Exhibit 10.26

LICENSE AGREEMENT
between
UNIVERSITY OF MARYLAND, BALTIMORE
and
CORNELL RESEARCH FOUNDATION, INC,
and
ARTEMIS NEUROSCIENCE, INC,

 
This License Agreement: (“Agreement") made effective (Ms 24th day of October,
2001 (the "Effective Date") by and between the University of Maryland.
Baltimore, a constituent institution of the University System of Maryland, an
agency of the State of Maryland having as address at 520 West Lombard Street,
Baltimore, Maryland 21201 ("UM"), Cornell Research Foundation, Inc., a wholly
owned subsidiary of Cornell University, located at Cornell Business & Technology
Park, 20 Thornwood Drive, Suite 105, Ithaca, NY 14850 ("CRF") and Artemis
Neurosciences. Inc., (ARTEMIS) a corporation of the State of Maryland, U.S.A.,
with its principal place of business at 9850 Key West Avenue, Suite 400,
Rockvile, MD 20850 ("Company"),

WITNESSETH:
WHEREAS, as a public research and education institution* UM is interested in
licensing Patent Rights (as defined below) in a manner that will benefit the
public by facilitating the distribution of useful products and the utilization
of new methods, and
lacks capacity to commercially develop, manufacture, and distribute such
products or methods; and
WHEREAS, subject to certain rights retained by die federal government in
federally sponsored research, UM and Astra AKticbolag of 5-151 85 Sodertaye,
Sweden ("Astra"), were joint owners by assignment from the Inventors, listed in
Exhibit A, of the entire right, title, and interest in the U.S. Patent* and
Patent Applications listed in Exhibit A and in any foreign patent applications
and patents corresponding thereto, and m the inventions described and claimed
therein, and any divisions, continuations, continuations in part,
re-examinations, Or reissues thereof ("UM Patent Rights"); and

WHEREAS, by an assignment agreement executed October 19,1998, Astra granted UM
all of Astra's right, title, and interest ia UM Patent Rights, and
 
WHEREAS, swbject to certain rights retained by the federal government in
federally sponsored research, UM and CRF are joint owners by assignment from the
Inventors, listed in Exhibit 6, of the entire right, title., and interest in the
U.S. Patents and Patent Applications listed in Exhibit B and in any foreign
patent applications and patents
corresponding thereto, and in the inventions described and claimed therein, and
any divisions, continuations, continuations in pari, reexaminations, or reissues
thereof ("UM/CRF Patent Rights"), and
 
WHEREAS, by an lotcr-Tnstitutionai Agreement executed May 11, 1999, UM and CRF
have agreed to act jointly in licensing UM/CRF Patent Rights; and

WHEREAS, Aventis Pharmaceuticals, Incorporated (formerly Hoescht Marion Roussel)
of Route 202-206, B ridge watet, NX 08807 ("Aventis"), is the owner by
assignment from the Inventors, listed in Exhibit C, of the entire right, title,
and interest in the U.S. Patents and Patent Applications listed in Exhibit C and
in any foreign patent applications and patents corresponding thereto, and in the
inventions described and claimed therein, and any divisions, continuations,
continuations in part, re-examinations, or reissues thereof ("Aventis Patent
Rights"); and

WHEREAS, by an agreement effective September 28,2000, Aventis has granted UM a
license with rights to exclusively sublicense Aventis Patent Rights to a third
party licensee ("Aventis License", Exhibit C in the Contribution Agreement,
defined below); and

 
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WHEREAS, Company desires to obtain a worldwide, exclusive, royalty-bearing
license to the aforementioned UM Patent Rights, UM/CRF Patent Rights, and
Aventis Patent Rights (all, collectively, "Patent Rights"), to make, have made,
use, lease, offer to sell, sell, and import products embodying the Patent
Rights; and

WHEREAS, by a Contribution Agreement executed on April 5, 2001, UM and Caso
Holding Company ("CHC"), of 200 WestPark Corporate Center, 4364 S. Alston
Avenue, Durham, NC 27713, have agreed to support Company in its efforts to
develop Patent Rights, which Contribution Agreement is incorporated herein by
reference as Exhibit D;

NOW, THEREFORE, in consideration of the foregoing premises and the following
mutual agreements, and other good and valuable consideration, the parties agree
as follows:

ARTICLE I, DEFINITIONS
For the purpose of this Agreement, the following words and phrases have the
following meanings:
1.1           "Affiliate" means any entity which directly or indireclly
controls, is controlled by, or is under common control with Company. "Control"
means the right to exercise more than 50% of the voting rights of a controlled
corporation or limited liability company or the power to direct or cause the
direction of the management or policies of any other controlled entity.

1.2           "Aventis Improvement" means any Improvement (as defined below)
made solely by one or more employees of, or owned solely by, Aventis or Aventis"
Affiliates.

1.3           "Combination Product" means a product in a form containing a
Licensed Product (as defined below) and one or more component(s) that is not a
Licensed Product and is sold separately by Company or its Affiliate in at least
one country,

1 .04        '"Company Improvement" means any Improvement (as defined below? .
made solely by one or more employees of, or owned solely by, Company or
Company's Affiliates.

1.05        "Confidential Information" means information relating to the subject
matter of the Patent Rights (as defined below) which has not been made public or
which is not generally known and includes, without limitation, any documents,
drawings, sketches, models, designs, data, memoranda, tapes, records, formulae
and algorithms, either orally, in hard copy form or in electronic form, which
Company receives from UM, CHC, or CRF, or UM, CHC, or CRF, receives from
Company.

1.6           "First Commercial Sale" means the initial transfer of a Licensed
Product for compensation by Company, an Affiliate or a Sublicensee to a Third
Party (defined below).

