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                                                                   EXHIBIT 10.12

                                                                         FORM OF

                            INDEMNIFICATION AGREEMENT

      This Indemnification Agreement (this "AGREEMENT") dated the ____ day of
_______, _____, by and between BioNumerik Pharmaceuticals, Inc., a Texas
corporation (the "COMPANY"), and ____________, an individual ("INDEMNITEE").

                                    RECITALS

      A. Competent and experienced persons are reluctant to serve or to continue
to serve as directors and officers of corporations or in other capacities unless
they are provided with adequate protection through insurance or indemnification
(or both) against claims against them arising out of their service and
activities on behalf of the corporation.

      B. The current uncertainties relating to the availability of adequate
insurance have increased the difficulty for corporations of attracting and
retaining competent and experienced persons to serve in such capacity.

      C. The Board of Directors of the Company (the "BOARD OF DIRECTORS") has
determined that the continuation of present trends in litigation will make it
more difficult to attract and retain competent and experienced persons to serve
as directors and officers of the Company, that this situation is detrimental to
the best interests of the Company's shareholders and that the Company should act
to assure such persons that there will be increased certainty of adequate
protection in the future.

      D. As a supplement to and in the furtherance of the Company's Articles of
Incorporation, as amended (the "ARTICLES"), and Bylaws, as amended (the
"BYLAWS"), it is reasonable, prudent, desirable and necessary for the Company
contractually to obligate itself to indemnify, and to pay in advance expenses on
behalf of, officers and directors to the fullest extent permitted by law so that
they will serve or continue to serve the Company free from concern that they
will not be so indemnified and that their expenses will not be so paid in
advance;

      E. This Agreement is not a substitute for, nor does it diminish or
abrogate any rights of Indemnitee under, the Articles and the Bylaws or any
resolutions adopted pursuant thereto (including any contractual rights of
Indemnitee that may exist).

      F. Indemnitee is a director and/or officer of the Company and his or her
willingness to continue to serve in such capacity is predicated, in substantial
part, upon the Company's willingness to indemnify him or her to the fullest
extent permitted by the laws of the State of Texas and upon the other
undertakings set forth in this Agreement.

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                                    AGREEMENT

      NOW, THEREFORE, in consideration of the premises and covenants contained
herein, the Company and Indemnitee hereby agree as follows:

                                   ARTICLE 1
                               CERTAIN DEFINITIONS

      Capitalized terms used but not otherwise defined in this Agreement have
the meanings set forth below:

      "CHANGE OF CONTROL" means the occurrence of any of the following events:

      (a) The acquisition after the date of this Agreement by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 15% or more of either the then-outstanding shares of common stock of the
Company (the "OUTSTANDING COMPANY COMMON STOCK") or the combined voting power of
the then-outstanding voting securities of the Company entitled to vote generally
in the election of directors (the "OUTSTANDING COMPANY VOTING SECURITIES");
provided, however, that none of the following acquisitions will constitute a
Change of Control:

            (i) Any acquisition directly from the Company or any Controlled
      Affiliate of the Company;

            (ii) Any acquisition by the Company or any Controlled Affiliate of
      the Company;

            (iii) Any acquisition by any employee benefit plan (or related
      trust) sponsored or maintained by the Company or any Controlled Affiliate
      of the Company;

            (iv) Any acquisition that is approved by at least a majority of the
      Incumbent Directors;

            (v) Any acquisition by Dr. Frederick H. Hausheer, or any entity or
      person that may be an affiliate of Dr. Hausheer or his heirs or any trust
      or foundation to which he has transferred or may transfer any Outstanding
      Company Common Stock or Outstanding Company Voting Securities; or

            (vi) Any acquisition by Dr. James R. Leininger, or any entity or
      person that may be an affiliate of Dr. Leininger or his heirs or any trust
      or foundation to which he has transferred or may transfer any Outstanding
      Company Common Stock or Outstanding Company Voting Securities; or

            (vii) Any acquisition by any entity or its security holders pursuant
      to a transaction that complies with clauses (i), (ii) and (iii) of
      paragraph (c) of this definition.

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      (b) Individuals who, as of the date of this Agreement, constitute the
Board of Directors (the "INCUMBENT DIRECTORS") cease for any reason to
constitute at least a majority of the Board of Directors; provided, however,
that any individual who becomes a director of the Company subsequent to the date
of this Agreement and whose election or appointment by the Board of Directors or
nomination for election by the Company's shareholders was approved by a vote of
at least a majority of the then Incumbent Directors will be considered as an
Incumbent Director, unless such individual's initial assumption of office occurs
as a result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a person or entity other than the
Company;

      (c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the Company or any of
its Subsidiaries, a sale or other disposition of all or substantially all of the
assets of the Company or an acquisition of assets or stock of another entity by
the Company or any of its Subsidiaries (each a "BUSINESS COMBINATION") unless,
in each case, following such Business Combination (i) all or substantially all
of the individuals and entities that were the beneficial owners of the
Outstanding Common Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than 50% of the then-outstanding shares of common stock and the combined
voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including a corporation that, as a
result of such Business Combination, owns the Company or all or substantially
all of the Company's assets either directly or through one or more Subsidiaries)
in substantially the same proportions as their ownership immediately prior to
such Business Combination of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities, as the case may be, (ii) no person or
entity (excluding (A) any entity resulting from such Business Combination or (B)
any employee benefit plan (or related trust) of the Company or corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly 15% or more of either the then- outstanding shares of common stock of
the corporation resulting from such Business Combination or the combined voting
power of the then-outstanding voting securities of such corporation, except to
the extent that such ownership existed prior to such Business Combination, and
(iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board of Directors, providing for such Business Combination; or

      (d) Approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.

      "CORPORATE STATUS" means the status of a person who is or was a director,
officer, employee, partner, member, manager, trustee, fiduciary or agent of the
Company or of any other Enterprise which such person is or was serving at the
request of the Company. In addition to any service at the actual request of the
Company, Indemnitee will be deemed, for purposes of this Agreement, to be
serving or to have served at the request of the Company as a director, officer,
employee, partner, member, manager, trustee, fiduciary or agent of another
Enterprise if Indemnitee is or was serving as a director, officer, employee,
partner, member, manager,

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fiduciary, trustee or agent of such Enterprise and (i) such Enterprise is or at
the time of such service was a Controlled Affiliate, (ii) such Enterprise is or
at the time of such service was an employee benefit plan (or related trust)
sponsored or maintained by the Company or a Controlled Affiliate or (ii) the
Company or a Controlled Affiliate directly or indirectly caused Indemnitee to be
nominated, elected, appointed, designated, employed, engaged or selected to
serve in such capacity.

      "CONTROLLED AFFILIATE" means any corporation, limited liability company,
partnership, joint venture, trust or other Enterprise, whether or not for
profit, that is directly or indirectly controlled by the Company. For purposes
of this definition, the term "control" means the possession, directly or
indirectly, of the power to direct, or cause the direction of, the management or
policies of an Enterprise, whether through the ownership of voting securities,
through other voting rights, by contract or otherwise; provided, however, that
direct or indirect beneficial ownership of capital stock or other interests in
an Enterprise entitling the holder to cast 30% or more of the total number of
votes generally entitled to be cast in the election of directors (or persons
performing comparable functions) of such Enterprise will be deemed to constitute
"control" for purposes of this definition.

      "DISINTERESTED DIRECTOR" means a director of the Company who is not and
was not a party to the Proceeding in respect of which indemnification is sought
by Indemnitee.

      "ENTERPRISE" means the Company and any other corporation, partnership,
limited liability company, joint venture, employee benefit plan, trust or other
entity or other enterprise of which Indemnitee is or was serving at the request
of the Company in a Corporate Status.

      "EXPENSES" means all attorney's fees, disbursements and retainers, court
costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage, fax
transmission charges, secretarial services, delivery service fees and all other
disbursements or expenses paid or incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing
to be a witness in, or otherwise participating in, a Proceeding, or in
connection with seeking indemnification under this Agreement. Expenses will also
include Expenses paid or incurred in connection with any appeal resulting from
any Proceeding, including the premium, security for and other costs relating to
any appeal bond or its equivalent. Expenses, however, will not include amounts
paid in settlement by Indemnitee or the amount of judgments or fines against
Indemnitee.

      "INDEPENDENT COUNSEL" means an attorney or firm of attorneys that is
experienced in matters of corporation law and neither currently is, nor in the
past five (5) years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party (other than with respect
to matters concerning the Indemnitee under this Agreement and/or the
indemnification provisions of the Articles or Bylaws, or of other indemnitees
under similar indemnification agreements), or (ii) any other party to the
Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding
the foregoing, the term "Independent Counsel" does not include any person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or Indemnitee in
an action to determine Indemnitee's rights under this Agreement.

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      "LOSSES" means any loss, liability, judgments, damages, amounts paid in
settlement, fines (including excise taxes and penalties assessed with respect to
employee benefit plans), penalties (whether civil, criminal or otherwise) and
all interest, assessments and other charges paid or payable in connection with
or in respect of any of the foregoing.

      "PROCEEDING" means any threatened, pending or completed action, suit,
claim, demand, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened
or completed proceeding, including any and all appeals, whether brought by or in
the right of the Company or otherwise, whether civil, criminal, administrative
or investigative, whether formal or informal, and in each case whether or not
commenced prior to the date of this Agreement, in which Indemnitee was, is or
will be involved as a party or otherwise, by reason of or relating to
Indemnitee's Corporate Status and by reason of or relating to either (i) any
action or alleged action taken by Indemnitee (or failure or alleged failure to
act) or of any action or alleged action (or failure or alleged failure to act)
on Indemnitee's part, while acting in his or her Corporate Status or (ii) the
fact that Indemnitee is or was serving at the request of the Company as
director, officer, employee, partner, member, manager, trustee, fiduciary or
agent of another Enterprise, in each case whether or not serving in such
capacity at the time any Loss or Expense is paid or incurred for which
indemnification or advancement of Expenses can be provided under this Agreement,
except one initiated by Indemnitee to enforce his or her rights under this
Agreement. For purposes of this definition, the term "threatened" will be deemed
to include Indemnitee's good faith belief that a claim or other assertion may
lead to institution of a Proceeding.

      References to "SERVING AT THE REQUEST OF THE COMPANY" include any service
as a director, officer, employee or agent of the Company which imposes duties
on, or involves services by, such director, officer, employee or agent with
respect to any employee benefit plan, its participants or beneficiaries; and a
person who acted in good faith and in a manner he or she reasonably believed to
be in the best interests of the participants and beneficiaries of an employee
benefit plan will be deemed to have acted in a manner "NOT OPPOSED TO THE BEST
INTERESTS OF THE COMPANY" as referred to under applicable law or in this
Agreement.

                                   ARTICLE 2
                             SERVICES TO THE COMPANY

      2.1 SERVICES TO THE COMPANY. Indemnitee agrees to continue to serve as a
[director][officer] of the Company. Indemnitee may at any time and for any
reason resign from such position (subject to any other contractual obligation or
any obligation imposed by operation of law), in which event the Company will
have no obligation under this Agreement to continue Indemnitee in such position.
This Agreement will not be construed as giving Indemnitee any right to be
retained in the employ of the Company (or any other Enterprise).

                                   ARTICLE 3
                                 INDEMNIFICATION

      3.1 COMPANY INDEMNIFICATION. Except as otherwise provided in this Article
3, if Indemnitee was, is or becomes a party to, or was or is threatened to be
made a party to, or was or is otherwise involved in, any Proceeding, the Company
will indemnify and hold harmless

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Indemnitee to the fullest extent permitted by the Articles, Bylaws and
applicable law, as the same exists or may hereafter be amended, interpreted or
replaced (but in the case of any such amendment, interpretation or replacement,
only to the extent that such amendment, interpretation or replacement permits
the Company to provide broader indemnification rights than were permitted prior
thereto), against any and all Expenses and Losses, and any federal, state, local
or foreign taxes imposed as a result of the actual or deemed receipt of any
payments under this Agreement, that are actually and reasonably paid or incurred
by Indemnitee in connection with such Proceeding. For purposes of this
Agreement, the meaning of the phrase "TO THE FULLEST EXTENT PERMITTED BY LAW"
will include to the fullest extent permitted by Article 2.02-1 of the Texas
Business Corporation Act ("TBCA") or any section that replaces or succeeds
Article 2.02-1 of the TBCA with respect to such matters. THE INDEMNIFICATION
PROVIDED TO INDEMNITEE IN THIS AGREEMENT WILL BE PROVIDED WHETHER OR NOT THE
NEGLIGENCE OR GROSS NEGLIGENCE OF INDEMNITEE IS ALLEGED OR PROVEN.

      3.2 MANDATORY INDEMNIFICATION IF INDEMNITEE IS WHOLLY OR PARTLY
SUCCESSFUL. Notwithstanding any other provision of this Agreement (other than
Section 6.9), to the extent that Indemnitee has been successful, on the merits
or otherwise, in defense of any Proceeding or any part thereof, the Company will
indemnify Indemnitee against all Expenses that are paid or incurred by
Indemnitee in connection therewith. If Indemnitee is not wholly successful in
such Proceeding, but is successful, on the merits or otherwise, as to one or
more but fewer than all claims, issues or matters in such Proceeding, the
Company will indemnify and hold harmless Indemnitee against all Expenses paid or
incurred by Indemnitee in connection with each successfully resolved claim,
issue or matter on which Indemnitee was successful. For purposes of this Section
3.2, the termination of any Proceeding, or any claim, issue or matter in such
Proceeding, by dismissal with or without prejudice will be deemed to be a
successful result as to such Proceeding, claim, issue or matter.

      3.3 INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his
or her Corporate Status, a witness in any Proceeding to which Indemnitee is not
a party, the Company will indemnify Indemnitee against all Expenses paid or
incurred by Indemnitee on his or her behalf in connection therewith.

