Document:

Exhibit 10.3

 

TEXAS REGIONAL BANCSHARES, INC.

 

NONSTATUTORY STOCK OPTION AGREEMENT

(Granted under the 2006 Incentive Plan)

 

This
Nonstatutory Stock Option Agreement (the “Agreement”) is executed to be
effective               ,
2006, by and between Texas Regional Bancshares, Inc., a Texas corporation
(the “Corporation”), and                        
 (the “Director”).

 

The
Corporation desires to provide the Director an opportunity to purchase shares
of the Corporation’s Class A Voting Common Stock, $1.00 par value per
share (hereinafter referred to as “Common Stock” or “Stock”) pursuant to the
Texas Regional Bancshares, Inc. 2006 Incentive Plan (the “Plan”). This
Agreement represents an Award Statement or option agreement for purposes of the
Plan.

 

The
grant made pursuant to this Agreement represents an award of a Nonstatutory
Stock Option for purposes of Section 4.3(d)(2) of the Plan and other
applicable provisions of the Plan. The Corporation intends that any stock
option granted or exercised under this Agreement not qualify as an “incentive
stock option” under Section 422 of the Internal Revenue Code of 1986, as
amended from time to time (the “Code”), and pertinent regulations.

 

Now,
therefore, in consideration of the mutual covenants hereinafter set forth and
for other good and valuable consideration, the parties hereto agree as follows.

 

1.                                       Grant of Option. The Corporation hereby irrevocably grants
to the Director the right and option (the “Option”), to purchase all or any part of
an aggregate of                         
shares of Common Stock (such number being subject to adjustment as provided in
this Agreement) on the terms and conditions herein set forth.

 

2.                                       Purchase Price. The purchase price of the Common Stock
covered by the Option shall be $                  
per share (the “Exercise Price”).

 

3.                                       Term of Option; Vesting Schedule. The Option herein granted shall vest and may be
exercised as follows:  the Director may exercise
the Option to purchase all of the Stock subject to the Option beginning on                
(the date upon which any option herein granted first becomes exercisable being
herein called the “Commencement Date”). The Option must be exercised prior to ten
years from the date of this Agreement (the “Expiration Date”), subject to
earlier termination as provided in this Agreement. The Option may be
exercised within the above limitations, at any time or from time to time, as to
any part of or all the shares covered hereby; provided, however, that the
Option may not be exercised as to less than 30 shares at any one time (or
the remaining shares then purchasable under the Option, if less than 30 shares)
or with respect to any fractional share.

 

The
purchase price of the shares as to which the Option is exercised shall be paid
in full in cash or check at the time of exercise, or the Director may effect
a cashless exercise as herein provided.

 

The
holder of the Option shall not have any of the rights of a shareholder with
respect to the shares covered by the Option except to the extent that one or
more certificates for such shares are delivered to him or her upon the due
exercise of the Option.

 

 

If
registration is required by law, the Option may not be exercised unless at
the date of exercise an appropriate registration statement under the Securities
Act of 1933, as amended, relating to the shares covered by the Option shall be
in effect. If such registration is required by law, the Corporation will
endeavor to obtain prior to the time when the Option would otherwise be
exercisable the registration of the shares covered by the Option under the Act,
as amended, but the exercise period shall not extend to or beyond the
Expiration Date.

 

4.                                       Nontransferability. The Option shall not be transferable
otherwise than by will or by the laws of descent and distribution, and the
Option may be exercised, during the lifetime of the Director, only by him.
More particularly (but without limiting the generality of the foregoing), the
Option may not be assigned, transferred (except as provided above),
pledged, or hypothecated in any way, shall not be assignable by operation of
law, and shall not be subject to execution, attachment, or similar process. Any
attempted assignment, transfer, pledge, hypothecation, or other disposition of
the Option contrary to the provisions hereof, and the levy of any execution,
attachment, or similar process upon the Option, shall be null and void and
without effect.

 

5.                                       Exercise Period. Any or all Common Stock purchasable under
the Option will be purchasable at any time following the Commencement Date, and
prior to the Expiration Date, subject to any other limitation provided in this
Agreement.