1.7           "Improvement" means any patentable discoveries or inventions
related to Patent Rights in the Licensed Field, reasonably necessary for the
practice of Patent Rights by Company under this Agreement, which is or may be
patentable or otherwise protected under law.

1.8           "Joint Improvement" means an Improvement made by one or more
employees of, or owned by, Company or Company's Affiliates, and: 1) one or more
employees of, or owned by, UM and/or, 2) one or more employees of, or owned by,
Aventis and/or, 3) one or more employees of, or owned by CRF.

1.9           "Licensed Field" means all human and veterinary therapeutic and
diagnostic uses and therapeutic neuroprotective properties of a compound in the
treatment and diagnosis in humans and animals of epilepsy, neurodegenerative
diseases, ischemic/hypoxic/hypoglycemic damage to cerebral tissue, anxiety,
migraines and pain.

 
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1.10           "Licensed Product" means any product, including but not limited
to a Combination Product, using any Patent Rights, including any product
containing a compound that is covered by Patent Rights.

1.11           "Net Sales" means the gross sales revenues and fees billed by
Company, an Affiliate or a Sublicensee for the sale of Licensed Products, less
the sum of the following:
(a)           customary trade, quantity and cash discounts actually allowed and
taken;
(b)           sales or use taxes, excise taxes and customs duties included in
the invoiced amount;
(c)           outbound transportation prepared or allowed if separately itemized
on the invoice to the customer; and
(d)           amounts actually allowed or credited on returns of Licensed
Products.
(e)           "Net Sales" does not include any further downstream sales of a
Licensed Product alter the first sale thereof by Company, an Affiliate or a
Sublicensee to a Third Party purchaser. No deductions will be made for
commissions paid to individuals, whether they be with independent sales agencies
or regularly employed on the payroll by Company, its Affiliate(s) or
Sublicensee(s), or for cost of collections. Licensed Products will be considered
sold when billed out or invoiced, whichever is first.

1.12           "Patent Rights" means:

(a)           U.S. and foreign patent applications and patents listed in
Exhibits A, B, and C as they may be amended from time to time in accordance with
Article 17;
(b)           U.S. and foreign patents issuing from the applications listed in
Exhibits A, B, and C, and as they may be amended, and from all divisions and
continuations of these applications;
(c)           claims of U.S. and foreign continuation-in-part applications, and
of the resulting patents, which are directed to subject matter specifically
described in the U.S. and foreign applications listed in Exhibits A, B, and C,
as amended;
(d)           claims of all foreign patent applications, and of the resulting
patents, which are directed to subject matter specifically described in the U.S.
patents and patent applications described in (a), (b), or (c) above; and
(e)           any reissues, reexaminations and extensions, or the foreign
equivalent of these of U.S. and foreign patents described in (a), (b), or (c)
above.
1.13           "Research Agreement" means a separate agreement between Company
and UM under which UM will assist Company in conducting unspecified research.
1.14           "Sublicensee" means a person or entity, including an Affiliate,
to which Company transfers all or some of the Patent Rights through a
sublicense.
1.15           "Third Party" means any entity or person other than UM, Company,
an Affiliate, Sublicensee, the inventors, CRF, or Aventis.
1.16           "UM Improvement" means any Improvement, made solely by one or
more employees of, or owned solely by, UM.

ARTICLE 2. GRANT OF LICENSE

2.1           Subject to the rights of the United States under its earlier grant
to UM and pursuant to 35 U.S.C. Section 201 et__s_cq. and all implementing
regulations, UM grants to Company, and Company accepts, a sole and exclusive
worldwide license, with rights to sublicense, under UM rights in Patent Rights
to make, have made, use, lease, offer to sell, sell and import the Licensed
Products within the Licensed Field for the term of this Agreement.

2.2           Subject to the rights of the United States under its earlier grant
to CRF and pursuant to 35 U.S.C. Section 201 et seq. and all implementing
regulations, CRF grants to Company, and Company accepts, a sole and exclusive
worldwide license, with rights to sublicense, under CRF rights in Patent Rights
to make, have made, use, lease, offer to sell, sell and import the Licensed
Products within the Licensed Field for the term of this Agreement.
 
 
2.3           Company may transfer its rights to an Affiliate through agreements
that are consistent with this Agreement, provided Company is responsible for the
operation of its Affiliate relevant to this Agreement as if operations were
carried Out by Company, including the payment of royalties, whether or not paid
to Company by Affiliate.

 
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2.4           Company may grant sublicenses consistent with this Agreement
provided Company is responsible for the operation of its Sublicensees relevant
to this Agreement as if the operations were carried out by Company, including
the payment of royalties, whether or not paid to Company by Sublicensees.

2-05       Company will identify its Affiliates and in Sublicensees hereunder to
UM by name, address and field of sublicense (both as to geography and subject
matter), and will promptly provide to UM a copy of each sublicense and a copy of
each agreement or document designating or establishing an Affiliate.

2.06           If Company intends to accept from Affiliates or Sublicensees
anything of value in lieu of cash in consideration for any sublicense or other
transfer of rights under this Agreement, Company must first obtain UM's written
approval.

2.7           UM specifically reserves the rights:
(a)           to practice Patent Rights and to make and use the Licensed
Products on a royally-free basis solely for research and education, and to
license other non-profit educational and research institutions to practice
Patent Rights for the same purposes;
(b)           to provide information and material covered by Patent Rights to
universities, colleges and other research Or educational institutions, but only
for noncommercial research and educational purposes and uses and not for any
commercial purposes or uses; and
(c)           to publish the general scientific findings from research related
to Patent Rights,

2.8           CRF specifically reserves the rights:
(a)           IO practice under the UM/CRF Patent Rights and io make and use the
Licensed Products on a royalty-free basis solely for research and education, and
lo license other non-profit educational and research institutions to practice
the UM/CRF Patent Rights for the same purposes;
(b)           to provide information and material covered by the UM/CRF Patent
Rights to universities, colleges and other research or educational institutions,
but only for noncommercial research and educational purposes and uses and not
for any commercial purposes or uses; and
(c)           to publish the general scientific findings from research related
to UM/CRF Patent Rights.

