (HHS Ref. No. E-123-2006/1-US-01)

 
 
III.
U.S. Patent Application Serial No. 11/703,401, filed February 6, 2007, entitled
“Use of Phosphatases To Treat Glioblastomas” (HHS Ref. No. E-123-2006/0-US-03)

 
 
IV.
PCT International Application No. PCT/US2007/003095, filed February 6, 2007
entitled “Use of Phosphatases To Treat Glioblastomas” (HHS Ref. No.
E-123-2006/0-PCT-02)

 
 
V.
U.S. Provisional Patent Application No. 60/963,307, filed August 3, 2007
entitled “Use of Phosphatases To Treat Neuroblastomas and Medulloblastomas” (HHS
Ref. No. E-123-2006/2-US-01)

 
 
VI.
U.S. Provisional Patent Application No. 60/063,970, filed February 6, 2008
entitled “Use of  Phosphatases To Treat Neuroblastomas and Medulloblastomas”.

 
 
VII.
U.S. Application in preparation corresponding to Cooper and Dunham Referene No.
4101/79251.

 
Licensee:
 
Lixte Biotechnology, Inc.
 
Cooperative Research and Development Agreement (CRADA) Number (if a subject
invention):
 
CRADA No. 02165 (C-026-2006/0) and Four Amendments
 
Additional Remarks:
 
N/A
 
Public Benefit(s):
 
 
 

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Novel methods of treating glioblastomas and other tumors of the central nervous
system.
This Patent License Agreement, hereinafter referred to as the “Agreement”,
consists of this Cover Page, an attached Agreement, a Signature Page, Appendix A
(List of Patent(s) or Patent Application(s)), Appendix B (Fields of Use and
Territory), Appendix C (Royalties), Appendix D (Benchmarks and Performance),
Appendix E (Commercial Development Plan), Appendix F (Example Royalty Report),
and Appendix G (Royalty Payment Options).  The Parties to this Agreement are:
 
 
1)
The National Institutes of Health (“NIH”) or the Food and Drug Administration
(“FDA”), hereinafter singly or collectively referred to as “PHS”, agencies of
the United States Public Health Service within the Department of Health and
Human Services (“HHS”); and

 
 
2)
The person, corporation, or institution identified above or on the Signature
Page, having offices at the address indicated on the Signature Page, hereinafter
referred to as “Licensee”.

 
 
 

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PHS PATENT LICENSE AGREEMENT – EXCLUSIVE

 
PHS and Licensee agree as follows:
 
1.
BACKGROUND

 
 
1.1
In the course of conducting biomedical research, PHS investigators made
inventions that may have commercial applicability.

 
 
1.2
By assignment of rights from PHS employees and other inventors, HHS, on behalf
of the Government, owns intellectual property rights claimed in any United
States or foreign patent applications or patents corresponding to the assigned
inventions.  HHS also owns any tangible embodiments of these inventions actually
reduced to practice by PHS.

 
 
1.3
The Secretary of HHS has delegated to PHS the authority to enter into this
Agreement for the licensing of rights to these inventions.

 
 
1.4
PHS desires to transfer these inventions to the private sector through
commercialization licenses to facilitate the commercial development of products
and processes for public use and benefit.

 
 
1.5
Licensee desires to acquire commercialization rights to certain of these
inventions in order to develop processes, methods, or marketable products for
public use and benefit.

 
2.
DEFINITIONS

 
 
2.1
“Benchmarks” mean the performance milestones that are set forth in Appendix D.

 
 
2.2
“Commercial Development Plan” means the written commercialization plan attached
as Appendix E.

 
 
2.3
“First Commercial Sale” means the initial transfer by or on behalf of Licensee
or its sublicensees of Licensed Products or the initial practice of a Licensed
Process by or on behalf of Licensee or its sublicensees in exchange for cash or
some equivalent to which value can be assigned for the purpose of determining
Net Sales.

 
 
2.4
“Government” means the Government of the United States of America.

 
 
2.5
“Licensed Fields of Use” means the fields of use identified in Appendix B.

 
 
2.6
“Licensed Patent Rights” shall mean:

 
 
(a)
Patent applications (including provisional patent applications and PCT patent
applications) or patents listed in Appendix A, all divisions and continuations
of these applications, all patents issuing from these applications, divisions,
and continuations, and any reissues, reexaminations, and extensions of these
patents;

 
 
(b)
to the extent that the following contain one or more claims directed to the
invention or inventions disclosed in 2.6(a):

 
 
(i)
continuations in part of 2.6(a);

 
 
(ii)
all divisions and continuations of these continuations in part;

 
 
 

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(iii)
all patents issuing from these continuations in part, divisions, and
continuations;

 
 
(iv)
priority patent application(s) of, and application(s) claiming priority of,
2.6(a); and

 
 
(v)
any reissues, reexaminations, and extensions of these patents;

 
 
(c)
to the extent that the following contain one or more claims directed to the
invention or inventions disclosed in 2.6(a): all counterpart foreign and U.S.
patent applications and patents to 2.6(a) and 2.6(b), including those listed in
Appendix A; and

 
 
(d)
Licensed Patent Rights shall not include 2.6(b) or 2.6(c) to the extent that
they contain one or more claims directed to new matter which is not the subject
matter disclosed in 2.6(a).

 
 
2.7
“Licensed Processes” means processes which, in the course of being practiced,
would be within the scope of one or more claims of the Licensed Patent Rights
that have not been held unpatentable, invalid or unenforceable by an unappealed
or unappealable judgment of a court of competent jurisdiction.

 
 
2.8
“Licensed Products” means tangible materials which, in the course of
manufacture, use, sale, or importation, would be within the scope of one or more
claims of the Licensed Patent Rights that have not been held unpatentable,
invalid or unenforceable by an unappealed or unappealable judgment of a court of
competent jurisdiction.

 
 
2.9
“Licensed Territory” means the geographical area identified in Appendix B.

 
 
2.10
“Net Sales” means the total gross receipts for sales of Licensed Products or
practice of Licensed Processes by or on behalf of Licensee or its sublicensees,
and from leasing, renting, or otherwise making Licensed Products available to
others without sale or other dispositions, whether invoiced or not, less returns
and allowances, packing costs, insurance costs, freight out, taxes or excise
duties imposed on the transaction (if separately invoiced), and wholesaler and
cash discounts in amounts customary in the trade to the extent actually
granted.  No deductions shall be made for commissions paid to individuals,
whether they are with independent sales agencies or regularly employed by
Licensee, or sublicensees, and on its payroll, or for the cost of collections.

 
 
2.11
“Practical Application” means to manufacture in the case of a composition or
product, to practice in the case of a process or method, or to operate in the
case of a machine or system; and in each case, under these conditions as to
establish that the invention is being utilized and that its benefits are to the
extent permitted by law or Government regulations available to the public on
reasonable terms.