      3.4 EXCLUSIONS. Notwithstanding any other provision of this Agreement, the
Company will not be obligated under this Agreement to provide indemnification in
connection with the following:

            (a) Any Proceeding (or part of any Proceeding) initiated or brought
      voluntarily by Indemnitee against the Company or its directors, officers,
      employees or other indemnities, unless the Board of Directors has
      authorized or consented to the initiation of the Proceeding (or such part
      of any Proceeding); provided, however, that nothing in this Section 3.4(a)
      shall limit the right of Indemnitee to be indemnified under Section 8.4.

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            (b) For an accounting of profits made from the purchase and sale (or
      sale and purchase) by Indemnitee of securities of the Company within the
      meaning of Section 16(b) of the Exchange Act or any similar successor
      statute.

                                   ARTICLE 4
                             ADVANCEMENT OF EXPENSES

      4.1 EXPENSE ADVANCES. Except as set forth in Section 4.2, the Company
will, if requested by Indemnitee, advance, to the fullest extent permitted by
law, to Indemnitee (hereinafter an "EXPENSE ADVANCE") any and all Expenses paid
or incurred by Indemnitee in connection with any Proceeding (whether prior to or
after its final disposition). Indemnitee's right to each Expense Advance will
not be subject to the satisfaction of any standard of conduct and will be made
without regard to Indemnitee's ultimate entitlement to indemnification under the
other provisions of this Agreement, or under provisions of the Articles or
Bylaws or otherwise. Each Expense Advance will be unsecured and interest free
and will be made by the Company without regard to Indemnitee's ability to repay
the Expense Advance; provided, however, that, if applicable law requires, an
Expense Advance will be made only upon delivery to the Company of an undertaking
(hereinafter an "UNDERTAKING"), by or on behalf of Indemnitee, to repay such
Expense Advance if it is ultimately determined, by final decision by a court or
arbitrator, as applicable, from which there is no further right to appeal, that
Indemnitee is not entitled to be indemnified for such Expenses under the
Articles, Bylaws, the TBCA, this Agreement or otherwise. An Expense eligible for
an Expense Advance will include any and all reasonable Expenses incurred
pursuing an action to enforce the right of advancement provided for in this
Article 4, including Expenses incurred preparing and forwarding statements to
the Company to support the Expense Advances claimed.

      4.2 EXCLUSIONS. Indemnitee will not be entitled to any Expense Advance in
connection with any of the matters for which indemnity is excluded pursuant to
Section 3.4.

      4.3 TIMING. An Expense Advance pursuant to Section 4.1 will be made within
ten days after the receipt by the Company of a written statement or statements
from Indemnitee requesting such Expense Advance (which statement or statements
will include, if requested by the Company, reasonable detail underlying the
Expenses for which the Expense Advance is requested), whether such request is
made prior to or after final disposition of such Proceeding. Such request must
be accompanied by or preceded by the Undertaking, if then required by the TBCA
or any other applicable law.

                                   ARTICLE 5
                  CONTRIBUTION IN THE EVENT OF JOINT LIABILITY

      5.1 CONTRIBUTION BY COMPANY. To the fullest extent permitted by law, if
the indemnification provided for in this Agreement is unavailable to Indemnitee
for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, will
contribute to the amount of Expenses and Losses incurred or paid by Indemnitee
in connection with any Proceeding in proportion to the relative benefits
received by the Company and all officers, directors and employees of the Company
other than Indemnitee who are jointly liable with Indemnitee (or would be if
joined in such Proceeding), on the one hand, and Indemnitee, on the other hand,
from
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the transaction from which such Proceeding arose; provided, however, that
the proportion determined on the basis of relative benefit may, to the extent
necessary to conform to law, be further adjusted by reference to the relative
fault of the Company and all officers, directors and employees of the Company
other than Indemnitee who are jointly liable with Indemnitee (or would be if
joined in such Proceeding), on the one hand, and Indemnitee, on the other hand,
in connection with the events that resulted in such Expenses and Losses, as well
as any other equitable considerations which applicable law may require to be
considered. The relative fault of the Company and all officers, directors and
employees of the Company other than Indemnitee who are jointly liable with
Indemnitee (or would be if joined in such Proceeding), on the one hand, and
Indemnitee, on the other hand, will be determined by reference to, among other
things, the degree to which their actions were motivated by intent to gain
personal profit or advantage, the degree to which their liability is primary or
secondary, and the degree to which their conduct was active or passive.

      5.2 INDEMNIFICATION FOR CONTRIBUTION CLAIMS BY OTHERS. To the fullest
extent permitted by law, the Company will fully indemnify and hold Indemnitee
harmless from any claims of contribution which may be brought by other officers,
directors or employees of the Company who may be jointly liable with Indemnitee
for any Loss or Expense arising from a Proceeding.

                                   ARTICLE 6
                       PROCEDURES AND PRESUMPTIONS FOR THE
                 DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION

      6.1 NOTIFICATION OF CLAIMS; REQUEST FOR INDEMNIFICATION. Indemnitee agrees
to notify promptly the Company in writing of any claim made against Indemnitee
for which indemnification will or could be sought under this Agreement;
provided, however, that a delay in giving such notice will not deprive
Indemnitee of any right to be indemnified under this Agreement unless, and then
only to the extent that, the Company did not otherwise learn of the Proceeding
and such delay is materially prejudicial to the Company's ability to defend such
Proceeding; and, provided, further, that notice will be deemed to have been
given without any action on the part of Indemnitee in the event the Company is a
party to the same Proceeding. The omission to notify the Company will not
relieve the Company from any liability for indemnification which it may have to
Indemnitee otherwise than under this Agreement. Indemnitee may deliver to the
Company a written request to have the Company indemnify and hold harmless
Indemnitee in accordance with this Agreement. Subject to Section 6.9, such
request may be delivered from time to time and at such time(s) as Indemnitee
deems appropriate in his or her sole discretion. Following such a written
request for indemnification, Indemnitee's entitlement to indemnification shall
be determined according to Section 6.2. The Secretary of the Company will,
promptly upon receipt of such a request for indemnification, advise the Board of
Directors in writing that Indemnitee has requested indemnification. The Company
will be entitled to participate in any Proceeding at its own expense.

      6.2 DETERMINATION OF RIGHT TO INDEMNIFICATION. The Corporation may provide
indemnification or contribution to Indemnitee under this Agreement without
making the determination described in this Section 6.2, unless such a
determination is required by applicable law. Upon written request by Indemnitee
for indemnification pursuant to Section 6.1 hereof or

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contribution or indemnification pursuant to Article 5 hereof with respect to any
Proceeding, a determination with respect to Indemnitee's entitlement thereto
will be made by one of the following, at the election of Indemnitee as: (1) so
long as there are Disinterested Directors with respect to such Proceeding, a
majority vote of the Disinterested Directors, even though less than a quorum of
the Board of Directors, (2) so long as there are Disinterested Directors with
respect to such Proceeding, a committee of such Disinterested Directors
designated by a majority vote of such Disinterested Directors, even though less
than a quorum of the Board of Directors or (3) Independent Counsel in a written
opinion delivered to the Board of Directors, a copy of which will also be
delivered to Indemnitee. The election by Indemnitee to use a particular person,
persons or entity to make such determination is to be included in the written
request for indemnification submitted by Indemnitee (and if no election is made
in the request it will be assumed that Indemnitee has elected the Independent
Counsel to make such determination). The person, persons or entity chosen to
make a determination under this Agreement of the Indemnitee's entitlement to
indemnification and/or contribution will act reasonably and in good faith in
making such determination. Notwithstanding anything herein to the contrary, the
rights of indemnification and to receive Expense Advances and contribution as
provided by this Agreement will be deemed severable and the unavailability of
such rights or ineligibility of another party to receive indemnification,
Expense Advances or contribution pursuant to any separate agreement will not
affect the availability of such rights or the Indemnitee's eligibility to
receive indemnification, Expense Advances or contribution as provided by this
Agreement.

      6.3 SELECTION OF INDEPENDENT COUNSEL. If the determination of entitlement
to indemnification pursuant to Section 6.2 or contribution or indemnification
pursuant to Article 5 will be made by an Independent Counsel, the Independent
Counsel will be selected as provided in this Section 6.3. The Independent
Counsel will be selected by Indemnitee (unless Indemnitee requests that such
selection be made by the Board of Directors, in which event the immediately
following sentence will apply) and Indemnitee will give written notice to the
Company advising it of the identity of the Independent Counsel so selected If
the Independent Counsel is selected by the Board of Directors, the Company will
give written notice to Indemnitee advising him or her of the identity of the
Independent Counsel so selected. In either event, Indemnitee or the Company, as
the case may be, may, within ten days after such written notice of selection is
given, deliver to the Company or to Indemnitee, as the case may be, a written
objection to such selection; provided, however, that such objection may be
asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of "Independent Counsel" as defined in this Agreement, and
the objection will set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected will act
as Independent Counsel. If a written objection is made and substantiated, the
Independent Counsel selected may not serve as Independent Counsel unless and
until such objection is withdrawn or a court has determined that such objection
is without merit. If, within 30 days after submission by Indemnitee of a written
request for indemnification pursuant to Section 6.1, no Independent Counsel is
selected, or an Independent Counsel for which an objection thereto has been
properly made remains unresolved, either the Company or Indemnitee may petition
an appropriate court of the State of Texas or any other court of competent
jurisdiction for resolution of any objection which has been made by the Company
or Indemnitee to the other's selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the court or by such
other person as the court may designate, and the person with respect to whom all
objections are so resolved or the person so appointed will act as Independent
Counsel under

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Section 6.2. The Company will pay any and all fees and expenses incurred by such
Independent Counsel in connection with acting pursuant to Section 6.2 hereof,
and the Company will pay all fees and expenses incident to the procedures of
this Section 6.3, regardless of the manner in which such Independent Counsel was
selected or appointed.

      6.4 BURDEN OF PROOF. In making a determination with respect to entitlement
to indemnification or contribution hereunder, the person, persons or entity
making such determination will presume that Indemnitee is entitled to
indemnification or contribution under this Agreement. Anyone seeking to overcome
this presumption will have the burden of proof and the burden of persuasion, by
clear and convincing evidence. In making a determination with respect to
entitlement to indemnification or contribution hereunder which under this
Agreement, the Articles, Bylaws or applicable law requires a determination of
Indemnitee's good faith and/or whether Indemnitee acted in a manner which he or
she reasonably believed to be in or not opposed to the best interests of the
Company, the person, persons or entity making such determination will presume
that Indemnitee has at all times acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Company. Anyone seeking to overcome this presumption will have the burden of
proof and the burden of persuasion, by clear and convincing evidence. Indemnitee
will be deemed to have acted in good faith if Indemnitee's action with respect
to a particular Enterprise is based on the records or books of account of such
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of such Enterprise in the course of their duties, or
on the advice of legal counsel for such Enterprise or on information or records
given or reports made to such Enterprise by an independent certified public
accountant or by an appraiser or other expert selected by such Enterprise;
provided, however this sentence will not be deemed to limit in any way the other
circumstances in which Indemnitee may be deemed to have met such standard of
conduct. In addition, the knowledge and/or actions, or failure to act, of any
other director, officer, agent or employee of such Enterprise will not be
imputed to Indemnitee for purposes of determining the right to indemnification
or contribution under this Agreement.

      6.5 NO PRESUMPTION IN ABSENCE OF A DETERMINATION OR AS RESULT OF AN
ADVERSE DETERMINATION; PRESUMPTION REGARDING SUCCESS. Neither the failure of any
person, persons or entity chosen to make a determination as to whether
Indemnitee has met any particular standard of conduct or had any particular
belief to make such determination, nor an actual determination by such person,
persons or entity that Indemnitee has not met such standard of conduct or did
not have such belief, prior to or after the commencement of legal proceedings by
Indemnitee to secure a judicial determination that Indemnitee should be
indemnified under this Agreement under applicable law, will be a defense to
Indemnitee's claim or create a presumption that Indemnitee has not met any
particular standard of conduct or did not have any particular belief. In
addition, the termination of any Proceeding by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, will not create a presumption that Indemnitee did
not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by this
Agreement or applicable law. In the event that any Proceeding to which
Indemnitee is a party is resolved in any manner other than by final adverse
judgment (as to which all rights of appeal therefrom have been exhausted or
lapsed) against Indemnitee (including, without limitation, settlement of such
Proceeding with or without payment of money or other consideration) it will be
presumed that Indemnitee has been successful on the merits or otherwise in such
Proceeding.

                                       10
<PAGE>

Anyone seeking to overcome this presumption will have the burden of proof and
the burden of persuasion, by clear and convincing evidence.

      6.6 TIMING OF DETERMINATION. The Company will use its reasonable best
efforts to cause any determination required to be made pursuant to Section 6.2
to be made as promptly as practicable after Indemnitee has submitted a written
request for indemnification pursuant to Section 6.1 or contribution or
indemnification pursuant to Article 5. If the person, persons or entity chosen
to make a determination does not make such determination within 30 days after
the later of the date (a) the Company receives Indemnitee's request for
indemnification pursuant to Section 6.1 or contribution or indemnification
pursuant to Article 5 and (b) on which an Independent Counsel is selected
pursuant to Section 6.3, if applicable (and all objections to such person, if
any, have been resolved), the requisite determination of entitlement to
indemnification or contribution will be deemed to have been made and Indemnitee
will be entitled to such indemnification or contribution, so long as (i)
Indemnitee has fulfilled his or her obligations pursuant to Section 6.8 and (ii)
such indemnification is not prohibited under applicable law; provided, however,
that such 30 day period may be extended for a reasonable time, not to exceed an
additional 15 days, if the person, persons or entity making the determination
with respect to entitlement to indemnification or contribution in good faith
requires such additional time for the obtaining of or evaluating of
documentation and/or information relating thereto.

      6.7 TIMING OF PAYMENTS. All payments of Expenses, including any Expense
Advance, and other amounts by the Company to the Indemnitee pursuant to this
Agreement will be made as soon as practicable after a written request or demand
therefor by Indemnitee is presented to the Company, but in no event later than
fifteen (15) days after (i) such demand is presented or (ii) such later date as
a determination of entitlement to indemnification or contribution is made in
accordance with Section 6.6, if applicable; provided, however, that an Expense
Advance will be made within the time provided in Section 4.3 hereof.