2.9           Aventis specifically reserves the rights to use Aventis Patent
Rights in the Field of Use for research purposes only. Aventis retains all
rights to use Aventis Patent Rights for applications not included in the Field
of Use,
 
 
2.10        UM Improvements are owned by UM. Aventis Improvements are owned by
Aventis. Joint Improvements are owned jointly. Company Improvements are owned by
Company, subject to a grant to UM of a non-exclusive, non-transferable,
irrevocable, and royalty-free license to practice Company Improvements in any
field of use for research and education but not for commercial purposes.

ARTICLE 3. COMPANY'S OBLIGATIONS

3.1           Within 180 days of the date of legal formation of Company in the
State of Maryland, Company will deliver to UM a research and development plan
and a business plan. The research and development plan will show the amount of
money and time budgeted and planned for technical development of Patent Rights,
and a proposed commercialization scheme for Patent Rights. The business plan
will show the amount of money, time, number and kind of personnel budgeted, and
activities planned, for each phase of commercialization of Patent Rights and
Licensed Product development, including but not limited to: clinical studies,
regulatory approval, marketing, manufacturing and further sub-licensing of
Licensed Products. Prior to the First Commercial Sale of a Licensed Product,
Company will provide progress reports to UM once every 3 months comparing actual
progress to the research and development plan, and the business plan. UM will
provide the research and development plan to Aventis as Confidential
Information- UM may provide the progress reports, research and development plan,
and the business plan to CRF as Confidential Information.

 
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3.2           Company will use commercially reasonable efforts io bring one or
more Licensed Products to market in each country in which Licensed Products arc
licensed if, in the reasonable judgment of the Company's management, there is
sufficient commercial justification to do so.

3.3           Company will have full legal and financial responsibility for all
costs that are incurred mid all activities that are undertaken after the signing
of this Agreement which are related to development, safely, and required
periodic reporting to the FDA and such equivalent regulatory agencies,
marketing, regulatory approvals, price registrations, compliance with all
applicable laws and regulations and other activities required by or of Company
or its Affiliates or Sublicensees (or their respective agents or distributors)
elsewhere to obtain appropriate governmental approvals for, and to
commercialize, Licensed Product.

3.4           The use and disclosure of technical information acquired pursuant
to this Agreement and the exercise of Patent Rights governed by this Agreement
are subject to the export, assets, and financial control regulations of the
United States of America, including, but not limited to, restrictions under
regulations of the United States that may be applicable to direct or indirect
re-exportation of such technical information or of equipment, products, or
services directly produced by use of such technical information. Company is
responsible for taking any steps necessary to comply with such regulations.

3.5           Company assumes all "Obligations of Company" in the Contribution
Agreement (Exhibit D). The 20% ownership stake in Company granted to UM by
Company is given in partial consideration for the license of Patent Rights under
this Agreement.

3.6           Company, Affiliates, and Sublicensees will provide prompt notice
to UM of any inquiries as to any Patent Rights which have claims to
manufacturing processes, which inquiries are provided pursuant to 35 USC § 271
(g), and will cooperate with respect to responses thereto.

ARTICLE 4.  EQUITY TRANSACTION AND MANAGEMENT OF COMPANY

4.1           Within 60 days after the Effective Date, Company will deliver to
UM a number of common shares sufficient to provide UM 20% ownership stake in the
Company following such issuance, for and in consideration of this Agreement.
Shares issued to UM will have the same rights as those issued to other founder
shareholders and in the event of future dilution of equity, founders' shares
will be diluted equally. UM shares will be issued under the name of "University
System of Maryland to use of University of Maryland, Baltimore."

4.2           No later than the Effective Date, UM will designate 1 voting
director and 1 non-voting observer who will serve on the Board of Directors of
Company. UM will have the right to designate 1 director and 1 observer for so
long as this Agreement is in effect.

ARTICLE 5. PAYMENTS AND ROYALTIES

5.01           No up-front license fee, milestone fee, or license maintenance
fees will be paid for Patent Rights.

5.02           There will be no minimum royalties paid for Patent Rights.

5.3           A royalty rate of 2% will be paid by Company for Net Sales of
Licensed Products excluding Combination Products and a royalty rate of 1% will
be paid by Company for Net Sales of Combination Products.

5.4           Running royalty payments due and payable for each calendar quarter
wjj] he made within 30 days after the close of each calendar quarter.  If no
royalties are due for any quarter. Company will send a statement to such effect
to UM.

 
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5.05           Company will pay running royalties on a country-by-country basis
as provided in paragraph 5.03 in each country for Licensed Products covered in
that country under Patent Rights, until the later of: (i) disallowance,
expiration or invalidation of all claims in the Patent Rights of that country
that cover the Licensed Products or fii) 10 years following First Commercial
Sale of the first Licensed Product in any country.