 
 
2.12
“Research License” means a nontransferable, nonexclusive license to make and to
use Licensed Products or Licensed Processes as defined by the Licensed Patent
Rights for purposes of research and not for purposes of commercial manufacture
or distribution or in lieu of purchase.

 
 
2.13
"Affiliate(s)" means a corporation or other business entity, which, directly or
indirectly, is controlled by, controls, or is under common control with
Licensee.  For this purpose, the term "control" shall mean ownership of more
than fifty percent (50%) of the voting stock or other ownership interest of the
corporation or other business entity, or the power to elect or appoint more than
fifty percent (50%) of the members of the governing body of the corporation or
other business entity.

 
 
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3.
GRANT OF RIGHTS

 
 
3.1
PHS hereby grants and Licensee accepts, subject to the terms and conditions of
this Agreement, an exclusive license under the Licensed Patent Rights in the
Licensed Territory to make and have made, to use and have used, to sell and have
sold, to offer to sell, and to import any Licensed Products in the Licensed
Fields of Use and to practice and have practiced any Licensed Processes in the
Licensed Fields of Use.

 
 
3.2
This Agreement confers no license or rights by implication, estoppel, or
otherwise under any patent applications or patents of PHS other than the
Licensed Patent Rights regardless of whether these patents are dominant or
subordinate to the Licensed Patent Rights.

 
4.
SUBLICENSING

 
 
4.1
Upon written approval, which shall include prior review of any sublicense
agreement by PHS and which shall not be unreasonably withheld, Licensee may
enter into sublicensing agreements under the Licensed Patent Rights.

 
 
4.2
Licensee agrees that any sublicenses granted by it shall provide that the
obligations to PHS of Paragraphs 5.1 5.4, 8.1, 10.1, 10.2, 12.5, and 13.8-13.10
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 Paragraphs to
all sublicense agreements.

 
 
4.3
Any sublicenses granted by Licensee shall provide for the termination of the
sublicense, or the conversion to a license directly between the sublicensees and
PHS, at the option of the sublicensee, upon termination of this Agreement under
Article 13.  This conversion is subject to PHS approval which will not be
unreasonably withheld and contingent upon acceptance by the sublicensee of the
remaining provisions of this Agreement.

 
 
4.4
Licensee agrees to forward to PHS a complete copy of each fully executed
sublicense agreement postmarked within thirty (30) days of the execution of the
agreement.  To the extent permitted by law, PHS agrees to maintain each
sublicense agreement in confidence.

 
5.
STATUTORY AND PHS REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS

 
 
5.1           (a)
PHS reserves on behalf of the Government an irrevocable, nonexclusive,
nontransferable, royalty free license for the practice of all inventions
licensed under the Licensed Patent Rights throughout the world by or on behalf
of the Government and on behalf of any foreign government or international
organization pursuant to any existing or future treaty or agreement to which the
Government is a signatory.  Prior to the First Commercial Sale, Licensee agrees
to provide PHS with reasonable quantities of Licensed Products or materials made
through the Licensed Processes for PHS research use; and

 
 
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(b)
In the event that the Licensed Patent Rights are Subject Inventions made under a
Cooperative Research and Development Agreement (“CRADA”), Licensee grants to the
Government, pursuant to 15 U.S.C. §3710a(b)(1)(A), a nonexclusive,
nontransferable, irrevocable, paid up license to practice Licensed Patent Rights
or have Licensed Patent Rights practiced throughout the world by or on behalf of
the Government.  In the exercise of this license, the Government shall not
publicly disclose trade secrets or commercial or financial information that is
privileged or confidential within the meaning of 5 U.S.C. §552(b)(4) or which
would be considered as such if it had been obtained from a non Federal
party.  Prior to the First Commercial Sale, Licensee agrees to provide PHS
reasonable quantities of Licensed Products or materials made through the
Licensed Processes for PHS research use.

 
 
5.2
Licensee agrees that products used or sold in the United States embodying
Licensed Products or produced through use of Licensed Processes shall be
manufactured substantially in the United States, unless a written waiver is
obtained in advance from PHS.

 
 
5.3
Licensee acknowledges that PHS may enter into future CRADAs under the Federal
Technology Transfer Act of 1986 that relate to the subject matter of this
Agreement.  Licensee agrees not to unreasonably deny requests for a Research
License from future collaborators with PHS when acquiring these rights is
necessary in order to make a CRADA project feasible.  Licensee may request an
opportunity to join as a party to the proposed CRADA.

 
 
5.4
(a)
In addition to the reserved license of Paragraph 5.1, PHS reserves the right to
grant Research Licenses directly or to require Licensee to grant Research
Licenses on reasonable terms.  The purpose of these Research Licenses is to
encourage basic research, whether conducted at an academic or corporate
facility.  In order to safeguard the Licensed Patent Rights, however, PHS shall
consult with Licensee before granting to commercial entities a Research License
or providing to them research samples of materials made through the Licensed
Processes; and

 
 
(b)
In exceptional circumstances, and in the event that Licensed Patent Rights are
Subject Inventions made under a CRADA, the Government, pursuant to 15 U.S.C.
§3710a(b)(1)(B), retains the right to require the Licensee to grant to a
responsible applicant a nonexclusive, partially exclusive, or exclusive
sublicense to use the Licensed Patent Rights in the Licensed Field of Use on
terms that are reasonable under the circumstances, or if Licensee fails to grant
this license, the Government retains the right to grant the license itself.  The
exercise of these rights by the Government shall only be in exceptional
circumstances and only if the Government determines:

 
 
(i)
the action is necessary to meet health or safety needs that are not reasonably
satisfied by Licensee;

 
 
(ii)
the action is necessary to meet requirements for public use specified by Federal
regulations, and these requirements are not reasonably satisfied by the
Licensee; or

 
 
(iii)
the Licensee has failed to comply with an agreement containing provisions
described in 15 U.S.C. §3710a(c)(4)(B); and

 
 
(c)
The determination made by the Government under this Paragraph 5.4 is subject to
administrative appeal and judicial review under 35 U.S.C. §203(2).

 
6.
ROYALTIES AND REIMBURSEMENT

 
 
6.1
Licensee agrees to pay PHS a noncreditable, nonrefundable license issue royalty
as set forth in Appendix C.

 
 
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6.2
Licensee agrees to pay PHS a nonrefundable minimum annual royalty as set forth
in Appendix C.