 

6.                                       Retirement or Other Cessation as Director. In the event that, prior to the Expiration
Date, the Director ceases to be a director of the Corporation, the Director may thereafter
exercise his or her option in the same manner as if the Director had continued as
a director of the Corporation; provided, however, that the Corporation may immediately
terminate all unexercised options if the Corporation shall determine that the former
Director has engaged in any activity detrimental to the Corporation’s interests.
Nothing in this Option Agreement shall confer upon the Director any right to
continue as a director of the Corporation or of any of its subsidiaries or
interfere in any way with the right of the shareholders or any such subsidiary
to terminate him or her as a director at any time.

 

7.                                       Death of Director. In the event that, prior to the Expiration
Date, the Director shall die at a time when the Director is entitled to
exercise this Option, the Option may be exercised by a legatee or legatees
of the Director under his or her last will, or by the legal representative of
his or her estate, at any time prior to the Expiration Date or the date three (3) months
after the date of the Director’s death, whichever is earlier, and, except as so
exercised, such Option shall expire at the end of such period.

 

8.                                       Changes in Capital Structure. If all or any portion of the Option shall
be exercised subsequent to any share dividend, split-up, recapitalization,
merger, consolidation, combination or exchange of shares, separation,
reorganization, or liquidation occurring after the date hereof, as a result of
which shares of any class shall be issued in respect of outstanding Common
Shares or Common Shares shall be changed into the same or a different number of
shares of the same or another class or classes, the following adjustment
shall be made:  The person or persons
exercising the Option shall receive, for the aggregate price calculated and
paid upon such exercise as provided in Sections 2 and 3 above, the aggregate
number and class of shares which such person or persons would be holding
at the time of such exercise, as a result of such purchase and as a result of
all such share dividends, split-ups, recapitalizations, mergers,
consolidations, combinations or exchanges of shares, separations,
reorganizations, or liquidations; provided, however, that no fractional share
shall be issued upon any such exercise, and the number of shares subject to the
Option and the aggregate price to be paid shall be appropriately reduced on
account of any fractional share not issued. The foregoing shall be determined
as if Common Shares (as authorized at the date hereof) had been purchased at
the date

 

2

 

hereof
for the same aggregate price (on the basis of the price per share set forth in Section 2
applicable at the date hereof), and had not been disposed of. No adjustment
shall be made in the minimum number of shares which may be purchased at
any one time, as fixed by Section 3 hereof.

 

9.                                       Method of Exercising Option.

 

(a)                                  Exercise Procedure. Subject to the terms and conditions of this
Option Agreement, the Option may be exercised by written notice to the
Corporation, in care of the Chief Executive Officer, at 3900 North Tenth
Street, 11th Floor, McAllen, Texas 78501. Such notice shall state
the election to exercise the Option and the number of shares in respect of
which it is being exercised, and shall be signed by the person or persons so
exercising the Option. At the option of the Corporation, the Corporation may make
available means of electronic transmission of notice of exercise and provided
that the Director follows such instructions the Option will be deemed exercised
upon compliance with the electronic exercise procedures. Such notice shall
either: (i) be accompanied by payment of the full purchase price of such
shares, in which event the Corporation shall deliver a certificate or certificates
representing such shares as soon as practicable after the notice is received;
or (ii) fix a date (not less than five nor more than ten business days
from the date such notice is received by the Corporation) for the payment of
the full purchase price of such shares, against delivery of a certificate or
certificates representing such shares; or (iii) be accompanied by a notice
of cashless exercise as provided in subparagraph (b) below. Payment of the
purchase price shall, in either case, be made by check payable to the order of
the Corporation unless the exercise notice is accompanied by a cashless
exercise notice as provided in subparagraph (b) below. The certificate or
certificates for the share as to which the Option is exercised shall be registered
in the name of the person or persons exercising the Option (or, if the Option
is exercised by the Director and if the Director requests in the notice
exercising the Option, shall be registered in the name of the Director and
another person jointly, with right of survivorship) and shall be delivered as
provided above to or upon the written order of the person or persons exercising
the Option. In the event the Option is exercised, pursuant to this Agreement,
by any person or persons other than the Director, such notice shall be
accompanied by appropriate proof of the right of such person or persons to
exercise the Option. All shares purchased upon the exercise of the Option as
provided herein shall be fully paid and nonassessable.