5.06
(a)   Royalties are payable from the country in which they are earned and are
subject to foreign exchange regulations then prevailing in that country. Royalty
payments must be paid to UM in United States Dollars by check or checks drawn to
the order of UM or by electronic funds transfers to an account designated by UM.
To the extent sales may have been made by Company, its Affiliates or
Sublicensees in a foreign country, those royalties will be first determined in
the currency of the country in which the royalties are earned and then converted
to their equivalent in United States Dollars. The buying rates of exchange for
converting the currencies involved into the currency of the United States will
be based on rates as quoted by the Morgan Guaranty Trust Company of New York,
New York, averaged on the last business day of each of 3 consecutive calendar
months constituting the calendar quarter in which the royalties were earned,
will be used to determine any such conversion. Company will bear any loss of
exchange or value and pay any expenses incurred in the transfer or conversion to
U.S. dollars.
(b) To the extent that statutes, laws, codes, or government regulations
(including currency exchange regulations) prevent or limit royalty payments by
Company, its Affiliates or its Sublicensees in any country, Company will render
to UM annual reports of sales of the Licensed Product in such country. All
monies due and owing UM as provided in the annual reports at UM's option (1)
will promptly be deposited by Company, its Affiliates or its Sublicensees, as
the case may be, in a local bank in such country in an account to be designated
by UM in writing or (2) will be paid promptly to UM or deposited in its account,
as directed in writing by UM in any other country where the payment or deposit
is lawful under the currency restrictions.

Interest is due on any payments to UM required by any Section of this
Agreement that are more than 30 days late. The interest rate is 6% simple
interest per annum.

5.08        Royalties received by UM on Net Sales of Licensed Product
incorporating UM/CRF Patent Rights will be divided with UM receiving a 60% share
and CRF receiving a 40% share. On March 31, .Tune 30, September 30, and December
31 of each year, UM will pay to CRF an amount equal to 40% of all royalties
received by UM on Net Sales of Licensed Product incorporating UM/CRF Patent
Rights. If no royalties are earned during a calendar quarter, UM will so report.
Each party is responsible for paying to its inventors, colleges, schools or
departments such share of royalties attributable to the inventor's invention as
is customary under the party's policies and practices.

ARTICLE 6. PATENT PROSECUTION AND PUBLICATIONS

6.1           UM is responsible for filing patent applications for UM Patent
Rights and UM/CRF Patent Rights. Aventis is responsible for filing patent
applications for Aventis Patent Rights.

6.2           Company will promptly report to UM in writing each Company
Improvement. All reports of Company Improvements are Confidential Information.
Such reports will be in sufficient detail to determine inventorship.
Inventorship will be determined in accordance with the patent laws of the United
States. UM is responsible for filing patent applications on UM Improvements,
Company Improvements, and Joint Improvements arising out of UM Patent Rights,
UM/CRF Patent Rights and Aventis Patent Rights. Aventis is responsible for
filing patent applications for Aventis Improvements.

 
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6.3           When UM is responsible for filing a patent application, Company
must reimburse to UM within 30 days of UM's request all reasonable costs and
fees incurred by UM and CRF in connection with the prosecution and maintenance
of the application, including all costs associated with preparation, filing,
prosecution, issuance, reissuance, reexamination, interference, and maintenance
of all United States applications, patents, divisions, etc. and those reasonable
costs and fees associated with corresponding foreign applications and patent
fees, including ail costs and fees associated with the preparation, filing,
prosecution, opposition proceedings and revocation proceedings and further
including fees or costs incurred by UM prior to the Effective Date. Within 30
days after the Effective Date, Company will designate foreign countries in which
patent applications are to be filed, such filings to be made by UM and UM's
choice of patent counsel with concurring approval by Company, not to be
unreasonably withheld, at Company's expense. The foreign countries will
specifically include Canada and the UK. However, in accordance with Section 7.2
of the Contribution Agreement (Exhibit D), so long as Company performs its
obligations under the Contribution Agreement, UM will not request reimbursement
from Company for any patent costs or fees incurred by UM or CRF until $500,000
in funding has been raised hy Company. UM may file, at its own expense,
applications in foreign countries not designated by Company, and Company's
license of Patent Rights will not extend to those countries.

6.4           Company, UM and Aventis will cooperate to limit the expenditures
associated with filing patent applications, while ensuring that the Patent
Rights cover all items of commercial interest and importance. The party
responsible for filing a patent application, ("Filing Party") is solely
responsible for making decisions regarding whether or not a patent application
is to be filed, scope and content of U.S. and foreign patent applications and
prosecution of the applications, but when the Filing Party is UM, UM will give
Company reasonable opportunity to advise UM. Company will cooperate with the
Filing Party in the prosecution, filing, and maintenance of any patent
applications and when the Filing Party is UM, UM will promptly advise Company as
to all developments with respect to the applications and prosecution and copies
of all papers received and
filed in connection with such prosecution will be provided promptly to enable
Company to advise UM thereon, but only as to those countries designated by
Company pursuant to Section 6.03.

6.5           The scope of patent coverage within Patent Rights will not be
significantly modified by UM without prior review by Company, but any
modification will not require the approval of Company, and Company will not
control the prosecution of Patent Rights. Company may wish to relieve itself of
any obligation to pay for the future expenses of preparation, filing,
prosecution, issuance, reissuance, reexamination, interferences, or maintenance
of any Patent Rights in any country or countries except the U.S., Canada and the
UK, by giving 90 days advance notice to UM. Thereafter this license and any
sublicenses hereunder are terminated with respect to those Patent Rights in each
country where Company has elected to discontinue support of such Patent Rights,
but only with respect to the Patent Rights Company has elected to discontinue.
This license and any sublicenses hereunder will continue in full force and
effect with respect to all other Patent Rights. Company will reimburse the
Filing Party for all expenses incurred prior to, or as a result of, irrevocable
action taken prior to its notice to the Filing Party.