      6.8 COOPERATION. Indemnitee will cooperate with the person, persons or
entity making a determination with respect to Indemnitee's entitlement to
indemnification or contribution, including providing to such person, persons or
entity, upon reasonable advance request, any documentation or information which
is not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
Expenses incurred by Indemnitee in so cooperating with the person, persons or
entity making such determination will be borne by the Company (irrespective of
the determination as to Indemnitee's entitlement to indemnification or
contribution) and the Company will indemnify Indemnitee therefor and will hold
Indemnitee harmless therefrom.

      6.9 TIME FOR SUBMISSION OF REQUEST. Indemnitee will be required to submit
any request for Indemnification pursuant to this Article 6 or contribution or
indemnification pursuant to Article 5 within a reasonable time, not to exceed
two years, after any judgment, order, settlement, dismissal, arbitration award,
conviction, acceptance of a plea of nolo contendere (or its equivalent) or other
full or partial final determination or disposition of the Proceeding (with the
latest date of the occurrence of any such event to be considered the
commencement of the two year period).

                                       11
<PAGE>

                                   ARTICLE 7
                               LIABILITY INSURANCE

      7.1 COMPANY INSURANCE. Subject to Section 7.3, the Company will obtain and
maintain a policy or policies of insurance with one or more reputable insurance
companies providing Indemnitee with coverage in such amount as will be
determined by the Board of Directors for Losses and Expenses paid or incurred by
Indemnitee as a result of acts or omissions of Indemnitee in his or her
Corporate Status, and to ensure the Company's performance of its indemnification
obligations under this Agreement; provided, however, in all policies of director
and officer liability insurance obtained by the Company, Indemnitee will be
named as an insured party in such manner as to provide Indemnitee with the same
rights and benefits as are afforded to the most favorably insured directors or
officers, as applicable, of the Company under such policies. Any reductions to
the amount of director and officer liability insurance coverage maintained by
the Company as of the date hereof will be subject to the approval of the Board
of Directors.

      7.2 NOTICE TO INSURERS. If, at the time of receipt by the Company of a
notice from any source of a Proceeding as to which Indemnitee is a party or
participant, the Company will give prompt notice of such Proceeding to the
insurers in accordance with the procedures set forth in the respective policies,
and the Company will provide Indemnitee with a copy of such notice and copies of
all subsequent correspondence between the Company and such insurers related
thereto. The Company will thereafter take all necessary or desirable actions to
cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a
result of such Proceeding in accordance with the terms of such policies.

      7.3 INSURANCE NOT REQUIRED. Notwithstanding Section 7.1, the Company will
have no obligation to obtain or maintain the insurance contemplated by Section
7.1 if the Board of Directors determines in good faith that such insurance is
not reasonably available, if the premium costs for such insurance are
disproportionately high compared to the amount of coverage provided, or if the
coverage provided by such insurance is limited by exclusions so as to provide an
insufficient benefit. The Company will promptly notify Indemnitee of any such
determination not to provide insurance coverage.

                                   ARTICLE 8
                             REMEDIES OF INDEMNITEE

      8.1 ACTION BY INDEMNITEE. In the event that (i) a determination is made
pursuant to Article 6 of this Agreement that Indemnitee is not entitled to
indemnification or contribution under this Agreement, (ii) an Expense Advance is
not timely made pursuant to Section 4.3 of this Agreement, (iii) no
determination of entitlement to indemnification or contribution is made within
the applicable time periods specified in Section 6.6 or (iv) payment of
indemnified amounts or amounts in contribution is not made within the applicable
time periods specified in Section 6.7, Indemnitee will be entitled to an
adjudication in an appropriate court of the State of Texas, or in any other
court of competent jurisdiction, of his or her entitlement to such
indemnification, payment of an Expense Advance or contribution. Alternatively,
Indemnitee, at Indemnitee's option, may seek an award in arbitration to be
conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of
the American Arbitration Association. The

                                       12
<PAGE>

provisions of Texas law (without regard to its conflict of laws rules) will
apply to any such arbitration. The Company will not oppose Indemnitee's right to
seek any such adjudication or award in arbitration.

      8.2 DE NOVO REVIEW IF PRIOR ADVERSE DETERMINATION. In the event that a
determination is made pursuant to Article 6 that Indemnitee is not entitled to
indemnification or contribution, any judicial proceeding or arbitration
commenced pursuant to this Article 8 will be conducted in all respects as a de
novo trial or arbitration, as applicable, on the merits and Indemnitee will not
be prejudiced by reason of that adverse determination. In any judicial
proceeding or arbitration commenced pursuant to this Article 8, Indemnitee will
be presumed to be entitled to indemnification and/or contribution under this
Agreement, the Company will have the burden of proving Indemnitee is not
entitled to indemnification or contribution and the Company may not refer to or
introduce evidence of any determination pursuant to Article 6 adverse to
Indemnitee for any purpose. If Indemnitee commences a judicial proceeding or
arbitration pursuant to this Article 8, Indemnitee will not be required to
reimburse the Company for any Expense Advance made pursuant to Article 4 until a
final determination is made with respect to Indemnitee's entitlement to
indemnification and/or contribution (as to which all rights of appeal have been
exhausted or lapsed).

      8.3 COMPANY BOUND BY FAVORABLE DETERMINATION BY REVIEWING PARTY. If a
determination is made that Indemnitee is entitled to indemnification pursuant to
Article 6 or contribution or indemnification pursuant to Article 5, the Company
will be bound by such determination in any judicial proceeding or arbitration
commenced pursuant to this Article 8, absent (i) a misstatement by Indemnitee of
a material fact or an omission of a material fact necessary to make Indemnitee's
statements in connection with the request for indemnification or contribution
not materially misleading or (ii) a prohibition of such indemnification under
law.

      8.4 COMPANY BEARS EXPENSES IF INDEMNITEE SEEKS ADJUDICATION. In the event
that Indemnitee, pursuant to this Article 8, seeks a judicial adjudication or
arbitration of his or her rights under, or to recover damages for breach of,
this Agreement, any other agreement for indemnification, the indemnification or
advancement of expenses provisions in the Articles or Bylaws, payment of
Expenses in advance or contribution hereunder or to recover under any director
and officer liability insurance policies maintained by the Company, the Company
will, to the fullest extent permitted by law, indemnify and hold harmless
Indemnitee against any and all Expenses which are paid or incurred by Indemnitee
in connection with such judicial adjudication or arbitration, regardless of
whether Indemnitee ultimately is determined to be entitled to such
indemnification, payment of Expenses in advance or contribution or insurance
recovery. In addition, if requested by Indemnitee, the Company will (within ten
days after receipt by the Company of the written request therefor), pay as an
Expense Advance such Expenses, to the fullest extent permitted by law.

      8.5 COMPANY BOUND BY PROVISIONS OF THIS AGREEMENT. The Company will be
precluded from asserting in any judicial or arbitration proceeding commenced
pursuant to this Article 8 that the procedures and presumptions of this
Agreement are not valid, binding and enforceable and will stipulate in any such
judicial or arbitration proceeding that the Company is bound by all the
provisions of this Agreement.

                                       13
<PAGE>

                                   ARTICLE 9
             NON-EXCLUSIVITY, SUBROGATION; NO DUPLICATIVE PAYMENTS;
                              MORE FAVORABLE TERMS

      9.1 NON-EXCLUSIVITY. The rights of indemnification and to receive Expense
Advances and contribution as provided by this Agreement will not be deemed
exclusive of any other rights to which Indemnitee may at any time be entitled
under applicable law, the Articles, the Bylaws, any agreement, a vote of
shareholders, a resolution of the directors or otherwise. To the extent
Indemnitee otherwise would have any greater right to indemnification or payment
of any advancement of Expenses or contribution under any other provisions under
applicable law, the Articles, Bylaws, any agreement, vote of shareholders, a
resolution of directors or otherwise, Indemnitee will be entitled under this
Agreement to such greater right. No amendment, alteration or repeal of this
Agreement or of any provision hereof limits or restricts any right of Indemnitee
under this Agreement in respect of any action taken or omitted by such
Indemnitee prior to such amendment, alteration or repeal. To the extent that a
change in the TBCA, whether by statute or judicial decision, permits greater
indemnification, advancement of expenses or contribution than would be afforded
currently under the Articles, Bylaws and this Agreement, it is the intent of the
parties hereto that Indemnitee enjoy by this Agreement the greater benefits so
afforded by such change. No right or remedy herein conferred is intended to be
exclusive of any other right or remedy, and every other right and remedy will be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, will not prevent the
concurrent assertion or employment of any other right or remedy.

      9.2 SUBROGATION. In the event of any payment by the Company under this
Agreement, the Company will be subrogated to the extent of such payment to all
of the rights of recovery of Indemnitee with respect thereto and Indemnitee will
execute all papers required and take all action necessary to secure such rights,
including execution of such documents as are necessary to enable the Company to
bring suit to enforce such rights (it being understood that all of Indemnitee's
reasonable Expenses related thereto will be borne by the Company).

      9.3 NO DUPLICATIVE PAYMENTS. The Company will not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable (or any Expense
for which advancement is provided) hereunder if and to the extent that
Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise. The Company's obligation to indemnify
or advance Expenses hereunder to Indemnitee in respect of Proceedings relating
to Indemnitee's service at the request of the Company as a director, officer,
employee, partner, member, manager, trustee, fiduciary or agent of any other
Enterprise will be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from such other Enterprise.

      9.4 MORE FAVORABLE TERMS. In the event the Company enters into an
indemnification agreement with another officer or director, as the case may be,
containing terms more favorable to the indemnitee thereof than the terms
contained herein (and absent special circumstances justifying such more
favorable terms), Indemnitee will be afforded the benefit of such more favorable
terms and such more favorable terms will be deemed incorporated by reference
herein as if set forth in full herein. As promptly as practicable following the
execution

                                       14
<PAGE>

thereof, the Company will (a) send a copy of the agreement containing more
favorable terms to Indemnitee, and (b) prepare, execute and deliver to
Indemnitee an amendment to this Agreement containing such more favorable terms.

                                   ARTICLE 10
                             DEFENSE OF PROCEEDINGS

      10.1 COMPANY ASSUMING THE DEFENSE. Subject to Section 10.3 below, in the
event the Company is obligated to pay in advance the Expenses of any Proceeding
pursuant to Article 4, the Company will be entitled, by written notice to
Indemnitee, to assume the defense of such Proceeding, with counsel approved by
Indemnitee, which approval will not be unreasonably withheld. The Company will
identify the counsel it proposes to employ in connection with such defense as
part of the written notice sent to Indemnitee notifying Indemnitee of the
Company's election to assume such defense, and Indemnitee will be required,
within ten days following Indemnitee's receipt of such notice, to inform the
Company of its approval of such counsel or, if it has objections, the reasons
therefor. If such objections cannot be resolved by the parties, the Company will
identify alternative counsel, which counsel will also be subject to approval by
Indemnitee in accordance with the procedure described in the prior sentence.

      10.2 RIGHT OF INDEMNITEE TO EMPLOY COUNSEL. Following approval of counsel
by Indemnitee pursuant to Section 10.1 and retention of such counsel by the
Company, the Company will not be liable to Indemnitee under this Agreement for
any fees and expenses of counsel subsequently incurred by Indemnitee with
respect to the same Proceeding; provided, however, that (a) Indemnitee has the
right to employ counsel in any such Proceeding at Indemnitee's expense and (b)
the Company will be required to pay the fees and expenses of Indemnitee's
counsel if (i) the employment of counsel by Indemnitee has been previously
authorized by the Company, (ii) Indemnitee reasonably concludes that there is an
actual or potential conflict between the Company (or any other person or persons
included in a joint defense) and Indemnitee in the conduct of such defense or
representation by such counsel retained by the Company or (iii) the Company does
not continue to retain the counsel approved by Indemnitee.

      10.3 COMPANY NOT ENTITLED TO ASSUME DEFENSE. Notwithstanding Section 10.1,
the Company will not be entitled to assume the defense of any Proceeding brought
by or on behalf of the Company or any Proceeding as to which Indemnitee has
reasonably made the conclusion provided for in Section 10.2(b)(ii).

                                   ARTICLE 11
                                   SETTLEMENT

      11.1 COMPANY'S PRIOR CONSENT REQUIRED. Notwithstanding anything in this
Agreement to the contrary, the Company will have no obligation to indemnify
Indemnitee under this Agreement for any amounts paid in settlement of any
Proceeding effected without the Company's prior written consent.

      11.2 WHEN INDEMNITEE'S PRIOR CONSENT REQUIRED. The Company will not,
without the prior written consent of Indemnitee, consent to the entry of any
judgment against Indemnitee

                                       15
<PAGE>

or enter into any settlement or compromise which (i) includes an admission of
fault of Indemnitee, any non-monetary remedy imposed on Indemnitee or a Loss for
which Indemnitee is not wholly indemnified hereunder or (ii) with respect to any
Proceeding with respect to which Indemnitee may be or is made a party or a
participant or may be or is otherwise entitled to seek indemnification
hereunder, does not include, as an unconditional term thereof, the full release
of Indemnitee from all liability in respect of such Proceeding, which release
will be in form and substance reasonably satisfactory to Indemnitee. Neither the
Company nor Indemnitee will unreasonably withhold its consent to any proposed
settlement; provided, however, Indemnitee may withhold consent to any settlement
that does not provide a full and unconditional release of Indemnitee from all
liability in respect of such Proceeding.

                                   ARTICLE 12
                             ESTABLISHMENT OF TRUST

      12.1 REQUEST BY INDEMNITEE. In the event a Change of Control occurs after
the date of this Agreement, the Company will be required, upon receipt of a
written request from Indemnitee following initiation of a Proceeding for which
Indemnitee reasonably believes that he or she may be entitled to indemnification
or contribution by the Company under this Agreement, the Articles, the Bylaws or
otherwise, to create a trust (the "TRUST") for the benefit of the Indemnitee.
The trustee of the Trust will be selected by the Indemnitee.