 
 
6.3
Licensee agrees to pay PHS earned royalties as set forth in Appendix C.

 
 
6.4
Licensee agrees to pay PHS benchmark royalties as set forth in Appendix C.

 
 
6.5
Licensee agrees to pay PHS sublicensing royalties as set forth in Appendix C.

 
 
6.6
A patent or patent application licensed under this Agreement shall cease to fall
within the Licensed Patent Rights for the purpose of computing earned royalty
payments in any given country on the earliest of the dates that:

 
 
(a)
the application has been abandoned and not continued;

 
 
(b)
the patent expires or irrevocably lapses, or

 
 
(c)
the claim has been held to be invalid or unenforceable by an unappealed or
unappealable decision of a court of competent jurisdiction or administrative
agency.

 
 
6.7
No multiple royalties shall be payable because any Licensed Products or Licensed
Processes are covered by more than one of the Licensed Patent Rights.

 
 
6.8
On sales of Licensed Products by Licensee to sublicensees or on sales made in
other than an arms length transaction, the value of the Net Sales attributed
under this Article 6 to this transaction shall be that which would have been
received in an arms length transaction, based on sales of like quantity and
quality products on or about the time of this transaction.

 
 
6.9
PHS has not incurred any expenses associated with the preparation, filing,
prosecution, and maintenance of the patent applications and patents included
within the Licensed Patent Rights prior to the effective date of this Agreement.

 
 
6.10
With regard to expenses associated with the preparation, filing, prosecution,
and maintenance of all patent applications and patents included within the
Licensed Patent Rights and incurred by PHS on or after the effective date of
this Agreement, PHS, at its sole option, may require Licensee:

 
 
(a)
to pay PHS on an annual basis, within sixty (60) days of PHS’ submission of a
statement and request for payment, a royalty amount equivalent to these patent
expenses incurred during the previous calendar year(s);

 
 
(b)
to pay these expenses directly to the law firm employed by PHS to handle these
functions.  However, in this event, PHS and not Licensee shall be the client of
the law firm; or

 
 
(c)
in limited circumstances, Licensee may be given the right to assume
responsibility for the preparation, filing, prosecution, or maintenance of any
patent application or patent included with the Licensed Patent Rights.  In that
event, Licensee shall directly pay the attorneys or agents engaged to prepare,
file, prosecute, or maintain these patent applications or patents and shall
provide PHS with copies of each invoice associated with these services as well
as documentation that these invoices have been paid.

 
 
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6.11
PHS agrees, upon written request, to provide Licensee with summaries of patent
prosecution invoices for which PHS has requested payment from the Licensee under
Paragraphs 6.9 and 6.10.  Licensee agrees that all information provided by PHS
related to patent prosecution costs shall be treated as confidential commercial
information and shall not be released to a third party except as required by law
or a court of competent jurisdiction.

 
 
6.12
Licensee may elect to surrender its rights in any country of the Licensed
Territory under any of the Licensed Patent Rights upon ninety (90) days written
notice to PHS and owe no payment obligation under Paragraph 6.10 for
patent-related expenses incurred in that country after ninety (90) days of the
effective date of the written notice.

 
7.
PATENT FILING, PROSECUTION, AND MAINTENANCE

 
 
7.1
Licensee shall file, prosecute, and maintain patent application(s) relating to
the Licensed Patent Rights and shall promptly provide to PHS all serial numbers
and filing dates, together with copies of all these applications, including
copies of all Patent Office actions, responses, and all other Patent Office
communications.  In addition, Licensee shall file with Patent Offices a Power of
Attorney that names both Licensee and PHS or names inventors of the Licensed
Patent Rights who are obligated to assign to Licensee or PHS.  This Power of
Attorney shall be filed with every Patent Office involved in prosecuting all
patent applications pertaining to Licensed Patent Rights.  Licensee shall
consult with PHS, when so requested, prior to communicating with any Patent
Office with respect to the Licensed Patent Rights.  PHS shall timely provide to
Licensee or its attorneys any formal document necessary to file, prosecute, and
maintain patents and patent applications relating to the Licensed Patent Rights.

 
 
7.2
Licensee shall make an election with respect to foreign filing, upon
consultation with PHS, including which countries foreign filing shall be done
prior to the election, within eight (8) months of any United States filing.  If
any foreign patent applications are filed, Licensee shall promptly provide to
PHS all serial numbers and filing dates.  Licensee also shall provide PHS copies
of foreign patent applications and Patent Office actions.  Licensee shall
consult with PHS, when so requested, prior to communication with any Patent
Office with respect to the Licensed Patent Rights.

 
 
7.3
Licensee shall promptly record available Assignments of domestic Licensed Patent
Rights in the United States Patent and Trademark Office and shall promptly
provide PHS with the original of each recorded Assignment with respect to PHS.

 
 
7.4
Notwithstanding any other provision of this Agreement, Licensee shall not
abandon the prosecution of any patent application, including provisional patent
applications (except for purposes of filing continuation application(s)) or the
maintenance of any patent contemplated by this Agreement, without prior written
notice to PHS.  Upon receiving the written notice, PHS may, at its sole option,
take over the prosecution of any patent application, or the maintenance of any
patent. Licensee agrees to furnish written notice to PHS as soon as possible
after Licensee’s decision to abandon prosecution, and Licensee will not abandon
prosecution within thirty (30) days of a prosecution deadline. Licensee shall
promptly provide PHS with copies of all issued patents under this Agreement.

 
 
7.5
Licensee shall promptly provide PHS with copies of all issued patents under this
Agreement.

 
 
7.6
In the event that Licensee anticipates the possibility of any extraordinary
expenditures arising from the preparation, filing, prosecution, licensing, or
defense of any patent application or patent contemplated by this Agreement,
including, without limitation, interferences, reexaminations, reissues and
oppositions, Licensee shall provide PHS with all relevant information.

 
 
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8.
RECORD KEEPING

 
 
8.1
Licensee agrees to keep accurate and correct records of Licensed Products made,
used, sold, or imported and Licensed Processes practiced under this Agreement
appropriate to determine the amount of royalties due PHS.  These records shall
be retained for at least five (5) years following a given reporting period and
shall be available during normal business hours for inspection, at the expense
of PHS, by an accountant or other designated auditor selected by PHS for the
sole purpose of verifying reports and royalty payments hereunder.  The
accountant or auditor shall only disclose to PHS information relating to the
accuracy of reports and royalty payments made under this Agreement.  If an
inspection shows an underreporting or underpayment in excess of five percent
(5%) for any twelve (12) month period, then Licensee shall reimburse PHS for the
cost of the inspection at the time Licensee pays the unreported royalties,
including any additional royalties as required by Paragraph 9.8.  All royalty
payments required under this Paragraph shall be due within thirty (30) days of
the date PHS provides Licensee notice of the payment due.