6.6           In order to safeguard Patent Rights, CRF and Company will take
reasonable steps to postpone the publication of any results or other public
disclosure of research performed by inventors who are their employees, relating
to the licensed Patent Rights, until such time as materials containing those
results are first submitted by the party employing the inventor to UM for
review, comment, and consideration of appropriate patent action. UM will take
reasonable steps to postpone the publication of any results or other public
disclosure of the results of research performed by inventors who are its
employees, relating to Patent Rights, until such time as the materials
containing those results ate first submitted by UM to Company for review,
comment, and consideration of appropriate patent action, and, if the publication
or other disclosure relates to CRF rights in Patent Rights, to CRF. Such
materials relating to a planned written publication or other public disclosure
will be submitted by the party that plans to publish or disclose for review at
least 60 days prior to the date of the planned submission for written
publication. The party receiving the materials will notify the party that has
submitted the materials, within 30 days after receipt of the materials,
indicating whether or not patent applications need to be filed in connection
with obtaining or maintaining Patent Rights. Written publication or public
disclosure by UM, CRF and Company will be deferred up to a maximum of 90 days
after the date the receiving party receives the materials to enable patent
applications to be filed as deemed necessary by the Filing Party.

 
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6.07           Upon the initiation of a Phase III clinical trial of a Licensed
Product by Company, an Affiliate, or Sublicensee, Company will reimburse Aventis
for any patent expenses incurred by Aventis up to the date of initiation of the
Phase III clinical trial, to a maximum amount of two hundred fifty thousand
dollars ($250,000), and will reimburse Aventis for all patent expenses
subsequently incurred for Aventis Patents.

ARTICLE 7.  ABATEMENT OF INFRINGEMENT

7.1           Company will enforce UM and UM/CRF Patents within licensed Patent
Rights against any infringement or alleged infringement, and will at all times
keep UM informed as to the status of the infringement claims. Company may, in
its sole judgment and at its own expense, institute suit against any infringer
or alleged infringer and control, settle, and defend such suit in a manner
consistent with the terms and provisions of this Agreement and recover any
resulting damages, awards, or settlements, subject to Section 7.03. This right
to sue for infringement will not be used in an arbitrary or capricious manner.
UM will reasonably cooperate in the litigation with prior approval of Company,
at Company's expense.

7.2           If Company is aware of any patent infringement, Company will
advise UM of the infringement. If UM is aware of any patent infringement, UM
will advise Company of the infringement. If CRF is aware of any patent
infringement, CRF will advise UM. If Company does not enforce any UM or UM/CRF
patent within Patent Rights, the patent owner in its sole judgment and at its
own expense may do so, and may control, settle, and defend such suit in a manner
consistent with the terms and provisions of this Agreement, and recover, for its
own account, any resulting damages, awards, or settlements. Company will
reasonably cooperate in the litigation.

7.3           Any compensatory damages received by Company as a judicial award
and any cash or non-cash settlement received by Company to resolve a claim or
litigation as discussed under Section 7.0] will be deemed to reflect loss of Net
Sales of Licensed Products, and Company will pay UM a royally on the lost Net
Sales of Licensed Products in accordance with this Agreement, net of all
reasonable costs and expenses (including but not limited to reasonable
attorneys' fees and disbursements, experts' fees and disbursements, court costs,
stenographers' fees and disbursements, and any other such reasonable fees and
disbursements associated with the suit and pre-litigation activities and legal
opinions in connection therewith). However, if punitive damages are awarded to
Company, then the reasonable costs and expenses will be deducted first from
punitive damages and any balance will be deducted from compensatory damages. If
there are punitive damages remaining after the deduction of the litigation
expenses, UM and Company will share equally in the remaining funds.

7.4           Any compensatory damages received by Company in an action as
described in Section 7.01 that are specified hy court order of damages as
compensation for injury other than loss of Net Sales of Licensed Products will
not be considered part of Net Sales of Licensed Product.

7.5           Aventis has the first Option, but not the obligation, to enforce
Aventis (Patent Rights against any infringement or alleged infringement. If
Aventj.s declines to enforce Aventis Patent Rights. UM has the option to enforce
such rights. If UM declines. Company has the option to enforce such rights at
its own expense. The party enforcing Aventis Patent Rights may, in its sole
judgment and at its own expense, institute suit against any infringer or alleged
infringer and control, settle, and defend such suit in a manner consistent with
the terms and provisions of this Agreement and recover any resulting damages,
awards, or settlements. Aventis, UM and Company will recover their respective
actual out-of-pocket expenses, or equitable proportions thereof associated with
any litigation or settlement made by any party. This right to sue for
infringement will not be used in an arbitrary or capricious manner. Aventis, UM
and Company will keep each other informed of the status of and of their
respective activities regarding any litigation or settlement thereof concerning
Aventis Patent Rights and will reasonably cooperate in the litigation at the
request of the party enforcing Aventis Patent Rights, without expense to the
requesting party.

 
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7.6           Company will defend, indemnify and hold harmless UM, CRF, the
State of Maryland, and inventors of Patent Rights and Improvements with respect
to costs of defense and any and all liabilities resulting from suits,
countersuits, or legal actions of any nature that may be asserted against UM,
CRF, the State of Maryland, and the Inventors in response to or as a result of
the filing of an action by Company pursuant to Section 7.01.

7.7           Company will provide UM (i) notice of patents relevant to a U.S.
NDA prior to the time the NDA is filed and (ii) immediate notice of the issuance
of any other patents relevant to a U.S. NDA and Company, UM and Aventis will
jointly decide within 30 days of the patent date, if the patent is to be listed
pursuant to any Drug Approval Application (particularly in Canada) and any
pending or approved Health Registration or NDA in the U.S. for Licensed Product.