 

(b)                                 Cashless Exercise. In the discretion of the Director, provided
that the fair market value of the Shares exceeds the exercise price of the
Option, in lieu of exercising this Option by payment of the Exercise Price by
delivering cash or check, the Director may elect to exercise the Option
and pay for Shares in a cashless exercise. In order to effect a cashless
exercise, the Director shall indicate in the exercise notice or other written
communication acceptable to the Corporation that he or she intends to make a
cashless exercise, and the Director shall deliver a number of shares equal to
the value (as determined below) of this Option (or the portion thereof being
exercised). In such event the Shares that the Corporation shall issue to the
Director with respect to such exercise shall be computed using the following
formula:

 

	
  X =   

  	
  Y
  * (A - B)

  	
   

  
	
   

  	
  A

  	
   

  

 

	
  where:

  	
   

  	
  X
  = the number of Shares to be issued to the Director

  
	
   

  	
   

  	
  Y
  = the number of Shares being exercised under this Option, to the extent

  
	
   

  	
   

  	
  that this Option is being exercised

  
	
   

  	
   

  	
  A
  = the fair market value of one Share as of the date of exercise

  
	
   

  	
   

  	
  B
  = the Exercise Price per Share

  

 

3

 

For
purposes of this calculation, the fair market value shall mean, on any
specified date, an amount equal to the mean between the reported high and low prices
of the Corporation’s Stock as traded on or reported through the NASDAQ Stock
Market, Inc. (“NASDAQ”) National Market System on the specified date or,
if no shares of the Corporation’s Stock have been traded on any such dates, the
mean between the reported high and low prices of the Corporation’s Stock traded
on or reported through NASDAQ as reported on the first day prior thereto on
which shares of the Corporation’s Stock were so traded. If shares of the
Corporation’s Stock are no longer traded on or reported through NASDAQ, Fair
Market Value shall be determined in good faith by the Committee using other
reasonable means.

 

10.                                 Change of Control and other Reorganizations. In the event of a Change of Control, as
that term is defined in the Plan, the provisions of Article X of the Plan
shall control, provided that, notwithstanding any provisions in the Plan to the
contrary (which provisions may be varied by this Agreement as set forth in
the Plan), upon a Change of Control, whether or not the Corporation is the
surviving corporation in such Change in Control and whether or not the
surviving corporation proposes to assume this Option, the Option shall
effective prior to the Change in Control (or such number of days prior thereto
as the Board of Directors may fix and determine) immediately vest and be
fully exercisable as to all shares of stock for which this Option has been
granted, without regard to the vesting schedule set forth in section 3
above. In such event, the Commencement Date for any portion of the Option
vested as a result of the Change in Control shall be either immediately prior
to the Change in Control or such earlier vesting acceleration date set by the
Board of Directors. The existence of this Option shall not in any way prevent
any change of control or other transaction described in Article X of the
Plan, and the Employee shall not have the right to prevent any such
transaction.

 

11.                                 Notice of Disposition. The Director shall immediately notify the Corporation in writing of any disposition of the stock acquired pursuant to the Option. The notice shall state the number of shares disposed of, the dates of acquisition and disposition of the shares, and the consideration received upon that disposition.
 

12.                                 Derivative Securities. Notwithstanding anything herein to the
contrary (and in addition to any limitations on transferability as otherwise
contained herein, including any such limitations as are contained in Section 4
hereof), a derivative security, as that term is defined for purposes of Rule 16b-3
promulgated by the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended, issued under the Plan, including
any issued pursuant to this Agreement, is not transferable by the Director
other than by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Internal Revenue Code of
1986, as amended, 26 U.S.C. § 1 et seq. (“Internal Revenue Code”)
or Title I of the Director Retirement Income Security Act, or the rules thereunder.

 

13.                                 General. The Corporation shall at all times during the term of the Option
reserve and keep available such number of shares of Common Stock as will be
sufficient to satisfy the requirements of this Option Agreement, shall pay all
original issue and transfer taxes with respect to the issue and transfer of
shares pursuant hereto and all other fees and expenses necessarily incurred by
the Corporation in connection therewith, and will from time to time use its
best efforts to comply with all laws and regulations which, in the opinion of
counsel for the Corporation, shall be applicable thereto.