 
 
8.2
Licensee agrees to have an audit of sales and royalties conducted by an
independent auditor at least every two (2) years if annual sales of the Licensed
Products or Licensed Processes are over ten (10) million dollars.  The audit
shall address, at a minimum, the amount of gross sales by or on behalf of
Licensee during the audit period, terms of the license as to percentage or fixed
royalty to be remitted to the Government, the amount of royalties owed to the
Government under this Agreement, and whether the royalties owed have been paid
to the Government and is reflected in the records of the Licensee.  The audit
shall also indicate the PHS license number, product, and the time period being
audited.  A report certified by the auditor shall be submitted promptly by the
auditor directly to PHS on completion.  Licensee shall pay for the entire cost
of the audit.

 
9.
REPORTS ON PROGRESS, BENCHMARKS, SALES, AND PAYMENTS

 
 
9.1
Prior to signing this Agreement, Licensee has provided PHS with the Commercial
Development Plan in Appendix E, under which Licensee intends to bring the
subject matter of the Licensed Patent Rights to the point of Practical
Application.  This Commercial Development Plan is hereby incorporated by
reference into this Agreement.  Based on this plan, performance Benchmarks are
determined as specified in Appendix D.

 
 
9.2
Licensee shall provide written annual reports on its product development
progress or efforts to commercialize under the Commercial Development Plan for
each of the Licensed Fields of Use within sixty (60) days after December 31 of
each calendar year.  These progress reports shall include, but not be limited
to: progress on research and development, status of applications for regulatory
approvals, manufacturing, sublicensing, marketing, importing, and sales during
the preceding calendar year, as well as, plans for the present calendar
year.  PHS also encourages these reports to include information on any of
Licensee's public service activities that relate to the Licensed Patent
Rights.  If reported progress differs from that projected in the Commercial
Development Plan and Benchmarks, Licensee shall explain the reasons for these
differences.  In the annual report, Licensee may propose amendments to the
Commercial Development Plan, acceptance of which by PHS may not be denied
unreasonably.  Licensee agrees to provide any additional information reasonably
required by PHS to evaluate Licensee's performance under this
Agreement.  Licensee may amend the Benchmarks at any time upon written approval
by PHS. PHS shall not unreasonably withhold approval of any request of Licensee
to extend the time periods of this schedule if the request is supported by a
reasonable showing by Licensee of diligence in its performance under the
Commercial Development Plan and toward bringing the Licensed Products to the
point of Practical Application as defined in 37 CFR §404.3(d).  Licensee shall
amend the Commercial Development Plan and Benchmarks at the request of PHS to
address any Licensed Fields of Use not specifically addressed in the plan
originally submitted.

 
 
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9.3
Licensee shall report to PHS the dates for achieving Benchmarks specified in
Appendix D and the First Commercial Sale in each country in the Licensed
Territory within thirty (30) days of such occurrences.

 
9.4
Licensee shall submit to PHS, within sixty (60) days after each calendar half
year ending June 30 and December 31, a royalty report, as described in the
example in Appendix F, setting forth for the preceding half year period the
amount of the Licensed Products sold or Licensed Processes practiced by or on
behalf of Licensee in each country within the Licensed Territory, the Net Sales,
and the amount of royalty accordingly due.  With each royalty report, Licensee
shall submit payment of earned royalties due.  If no earned royalties are due to
PHS for any reporting period, the written report shall so state.  The royalty
report shall be certified as correct by an authorized officer of Licensee and
shall include a detailed listing of all deductions made under Paragraph 2.10 to
determine Net Sales made under Article 6 to determine royalties due.

 
 
9.5
Licensee agrees to forward semi annually to PHS a copy of these reports received
by Licensee from its sublicensees during the preceding half year period as shall
be pertinent to a royalty accounting to PHS by Licensee for activities under the
sublicense.

 
 
9.6
Royalties due under Article 6 shall be paid in U.S. dollars and payment options
are listed in Appendix G.  For conversion of foreign currency to U.S. dollars,
the conversion rate shall be the New York foreign exchange rate quoted in The
Wall Street Journal on the day that the payment is due.  Any loss of exchange,
value, taxes, or other expenses incurred in the transfer or conversion to U.S.
dollars shall be paid entirely by Licensee.  The royalty report required by
Paragraph 9.4 shall be mailed to PHS at its address for Agreement Notices
indicated on the Signature Page.

 
 
9.7
Licensee shall be solely responsible for determining if any tax on royalty
income is owed outside the United States and shall pay the tax and be
responsible for all filings with appropriate agencies of foreign governments.

 
 
9.8
Additional royalties may be assessed by PHS on any payment that is more than
ninety (90) days overdue at the rate of one percent (1%) per month.  This one
percent (1%) per month rate may be applied retroactively from the original due
date until the date of receipt by PHS of the overdue payment and additional
royalties.  The payment of any additional royalties shall not prevent PHS from
exercising any other rights it may have as a consequence of the lateness of any
payment.

 
 
9.9
All plans and reports required by this Article 9 and marked “confidential” by
Licensee shall, to the extent permitted by law, be treated by PHS as commercial
and financial information obtained from a person and as privileged and
confidential, and any proposed disclosure of these records by the PHS under the
Freedom of Information Act (FOIA), 5 U.S.C. §552 shall be subject to the
predisclosure notification requirements of 45 CFR §5.65(d).

 
 
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10.
PERFORMANCE

 
 
10.1
Licensee shall use its reasonable commercial efforts to bring the Licensed
Products and Licensed Processes to Practical Application.  “Reasonable
commercial efforts” for the purposes of this provision shall include adherence
to the Commercial Development Plan in Appendix E and performance of the
Benchmarks in Appendix D.  The efforts of a sublicensee shall be considered the
efforts of Licensee.

 
 
10.2
Upon the First Commercial Sale, until the expiration or termination of this
Agreement, Licensee shall use its reasonable commercial efforts to make Licensed
Products and Licensed Processes reasonably accessible to the United States
public.

 
 
10.3
Licensee agrees, after its First Commercial Sale, to make reasonable quantities
of Licensed Products or materials produced through the use of Licensed Processes
available on a compassionate use basis to patients, either through the patient’s
physician(s) or the medical center treating the patient.

 
 
10.4
Licensee agrees, after its First Commercial Sale and as part of its marketing
and product promotion, to develop educational materials (e.g., brochures,
website, etc.) directed to patients and physicians detailing the Licensed
Products or medical aspects of the prophylactic and therapeutic uses of the
Licensed Products.

 
 
10.5
Licensee agrees to supply, to the Mailing Address for Agreement Notices
indicated on the Signature Page, the Office of Technology Transfer, NIH with
inert samples of the Licensed Products or Licensed Processes or their packaging
for educational and display purposes only.

 
11.
INFRINGEMENT AND PATENT ENFORCEMENT

 
 
11.1
PHS and Licensee agree to notify each other promptly of each infringement or
possible infringement of the Licensed Patent Rights, as well as, any facts which
may affect the validity, scope, or enforceability of the Licensed Patent Rights
of which either party becomes aware.