ARTICLE 8. CONFIDENTIALITY

8.01           It may be necessary Cor UM, Company and CRF to disclose to each
other certain Confidential Information. Confidential Information received from
another party may be disclosed by the receiving party only in accordance with
the following provisions:
(a)           Except as hereafter specifically authorized in writing by the
disclosing party, the receiving party will not, for a period of 5 years after
the date of receipt of Confidential Information, disclose Confidential
Information to a person not bound to confidentiality under this Agreement, or
use the Confidential Information for any purpose outside the scope of this
Agreement.
(b)           These obligations of non-disclosure and non-use will not apply to
any Confidential Information which the receiving party can demonstrate by
reliable writU'n evidence:
(i)           was generally available to the public at the time of disclosure to
the receiving
party; or
(ii)           was already in the possession of the receiving party at the time
of the disclosure, other than pursuant to a confidential disclosure agreement
between the parties and not due to any unauthorized act by the receiving party;
or
(iii)           was developed by the receiving party prior to the disclosure; or
(iv)           the receiving party is required by law to discJose.
(c)           These obligations of non-disclosure and non-use will not continue
to apply to any Confidential Information which the receiving party can
demonstrate by reliable written evidence:

(i)           has become generally available to the public other than through a
breach of this Agreement by the receiving party;
(ii)           has been acquired by the receiving party on a nonconfidential
basis from any third party having a lawful right to disclose it to the receiving
party; or
(iii)           corresponds to information developed by the receiving party
(iv)           independent of and with no reliance upon the disclosing party's
Confidential Information.
(d)           If a party relies upon a fact or facts described in part (b) or
(c) of this Section as justification for disclosure of Confidential Information
during the Confidential Period, that party bears the burden of proof with
respect to the fact or facts relied upon.

8.2           Each party will use that level of care to prevent the use or
disclosure of another party's Confidential Information as it exercises in
protecting its own Confidential Information. Company recognizes that UM and CRF
are educational institutions with standards and practices for protection of
Confidential Information which differs from Company's standards and practices.
By this Agreement UM and CRF undertake to use reasonable efforts to protect the
confidentiality of Company's Confidential Information. Company agrees that,
provided such efforts are made, it will not seek to hold UM, CRF or their
personnel liable in the event of disclosure of Company's Confidential
Information notwithstanding reasonable efforts to prevent the occurrences.

 
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8.3           Company recognizes that the records of UM are subject to the
Maryland Access to Public Records Law. Company asserts that any Confidential
Information of Company provided to UM under this Agreement is confidential,
proprietary, and trade secret information, not subject to disclosure under
Maryland's Access to Public Records Law. UM will assert this position in
response to any request for public information applicable to Company's
Confidential Information, and will promptly notify Company upon receipt of any
requests for the information. The Maryland Access to Public Records Law is at
Title 10, Subtitle 6, Part II, State Government Article, Annotated Code of
Maryland.

8.4           All Confidential Information disclosed in written form will be
clearly marked by the disclosing party as "Confidential." All Confidential
Information disclosed orally or in any other form will be summarized by the
disclosing party and delivered to the receiving party within 30 clays, in a
written document clearly marked as "Confidential", or will otherwise be clearly
identified in writing by the disclosing party as confidential.

8.5           Upon termination of this Agreement for any reason other than a
material breach, each party will return to the other all material received which
is Confidential Information, together with all copies and other forms of
reproduction, except that a single archive copy may be kept in the receiving
party's legal files. Each party agrees that
termination of this Agreement does not alter the 5 year obligation of
confidentiality set forth in this Section.

ARTICLE 9. REPORTS AND ACCOUNTING

9.1           During the term of this Agreement and for 5 years after its
termination, Company will keep, and require each Affiliate and Sublicensee to
keep, complete, true, and accurate records containing all the particulars that
may be necessary to enable consideration payable to UM to be determined, and
permit said records to be inspected at any time during regular business hours,
upon reasonable notice, by an independent auditor appointed by UM for this
purpose and reasonably acceptable to Company. The auditor will report to UM only
the amount of consideration payable under this Agreement. This audit will be at
UM's expense unless the audit shows an underpayment in amounts due to UM in
relation to amounts paid to UM by 5% or more for any 3 month royalty period in
the periods subject to audit, in which case the audit expense will be borne by
Company.

9.2           Within 20 calendar days after each March 31, June 30, September 30
and December 31, Company will deliver to UM a true and accurate report, giving
particulars of the business conducted by Company, its Affiliates and its
Sublicensees, if any, in the preceding 3 month period that are pertinent to any
accounting for royalty or other payments under this Agreement. These reports
will include at least the following information for the 3 month reporting
period:
(a)           number of Licensed Products manufactured and sold by Company and
by each
Affiliate and each Sublicensee;
(b)           total billings for Licensed Products sold by Company and by each
Affiliate and by
"each Sublicensee;
(c)           total billings for Combination Products sold hy each Affiliate and
each Sublicensee.
(d)           accounting for all Licensed Products used or sold;
(e)           deductions as provided in Section 1.11; and
(f)           names and addresses of all Affiliates and Sublicensees of Company.

For items (a), (b), (c), and (d) above, Company will specify the Patent Right or
Rights that cover each Licensed Product manufactured, sold, or used.

9.3           Within 30 days after each March 31, June 30, September 30, and
December 31, Company must pay to UM the royalties due and payable under this
Agreement for the calendar quarter covered by the report required by Section
9.02. If no royalties are due, Company will so report.

9.4           Company will forward to UM a copy of each report received by
Company from an Affiliate or Sublicensee promptly after Company's receipt of
such report. In no event will Affiliate or Sublicensee reports be due to Company
less often than quarterly.