      12.2 FUNDING OBLIGATIONS. Following a request from Indemnitee pursuant to
Section 12.1 to establish the Trust with respect to a particular Proceeding, the
Company will, from time to time upon written request of Indemnitee, fund the
Trust in an amount sufficient to satisfy any and all Expenses and Losses
reasonably anticipated at the time of such request to be incurred by or on
behalf of Indemnitee in connection with such Proceeding, provided, however, that
the aggregate amount that the Company may be required to fund in the Trust with
respect to such Proceeding will not, in any event, exceed (i) $50,000 if the
Company's securities are not listed on any of a national securities exchange or
the Nasdaq National Market or Nasdaq Small Cap Market, and the Company does not
have any securities registered pursuant to Section 12 of the Exchange Act, and
(ii) $200,000 if the Company's securities are listed on a national securities
exchange or the Nasdaq National Market or Nasdaq Small Cap Market or the Company
has securities registered pursuant to Section 12 of the Exchange Act; and,
provided, further, that the aggregate amount that the Company may be required to
fund in all Trusts with respect to all Proceedings for which the Company may be
required to indemnify Indemnitee or make contribution with respect to
Indemnittee will not, in any event, exceed (i) $50,000 if the Company's
securities are not listed on any of a national securities exchange or the Nasdaq
National Market or Nasdaq Small Cap Market, and the Company does not have any
securities registered pursuant to Section 12 of the Exchange Act, and (ii)
$200,000 if the Company's securities are listed on a national securities
exchange or the Nasdaq National Market or Nasdaq Small Cap Market or the Company
has securities registered pursuant to Section 12 of the Exchange Act. The amount
or amounts to be deposited in the Trust pursuant to the foregoing obligation
will be determined by mutual agreement of Indemnitee and the Company, and if
they are unable to reach such agreement, then by Independent Counsel (selected
as provided in Section 6.3). The terms of the Trust will provide that (i) except
upon prior written consent of Indemnitee, the Trust will not be revoked or the
principal thereof invaded, (ii) the trustee will advance to Indemnitee, within
fifteen (15) business days of a written request by Indemnitee, any

                                       16
<PAGE>

and all Expenses (and Indemnitee hereby agrees to execute the Undertaking
contemplated by Section 4.1, if required at the time any request for an Expense
Advance is submitted to the trustee), (iii) the Trust will continue to be funded
by the Company in accordance with the funding obligations set forth in this
Section 12.2, (iv) the trustee will promptly pay to Indemnitee any amounts to
which Indemnitee is entitled to indemnification or contribution pursuant to this
Agreement or otherwise and (v) all unexpended funds in the Trust will revert to
the Company upon a final determination by the person, persons or entity making a
determination of entitlement to indemnification or contribution pursuant to
Article 6 or a court or arbitrator presiding over an action commenced pursuant
to Article 8, as the case may be, that Indemnitee has been fully indemnified (or
all amounts to be contributed by the Company have been contributed) with respect
to the Proceeding giving rise to the establishment of the Trust.

                                   ARTICLE 13
                              DURATION OF AGREEMENT

      13.1 DURATION OF AGREEMENT. This Agreement will continue until and
terminate upon the latest of (a) the statute of limitations applicable to any
claim that could be asserted against an Indemnitee with respect to which
Indemnitee may be entitled to indemnification and/or an Expense Advance under
this Agreement, (b) ten years after the date that Indemnitee has ceased to serve
as a director or officer of the Company or as a director, officer, employee,
partner, member, manager, fiduciary or agent of any other Enterprise which
Indemnitee served at the request of the Company, or (c) if, at the later of the
dates referred to in (a) and (b) above, there is pending a Proceeding in respect
of which Indemnitee is granted rights of indemnification or the right to an
Expense Advance under this Agreement or a Proceeding commenced by Indemnitee
pursuant to Article 8 of this Agreement, one year after the final termination of
such Proceeding, including any and all appeals.

                                   ARTICLE 14
                                  MISCELLANEOUS

      14.1 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties in respect of the subject matter hereof and
supersedes all prior understandings, agreements or representations by or among
the parties, written or oral, to the extent they relate in any way to the
subject matter hereof; provided, however, it is agreed that the provisions
contained in this Agreement are a supplement to, and not a substitute for, any
provisions regarding the same subject matter contained in the Articles, the
Bylaws and any employment or similar agreement between the parties.

      14.2 ASSIGNMENT; BINDING EFFECT; THIRD PARTY BENEFICIARIES. No party may
assign either this Agreement or any of its rights, interests or obligations
hereunder without the prior written approval of the other party; provided,
however, that the Company may assign all (but not less than all) of its rights,
obligations and interests hereunder to any direct or indirect successor to all
or substantially all of the business or assets of the Company by purchase,
merger, consolidation or otherwise and will cause such successor to be bound by
and expressly assume the terms and provisions hereof. All of the terms,
agreements, covenants, representations, warranties and conditions of this
Agreement are binding upon, and inure to the benefit of and are enforceable by,
the parties and their respective successors, permitted assigns, heirs, executors

                                       17
<PAGE>

and personal and legal representatives. There are no third party beneficiaries
having rights under or with respect to this Agreement.

      14.3 NOTICES. All notices, requests and other communications provided for
or permitted to be given under this Agreement must be in writing and be given by
personal delivery, by certified or registered United States mail (postage
prepaid, return receipt requested), by a nationally recognized overnight
delivery service for next day delivery, or by facsimile transmission, as follows
(or to such other address as any party may give in a notice given in accordance
with the provisions hereof):

        IF TO THE COMPANY:

        BioNumerik Pharmaceuticals, Inc.
        8122 Datapoint Drive, Suite 1250
        San Antonio, Texas 78229
                 Attention: Chief Executive Officer
                 Facsimile: 210.614.0643

        WITH A COPY (WHICH WILL NOT CONSTITUTE NOTICE) TO:

        BioNumerik Pharmaceuticals, Inc.
        8122 Datapoint Drive, Suite 1250
        San Antonio, Texas 78229
                 Attention: Vice President, Administration & General Counsel
                 Facsimile: 210.614.9439

        IF TO INDEMNITEE:

        [Name]
        [Address]
        [City, State, Zip]
                 Facsimile:

All notices, requests or other communications will be effective and deemed given
only as follows: (i) if given by personal delivery, upon such personal delivery,
(ii) if sent by certified or registered mail, on the fifth business day after
being deposited in the United States mail, (iii) if sent for next day delivery
by overnight delivery service, on the date of delivery as confirmed by written
confirmation of delivery, (iv) if sent by facsimile, upon the transmitter's
confirmation of receipt of such facsimile transmission, except that if such
confirmation is received after 5:00 p.m. (in the recipient's time zone) on a
business day, or is received on a day that is not a business day, then such
notice, request or communication will not be deemed effective or given until the
next succeeding business day. Notices, requests and other communications sent in
any other manner, including by electronic mail, will not be effective.

                                       18
<PAGE>

      14.4 SPECIFIC PERFORMANCE; REMEDIES. Each party acknowledges and agrees
that the other party would be damaged irreparably if any provision of this
Agreement were not performed in accordance with its specific terms or were
otherwise breached. Accordingly, the parties will be entitled to an injunction
or injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and its provisions in any action or
proceeding instituted in any court of the United States or any state thereof
having jurisdiction over the parties and the matter, in addition to any other
remedy to which they may be entitled, at law or in equity. Except as expressly
provided herein, the rights, obligations and remedies created by this Agreement
are cumulative and in addition to any other rights, obligations or remedies
otherwise available at law or in equity. Except as expressly provided herein,
nothing herein will be considered an election of remedies.

      14.5 SUBMISSION TO JURISDICTION. Any Proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement may only be brought in a district court of the State of Texas sitting
in Bexar County, which will be the exclusive and only proper forum for
adjudicating such Proceeding, and each party consents to the exclusive
jurisdiction and venue of such court (and of the appropriate appellate courts
therefrom) in any such Proceeding and irrevocably waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of the venue of any such Proceeding in any such court or that any such
Proceeding brought in any such court has been brought in an inconvenient forum.
Process in any such action, suit or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court.

      14.6 HEADINGS. The article and section headings contained in this
Agreement are inserted for convenience only and will not affect in any way the
meaning or interpretation of this Agreement.

      14.7 GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of Texas, without giving effect to any
choice of law principles.

      14.8 AMENDMENT. This Agreement may not be amended or modified except by a
writing signed by all of the parties.

      14.9 EXTENSIONS; WAIVERS. Any party may, for itself only, (i) extend the
time for the performance of any of the obligations of any other party under this
Agreement, (ii) waive any inaccuracies in the representations and warranties of
any other party contained herein or in any document delivered pursuant hereto
and (iii) waive compliance with any of the agreements or conditions for the
benefit of such party contained herein. Any such extension or waiver will be
valid only if set forth in a writing signed by the party to be bound thereby. No
waiver by any party of any default, misrepresentation or breach of warranty or
covenant hereunder, whether intentional or not, may be deemed to extend to any
prior or subsequent default, misrepresentation or breach of warranty or covenant
hereunder or affect in any way any rights arising because of any prior or
subsequent such occurrence. Neither the failure nor any delay on the part of any
party to exercise any right or remedy under this Agreement will operate as a
waiver thereof, nor will any single or partial exercise of any right or remedy
preclude any other or further exercise of the same or of any other right or
remedy.

                                       19
<PAGE>

      14.10 SEVERABILITY. The provisions of this Agreement will be deemed
severable and the invalidity or unenforceability of any provision will not
affect the validity or enforceability of the other provisions hereof; provided
that if any provision of this Agreement, as applied to any party or to any
circumstance, is judicially determined not to be enforceable in accordance with
its terms, the parties agree that the court judicially making such determination
may modify the provision in a manner consistent with its objectives such that it
is enforceable, and/or to delete specific words or phrases, and in its modified
form, such provision will then be enforceable and will be enforced.

      14.11 COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in two
or more counterparts, each of which will be deemed an original but all of which
together will constitute one and the same instrument. This Agreement will become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties, which delivery may be made by exchange of
copies of the signature page by facsimile transmission. For purposes of
determining whether a party has signed this Agreement or any document
contemplated hereby or any amendment or waiver hereof, only a handwritten
signature on a paper document or a facsimile transmission of a handwritten
original signature will constitute a signature, notwithstanding any law relating
to or enabling the creation, execution or delivery of any contract or signature
by electronic means.

      14.12 CONSTRUCTION. This Agreement has been freely and fairly negotiated
among the parties. If an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the parties
and no presumption or burden of proof will arise favoring or disfavoring any
party because of the authorship of any provision of this Agreement. Any
reference to any law will be deemed also to refer to such law as amended and all
rules and regulations promulgated thereunder, unless the context requires
otherwise. The words "include," "includes," and "including" will be deemed to be
followed by "without limitation." Pronouns in masculine, feminine, and neuter
genders will be construed to include any other gender, and words in the singular
form will be construed to include the plural and vice versa, unless the context
otherwise requires. The words "this Agreement," "herein," "hereof," "hereby,"
"hereunder," and words of similar import refer to this Agreement as a whole and
not to any particular subdivision unless expressly so limited. The parties
intend that each representation, warranty, and covenant contained herein will
have independent significance. If any party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty or covenant relating to the same subject
matter (regardless of the relative levels of specificity) which the party has
not breached will not detract from or mitigate the fact that the party is in
breach of the first representation, warranty, or covenant. Time is of the
essence in the performance of this Agreement.

                            [Signature page follows]

                                       20
<PAGE>

                  [SIGNATURE PAGE TO INDEMNIFICATION AGREEMENT]

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

                                        BIONUMERIK PHARMACEUTICALS, INC.

                                        By:_____________________________________
                                           Name:  Frederick H. Hausheer, M.D.
                                           Title: Chief Executive Officer

                                        INDEMNITEE

                                        ___________________________________
                                        Signature

                                        ___________________________________
                                        Print Name

                                       21<PAGE>
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTION.

                                                                   EXHIBIT 10.13

                             COLLABORATION AGREEMENT

                                     Between

                          The Johns Hopkins University
                               Baltimore, MD 21287

                                       and

                        BioNumerik Pharmaceuticals, Inc.
                              San Antonio, TX 78229

<PAGE>

                             COLLABORATION AGREEMENT

THIS COLLABORATION AGREEMENT (this "Agreement") is entered into effective as of
November 19, 2001 by and between BioNumerik Pharmaceuticals, Inc., a Texas
corporation ("BioNumerik" or the "Company") and The Johns Hopkins University, a
Maryland corporation (the "Institution"). BioNumerik and the Institution,
intending to be legally bound, agree as follows:

WHEREAS, the Institution and BioNumerik have previously established a joint
research program in which BioNumerik and the Institution are collaborating on
the discovery and development of novel therapeutic agents that modulate DNA
methylation in cancer.

WHEREAS, the Institution and BioNumerik wish to continue their joint research
program and collaboration on the discovery and development of novel therapeutic
agents that modulate DNA methylation in cancer.

NOW, THEREFORE, the parties hereto agree as follows:

1. TERM OF RESEARCH PROGRAM. Subject to the provisions for termination
hereinafter provided, the term of the research program to be conducted pursuant
to this Agreement (the "Program") shall be for a period (the "Program Term")
commencing November 19, 2001 and terminating at the close of business on
November 19, 2006.

2. PRINCIPAL INVESTIGATORS. For as long as he remains at the Institution, Dr.
Stephen Baylin shall direct and act as principal investigator for the
Institution's portion of the Program. During the Program Term, Dr. Frederick H.
Hausheer shall direct and act as principal investigator for the BioNumerik
portion of the Program.

3. SCOPE OF THE PROGRAM.

      (a) Year One Program Objectives.

The overall Program will be aimed at the discovery and development of novel
therapeutic agents that modulate DNA methylation in cancer and possibly have
therapeutic benefit in other areas. The focus of the Program will be to
synthesize, patent and test novel chemical entities which target cancer cells
with altered DNA methylation. Dr. Baylin and Dr. Hausheer shall work together to
develop and agree upon a definitive outline of the work to be conducted during
the first year of the Program. Thereafter, the Program will be conducted
pursuant to a definitive annual research plan to be agreed upon by the
Institution and BioNumerik at least 30 days before the commencement of each
future year of the Program.