 

14.                                 Parent and Subsidiary. As used herein, the terms “parent” and “subsidiary”
shall mean any present or future corporation which would be a “parent
corporation” or a “subsidiary corporation” of the Corporation, as those terms
are defined in Section 424 of the Internal Revenue Code of 1986.

 

4

 

15.                                 Conditions of Plan. This Agreement is executed pursuant to the
Plan, which is defined above as the Texas Regional Bancshares, Inc. 2006 Incentive
Plan. The Plan may contain other conditions not contained in this
Agreement, and the Director enters into this Agreement subject to any
conditions and limitations contained in the Plan. In the event of any
inconsistency between any provision of this Agreement and mandatory terms and
conditions of the Plan, the terms and conditions of the Plan shall control. To
the extent that the Plan does not address an issue or allows the option
agreement to vary from the terms and conditions of the Plan, the terms and
conditions of this Agreement shall control. To the extent inconsistent with the
terms of this Agreement, the terms of the Plan shall control for all purposes.
Defined terms used in this Agreement and not otherwise defined herein shall
have the meanings assigned to them in the Plan.

 

[Remainder of page left blank intentionally;

signature lines follow.]

 

5

 

IN
WITNESS WHEREOF, the Corporation and the Director enter into this Agreement to
be effective as of the day and year first above written.

 

	
   

  	
  TEXAS
  REGIONAL BANCSHARES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Glen
  E. Roney, Chairman of the Board

  
	
   

  	
   

  	
  and
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DIRECTOR:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  

 

6Exhibit
10.22

 

SEPARATION
AGREEMENT

 

THIS SEPARATION AGREEMENT between Access Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
and Kerry Gray (hereinafter referred to as “Gray”), dated as of May 10,
2005 (the “Effective  Date”);

 

WHEREAS, Gray is
a member of the Board of Directors of the Company (the “Board”), and
President and Chief Executive Officer of the Company;

 

WHEREAS, Gray
intends to resign and terminate his employment and all other positions with the
Company and its subsidiaries, including the offices of President and Chief
Executive Officer and Gray’s membership on the Board;

 

WHEREAS, the
Company intends to accept Gray’s resignation and wishes to provide to Gray
certain payments and to provide Gray with certain other benefits upon such
termination and Gray agrees to give certain releases and provide certain
services to the Company;

 

NOW, THEREFORE, in
consideration of the mutual promises set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

 

1.                                       Resignation and Termination.

 

1.1.                              Gray hereby resigns from all positions he
currently holds with the Company and any subsidiary of the Company, including
without limitation the positions of President, Chief Executive Officer and
Director, and member of the Board and any committee thereof, effective as of
the Effective Date. Gray agrees to transfer any shares of any subsidiary or
interest of any trust of the Company held by him as nominee or in any other
capacity to the Company or its designee.

 

1.2.                              The Employment Agreement, dated as of
April 1, 1998, by and between the Company and Gray is hereby terminated in
its entirety as of the Effective Date and neither party thereto shall have any
further rights or owe any further payment, duty or obligation to the other
thereunder; notwithstanding the foregoing, (a) the non-competition obligation
of Gray set forth in Section 7 of the Employment Agreement as it relates to (i)
mucoadhesive film technology and (ii) products incorporating platinum for use
as a chemotherapeutic agent and (b) the non-solicitation obligation of Gray set
forth in Section 8 of the Employment Agreement shall each survive for a period
of one year from the date of this Agreement.

 

 

2.             Company Covenants.

 

2.1.                              Cash Payments. Commencing as of the Effective Date, Gray shall be entitled to the
following cash payments:

 

(a)                                  On the Effective Date, the Company shall pay to
Gray a cash payment of $225,000; and

 

(b)                                 For a period of eighteen (18) months following
the Effective Date, the Company shall pay to Gray a payment of $33,333.33 on
the penultimate business day of each calendar month, with the first such
payment due and payable on May 30, 2005 making an aggregate payment of $600,000
under this Section 2.1(b).

 

2.2.                              Common Stock Issuances. For a period of eighteen (18) months following
the Effective Date, the Company shall issue to Gray 3,500 shares of the Company’s
common stock on the penultimate business day of each calendar month, with the
first such issuance due on May 30, 2005 making an aggregate issuance of 63,000
shares under this Section 2.2. The Company agrees to register the resale
of such shares on the next registration statement that it files for which
registration of such resale is allowed by the rules of the Securities and
Exchange Commission.