 
 
11.2
Pursuant to this Agreement and the provisions of Chapter 29 of Title 35, United
States Code, Licensee may:

 
 
(a)
bring suit in its own name, at its own expense, and on its own behalf for
infringement of presumably valid claims in the Licensed Patent Rights;

 
 
(b)
in any suit, enjoin infringement and collect for its use, damages, profits, and
awards of whatever nature recoverable for the infringement; or

 
 
(c)
settle any claim or suit for infringement of the Licensed Patent Rights
provided, however, that PHS and appropriate Government authorities shall have
the first right to take such actions; and

 
 
9

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(d)
If Licensee desires to initiate a suit for patent infringement, Licensee shall
notify PHS in writing.  If PHS does not notify Licensee of its intent to pursue
legal action within ninety (90) days, Licensee shall be free to initiate
suit.  PHS shall have a continuing right to intervene in the suit.  Licensee
shall take no action to compel the Government either to initiate or to join in
any suit for patent infringement.  Licensee may request the Government to
initiate or join in any suit if necessary to avoid dismissal of the suit. Should
the Government be made a party to any suit, Licensee shall reimburse the
Government for any costs, expenses, or fees which the Government incurs as a
result of the motion or other action, including all costs incurred by the
Government in opposing the motion or other action.  In all cases, Licensee
agrees to keep PHS reasonably apprised of the status and progress of any
litigation.  Before Licensee commences an infringement action, Licensee shall
notify PHS and give careful consideration to the views of PHS and to any
potential effects of the litigation on the public health in deciding whether to
bring suit.

 
 
11.3
In the event that a declaratory judgment action alleging invalidity or non
infringement of any of the Licensed Patent Rights shall be brought against
Licensee or raised by way of counterclaim or affirmative defense in an
infringement suit brought by Licensee under Paragraph 11.2, pursuant to this
Agreement and the provisions of Chapter 29 of Title 35, United States Code or
other statutes, Licensee may:

 
 
(a)
defend the suit in its own name, at its own expense, and on its own behalf for
presumably valid claims in the Licensed Patent Rights;

 
 
(b)
in any suit, ultimately to enjoin infringement and to collect for its use,
damages, profits, and awards of whatever nature recoverable for the
infringement; and

 
 
(c)
settle any claim or suit for declaratory judgment involving the Licensed Patent
Rights-provided, however, that PHS and appropriate Government authorities shall
have the first right to take these actions and shall have a continuing right to
intervene in the suit; and

 
 
(d)
If PHS does not notify Licensee of its intent to respond to the legal action
within a reasonable time, Licensee shall be free to do so.  Licensee shall take
no action to compel the Government either to initiate or to join in any
declaratory judgment action.  Licensee may request the Government to initiate or
to join any suit if necessary to avoid dismissal of the suit.  Should the
Government be made a party to any suit by motion or any other action of
Licensee, Licensee shall reimburse the Government for any costs, expenses, or
fees, which the Government incurs as a result of the motion or other action.  If
Licensee elects not to defend against the declaratory judgment action, PHS, at
its option, may do so at its own expense.  In all cases, Licensee agrees to keep
PHS reasonably apprised of the status and progress of any litigation.  Before
Licensee commences an infringement action, Licensee shall notify PHS and give
careful consideration to the views of PHS and to any potential effects of the
litigation on the public health in deciding whether to bring suit.

 
 
11.4
In any action under Paragraphs 11.2 or 11.3 the expenses including costs, fees,
attorney fees, and disbursements, shall be paid by Licensee.  The value of any
recovery made by Licensee through court judgment or settlement shall be treated
as Net Sales and subject to earned royalties.

 
 
11.5
PHS shall cooperate fully with Licensee in connection with any action under
Paragraphs 11.2 or 11.3.  PHS agrees promptly to provide access to all necessary
documents and to render reasonable assistance in response to a request by
Licensee.

 
12.
NEGATION OF WARRANTIES AND INDEMNIFICATION

 
 
12.1
PHS offers no warranties other than those specified in Article 1.

 
 
10

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12.2
PHS does not warrant the validity of the Licensed Patent Rights and makes no
representations whatsoever with regard to the scope of the Licensed Patent
Rights, or that the Licensed Patent Rights may be exploited without infringing
other patents or other intellectual property rights of third parties.

 
 
12.3
PHS MAKES NO WARRANTIES, EXPRESSED OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE OF ANY SUBJECT MATTER DEFINED BY THE CLAIMS OF THE LICENSED
PATENT RIGHTS OR TANGIBLE MATERIALS RELATED THERETO.

 
 
12.4
PHS does not represent that it shall commence legal actions against third
parties infringing the Licensed Patent Rights.

 
 
12.5
Licensee shall indemnify and hold PHS, its employees, students, fellows, agents,
and consultants harmless from and against all liability, demands, damages,
expenses, and losses, including but not limited to death, personal injury,
illness, or property damage in connection with or arising out of:

 
 
(a)
the use by or on behalf of Licensee, its sublicensees, directors, employees, or
third parties of any Licensed Patent Rights; or

 
 
(b)
the design, manufacture, distribution, or use of any Licensed Products, Licensed
Processes or materials by Licensee, or other products or processes developed in
connection with or arising out of the Licensed Patent Rights.

 
 
12.6
Licensee agrees to maintain a liability insurance program consistent with sound
business practice.

 
13.
TERM, TERMINATION, AND MODIFICATION OF RIGHTS

 
 
13.1
This Agreement is effective when signed by all parties, unless the provisions of
Paragraph 14.16 are not fulfilled, and shall extend to the expiration of the
last to expire of the Licensed Patent Rights unless sooner terminated as
provided in this Article 13.

 
 
13.2
In the event that Licensee is in default in the performance of any material
obligations under this Agreement, including but not limited to the obligations
listed in Paragraph 13.5, and if the default has not been remedied within ninety
(90) days after the date of notice in writing of the default, PHS may terminate
this Agreement by written notice and pursue outstanding royalties owed through
procedures provided by the Federal Debt Collection Act.

 
 
13.3
In the event that Licensee becomes insolvent, files a petition in bankruptcy,
has such a petition filed against it, determines to file a petition in
bankruptcy, or receives notice of a third party's intention to file an
involuntary petition in bankruptcy, Licensee shall immediately notify PHS in
writing.  Furthermore, PHS shall have the right to terminate this Agreement
immediately upon Licensee's receipt of written notice.

 
 
13.4
Licensee shall have a unilateral right to terminate this Agreement or any
licenses in any country or territory by giving PHS sixty (60) days written
notice to that effect.