 
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9.5           Any tax required to be withheld under the laws of any country on
royalties payable to UM by Company or its Sublicensees under this Agreement will
be promptly paid by Company or its Affiliates and its Sublicensees for and on
behalf of UM to the appropriate governmental authority, and Company will furnish
UM with proof of payment of the tax together with official or other appropriate
evidence issued by the competent governmental authority sufficient to enable UM
to support a claim for tax credit with respect to any sum so withheld. Any tax
required to be withheld on payments by Company to UM will be an expense of and
be borne solely by UM, and Company's royalty payment(s) to UM following the
withholding of the tax will be decreased by the amount of such tax withholding.
Company will cooperate with UM in the event UM elects to assert, at its own
expense, exemption from any tax.

9.6           Company will report to UM the date of First Commercial Sale by
Company and each Affiliate and Sublicensee within 20 calendar days of the First
Commercial Sale.

ARTICLE 10. TERM AND TERMINATION

10.1           Unless sooner terminated in accordance with any of the succeeding
provisions of this Article 10, this Agreement will continue in full force and
effect until the later of: (a) expiration or invalidation of the last Patent
Right anywhere which is licensed under this Agreement, or (b) 10 years after the
First Commercial Sale of the first Licensed Product.

10.2           Should Company fail to pay UM any sum due and payable under this
Agreement or the Contribution Agreement, UM may terminate this Agreement on 30
days written notice, unless Company pays UM within the 30 day period all
delinquent sums together with interest due and unpaid. Upon expiration of the 30
day period, if Company has not paid all sums and interest due and payable, the
rights, privileges, and license granted hereunder terminate.

10.3           If the Contribution Agreement is terminated, UM may terminate
this Agreement on 30 days written notice.
10.4           If by November 9, 2002, Company has not started development
activities for a Licensed Product covered by Aventis Patent Rights or
sublicensed its rights in Aventis Patent Rights io a Sublicensee that has
started development activities of Aventis Patent Rights, this Agreement is
terminated and all rights will revert to the respective grantors of Patent
Rights.

10.05                      Prior to the First Commercial Sale of a Licensed
Product, Company is considered diligent with regard to development of a Licensed
Product if Company provides updates and reports as described in Section 3.01 and
in Article 9 and Company continues to provide the necessary financial and other
resources which are required to develop or maintain availability of Licensed
Products.

10.6           If UM declares Company not diligent in development or sales of
Licensed Product based upon the criteria set forth in Section 10.05 for any
reason other than the withholding by a regulatory agency of marketing approval
in spite of Company's diligent effort to obtain such approval, then UM may
terminate this Agreement as to the Patent Rights in question upon 30 days
written notice.

10.7           Company and UM anticipate entering into a separate research
agreement under which UM will assist Company in compiling and analyzing existing
data from non¬clinical and pre-formulation and formulation data. Provided UM and
Company execute such a research agreement, if Company fails to fulfill its
obligations to UM under the research agreement, UM may terminate this Agreement
on 30 days written notice, unless Company cures its breach of the research
agreement within the 30 day period. Upon expiration of the 30 day period, if
Company has not cured its breach of the research agreement, UM may terminate the
rights, privileges, and license granted hereunder.

10.8           Company's failure to perform its obligations in accordance with
Article 26 of this Agreement is deemed to be a material pre-pctition incurable
default and breach under this Agreement upon which UM may terminate this
Agreement and any sublicense granted hereunder, with no option to cure and no
notice to Company.

 
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10.9           Except as set forth in Sections 10.02, 10.03, 10.04, 10.06,
10.07, and 10.08, in the event that any provision of this Agreement is breached
by Company, any Affiliate or any Sublicensee, UM may terminate this Agreement
and any sublicenses granted hereunder upon 90 days written notice to Company.
However, if the breach is corrected within the 90 day period and UM is
reimbursed for all damages directly resulting from the breach, the Agreement and
any sublicenses will continue in full force and effect and UM will so notify
Company in writing.

10.10                      Company may terminate this Agreement at any time by
giving UM 90 days written notice of termination, and upon payment to UM of all
payments maturing through the effective date of the termination.

10.11                      Termination does not relieve either party of any
obligation which arises before termination including obligations under Article
4, Article 5, Article 6, Article 7, Article 8, Article 11, Article 13, Article
14, Article 15, Article 25, and Article 27.

10.12                      Upon termination of this Agreement for any reason,
any Sublicensee that is not in default may seek a license from UM.

10.13                      Upon and effective as of the date of termination of
this Agreement, Company grants to UM a non-exclusive royalty-free license, with
the right to sublicense others, with respect to Company Improvements and
Company's interest in Joint Improvements.

10.14                      Within 120 days of the date of the termination of
this Agreement for any reason, UM may make written request to Company for
transfer to UM or its designee of Company's rights to trademarks and trade names
associated solely with Licensed Products. Upon UM's request, Company will
provide to UM all written document(s) necessary to accomplish such a transfer.
10.15                      Upon termination of this Agreement, except as
provided in Section 10.16, Company, Affiliates and Sublicensees must discontinue
the use, distribution and sale of Licensed Products and upon direction of UM,
return or destroy any remaining Licensed Products.

10.16                      Subject to all terms and conditions of the license,
including payment of royalties, for a period of 60 days after expiration or
termination of this Agreement, Company may market any Licensed Products on hand
at the time of expiration or termination.

ARTICLE 11. CONSENT FOR ADVERTISING
Neither Company, CRF or UM will use the name of the other or of Aventis or CMC,
or any adaptation thereof, or the names of employees of the other, in any
advertising, promotional, or sales literature without prior written consent
obtained from the other party, or from the entity whose name will be used.
Either party may publicize the fact that the parties have made this Agreement
and the general nature of the license.

ARTICLE 12. ASSIGNABILITY

12.1           This Agreement and the rights granted to Company arc not
assignable or otherwise transferable by Company without the prior written
consent of UM, which will not be unreasonably withheld.