It is intended that the Program research will include the following:

      i)   BioNumerik will endeavor to identify and synthesize molecules,
which may be patentable or unpatentable, for the purpose of identifying and
meeting molecular requirements for drug modulation of DNA methylation events.

<PAGE>

      ii)  Dr. Baylin and the Institution will focus laboratory efforts and Dr.
Baylin's personal expertise on the elucidation and clarification of key
mechanism(s) for optimal therapeutic targeting in cancer cells which involve
aberrant DNA methylation.

      iii) BioNumerik will work to develop and refine robust and detailed
atomistic and chemical structural models and perform physics-based computer
simulations that describe the biological, thermodynamic, structural and
biochemical mechanisms that are the focus of the laboratory work of the
Institution under the Program and to use these models and information in the
design and synthesis of its new chemical entities as described above.

      iv)  The Institution will conduct in vitro testing of the new compounds
discovered and synthesized by BioNumerik for their ability to influence aberrant
DNA methylation with a view to identifying the most potent and desirable
potential therapeutic entity to advance to clinical trials in humans.

4. ADDITIONAL BIONUMERIK RESPONSIBILITIES.

      (a) The work to be conducted by the Institution under this Agreement will
be funded out of the [**] amounts paid by BioNumerik to Institution pursuant to
the Joint Collaboration, Licensing, and Clinical Trials Agreement, dated as of
February 9, 2000, between BioNumerik and The Johns Hopkins University.

      (b) BioNumerik will also undertake sole responsibility for endeavoring to
obtain patent protection (including payment of future patent filing fees) on new
chemical entities which are developed under the Program and which are identified
as either joint inventions or sole inventions of BioNumerik, in the United
States and such other countries in the remainder of the world as BioNumerik may
determine. The Institution will cooperate with BioNumerik in providing such
information and assistance, and executing such documents and instruments, as may
be requested by BioNumerik from time to time in connection with prosecution of
patents relating to the joint Inventions (as hereinafter defined). The
Institution will take responsibility for obtaining U.S. and international patent
protection for all sole Institution inventions.

      (c) BioNumerik will be responsible for supporting the preclinical and
clinical development of a new drug which is intended for possible human
treatment in the focus area of the Program. As described in Section 9, the
Institution will have a right of first offer to take the selected novel
therapeutic entity into clinical trials.

5. PUBLICATION RIGHTS.

Dr. Baylin and the Institution shall have rights to publish the results of the
collaborative research work conducted pursuant to the Program that are
consistent with the rights normally associated with collaborative academic and
industry research, subject, in all cases, to prepublication notice sent to
BioNumerik at least 30 days in advance of publication submission and
prepublication review by BioNumerik. No publication of any compounds, structures
or other information which is Confidential Information (as defined below) of
BioNumerik will be made by the Institution or

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>

Dr. Baylin without the prior written consent of BioNumerik (which consent will
not be unreasonably withheld and in any event will not be withheld longer than
90 days after receipt of a manuscript of the proposed publication). Dr. Baylin,
the Institution and BioNumerik further agree to delay publication for up to 90
days when requested by BioNumerik to permit patent applications to be filed or
where otherwise requested by BioNumerik to protect business strategy or
intellectual property rights. Authorship on any specific publication resulting
from the Program will be determined jointly by Dr. Baylin and Dr. Hausheer.

6. CONFIDENTIALITY.

Each party to this Agreement (a "receiving party") who receives Confidential
Information (as defined below) disclosed by the other party to this Agreement (a
"disclosing party") shall not, during the term of this Agreement and for five
(5) years after termination of this Agreement, make use of or disclose, without
the prior written consent of the disclosing party, Confidential Information
disclosed by the disclosing party or any of its Affiliates. Each receiving party
further agrees that it will return to each disclosing party all written
materials in its possession embodying Confidential Information of such
disclosing party. For purposes of this Agreement, "Confidential Information"
includes intellectual property or other information obtained by a receiving
party from a disclosing party and which is marked as confidential or which the
disclosing party could reasonably be expected to desire be held in confidence,
or the disclosure of which would likely be embarrassing, detrimental or
disadvantageous to the disclosing party or its Affiliates. Confidential
Information, however, shall not include information (a) which is, at the time in
question, in the public domain through no wrongful act of the receiving party,
(b) which is later disclosed to a receiving party by one not under obligations
of confidentiality to the disclosing party, or (c) which is required by court or
governmental order, to be disclosed. Each of the Institution and Dr. Baylin
recognizes and agrees that BioNumerik shall at all times during this Agreement
and after termination of this Agreement retain ownership of its patents,
copyrights, trade secrets and other proprietary information and neither Dr.
Baylin nor the Institution shall have any right to use or disclose any such
patents, copyrights, trade secrets or other proprietary information unless
consented or agreed to in writing by BioNumerik. BioNumerik recognizes and
agrees that the Institution shall at all times during this Agreement and after
termination of this Agreement retain ownership of its patents, copyrights, trade
secrets and other proprietary information and BioNumerik shall not have any
right to use or disclose any such patents, copyrights, trade secrets or other
proprietary information except as provided herein or in other written agreements
with the Institution.

7. REPORTING AND RECORD KEEPING.

Written progress reports will be exchanged by the parties at least twice a year.
Interim data will be provided, reviewed and jointly discussed by the parties in
the interim. It is agreed that each party hereto and its authorized
representative(s), and regulatory authorities to the extent required by law,
may, during regular business hours, arrange in advance with the other party to:
(1) examine and inspect such other party's facilities required for performance
of the Program; and (2) inspect and copy on a confidential basis all data and
work products of such party relating to the Program. Each party shall prepare
and maintain complete and accurate written records, accounts, reports and data
of the research conducted by it under the Program.

<PAGE>

8. INTELLECTUAL PROPERTY.

      (a) Inventions. For purposes of this Agreement, " Inventions" shall mean
any invention, method or discovery, or improvements, whether patentable or not,
conceived or reduced to practice during and as a part of the research performed
pursuant to or in accordance with the Program (i) solely by Dr. Baylin and/or
the Institution's staff or employees supervised by him, or (ii) jointly by such
an individual or individuals with one or more employees of BioNumerik. All such
Inventions developed solely by Dr. Baylin and/or the Institution's staff or
employees supervised by him shall be owned by the Institution, subject to the
licensing provisions set forth in this Section 8. All jointly developed
Inventions shall be owned jointly by the Institution and BioNumerik, subject to
the licensing provisions set forth in this Section 8. All inventions and
discoveries arising out of the Program that are developed solely by BioNumerik
shall be owned solely by BioNumerik.

      (b) Grant of License. The Institution will grant to BioNumerik an
exclusive, world-wide, royalty bearing license, which license (the "License
Agreement") will be in the form contained in Exhibit A hereto, for both sole and
joint rights of the Institution with respect to Inventions (including the right
to grant sublicenses). Such grant is subject to the retained right of the
Institution to make, have made, provide and use for its and The Johns Hopkins
Health System's non-profit internal research purposes Inventions. Should any
federal grant money be used to develop Inventions, this grant shall also be
subject to the rights retained by the United States Government under P.L.
96-517, as amended by P.L. 98-620. The Institution will sign any amendments to
the License Agreement as may be necessary to add any Invention for inclusion in
the License Agreement after the Institution and BioNumerik have agreed upon a
royalty rate for the Invention, which royalty rate will be within the ranges
contained in Exhibit A. If no amendments have been made to the attached License
Agreement within (6) six months of the expiration of this Collaboration
Agreement, the License Agreement will terminate.

The Institution agrees to give BioNumerik notice prior to using any federal
grant money in connection with the Program. The Institution further agrees to
use reasonable measures to protect trade secrets and other intellectual property
rights that are covered by the Institution's retained right contained in this
Section 8(b).

9. RIGHT OF FIRST OFFER TO CONDUCT CLINICAL TRIALS.

      BioNumerik hereby grants the Institution a first right to negotiate to
conduct evaluative clinical trials of drugs developed by BioNumerik under the
Program (the "Trials"). The right granted under this Section 9 will expire [**]
days after the Institution's receipt of a written notice identifying the drug
developed by BioNumerik under the Program and containing an initial draft of the
proposed commercial investigational new drug application ("IND") to be prepared
and filed by BioNumerik with the Food and Drug Administration. In the event the
Institution and BioNumerik are unable to agree upon the material terms of a
clinical trials agreement within an additional thirty (30) day negotiation
period, the Institution's right to conduct clinical trials as provided herein
shall terminate with respect to that drug. In connection with any agreement
entered into with respect to the Trials, BioNumerik agrees to reimburse the
Institution's direct and indirect costs, provided, however, that the Institution
agrees that total indirect costs for such trials shall not exceed [**] of total
direct costs for off-campus based studies.

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

<PAGE>

10. NONCOMPETITION.

      The Institution represents to BioNumerik that Dr. Baylin is not and that
he will not during the term of the Program conduct research with any party other
than BioNumerik on compounds or technology that would be included within the
area of the Program. Neither Dr. Baylin nor the Institution shall use any
information, testing data or compound data relating to BioNumerik compounds in
any other research sponsored by commercial entities unless consented to by
BioNumerik in writing. In addition, the Institution recognizes and agrees that,
except as expressly provided herein or in other written agreements between
BioNumerik and the Institution, BioNumerik shall have no obligation to pay Dr.
Baylin or the Institution royalties or any other payments with respect to sales
or other revenues or proceeds received by BioNumerik.

11. PROGRAM DURATION / TERMINATION.

      The Program will have a term of five years commencing and ending as
provided in Section 1 of this Agreement. Notwithstanding any other provision of
this Agreement, either party hereto shall have the right at its option to
terminate the Program at any time after year one of the Program by giving 90
days prior written notice to the other party. In the event of termination of the
Program by BioNumerik or the Institution, all rights and duties arising under
the Program and Sections 1, 2, 3 and 4 of this Agreement shall cease as of the
date of such termination. All other provisions of this Agreement, including
without limitation the rights and obligations under Section 8 hereof, shall
survive and continue after any such termination in accordance with their terms.

12. CONSTRUCTION. Each party to this Agreement has had the opportunity to review
this Agreement with its legal counsel. This Agreement shall not be construed or
interpreted against any party on the basis that such party drafted or authored a
particular provision, parts of or the entirety of this Agreement.

13. ASSIGNMENT. This Agreement and the rights and obligations hereunder may not
be assigned by either party without the prior consent of the other party;
provided, however, that BioNumerik may assign this Agreement without consent to
any entity which acquires all or substantially all of its assets or business,
whether by merger or otherwise.

14. NOTICES. Any notice, consent or approval required under this Agreement shall
be in writing sent by registered or certified airmail, postage prepaid, or by
fax or telex (confirmed by such registered or certified mail) and addressed as
follows:

If to the Institution: Michael B. Amey
                       Assistant Dean for Research Administration
                       The Johns Hopkins University School of Medicine
                       2024 E. Monument Street, Suite 2-100, Baltimore, MD 21287

<PAGE>

with a copy to:        Stephen Baylin, M.D.
                       The Johns Hopkins Oncology Center
                       410 North Bond Street
                       Baltimore, MD 21231

If to BioNumerik:      Frederick H. Hausheer, M.D.
                       8122 Datapoint Drive, Suite 1250
                       San Antonio, TX 78229

      All notices shall be deemed to be effective three business days after the
date of mailing. In case any party changes its address at which notice is to be
received, written notice of such change shall be given without delay to the
other party.

15. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding among the parties hereto as to the subject matter hereof and has
priority over all documents, verbal consents or understandings made between the
parties hereto before the conclusion of this Agreement with respect to the
subject matter hereof. None of the terms of this Agreement shall be amended or
modified except in writing signed by the parties hereto. In addition, that
certain Joint Collaboration, Licensing and Clinical Trials Agreement, dated as
of February 9, 2000, between the Institution and BioNumerik; and that certain
Master Clinical Trial Research Agreement, dated as of April 3, 1995, between the
Institution and BioNumerik shall continue in full force and effect in accordance
with their terms.

16. WAIVERS. A waiver by any party of any term or condition of this Agreement in
any one instance shall not be deemed or construed to be a waiver of such term or
condition for any similar instance in the future or of any subsequent breach
hereof.

17. SEVERABILITY. Should any provision of this Agreement be held to be invalid,
unenforceable, or against public policy, the remaining provisions hereof shall
not be affected thereby. In such event, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible with respect to those provisions which were held
to be invalid, unenforceable or against public policy.

18. UNIVERSITY NAME. BioNumerik shall not use the name, likeness, or logo of the
Johns Hopkins University; its Schools, Divisions, Departments, or Centers; The
Johns Hopkins Hospital and Health System; or Johns Hopkins' faculty, employees,
students, or trustees in any advertising, promotional, or sales material,
whether oral or written, without the prior consent of the Institution or unless
otherwise required by law, provided that BioNumerik may list the name of
Institution and the existence of the Research Agreement and the License
Agreement on BioNumerik's web site and in other general informational materials.

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of
November 19, 2001.

<PAGE>

                               THE JOHNS HOPKINS UNIVERSITY

                               By:    /s/ MICHAEL B. AMEY
                                      ------------------------------------------
                                      Michael B. Amey
                               Title: Assistant Dean for Research Administration

                               BIONUMERIK PHARMACEUTICALS, INC.

                               By:    /s/ FREDERICK H. HAUSHEER
                                      ------------------------------------------
                                      Frederick H. Hausheer, M.D.
                                      Chief Executive Officer

READ AND UNDERSTOOD:

/s/ STEPHEN BAYLIN
-------------------------------
Stephen Baylin, M.D.
<PAGE>

                                                                  EXHIBIT "A" TO
                                                         COLLABORATION AGREEMENT

                          EXCLUSIVE LICENSE AGREEMENT

                                     BETWEEN

                          THE JOHNS HOPKINS UNIVERSITY

                                        &

                        BIONUMERIK PHARMACEUTICALS, INC.