 
 
13.5
PHS shall specifically have the right to terminate or modify, at its option,
this Agreement, subject to paragraph 13.2, if PHS determines that the Licensee:

 
 
11

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(a)
is not executing the Commercial Development Plan submitted with its request for
a license and the Licensee cannot otherwise demonstrate to PHS’ reasonable
satisfaction that the Licensee has taken, or can be expected to take within a
reasonable time, effective steps to achieve Practical Application of the
Licensed Products or Licensed Processes;

 
 
(b)
has not achieved the Benchmarks as may be modified under Paragraph 9.2;

 
 
(c)
has willfully made a false statement of, or willfully omitted a material fact in
the license application or in any report required by the license Agreement;

 
 
(d)
has committed a material breach of a covenant or agreement contained in this
Agreement;

 
 
(e)
is not keeping Licensed Products or Licensed Processes reasonably available to
the public after commercial use commences;

 
 
(f)
cannot reasonably satisfy unmet health and safety needs; or

 
 
(g)
cannot reasonably justify a failure to comply with the domestic production
requirement of Paragraph 5.2 unless waived.

 
 
13.6
In making the determination referenced in Paragraph 13.5, PHS shall take into
account the normal course of such commercial development programs conducted with
sound and reasonable business practices and judgment and the annual reports
submitted by Licensee under Paragraph 9.2.  Prior to invoking termination or
modification of this Agreement under Paragraph 13.5, PHS shall give written
notice to Licensee providing Licensee specific notice of, and a ninety (90) day
opportunity to respond to, PHS’ concerns as to the items referenced in
13.5(a)-13.5(g).  If Licensee fails to alleviate PHS’ concerns as to the items
referenced in 13.5(a)-13.5(g) or fails to initiate corrective action to PHS’
reasonable satisfaction, PHS may terminate this Agreement.

 
 
13.7
When the public health and safety so require, and after written notice to
Licensee providing Licensee a sixty (60) day opportunity to respond, PHS shall
have the right to require Licensee to grant sublicenses to responsible
applicants, on reasonable terms, in any Licensed Fields of Use under the
Licensed Patent Rights, unless Licensee can reasonably demonstrate that the
granting of the sublicense would not materially increase the availability to the
public of the subject matter of the Licensed Patent Rights.  PHS shall not
require the granting of a sublicense unless the responsible applicant has first
negotiated in good faith with Licensee.

 
 
13.8
PHS reserves the right according to 35 U.S.C. §209(d)(3) to terminate or modify
this Agreement if it is determined that this action is necessary to meet the
requirements for public use specified by federal regulations issued after the
date of the license and these requirements are not reasonably satisfied by
Licensee.

 
 
13.9
Within thirty (30) days of receipt of written notice of PHS' unilateral decision
to modify or terminate this Agreement, Licensee may, consistent with the
provisions of 37 CFR §404.11, appeal the decision by written submission to the
designated PHS official.  The decision of the designated PHS official shall be
the final agency decision.  Licensee may thereafter exercise any and all
administrative or judicial remedies that may be available.

 
 
12

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13.10
Within ninety (90) days of expiration or termination of this Agreement under
this Article 13, a final report shall be submitted by Licensee.  Any royalty
payments, including those incurred but not yet paid (such as the full minimum
annual royalty), and those related to patent expense, due to PHS shall become
immediately due and payable upon termination or expiration.  If terminated under
this Article 13, sublicensees may elect to convert their sublicenses to direct
licenses with PHS pursuant to Paragraph 4.3.  Unless otherwise specifically
provided for under this Agreement, upon termination or expiration of this
Agreement, Licensee shall return all Licensed Products or other materials
included within the Licensed Patent Rights to PHS or provide PHS with
certification of the destruction thereof.

 
14.
GENERAL PROVISIONS

 
 
14.1
Neither party may waive or release any of its rights or interests in this
Agreement except in writing.  The failure of the Government to assert a right
hereunder or to insist upon compliance with any term or condition of this
Agreement shall not constitute a waiver of that right by the Government or
excuse a similar subsequent failure to perform any of these terms or conditions
by Licensee.

 
 
14.2
This Agreement constitutes the entire agreement between the parties relating to
the subject matter of the Licensed Patent Rights, Licensed Products and Licensed
Processes, and all prior negotiations, representations, agreements, and
understandings are merged into, extinguished by, and completely expressed by
this Agreement.

 
 
14.3
The provisions of this Agreement are severable, and in the event that any
provision of this Agreement shall be determined to be invalid or unenforceable
under any controlling body of law, this determination shall not in any way
affect the validity or enforceability of the remaining provisions of this
Agreement.

 
 
14.4
If either party desires a modification to this Agreement, the parties shall,
upon reasonable notice of the proposed modification by the party desiring the
change, confer in good faith to determine the desirability of the
modification.  No modification shall be effective until a written amendment is
signed by the signatories to this Agreement or their designees.

 
 
14.5
The construction, validity, performance, and effect of this Agreement shall be
governed by Federal law as applied by the Federal courts in the District of
Columbia.

 
 
14.6
All Agreement notices required or permitted by this Agreement shall be given by
prepaid, first class, registered or certified mail or by an express/overnight
delivery service provided by a commercial carrier, properly addressed to the
other party at the address designated on the following Signature Page, or to
another address as may be designated in writing by the other party. Agreement
notices shall be considered timely if the notices are received on or before the
established deadline date or sent on or before the deadline date as verifiable
by U.S. Postal Service postmark or dated receipt from a commercial
carrier.  Parties should request a legibly dated U.S. Postal Service postmark or
obtain a dated receipt from a commercial carrier or the U.S. Postal
Service.  Private metered postmarks shall not be acceptable as proof of timely
mailing.

 
 
14.7
This Agreement may not be assigned without prior written permission from PHS
except to an Affiliate, which permission shall not be unreasonably
withheld.  Licensee shall provide PHS a minimum of sixty (60) days to grant the
written permission.  In the event that no response from PHS during the sixty
(60) day period is received, Licensee shall consider the permission
granted.  Licensee shall pay PHS, as an additional royalty, one percent (1%) of
the fair market value of any consideration received for any assignment of this
Agreement within thirty (30) days of the assignment.

 
 
13

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14.8
Licensee agrees in its use of any PHS supplied materials to comply with all
applicable statutes, regulations, and guidelines, including PHS and HHS
regulations and guidelines.  Licensee agrees not to use the materials for
research involving human subjects or clinical trials in the United States
without complying with 21 CFR Part 50 and 45 CFR Part 46.  Licensee agrees not
to use the materials for research involving human subjects or clinical trials
outside of the United States without notifying PHS, in writing, of the research
or trials and complying with the applicable regulations of the appropriate
national control authorities.  Written notification to PHS of research involving
human subjects or clinical trials outside of the United States shall be given no
later than sixty (60) days prior to commencement of the research or trials.