 

2.3.                              Vesting and Exercise of Existing Options and
Restricted Stock. On the
Effective Date, all outstanding Company stock options and shares of restricted
stock of the Company held by Gray shall immediately and fully vest. All
outstanding Company stock options held by Gray shall remain exercisable by Gray
until June 30, 2007, notwithstanding anything to the contrary in documents
related to such option grants, and shall expire on such date.

 

2.4.                              Consulting. At the Company’s sole discretion, Gray and the Company hereby agree
that, beginning on July 1, 2005 and thereafter, the Company may request
that Gray serve the Company in the capacity of a consultant. The Company shall
pay to Gray the sum of $2,000 for each day worked by Gray as a consultant at
the request of the Company pursuant to this Agreement. From the Effective Date
until July 1, 2005 Gray agrees to cooperate with the Company, at no cost to the
Company, in connection with the transition of operations of the Company to a
new Chief Executive Officer of the Company.

 

2

 

2.5.                              Benefits. For a period of Twenty (20) months following the Effective Date, the
Company shall, at its sole expense, continue to maintain and provide coverage
under Gray’s existing health coverage plan. For a period of Twelve (12) months
following the Effective Date, the Company shall, at its sole expense, provide
outplacement services appropriate to Gray’s position.

 

2.6.                              Withholding. All payments required to be made by the Company hereunder to Gray shall
be subject to the withholding of such amounts, if any, relating to tax and
other payroll deductions as the Company may reasonably determine it must withhold
pursuant to any applicable law or regulation.

 

2.7.                              No Duty to Mitigate Damages. Gray’s payments and benefits under Sections
2.1, 2.2, 2.3 and 2.5 of this Agreement shall be considered severance pay in
consideration of his past service, and as an inducement to him to enter into
and become bound by this Agreement, and his entitlement thereto shall not be
dependent upon whether or not Gray provides further services of any type to or
for the Company or any third party.

 

3.             Gray Covenants.
Gray hereby covenants with the Company as follows:

 

3.1.                              Non-disclosure. Gray recognizes and acknowledges that he has had and will have access
to certain highly sensitive, special, unique information of the Company that is
confidential or proprietary. Gray hereby covenants and agrees not to use or
disclose any Confidential Information (as hereinafter defined) except for
disclosures made solely (i) to authorized representatives of the Company;
or (ii) as required by any governmental, statutory or judicial authority, provided
that prior to any such disclosure Gray shall provide the Company with notice of
such requirement as is practicable and shall cooperate with the Company in
responding to such requirement, including assisting the Company in procuring a
protective order or other modification of such required disclosure.

 

3.2.                              Confidential Information. For purposes of this Agreement, “Confidential
Information” means any data or information with respect to the business
conducted by the Company that is material to the Company and not generally
known by the public. To the extent consistent with the foregoing definition,
Confidential Information includes without limitation; (i) reports,
pricing, sales manuals and training manuals, selling and pricing procedures,
and financing methods of the Company, together with any techniques utilized by
the Company in designing, developing, manufacturing, testing or marketing its
products or in performing services for clients, customers and accounts of the
Company and (ii) the business plans and financial statements, reports and
projections of the Company.

 

3

 

3.3.                              Return of Property. Gray covenants, agrees and acknowledges that
all Confidential Information is and shall remain the sole, exclusive and
valuable property of the Company and Gray has and shall acquire no right, title
or interests therein. Any and all printed, typed, written or other material
which Gray may have or obtain shall be and remain the exclusive property of the
Company, and any and all material (including any copies) shall be promptly
delivered by Gray to the Company. The Company acknowledges that the personal
property listed on Exhibit B is and shall remain Gray’s
personal property unaffected by this Agreement

 

4.             Indemnification.
The Company shall indemnify Gray to the same extent provided to its other
directors and officers by its charter and by-laws against all costs, charges
and expenses, including, without limitation, attorneys’ fees, incurred or
sustained by Gray in connection with any action, suit or proceeding to which
Gray may be made a party by reason of being an officer, director or employee of
the Company for acts undertaken from the time of his employment by the Company
through the Effective Date (the “Indemnification  Period”), and
Gray will be included as an insured individual under any liability insurance
policy that insures other officers or directors of the Company for acts taken
during the Indemnification Period.