<PAGE>

                                LICENSE AGREEMENT

      THIS LICENSE AGREEMENT (the "Agreement") is entered into by and between
THE JOHNS HOPKINS UNIVERSITY, a Maryland corporation having an address at 111
Market Place, Suite 906, Baltimore, MD 21202 ("JHU") and BioNumerik
Pharmaceuticals, Inc, a Texas corporation having an address of 8122 Datapoint
Drive, Suite 1250, San Antonio, TX 78229 ("Company"), with respect to the
following:

                                    RECITALS

      WHEREAS, as a center for research and education, JHU is interested in
licensing PATENT RIGHTS (hereinafter defined) in a manner that will benefit the
public by facilitating the distribution of useful products and the utilization
of new methods, but is without capacity to commercially develop, manufacture,
and distribute any such products or methods; and

      WHEREAS, a course of research to discover and develop therapeutic agents
that modulate DNA methylation in cancer, funded at least in part by Company, has
been and will be conducted by Dr. Stephen Baylin and/or JHU's staff or employees
supervised by Dr. Baylin (hereinafter "JHU Inventors") in collaboration with
Company; and

      WHEREAS, JHU will acquire, through assignment of rights, title and
interest, with the exception of certain retained rights by the United States
government, an interest in any Inventions made by JHU Inventors during such
course of research; and

      WHEREAS, Company may desire to commercially develop, manufacture, use and
distribute such Inventions throughout the world;

      NOW THEREFORE, in consideration of the premises and the mutual promises
and covenants contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

      All references to particular Exhibits and Articles shall mean the Exhibits
to, and Articles of, this Agreement, unless otherwise specified. For the
purposes of this Agreement and the Exhibits hereto, the following words and
phrases shall have the following meanings:

      1.1 "AFFILIATED COMPANY" as used herein in either singular or plural shall
mean any corporation, company, partnership, joint venture or other entity, which
controls, is controlled by or is under common control with Company. For purposes
of this Paragraph 1.1, control shall mean the direct or indirect ownership of a
majority of the voting shares or the direct or indirect entitlement to appoint a
majority of the directors of the other entity.

      1.2 "BIOLOGICAL MATERIAL" shall mean materials in JHU's possession that
have been developed solely or jointly by JHU Inventors of PATENT RIGHTS and are
listed in Exhibit C, as amended from time to time by the parties hereto and any
functional equivalents, portions, progeny, derivatives or modifications thereof
made by Company.

<PAGE>

      1.3 "EFFECTIVE DATE" of this License Agreement shall mean the date that
Company provides written Notice of its intent to add an invention made under the
RESEARCH AGREEMENT to this License Agreement by first Amendment to this
Agreement (Exhibit D). This Notice must be given in duplicate to The Johns
Hopkins School of Medicine (JHUSOM) Office of Technology Licensing (OTL) and the
JHUSOM Office of Research Administration (ORA). This Notice will be binding.

      1.4 "EXCLUSIVE LICENSE" shall mean a grant by JHU to Company of its entire
right and interest in the PATENT RIGHTS subject to rights retained by the United
States government in accordance with P.L. 96-517, as amended by P.L. 98-620, and
subject to the retained right of JHU to make, have made, provide and use for its
and The Johns Hopkins Health Systems' non-profit internal research purposes
LICENSED PRODUCT and LICENSED SERVICE, including the ability, following notice
to Company, to distribute any biological material for nonprofit academic
research use to non-commercial entities as is customary in the scientific
community.

      1.5 "INVENTIONS" shall mean "Inventions" as defined in the RESEARCH
AGREEMENT.

      1.6 "LICENSED FIELD" shall mean all fields of potential medical and
non-medical uses for the inventions.

      1.7 "LICENSED PRODUCT" as used herein in either singular or plural shall
mean any material, composition, drug, or other product, or any process or
method, the manufacture, use or sale of which would constitute, but for the
license granted to Company pursuant to this Agreement, an infringement of a
claim of PATENT RIGHTS (infringement shall include, but is not limited to,
direct, contributory, or inducement to infringe) or is, incorporates or uses a
BIOLOGICAL MATERIAL in its manufacture.

      1.8 "LICENSED SERVICE" as used herein in either singular or plural shall
mean the performance on behalf of a third party of any method or the manufacture
of any product or the use of any product or composition which would constitute,
but for the license granted to Company pursuant to this Agreement, an
infringement of a claim of the PATENT RIGHTS, (infringement shall include, but
not be limited to, direct, contributory or inducement to infringe); or
incorporates or uses a BIOLOGICAL MATERIAL.

      1.9 "NET SALES" shall mean gross sales revenues and fees billed by Company
or AFFILIATED COMPANY from the sale of LICENSED PRODUCT less trade discounts
allowed, refunds, rebates, returns and recalls, transportation charges, duties
and taxes (including sales taxes). In the event that Company or AFFILIATED
COMPANY sells a LICENSED PRODUCT in combination with other ingredients or
substances or as part of a kit, the NET SALES for purposes of royalty payments
shall be based on the sales revenues and fees received from the entire
combination or kit.

      1.10 "NET SERVICE REVENUES" shall mean gross service revenues and fees
billed by Company or AFFILIATED COMPANY for the performance of LICENSED SERVICE
less sales and/or use taxes imposed upon and with specific reference to the
LICENSED SERVICE. In the event that Company or AFFILIATED COMPANY sells a
LICENSED SERVICE in combination with other services or substances or as part of
a kit, the NET SERVICE

<PAGE>

REVENUES for purposes of royalty payments shall be based on the sales revenues
and fees received from the entire combination.

      1.11 "PATENT RIGHTS" shall mean patents and patent applications listed on
Exhibit D hereto, as amended from time to time by mutual consent of the parties
hereto, and all continuations, divisions, and reissues based thereof, and any
corresponding foreign patent applications, and any patents or other equivalent
foreign PATENT RIGHTS issuing, granted or registered thereon. It is understood
that inventions and discoveries arising out of the Program (as defined in the
Research Agreement) that are developed solely by BioNumerik shall be owned
solely by BioNumerik and are not included in Patent Rights.

      1.12 "RESEARCH AGREEMENT" shall mean the Collaboration Agreement entitled
"COLLABORATION AGREEMENT between The Johns Hopkins University and BioNumerik
Pharmaceuticals, Inc" JHU Office of Research Administration tracking number
_________, dated as of November 19, 2001.

      1.13 "SIGNATURE DATE" shall mean the date the last party to this License
Agreement has executed this License Agreement.

      1.14 "SUBLICENSEE" as used herein in either singular or plural shall mean
any person or entity other than an AFFILIATED COMPANY to which Company has
granted a sublicense under this Agreement.

                                   ARTICLE II
                                  LICENSE GRANT

      2.1 GRANT. Subject to the terms and conditions of this Agreement, JHU
hereby grants to Company an EXCLUSIVE LICENSE to make, have made, use, and sell
the LICENSED PRODUCT and to provide the LICENSED SERVICE in the United States
and worldwide under the PATENT RIGHTS in the LICENSED FIELD. Subject to the
terms and conditions of this Agreement, JHU additionally grants COMPANY the
right to make, use and sell BIOLOGICAL MATERIAL in the LICENSED FIELD.

      2.2 SUBLICENSE. Company may sublicense others under this Agreement,
subject to JHU's approval, and shall provide a copy of each such sublicense
agreement to JHU promptly after it is executed. Each sublicense shall be
consistent with the terms of this Agreement. JHU will approve any sublicense
following notice from Company of the sublicense terms, provided that JHU will
not be obligated to approve an extremely unreasonable sublicense.

                                   ARTICLE III
                           FEES, ROYALTIES, & PAYMENTS

      3.1 INITIAL LICENSE PROCESSING FEE. Company shall pay to JHUSOM Office of
Technology Licensing within (30) days of the SIGNATURE DATE an Initial License
Processing Fee as set forth in Exhibit A. JHU will not submit an invoice for
this Initial License Processing Fee, which is nonrefundable and shall not be
credited against royalties or other fees, including, but not limited to, the
License Fee of Paragraph 3.2.

<PAGE>

      3.2 LICENSE FEE. Company shall pay to JHU within thirty (30) days of the
EFFECTIVE DATE of this Agreement a license fee as set forth in Exhibit A. JHU
will not submit an invoice for the license fee, which is nonrefundable and shall
not be credited against royalties or other fees.

      3.3 MINIMUM ANNUAL ROYALTIES. Beginning with the calendar year commencing
on January 1st immediately following the first commercial sale of LICENSED
PRODUCT or LICENSED SERVICE, Company shall pay to JHU minimum annual royalties
as set forth in Exhibit A. Each such payment shall be due within forty-five (45)
days after the end of such year.

      3.4 ROYALTIES. Company shall pay to JHU a running royalty within the range
set forth set forth in Exhibit A, as acceptable to both JHU and Company, for
each LICENSED PRODUCT sold, and for each LICENSED SERVICE provided, by Company
or AFFILIATED COMPANIES, based on NET SALES and NET SERVICE REVENUES for the
term of this Agreement. Such payments shall be made quarterly.

      In order to insure JHU the full royalty payments contemplated hereunder,
Company agrees that in the event any LICENSED PRODUCT shall be sold to an
AFFILIATED COMPANY or SUBLICENSEE or to a corporation, firm or association with
which Company shall have any agreement, understanding or arrangement with
respect to consideration (such as, among other things, an option to purchase
stock or actual stock ownership, or an arrangement involving division of profits
or special rebates or allowances) the royalties to be paid hereunder for such
LICENSED PRODUCT shall be based upon the greater of: 1) the [**] at which the
purchaser of LICENSED PRODUCT resells such product to the end user, 2) the [**]
received from using the LICENSED PRODUCT in providing a service, 3) the [**] of
the Licensed Product, or 4) the [**] of LICENSED PRODUCT paid by the purchaser.

      3.5 SUBLICENSE CONSIDERATION. Company shall pay to JHU a percentage of
consideration received from sublicensees under this Agreement as set forth in
Exhibit A. Such consideration shall include consideration of any kind received
by the Company or AFFILIATED COMPANIES from a SUBLICENSEE, such as upfront fees,
royalties or milestone fees and including any premium paid by the SUBLICENSEE
over Fair Market Value for stock of the Company or an Affiliated Company in
consideration for such sublicense. However, not included in such sublicense
consideration are amounts paid to the Company or an AFFILIATED COMPANY by the
SUBLICENSEE for product development, research work, clinical studies and
regulatory approvals performed by or for the Company or AFFILIATED COMPANIES, or
third parties on their behalf pursuant to a specific agreement including a
performance plan and commensurate budget. The term "Fair Market Value" shall
mean the average price that the stock in question is publicly trading at for
twenty (20) days prior to the announcement of its purchase by the SUBLICENSEE or
if the stock is not publicly traded, the value of such stock as determined by
the most recent private financing through a financial investor (an entity whose
sole interest in the Company or AFFILIATED COMPANY is financial) of the Company
or AFFILIATED COMPANY that issued the shares.

      3.6 REIMBURSEMENT. Patent protection regarding Inventions will be obtained
as provided in Section 4(b) of the Research Agreement. Company will reimburse
JHU, within thirty (30) days of the receipt of an invoice from JHU, for all cost
associated with the preparation, filing, maintenance, and prosecution of PATENT
RIGHTS relating to sole JHU Inventions

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>

incurred by JHU on or before the EFFECTIVE DATE of this Agreement. In accordance
with Paragraph 4.1 below, Company will reimburse JHU, within thirty (30) days of
the receipt of an invoice from JHU, for all cost associated with the
preparation, filing, maintenance, and prosecution of PATENT RIGHTS relating to
sole JHU Inventions incurred by JHU subsequent to the EFFECTIVE DATE of this
Agreement.

      3.7 FORM OF PAYMENT. All payments under this Agreement shall be made in
U.S. Dollars. Checks are to be made payable to "The Johns Hopkins University".
Wire transfers may be made through:

          The Johns Hopkins University
          AllFirst Bank
          25 S. Charles Street
          Baltimore, Maryland 21203

          Transit/Routing/ABA number: 052000113
          Account Number: 09000522
          Reference: JHU SOM Office of Technology Licensing
          (BioNumerik, Baylin Sponsored Research Agreement)
          Attn: Doreen Ferrington

      Company shall be responsible for any and all costs associated with wire
transfers.

      3.8 LATE PAYMENTS. In the event that any payment due hereunder is not made
when due, the payment shall accrue interest beginning on the tenth day following
the due date thereof, calculated at the annual rate of the sum of (a) [**] plus
(b) the prime interest rate quoted by The Wall Street Journal on the date said
payment is due, the interest being compounded on the last day of each calendar
quarter, provided however, that in no event shall said annual interest rate
exceed the maximum legal interest rate for corporations. Each such payment when
made shall be accompanied by all interest so accrued. Said interest and the
payment and acceptance thereof shall not negate or waive the right of JHU to
seek any other remedy, legal or equitable, to which it may be entitled because
of the delinquency of any payment including, but not limited to termination of
this Agreement as set forth in Paragraph 9.2.

                                   ARTICLE IV
                 PATENT PROSECUTION, MAINTENANCE, & INFRINGEMENT

      4.1 PROSECUTION & MAINTENANCE. JHU, at Company's reasonable expense, shall
file, prosecute and maintain all patents and patent applications specified under
PATENT RIGHTS that relate to sole JHU Inventions upon authorization of Company
and Company shall be licensed thereunder. Title to all such patents and patent
applications relating to sole JHU Inventions shall reside in JHU. JHU shall have
full and complete control over all patent matters relating to sole JHU
Inventions in connection therewith under the PATENT RIGHTS, provided however,
that JHU will consider and incorporate reasonable comments received from Company
and will provide Company with copies of any proposed filings, patent
correspondence or potential change in status a reasonable time before any action
is to be taken in order to allow Company an opportunity to comment. Company will
provide payment authorization to JHU at least one (1) month before an action is
due, provided that Company has received timely notice of such action from JHU.
Failure to provide authorization can be considered by JHU as a Company decision
not to authorize an action. In any country where Company elects not to have

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

<PAGE>

a patent application filed or to pay expenses associated with filing,
prosecuting, or maintaining a patent application or patent relating to sole or
joint JHU Inventions, JHU may file, prosecute, and/or maintain the patent
application or patent at its own expense and for its own exclusive benefit in
such country and Company thereafter shall not be licensed under such patent or
patent application with respect to such country.