 
 
14.9
Licensee acknowledges that it is subject to and agrees to abide by the United
States laws and regulations (including the Export Administration Act of 1979 and
Arms Export Control Act) controlling the export of technical data, computer
software, laboratory prototypes, biological material, and other
commodities.  The transfer of these items may require a license from the
appropriate agency of the U.S. Government or written assurances by Licensee that
it shall not export these items to certain foreign countries without prior
approval of this agency.  PHS neither represents that a license is or is not
required or that, if required, it shall be issued.

 
14.10
Licensee agrees to mark the Licensed Products or their packaging sold in the
United States with all applicable U.S. patent numbers and similarly to indicate
“Patent Pending” status.  All Licensed Products manufactured in, shipped to, or
sold in other countries shall be marked in a manner to preserve PHS patent
rights in those countries.

 
14.11
By entering into this Agreement, PHS does not directly or indirectly endorse any
product or service provided, or to be provided, by Licensee whether directly or
indirectly related to this Agreement.  Licensee shall not state or imply that
this Agreement is an endorsement by the Government, PHS, any other Government
organizational unit, or any Government employee.  Additionally, Licensee shall
not use the names of NIH, FDA, PHS, or HHS or the Government or their employees
in any advertising, promotional, or sales literature without the prior written
approval of PHS.

 
14.12
The parties agree to attempt to settle amicably any controversy or claim arising
under this Agreement or a breach of this Agreement, except for appeals of
modifications or termination decisions provided for in Article 13.  Licensee
agrees first to appeal any unsettled claims or controversies to the designated
PHS official, or designee, whose decision shall be considered the final agency
decision.  Thereafter, Licensee may exercise any administrative or judicial
remedies that may be available.

 
14.13
Nothing relating to the grant of a license, nor the grant itself, shall be
construed to confer upon any person any immunity from or defenses under the
antitrust laws or from a charge of patent misuse, and the acquisition and use of
rights pursuant to 37 CFR Part 404 shall not be immunized from the operation of
state or Federal law by reason of the source of the grant.

 
14.14
Any formal recordation of this Agreement required by the laws of any Licensed
Territory as a prerequisite to enforceability of the Agreement in the courts of
any foreign jurisdiction or for other reasons will be carried out by Licensee at
its expense, and appropriately verified proof of recordation will be promptly
furnished to PHS.

 
14.15
Paragraphs 4.3, 8.1, 9.5-9.7, 12.1-12.5, 13.9, 13.10, and 14.13 of this
Agreement shall survive termination of this Agreement.

 
 
14

--------------------------------------------------------------------------------

 

14.16
The terms and conditions of this Agreement shall, at PHS’ sole option, be
considered by PHS to be withdrawn from Licensee’s consideration and the terms
and conditions of this Agreement, and the Agreement itself to be null and void,
unless this Agreement is executed by the Licensee and a fully executed original
is received by PHS within sixty (60) days from the date of PHS signature found
at the Signature Page.

 
SIGNATURES BEGIN ON NEXT PAGE

 
15

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PHS PATENT LICENSE AGREEMENT – EXCLUSIVE
 
SIGNATURE PAGE

For PHS:
   
  
   
  
Richard U. Rodriguez. M.B.A.             Date
 
Date
Director, Division of Technology Development and Transfer
   
Office of Technology Transfer
   
National Institutes of Health
         
Mailing Address for Agreement notices:
         
Chief, Monitoring & Enforcement Branch, DTDT
   
Office of Technology Transfer
   
National Institutes of Health
   
6011 Executive Boulevard, Suite 325
   
Rockville, Maryland  20852-3804 U.S.A.
         
For Licensee (Upon, information and belief, the undersigned expressly certifies
or affirms that the contents of any statements of Licensee made or referred to
in this document are truthful and accurate.):
 
by:
   
  
     
Signature of Authorized Official
 
Date 
   
 
  
   
John S. Kovach
   
Printed Name
         
  
   
Chief Executive Officer
   
Title
   

 
 
16

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I.     Official and Mailing Address for Agreement notices:
   
John S. Kovach                                      
 
Name
     
Chief Executive Officer                                           
 
Title
     
Mailing Address
     
Lixte Biotechnology, Inc.
 
248 Route 25A #2
 
East Setauket, NY 11733
     
Email Address:
     
Phone:       631-942-7959
 
Fax:           631-982-5050
     
II.    Official and Mailing Address for Financial notices (Licensee’s contact
person for royalty payments)
 
John S. Kovach                                      
 
Name
     
Chief Executive Officer                                           
 
Title
     
Mailing Address:
     
Lixte Biotechnology, Inc.
 
248 Route 25A #2
 
East Setauket, NY 11733
     
Email Address:
     
Phone:       631-942-7959
 
Fax:           631-982-5050
     
Any false or misleading statements made, presented, or submitted to the
Government, including any relevant omissions, under this Agreement and during
the course of negotiation of this Agreement are subject to all applicable civil
and criminal statutes including Federal statutes 31 U.S.C. §§3801-3812 (civil
liability) and 18 U.S.C. §1001 (criminal liability including fine(s) or
imprisonment).

 
 
17

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APPENDIX A – PATENT(S) OR PATENT APPLICATION(S)
 
Patent(s) or Patent Application(s):
 
I.
U.S. Provisional Patent Application No. 60/771,163, filed February 6, 2006,
entitled “Use of Phosphatases To Treat Glioblastomas” (HHS Ref. No.
E-123-2006/0-US-01);

 
II.
U.S. Provisional Patent Application No. 60/797,201, filed May 2, 2006, entitled
“Use of Phosphatases To Treat Glioblastomas” (HHS Ref. No. E-123-2006/1-US-01)

 
III.
U.S. Patent Application Serial No. 11/703,401, filed February 6, 2007, entitled
“Use of Phosphatases To Treat Glioblastomas” (HHS Ref. No. E-123-2006/0-US-03)

 
IV.
PCT International Application No. PCT/US2007/003095, filed February 6, 2007
entitled “Use of Phosphatases To Treat Glioblastomas” (HHS Ref. No.
E-123-2006/0-PCT-02)

 
V.
U.S. Provisional Patent Application No. 60/963,307, filed August 3, 2007
entitled “Use of Phosphatases To Treat Neuroblastomas and Medulloblastomas” (HHS
Ref. No. E-123-2006/2-US-01)

 
VI.
U.S. Provisional Patent Application No. 60/063,970, filed February 6, 2008
entitled “Use of Phosphatases To Treat Neuroblastomas and Medulloblastomas”.