 

5.                                       Public Statement, Non-disparagement.

 

5.1.                              Gray and the Company shall make a press release
announcing Gray’s resignation in the form attached hereto as Exhibit A
(the “Approved  Public  Statement”) on the Effective Date. Neither
Gray nor the Company shall make any public statement other than the Approved Public
Statement or that is consistent with the Approved Public Statement.

 

5.2.                              Gray shall make no disparaging statements,
whether public or private, with regard to the Company, its officers, employees,
Oracle Partners or its affiliates or members of the Board unless and to the
extent specifically compelled by any governmental agency or tribunal to make a
statement.

 

5.3.                              The Company and the members of the Board shall
make no disparaging statements, whether public or private, about Gray unless
and to the extent specifically compelled by any government agency or tribunal
to make a statement. In response to an inquiry, or as necessary or appropriate
to make clear Gray’s status with the Company or the circumstances of his
departure, the Company and the members of the Board shall inform third parties
that Gray is a shareholder of the Company and/or that he is not an employee,
officer, director or other agent of the Company by saying that Gray remains a
shareholder of the Company and that Gray resigned voluntarily, or other words
of similar effect. Neither the Company nor the members of the Board shall make
any statement that implies or suggests that

 

4

 

the reason for Gray’s separation
from the Company was anything other than Gray’s voluntary action.

 

6.                                       Mutual Release and Covenant Not to Sue.

 

6.1                                 Release and Covenant Not to Sue from Gray.

 

(a)                                  Release. Gray hereby releases each of the Company and its officers, employees,
directors, shareholders (in their capacities as such), attorneys, agents,
successors, and assigns, from each and every right, claim, debt, demand,
liability, cost, expense, and/or cause of action, which he has or may have had
against any of such released parties as of the Effective Date, whether known or
unknown.

 

(b)                                 Covenant Not to Sue. Gray hereby covenants and agrees not to bring
suit against any of the Company or any of 
its officers, employees, directors, attorneys, agents, successors, and
assigns based upon any claim herein released.

 

(c)                                  Rights Retained. Notwithstanding anything in this Agreement to the contrary, Gray
expressly reserves his right to take action against the Company to preserve his
rights under this Agreement in the event of a breach thereof by the Company,
subject to Section 7 below.

 

6.2                                 Release and Covenant Not to Sue from the Company.

 

(a)                                  Release. The Company hereby releases each of Gray and his attorneys, agents,
successors, and assigns from each and every right, claim, debt, demand,
liability, cost, expense, and/or cause of action arising out of Gray’s service
or status as an employee, officer, director, shareholder (in his capacity as
such) or representative of shareholders of the Company, existing as of the
Effective Date and whether known or unknown.

 

(b)                                 Covenant Not to Sue. The Company hereby covenants and agrees not to
bring suit against each of Gray and his attorneys, agents, successors, and
assigns based upon any claim herein released.

 

(c)                                  Rights Retained. Notwithstanding anything in this Agreement to the contrary, the Company
expressly reserves its right to take action against Gray to preserve its rights
under this Agreement in the event of a breach thereof by Gray, subject to
Section 7 below.

 

7.                                       Arbitration. Any controversy or claim arising out of or relating to this Agreement,
or the breach thereof, shall be settled exclusively by single-arbitrator
arbitration, in Dallas, Texas, in accordance with the

 

5

 

Commercial Arbitration Rules of
the American Arbitration Association then in effect, and judgment upon the
award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.

 

8.                                       Collateral. Payments owed to Gray by the Company pursuant to Section 2 hereof
shall be secured by, and the Company hereby grants to Gray a security interest
in and to, all of the assets of the Company, ranking junior only to the
security interest granted to Cornell Capital Partners, LP and Highgate House
Funds, Ltd. Any failure to pay timely any amount due under Section 2.1(b)
shall result, automatically, in the full acceleration of all such payments not
yet paid in full if such amount due is not paid within 10 days after written
notice from Gray. With respect to the Company, any commencement of a bankruptcy
proceeding, assignment for the benefit of creditors or the appointment of a
receiver, trustee, liquidator or other similar official shall also result,
automatically, in the full acceleration of all such payments not yet paid in
full.