      4.2 NOTIFICATION. Each party will notify the other promptly in writing
when any infringement by another is discovered or suspected.

      4.3 INFRINGEMENT. Company shall have the first right to enforce any patent
within PATENT RIGHTS against any infringement or alleged infringement thereof,
and shall at all times keep JHU informed as to the status thereof. Company may,
in its sole judgment and at its own expense, institute suit against any such
infringer or alleged infringer and control, settle, and defend such suit in a
manner consistent with the terms and provisions hereof and recover, for its
account, any damages, awards or settlements resulting therefrom, subject to
Paragraph 4.4. This right to sue for infringement shall not be used in an
arbitrary or capricious manner. JHU shall reasonably cooperate in any such
litigation at Company's expense.

      If Company elects not to enforce any patent within the PATENT RIGHTS, then
it shall so notify JHU in writing within ninety (90) days of receiving notice
that an infringement exists, and JHU may, in its sole judgment and at its own
expense, take steps to enforce any patent and control, settle, and defend such
suit in a manner consistent with the terms and provisions hereof, and recover,
for its own account, any damages, awards or settlements resulting therefrom.

      4.4 RECOVERY. Any recovery by Company under Paragraph 4.3 shall be deemed
to reflect loss of commercial sales, and Company shall pay to JHU [**] of the
recovery, after all reasonable costs and expenses associated with each suit or
settlement have been subtracted. If the cost and expenses exceed the recovery,
then [**] of the excess shall be credited against royalties payable by Company
to JHU hereunder in connection with sales in the country of such legal
proceedings, provided, however, that any such credit under this Paragraph shall
not exceed [**] of the royalties otherwise payable to JHU with regard to sales
in the country of such action in any one calendar year, with any excess credit
being carried forward to future calendar years.

                                    ARTICLE V
                           OBLIGATIONS OF THE PARTIES

      5.1 REPORTS. Company shall provide to JHU within thirty (30) days of the
end of each March, June, September and December after the EFFECTIVE DATE of this
Agreement, a written report to JHU of the amount of LICENSED PRODUCT sold, and
LICENSED SERVICE sold, the total NET SALES and NET SERVICE REVENUES of such
LICENSED PRODUCT and LICENSED SERVICE, and the running royalties due to JHU as a
result of NET SALES and NET SERVICE REVENUES by Company, AFFILIATED COMPANIES
and SUBLICENSEE thereof. Payment of any such royalties due shall accompany such
report. The report of sales and royalties due shall be substantially in the
format of the sales and royalty report form given in Exhibit B. Until Company,
an AFFILIATED COMPANY or a SUBLICENSEE has achieved a first commercial sale of a
LICENSED PRODUCT and received FDA market approval, a report shall be submitted
at the end of every June and December after the EFFECTIVE DATE of this

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

<PAGE>

Agreement and will include a written report describing Company's, AFFILIATED
COMPANIES or any SUBLICENSEE's technical efforts towards meeting its obligations
under the terms of this Agreement.

      5.2 RECORDS. Company shall make and retain, for a period of three (3)
years following the period of each report required by Paragraph 5.1, true and
accurate records, files and books of account containing all the data reasonably
required for the full computation and verification of sales and other
information required in Paragraph 5.1. Such books and records shall be in
accordance with generally accepted accounting principles consistently applied.
Company shall permit, on a confidential basis, the inspection and copying of
such records, files and books of account by JHU or its agents during regular
business hours upon ten (10) business days' written notice to Company. Such
inspection shall not be made more than once each calendar year. All costs of
such inspection and copying shall be paid by JHU, provided that if any such
inspection shall reveal that an error has been made in the amount equal to five
percent (5%) or more of such payment, such costs shall be borne by Company.
Company shall include in any agreement with its AFFILIATED COMPANIES or its
SUBLICENSEE which permits such party to make, use or sell the LICENSED PRODUCT
or provide LICENSED SERVICE, a provision requiring such party to retain records
of sales of LICENSED PRODUCT and records of LICENSED SERVICE and other
information as required in Paragraph 5.1 and permit JHU to inspect such records
as required by this Paragraph.

      5.3 REASONABLE EFFORTS. Within six months of each amendment of this
License Agreement to include JHU inventions or discoveries made under the
RESEARCH AGREEMENT, Company shall submit a Development Plan, reasonably
satisfactory to JHU, which outlines Company's intent and ability to develop and
commercialize the JHU inventions or discoveries. Company shall exercise
reasonable efforts, consistent with the Development Plan provided, as might be
amended from time to time, to develop and to introduce the LICENSED PRODUCT and
LICENSED SERVICE into the commercial market as soon as practicable, consistent
with sound and reasonable business practice and judgement; thereafter, until the
expiration of the Agreement, Company shall endeavor to keep LICENSED PRODUCT and
LICENSED SERVICE reasonably available to the public. Company shall also exercise
commercially reasonable efforts to develop other LICENSED PRODUCT suitable for
different indications, so that the PATENT RIGHTS can be commercialized as
broadly and as speedily as good scientific and business judgement would deem
practical.

      5.4 OTHER PRODUCTS. After clinical or other evidence, provided in writing
by JHU or by another party, to Company, demonstrating the practicality of a
particular market which is not being developed or commercialized by Company,
Company shall either provide JHU with a reasonable development plan and start
development or attempt to reasonably sublicense the particular technology to a
third party. If within twelve (12) months of such notification by JHU, Company
has not initiated such development efforts or sublicensed that particular
market, JHU may terminate this license for such particular therapeutic market.
This Paragraph shall not be applicable if Company reasonably demonstrates to JHU
that commercializing such LICENSED PRODUCT or LICENSED SERVICE or granting such
a sublicense in said market would have a potentially adverse commercial effect
upon marketing or sales of the LICENSED PRODUCT developed and being sold by
Company.

      5.5 PATENT ACKNOWLEDGEMENT. Company agrees that all packaging containing
individual LICENSED PRODUCT sold by Company, AFFILIATED COMPANIES and
SUBLICENSEE of Company will be marked with the number of the applicable
patent(s) licensed hereunder in accordance with each country's patent laws.

<PAGE>

      5.6 JHU, through its JHU Inventor(s), shall within thirty days of the
EFFECTIVE DATE ship Deliverables by overnight courier service to arrive at
COMPANY on a business day.

          Deliverables shall be sent to:
             BioNumerik Pharmaceuticals, Inc.
             8122 Datapoint Drive, Suite 400
             San Antonio, TX  78229
             Attention:  Receiving Department

      Company shall provide notice to JHU School of Medicine's Office of
Technology Licensing of receipt of Deliverables by FAX upon receipt.

                                   ARTICLE VI
                                 REPRESENTATIONS

      6.1 REPRESENTATIONS BY JHU. JHU warrants that it has good and marketable
title to its interest in the inventions claimed under PATENT RIGHTS and
BIOLOGICAL MATERIAL with the exception of certain retained rights of the United
States government. JHU does not warrant the validity of any patents or that
practice under such patents or use of a BIOLOGICAL MATERIAL shall be free of
infringement. EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH 6.1, COMPANY,
AFFILIATED COMPANIES AND SUBLICENSEE AGREE THAT THE PATENT RIGHTS AND BIOLOGICAL
MATERIAL ARE PROVIDED "AS IS", AND THAT JHU MAKES NO REPRESENTATION OR WARRANTY
WITH RESPECT TO THE PERFORMANCE OF LICENSED PRODUCT AND LICENSED SERVICE
INCLUDING THEIR SAFETY, EFFECTIVENESS, OR COMMERCIAL VIABILITY. JHU DISCLAIMS
ALL WARRANTIES WITH REGARD TO PRODUCT AND SERVICE LICENSED UNDER THIS AGREEMENT,
INCLUDING, BUT NOT LIMITED TO, ALL WARRANTIES, EXPRESS OR IMPLIED, OF
MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE. NOTWITHSTANDING ANY
OTHER PROVISION OF THIS AGREEMENT, JHU ADDITIONALLY DISCLAIMS ALL OBLIGATIONS
AND LIABILITIES ON THE PART OF JHU AND INVENTORS, FOR DAMAGES, INCLUDING, BUT
NOT LIMITED TO, DIRECT, INDIRECT, SPECIAL, AND CONSEQUENTIAL DAMAGES, ATTORNEYS'
AND EXPERTS' FEES, AND COURT COSTS (EVEN IF JHU HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, FEES OR COSTS), ARISING OUT OF OR IN CONNECTION
WITH THE MANUFACTURE, USE, OR SALE OF THE PRODUCT AND SERVICE LICENSED UNDER
THIS AGREEMENT. COMPANY, AFFILIATED COMPANIES AND SUBLICENSEE ASSUME ALL
RESPONSIBILITY AND LIABILITY FOR LOSS OR DAMAGE CAUSED BY A PRODUCT AND SERVICE
MANUFACTURED, USED, OR SOLD BY COMPANY, ITS SUBLICENSEE AND AFFILIATED COMPANIES
WHICH IS A LICENSED PRODUCT OR LICENSED SERVICE AS DEFINED IN THIS AGREEMENT.

      6.2 RIGHT TO GRANT LICENSE. JHU represents that it has the right to grant
a license to Company in accordance with the terms and conditions of this
Agreement.

<PAGE>

                                   ARTICLE VII
                                 INDEMNIFICATION

      7.1 INDEMNIFICATION. JHU and the Inventors of LICENSED PRODUCT and
LICENSED SERVICE will not, under the provisions of this Agreement or otherwise,
have control over the manner in which Company or its AFFILIATED COMPANIES or its
SUBLICENSEE or those operating for its account or third parties who purchase
LICENSED PRODUCT or LICENSED SERVICE from any of the foregoing entities,
practice the inventions of LICENSED PRODUCT and LICENSED SERVICE. Company shall
defend and hold JHU, The Johns Hopkins Health Systems, their present and former
trustees, officers, Inventors of PATENT RIGHTS and BIOLOGICAL MATERIAL, agents,
faculty, employees and students harmless as against any judgments, fees,
expenses, or other costs arising from or incidental to any product liability or
other lawsuit, claim, demand or other action brought as a consequence of the
practice of said inventions or use of patent rights by any of the foregoing
entities, whether or not JHU or said Inventors, either jointly or severally, is
named as a party defendant in any such lawsuit. Practice of the inventions
covered by LICENSED PRODUCT and LICENSED SERVICE, by an AFFILIATED COMPANY or an
agent or a SUBLICENSEE or a third party on behalf of or for the account of
Company or by a third party who purchases LICENSED PRODUCT and LICENSED SERVICE
from Company, shall be considered Company's practice of said inventions for
purposes of this Paragraph. The obligation of Company to defend and indemnify as
set out in this Paragraph shall survive the termination of this Agreement.

                                  ARTICLE VIII
                                 CONFIDENTIALITY

      8.1 CONFIDENTIALITY. If necessary, the parties will exchange information,
which they consider to be confidential. The recipient of such information agrees
to accept the disclosure of said information which is marked as confidential at
the time it is sent to the recipient, and to employ all reasonable efforts to
maintain the information secret and confidential, such efforts to be no less
than the degree of care employed by the recipient to preserve and safeguard its
own confidential information. The information shall not be disclosed or revealed
to anyone except employees of the recipient who have a need to know the
information and who have entered into a secrecy agreement with the recipient
under which such employees are required to maintain confidential the proprietary
information of the recipient and such employees shall be advised by the
recipient of the confidential nature of the information and that the information
shall be treated accordingly.

      The obligations of this Paragraph shall also apply to AFFILIATED COMPANIES
and/or SUBLICENSEE provided such information by Company. JHU's, Company's,
AFFILIATED COMPANIES, and SUBLICENSEES' obligations under this Paragraph shall
extend until three (3) years after the termination of this Agreement.

      8.2 EXCEPTIONS. The recipient's obligations under Paragraph 8.1 shall not
extend to any part of the information:

            a.    that can be demonstrated to have been in the public domain or
                  publicly known and readily available to the trade or the
                  public prior to the date of the disclosure; or

<PAGE>

            b.    that can be demonstrated, from written records, to have been
                  in the recipient's possession and not subject to an existing
                  obligation of secrecy to the disclosing party, or readily
                  available to the recipient from another source not under
                  obligation of secrecy to the disclosing party prior to the
                  disclosure; or

            c.    that becomes part of the public domain or publicly known by
                  publication or otherwise, not due to any unauthorized act by
                  the recipient; or

            d.    that is demonstrated from written records to have been
                  independently developed by or for the receiving party without
                  reference to or use of confidential information disclosed by
                  the disclosing party.

            e.    that is required to be disclosed by law, government regulation
                  or court order.

      8.3 RIGHT TO PUBLISH. JHU may publish manuscripts, abstracts or the like
in the manner described in Section 5 of the RESEARCH AGREEMENT.

                                   ARTICLE IX
                               TERM & TERMINATION

      9.1 TERM. The term of this Agreement shall commence on the EFFECTIVE DATE
and shall continue, in each country, until the date of expiration of the last to
expire patent included within PATENT RIGHTS in that country, but in any event,
for a term of at least twenty (20) years after the EFFECTIVE DATE of this
Agreement in each particular country. The right to amend this Agreement expires
six (6) months after the termination of the RESEARCH AGREEMENT.

      9.2 TERMINATION BY EITHER PARTY. This Agreement may be terminated by
either party, in the event that the other party (a) files or has filed against
it a petition under the Bankruptcy Act, makes an assignment for the benefit of
creditors, has a receiver appointed for it or a substantial part of its assets,
or otherwise takes advantage of any statute or law designed for relief of
debtors or (b) fails to perform or otherwise breaches any of its material
obligations hereunder, if, following the giving of notice by the terminating
party of its intent to terminate and stating the grounds therefor, the party
receiving such notice shall not have cured the failure or breach within thirty
(30) days. In no event, however, shall such notice or intention to terminate be
deemed to waive any rights to damages or any other remedy which the party giving
notice of breach may have as a consequence of such failure or breach.