 
VII.
U.S. Application in preparation corresponding to Cooper and Dunham Referene No.
4101/79251.

 
 
 

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APPENDIX B – LICENSED FIELDS OF USE AND TERRITORY
 
I.
Licensed Fields of Use:

 
 
(a)
Treatment of Glioblastomas and other Central Nervous System (CNS) tumors

 
II.
Licensed Territory:

 
 
(a)
Worldwide

 
 
 

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APPENDIX C – ROYALTIES
 
Royalties:
 
I.
Licensee agrees to pay to PHS a noncreditable, nonrefundable license issue
royalty in the amount of Twenty Five Thousand dollars ($25,000) within sixty
(60) days from the effective date of this Agreement.

 
II.
Licensee agrees to pay PHS a nonrefundable minimum annual royalty in the amount
of Thirty Thousand ($30,000) on January 1 of each calendar year following the
year during which the March 22, 2006 CRADA agreement, as appended, between the
parties is terminated and may be credited against any earned royalties due for
sales made in that year.

 
III.
Licensee agrees to pay PHS earned royalties of Four and one-half percent (4.5%)
on Net Sales by or on behalf of Licensee and its sublicensees.

 
IV.
Licensee agrees to pay PHS Benchmark royalties within thirty (30) days of
achieving each Benchmark:

 
 
(a)
Fifty Thousand dollars ($50,000) upon starting Phase I Clinical Trials;

 
 
(b)
One Hundred Thousand dollars ($100,000) upon starting Phase II Clinical Trials;

 
 
(c)
Two Hundred Thousand dollars ($200,000) upon starting Phase III Clinical Trials;

 
 
(d)
Three Hundred Thousand dollars ($300,000) upon filing an IND submission; and

 
 
(e)
Six Hundred Twenty Five Thousand dollars ($625,000) upon the First Commercial
Sale

 
V.
Licensee agrees to pay PHS additional sublicensing royalties of fifteen percent
(15%) on the fair market value of any consideration received for granting each
sublicense within sixty (60) days of the execution of each sublicense.

 
 

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APPENDIX D – BENCHMARKS AND PERFORMANCE
 
Licensee agrees to the following Benchmarks for its performance under this
Agreement and, within thirty (30) days of achieving a Benchmark, shall notify
PHS that the Benchmark has been achieved.
 
I.
Initiation of Phase I Clinical Trials – Est. Second Quarter, 2010

 
II.
Initiation of Phase II Clinical Trials – Est. Second Quarter, 2011

 
III.
Initiation of Phase III Clinical Trials – Est. Third Quarter, 2012

 
IV.
Filing of an IND Submission – Est. Fourth Quarter, 2009

 
V.
First Commercial Sale Expected Timeline – Est. First Quarter, 2015

 

 
 

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APPENDIX E – COMMERCIAL DEVELOPMENT PLAN
 
The ultimate objective of the CRADA is to identify, characterize, and bring to
clinical trial regimens for the treatment of human brain tumors (GBMs) and other
Central Nervous System (CNS) tumors.  Lixte Biotechnology Holdings, Inc., the
parent company of Licensee will most likely conduct such a clinical trial in
association with NINDS.
 
Licensee is in contact with several large pharmaceutical companies with major
programs in development and evaluation of anti-cancer drugs about co-developing
one or more phosphatase ligands shown to have anti-cancer activity in vitro and
in vivo in the CRADA studies.  Licensee, however, is prepared to work with NINDS
and /or other branches of NIH to develop these compounds through pre-clinical
evaluation and clinical testing without the addition of a larger pharmaceutical
partner.
 
To facilitate this approach, NINDS has submitted an application to the NIH RAID
PILOT program to be reviewed in the summer of 2008.  If approved, NINDS would
collaborate with Licensee to complete pre-clinical development of one lead
compound under the RAID program through to submission of an IND to the FDA for a
Phase I trial.  The Phase I trial could be done with one of several large
academic brain tumor centers in the US, including the surgical neurology branch
of NINDS.  Following completion of Phase I testing, Licensee is committed to
supporting Phase II evaluations with or without an additional partner from the
pharmaceutical industry.

 
 

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APPENDIX F – EXAMPLE ROYALTY REPORT
 
Required royalty report information includes:
 
 
·
OTT license reference number (L-XXX-200X/0)

 
 
·
Reporting period

 
 
·
Catalog number and units sold of each Licensed Product (domestic and foreign)

 
 
·
Gross Sales per catalog number per country

 
 
·
Total Gross Sales

 
 
·
Itemized deductions from Gross Sales

 
 
·
Total Net Sales

 
 
·
Earned Royalty Rate and associated calculations

 
 
·
Gross Earned Royalty

 
 
·
Adjustments for Minimum Annual Royalty (MAR) and other creditable payments made

 
 
·
Net Earned Royalty due

 
Example
Catalog Number
 
Product Name
 
Country
 
Units Sold
   
Gross Sales (US$)
 
1
   
A
 
US
    250       62,500  
1
   
A
 
UK
    32       16,500  
1
   
A
 
France
    25       15,625  
2
   
B
 
US
    0       0  
3
   
C
 
US
    57       57,125  
4
   
D
 
US
    12       1,500                                            
Total Gross Sales
      153,250                
Less Deductions:
                       
Freight
      3,000                
Returns
      7,000                
Total Net Sales
      143,250                
Royalty Rate
      8 %              
Royalty Due
      11,460                
Less Creditable Payments
      10,000                
Net Royalty Due
      1,460  

 
 

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APPENDIX G – ROYALTY PAYMENT OPTIONS

NIH/PHS License Agreements
 
*In order to process payment via Electronic Funds Transfer sender MUST supply
the following information:
 
Procedure for Transfer of Electronic Funds to NIH for Royalty Payments
 
Bank Name: Federal Reserve Bank
ABA# 021030004
TREAS NYC
BNF=/AC-75080031
OBI=Licensee Name and OTT Reference Number
Dollar Amount Wired=$$
 
NOTE:  Only U.S. banks can wire directly to the Federal Reserve Bank. Foreign
banks cannot wire directly to the Federal Reserve Bank, but must go through an
intermediary U.S. bank. Foreign banks may send the wire transfer to the U.S.
bank of their choice, who, in turn forwards the wire transfer to the Federal
Reserve Bank.
 
Checks drawn on a U.S. bank account should be sent directly to the following
address:
 
National Institutes of Health (NIH)
P.O. Box 979071
St. Louis, MO 63197-9000
 
Overnight or courier deliveries should be sent to the following address:
 
US Bank
Government Lockbox SL-MO-C2GL
1005 Convention Plaza
St. Louis, MO 63101
Phone: 314-418-4087
 
Checks drawn on a foreign bank account should be sent directly to the following
address:
 
National Institutes of Health (NIH)
Office of Technology Transfer
Royalties Administration Unit
6011 Executive Boulevard
Suite 325, MSC 7660
Rockville, Maryland 20852
Phone: 301-496-7057
 
All checks should be made payable to “NIH Patent Licensing”.
 
The OTT Reference Number MUST appear on checks, reports and correspondence

 
 

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