 

9.                                       Legal Fees and Expenses. Each party hereto shall pay its own legal fees
and expenses of counsel reasonably incurred by such party in connection with
the negotiation, execution and delivery of this Agreement or in seeking in good
faith to obtain any right or benefit to which such party believes it or he is
entitled under this Agreement. In the event of a default by the Company with
respect to any payments owed to Gray under this Agreement, the Company agrees
to pay Gray any costs of collection, including but not limited to any
reasonable attorneys fees, which shall be deemed additional payments that are
secured pursuant to Section 8 hereto.

 

10.                                 Notices. Any notices required to be given under this Agreement shall be in
writing and shall be deemed given three (3) days after mailing in the continental
United States by registered or certified mail, or upon personal receipt after
delivery, telex, telecopy, or telegram, to the party entitled thereto at the
address stated below or to such changed address as the addressee may have given
by a similar notice:

 

	
  To the Company:

  	
   

  	
  Access Pharmaceuticals, Inc.

  
	
   

  	
   

  	
  2600 Stemmons Freeway, Suite
  176

  
	
   

  	
   

  	
  Dallas, TX 75207-2107

  
	
   

  	
   

  	
  Attn: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  John J. Concannon III, Esq.

  
	
   

  	
   

  	
  Bingham McCutchen LLP

  
	
   

  	
   

  	
  150 Federal Street

  
	
   

  	
   

  	
  Boston, MA 02110

  
	
   

  	
   

  	
   

  
	
  To Gray:

  	
   

  	
  Kerry Gray

  
	
   

  	
   

  	
  4939 Stonyford Dr.

  
	
   

  	
   

  	
  Dallas, Texas 75287

  

 

6

 

11.           General Provisions.

 

11.1.                        Binding Agreement. This Agreement shall be binding upon and inure
to the benefit of Gray and be enforceable by his personal or legal
representatives or successors. If Gray dies while any amounts would still be
payable to him hereunder, his rights herein shall still be exercisable by such
representatives or successors. Such amounts shall be paid to Gray’s estate in
accordance with the terms of this Agreement. This Agreement shall not otherwise
be assignable by Gray.

 

11.2.                        Successors. This Agreement shall inure to and be binding upon the Company’s
successors. The Company shall require any successor to all or substantially all
of its business and/or assets by sale, merger (where the Company is not the
surviving corporation), consolidation, lease or otherwise, by agreement in form
and substance satisfactory to Gray, to assume this Agreement expressly. This
Agreement shall not otherwise be assignable by the Company.

 

11.3.                        Amendment or Modification; Waiver. This Agreement may not be amended or modified
unless agreed to in writing by Gray and the Company. No waiver by either party
of any breach of this Agreement shall be deemed a waiver of any subsequent
breach.

 

11.4.                        Severability. In the event that any provision of this Agreement shall be determined
to be invalid or unenforceable, such provision shall be enforceable in any
jurisdiction in which valid and enforceable, and in any event the remaining
provisions shall remain in full force and effect to the fullest extent
permitted by law.

 

11.5.                        Rights Granted. This Agreement shall not give Gray any right to compensation or
benefits from the Company or any affiliate of the Company, except for the
rights specifically stated herein, including those certain severance and other
benefits that become payable on or after the Effective Date.

 

11.6.                        Governing Law. The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Delaware, without giving effect to the principles of
choice of law or conflicts of law.

 

11.7.                        Counterparts. This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same Agreement.

 

11.8.                        Section Headings. The descriptive section headings in this
Agreement have been inserted for convenience of reference only 

 

7

 

and are not intended to be part
of, or to affect the meaning or interpretation of, this Agreement.

 

12.                                 Exclusive Agreement. It is agreed and understood that this Agreement
represents the entire agreement between the Company and Gray concerning the
subject matter hereof and supersedes all prior agreements and understandings
concerning Gray’s rights upon the termination of his employment.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the day and year first above written.

 

	
  Access Pharmaceuticals, Inc.

  	
  Kerry Gray

  
	
   

  	
   

  
	
  By:

  	
    /s/ J. Michael
  Flinn

  	
   

  	
  /s/ Kerry P. Gray

  	
   

  
	
  Name: J. Michael Flinn

  	
   

  
	
  Title: Chairman of the Board

  	
   

  
					

 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}]]