      9.3 TERMINATION BY COMPANY. Company may terminate this Agreement and the
license granted herein, including any amendments, for any reason, upon giving
JHU ninety (90) days written notice, provided the RESEARCH AGREEMENT is
terminated concurrently.

      9.4 OBLIGATIONS AND DUTIES UPON TERMINATION. If this Agreement is
terminated, both parties shall be released from all obligations and duties
imposed or assumed hereunder to the extent so terminated, except as expressly
provided to the contrary in this Agreement. Upon termination, both parties shall
cease any further use of all confidential information disclosed to them as a
receiving party by the other party. Termination of this Agreement, for whatever
reason, shall not affect the obligation of either party to make any payments for
which it is liable prior to or upon such termination. Termination shall not
affect JHU's right to recover unpaid

<PAGE>

royalties or fees or reimbursement for patent expenses incurred pursuant to
Paragraph 4.1 prior to termination. Upon termination Company shall submit a
final royalty report to JHU and any royalty payments and unreimbursed patent
expenses due JHU shall become immediately payable, and all BIOLOGICAL MATERIAL
that is the property of JHU shall be returned to JHU Inventors or destroyed.
Furthermore, upon termination of this Agreement, all rights in and to the
licensed technology originally held by JHU and licensed by JHU to Company
hereunder, including PATENT RIGHTS and BIOLOGICAL MATERIAL, shall revert
immediately to JHU at no cost to JHU. All inventions and discoveries arising out
of the Program (as defined in the RESEARCH AGREEMENT) that are solely or jointly
owned by Company shall continue to be solely or jointly owned by Company and
shall not be affected by any such reversion. Upon termination of this Agreement,
any SUBLICENSEE shall become a direct licensee of JHU and shall retain any
sublicense previously granted to it, provided such SUBLICENSEE complies with the
provisions of this Agreement assumed by such SUBLICENSEE. Company shall provide
written notice of such to each SUBLICENSEE with a copy of such notice provided
to JHU.

                                    ARTICLE X
                                  MISCELLANEOUS

      10.1 USE OF NAME. Company shall not use the name of The Johns Hopkins
University or The Johns Hopkins Health System or any of its constituent parts,
such as the Johns Hopkins Hospital or any contraction thereof or the name of JHU
Inventors of PATENT RIGHTS in any advertising, promotional, sales literature or
fundraising documents without prior written consent from an officer of JHU.
Company shall allow at least seven (7) business days notice of any proposed
public disclosure for JHU's review and comment or to provide written consent.

      10.2 NO PARTNERSHIP. Nothing in this Agreement shall be construed to
create any agency, employment, partnership, joint venture or similar
relationship between the parties other than that of a licensor/licensee. Neither
party shall have any right or authority whatsoever to incur any liability or
obligation (express or implied) or otherwise act in any manner in the name or on
the behalf of the other, or to make any promise, warranty or representation
binding on the other.

      10.3 NOTICE OF CLAIM. Each party shall give the other or its
representative immediately notice of any suit or action filed, or prompt notice
of any claim made, against them arising out of the performance of this
Agreement.

      10.4 PRODUCT LIABILITY. Prior to initial human testing or first commercial
sale of any LICENSED PRODUCT or LICENSED SERVICE as the case may be in any
particular country, Company shall establish and maintain, in each country in
which Company, an AFFILIATED COMPANY or SUBLICENSEE shall test or sell LICENSED
PRODUCT and LICENSED SERVICE, product liability or other appropriate insurance
coverage appropriate to the risks involved in marketing LICENSED PRODUCT and
LICENSED SERVICE and will annually present evidence to JHU that such coverage is
being maintained. Upon JHU's request, Company will furnish JHU with a
Certificate of Insurance of each product liability insurance policy obtained.
JHU shall be listed as an additional insured in Company's said insurance
policies. If such Product Liability insurance is underwritten on a `claims made'
basis, Company agrees that any change in underwriters during the term of this
Agreement will require the purchase of `prior acts' coverage to ensure that
coverage will be continuous throughout the term of this Agreement.

<PAGE>

      10.5 NOTICE. All notices or communication required or permitted to be
given by either party hereunder shall be deemed sufficiently given if mailed by
registered mail or certified mail or sent by overnight courier, such as Federal
Express, to the other party at its respective address set forth below or to such
other address as one party shall give notice of to the other from time to time
hereunder. Mailed notices shall be deemed to be received on the third business
day following the date of mailing. Notices sent by overnight courier shall be
deemed received the following business day.

      If to Company:           Attn: Chief Executive Officer
                               BioNumerik Pharmaceuticals, Inc.
                               8122 Datapoint Drive, Suite 1250
                               San Antonio, TX  78229

      If to JHU:               Office of Technology Licensing
                               The Johns Hopkins University
                               School of Medicine
                               111 Market Place, Suite 906
                               Baltimore, MD 21202
                               Attn:  Director

      10.6 COMPLIANCE WITH ALL LAWS. In all activities undertaken pursuant to
this Agreement, both JHU and Company covenant and agree that each will in all
material respects comply with such Federal, state and local laws and statutes,
as may be in effect at the time of performance and all valid rules, regulations
and orders thereof regulating such activities.

      10.7 SUCCESSORS AND ASSIGNS. Neither this Agreement nor any of the rights
or obligations created herein, except for the right to receive any remuneration
hereunder, may be assigned by either party, in whole or in part, without the
prior written consent of the other party, except that either party shall be free
to assign this Agreement in connection with any sale of substantially all of its
business or assets, without the consent of the other. Prompt notice of any such
assignment will be given to JHU. In addition, Company may sublicense others
under this Agreement as provided in Paragraph 2.2. This Agreement shall bind and
inure to the benefit of the successors and permitted assigns of the parties
hereto.

      10.8 NO WAIVERS; SEVERABILITY. No waiver of any breach of this Agreement
shall constitute a waiver of any other breach of the same or other provision of
this Agreement, and no waiver shall be effective unless made in writing. Any
provision hereof prohibited by or unenforceable under any applicable law of any
jurisdiction shall as to such jurisdiction be deemed ineffective and deleted
herefrom without affecting any other provision of this Agreement. It is the
desire of the parties hereto that this Agreement be enforced to the maximum
extent permitted by law, and should any provision contained herein be held by
any governmental agency or court of competent jurisdiction to be void, illegal
or unenforceable, the parties shall negotiate in good faith for a substitute
term or provision which carries out the original intent of the parties as
closely as possible.
<PAGE>

      10.9  ENTIRE AGREEMENT; AMENDMENT. Company and JHU acknowledge that they
have read this entire Agreement and that this Agreement, including the attached
Exhibits (together with the Research Agreement) constitutes the entire
understanding and contract between the parties hereto and supersedes any and all
prior or contemporaneous oral or written communications with respect to the
subject matter hereof, all of which communications are merged herein. It is
expressly understood and agreed that (i) there being no expectations to the
contrary between the parties hereto, no usage of trade, verbal agreement or
another regular practice or method dealing within any industry or between the
parties hereto shall be used to modify, interpret, supplement or alter in any
manner the express terms of this Agreement; and (ii) this Agreement shall not be
modified, amended or in any way altered except by an instrument in writing
signed by both of the parties hereto.

      10.10 DELAYS OR OMISSIONS. Except as expressly provided herein, no delay
or omission to exercise any right, power or remedy accruing to any party hereto,
shall impair any such right, power or remedy to such party nor shall it be
construed to be a waiver of any breach or default, or an acquiescence therein,
or in any similar breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any party of any breach or
default under this Agreement, or any waiver on the part of any party of any
provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.

      10.11 FORCE MAJEURE. If either party fails to fulfill its obligations
hereunder (other than an obligation for the payment of money), when such failure
is due to an act of God, or other circumstances beyond its reasonable control,
including but not limited to fire, flood, civil commotion, riot, war (declared
and undeclared), revolution, or embargoes, then said failure shall be excused
for the duration of such event and for such a time thereafter as is reasonable
to enable the parties to resume performance under this Agreement.

      10.12 FURTHER ASSURANCES. Each party shall, at any time, and from to time,
prior to or after the EFFECTIVE DATE of this Agreement, at reasonable request of
the other party, execute and deliver to the other such instruments and documents
and shall take such actions as may be required to more effectively carry out the
terms of this Agreement.

      10.13 SURVIVAL. All representations, warranties, covenants and agreements
made herein and which by their express terms or by implication are to be
performed after the termination hereof, or are prospective in nature, shall
survive such termination, as the case may be. This shall include Articles VI,
VII, VIII, IX, and X.

      10.14 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement shall be
construed as giving any person, firm, corporation or other entity, other than
the parties hereto and their successors and permitted assigns and sublicensees,
any right, remedy or claim under or in respect of this Agreement or any
provision hereof.

      10.16 HEADINGS. Article headings are for convenient reference and not a
part of this Agreement. All Exhibits are incorporated herein by this reference.

      10.17 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which when taken together shall
be deemed but one instrument.

<PAGE>

      IN WITNESS WHEREOF, this Agreement shall take effect as of the EFFECTIVE
DATE when it has been executed below by the duly authorized representatives of
the parties.

THE JOHNS HOPKINS UNIVERSITY

By: /s/ WILLIAM P. TEW                                            April 30, 2002
    --------------------------------------------
    Title: William P. Tew, Ph.D.,                                         (Date)
           Assistant Dean and Executive Director
           Licensing and Business Development
           School of Medicine

COMPANY
BioNumerik Pharmaceuticals, Inc.

By: /s/ FREDERICK H. HAUSHEER                                     April 22, 2202
    --------------------------------------------
    Frederick H. Hausheer, M.D.                                           (Date)
    Chairman & Chief Executive Officer

<PAGE>

EXHIBIT A.  LICENSE FEE & ROYALTIES.

EXHIBIT B.  SALES & ROYALTY REPORT FORM.

EXHIBIT C.  BIOLOGICAL MATERIAL

EXHIBIT D.  COMPANY RIGHTS TO PATENTS and PATENT/PROVISIONAL APPLICATIONS

<PAGE>

                                    EXHIBIT A

                             LICENSE FEE & ROYALTIES

1. INITIAL LICENSE PROCESSING FEE: The initial license processing fee due under
Paragraph 3.1 of the License Agreement is [**].

2. LICENSE FEE: The license fee due under Paragraph 3.2 of the License Agreement
is [**].

3. MINIMUM ANNUAL ROYALTIES: The minimum annual royalties pursuant to Paragraph
3.3 of the License Agreement are [**] and shall be credited against running
royalties due in that year. If royalties paid to JHU pursuant to Paragraph 3.4
of the License Agreement do not equal or exceed [**] in any applicable calendar
year, Company shall pay the difference to JHU within the 45 day time period
after the end of such year. In the event Company fails to pay JHU the minimum
annual royalty as required for a year, the license granted hereunder shall
become a nonexclusive license so long as Company pays JHU a minimum annual
royalty of [**] in that calendar year and thereafter.

3. ROYALTIES: The running royalty rate payable under Paragraph 3.4 will be in
the range set forth as follows:

      (A) [**] of NET SALES and NET SERVICE REVENUES;

      (B) [**] of NET SALES and NET SERVICE REVENUES [**]; and

      (C) [**] of NET SALES and NET SERVICE REVENUES [**].

The royalty rate for each INVENTION shall be within the ranges set forth above
and shall be agreed upon in good faith by JHU and Company prior to the INVENTION
being added to EXHIBIT D. Only one royalty shall be paid on a product or service
that is covered by multiple patents or patent applications included in PATENT
RIGHTS.

In the event that (i) the patent covering a LICENSED PRODUCT or LICENSED SERVICE
has expired or been declared invalid or unenforceable during the term of this
Agreement and any generic form of Licensed Product or Licensed Service enters
the marketplace or (ii) all of the patents listed in Exhibit D have expired or
been declared invalid or unenforceable within the term of this License
Agreement, the parties shall consider a reasonable reduction in royalty rates
for the rest of the term.

4. SUBLICENSE CONSIDERATION: The percent sublicensee consideration payable under
Paragraph 3.5 will be as follows:

All sublicensee payments (including those described in Paragraph 3.5 as
consideration subject to a percentage payment to JHU but excluding those
described in Paragraph 3.5 as not included in sublicensee consideration) will be
included in NET SALES and a royalty will be paid thereon as provided in Section
3 above in the year in which such sublicensee payment is made.

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

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                                    EXHIBIT B

                        QUARTERLY SALES & ROYALTY REPORT

                    FOR LICENSE AGREEMENT BETWEEN COMPANY AND

                       THE JOHNS HOPKINS UNIVERSITY DATED

                          [EFFECTIVE DATE OF AGREEMENT]

                 FOR PERIOD OF ______________ TO ______________

                TOTAL ROYALTIES DUE FOR THIS PERIOD $___________

<TABLE>
<CAPTION>
                              TOTAL NET
PRODUCT        *JHU         SALES/SERVICES        ROYALTY      AMOUNT
  NAME      REFERENCE    (AS PER DEFINITIONS)      RATE         DUE
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<S>         <C>          <C>                      <C>          <C>

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</TABLE>

      * Please provide the JHU Disclosure Number or Patent Reference

      This report format is to be used to report quarterly royalty statements to
JHU. It should be placed on Company letterhead and accompany any royalty
payments due for the reporting period. This report shall be submitted even if no
sales are reported.

<PAGE>

                                    EXHIBIT C

                     BIOLOGICAL MATERIAL (SEE PARAGRAPH 1.2)

The following shall be provided to COMPANY under Paragraph 5.6. The amount(s)
specified have been agreed to by JHU and COMPANY as sufficient to allow COMPANY
to propagate the material(s), and JHU is under no obligation to provide
additional Deliverables. This Exhibit may be amended from time to time by mutual
agreement of JHU and COMPANY to incorporate newly discovered or made BIOLOGICAL
MATERIAL.

<PAGE>

                                   EXHIBIT D.

                                  PATENT RIGHTS

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