12.2           This Agreement is not assignable or otherwise transferable by UM
or CRF without the prior written consent of Company, which will not be
unreasonably withheld.

ARTICLE 13. APPLICABLE LAW; SEVERABILITY

13.1           This Agreement is made and construed in accordance with the laws
of the State of Maryland without regard to
choice of law issues, except that all questions concerning the construction or
effect of patents will be decided in accordance with the laws of the country in
which the particular patent concerned has been granted.

 
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13.2           Company submits itself to the jurisdiction of the State courts of
the State of Maryland and Federal courts within the State of Maryland for
purposes of any suit relating to this Agreemeni and agrees ihal the Stale and
Federal courts located in Baltimore City, Maryland provide a proper venue for
determining any legal action relating to this Agreement.

ARTICLE 14. INTEGRATION AND INTERPRETATION

14.1           This Agreement, together with any Exhibits specifically
referenced and attached, embodies the entire understanding between Company and
UM, and Company and CRF. There are no contracts, understandings, conditions,
warranties or representations, oral or written, express or implied, with
reference to the subject matter hereof which are not merged herein.

14.2           This Agreement is negotiated as an arm's-length business
transaction. Draftsmanship will not be taken into account in construing the
Agreement.

14.3           If any condition or provision in any Article of this Agreement is
held to be invalid or illegal or contrary to public policy by a court of
competent jurisdiction from which there is no appeal, this Agreement will be
construed as though the provision or condition did not appear. The remaining
provisions of this Agreement will continue in full force and effect.

ARTICLE 15. INDEMNITY/INSURANCE

15.1           UM and its officers and employees acting within the scope of
their employment by UM are subject to the Maryland Tort Claims Act ("the Act"),
Title 12, Subtitle I, State Government Article, Annotated Code of Maryland,
which permits claims in tort against the State of Maryland under certain
circumstances. In order to file a claim under the Act, a claimant must submit a
written claim to the Treasurer of the State of Maryland or a designee of that
office within one year after the injury to the person or property that is the
basis of the claim.

15.2           Company warrants and represents that comprehensive liability and
property damage insurance coverage is, or will be, in place for itself and its
officers, employees and agents by the Effective Date. Prior to Licensed Product
entering clinical trials, Company will acquire additional insurance coverage as
necessary to maintain the following minimum amounts per policy period:
(a)           Comprehensive liability (including product liability): (bodily
injury and loss of life) S1,000,000 per claim; $2,000,000 in the aggregate;
(b)           Property damage: $ 1,500,000 in the aggregate.

15.3           Company will defend, indemnify, and hold harmless UM, the
University System of Maryland, and the Slate of Maryland, the regents, officers,
employees, students, and agents of UM; CRF, its officers, employees and agents;
and Aventis, its officers, employees and agents (all, collectively
"Indemnitees") against any and all claims, costs, or liabilities, including
attorney's fees and court costs at both trial and appellate levels, for any
loss, damage, personal injury, or loss of life, (a) caused by the actions of
Company or its officers, servants, or agents, or third parties acting on behalf
of or under authorization from Company in the performance of this Agreement; (b)
arising out of use by Company or by any third party acting on behalf of or under
authorization from Company of products or processes (including licensed Patent
Rights) or arising from sales and use of Licensed Products; or (c) arising out
of use, by UM, CRF, or Aventis or their personnel, of products, processes, or
protocols developed by Company or its officers, servants, or agents, or by third
parties acting on behalf of or under authorization from Company; provided, that
(a) the Indemnitee receiving notice of any claim promptly notifies Company in
writing after receiving notice of a claim; and (b) the Indemnitee subject to the
claim fully cooperates with Company in the defense of any such claim. The
foregoing obligation will not apply to any claim, cost, or liability
attributable solely to the negligence of Indemnitee personnel.

 
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15.4           UM, CRF and Company further agree that nothing in this Agreement
will be interpreted as: (a) a denial to either party of any remedy or defense
available to it under the laws of the State of Maryland; (b) the consent of the
State of Maryland or its agents and agencies to be sued; or (c) a waiver of
sovereign immunity or any other governmental immunity of the State of Maryland
and the UM beyond the extent of any waiver provided by law.

15.5           Company will require all of its Affiliates and Sublicensees using
licensed Patent Rights to Indemnify the Indemnitees and insure for that
obligation, consistent with the requirements of Section 15.02 and 15.03.

ARTICLE 16. REPRESENTATIONS AND WARRANTIES

16.1           UM represents that as of the date its officer executes this
Agreement, that officer believes on the basis of facts reported to UM thai (a)
UM is authorized to license UM Patent Rights (subject 10 the rights of the
United States under its earlier contract with UM and pursuant to 35 U.S.C.
Section 201 et seq. and all implementing regulations), UM rights in UM/CRF
Patent Rights, and Aventis Patent Rights; and (b) UM is authorized to enter into
this Agreement without burdens, encumbrances, restraints, or limitations of any
kind which could adversely affect the rights of Company under this Agreement. UM
EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITFIOUT
LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT, AND PATENT VALIDITY; (c) the Patent Rights do not constitute
the subject matter of any currently pending litigation, and UM has not been
informed of any related litigation contemplated by CRF, Aventis or any Third
Party; and (d) UM has full legal right, power and authority to execute, deliver
and perform its obligations under this Agreement.

16.2           CRF represents that as of the dale its officer executes this
Agreement, that officer believes on the basis of facts reported to CRF that (a)
CRF is authorized to license CRF rights in Patent Rights (subject to the rights
of the United States pursuant to 35 U.S.C. Section 201 et seq. and all
implementing regulations) and (b) CRF is authorized to enter into this Agreement
without burdens, encumbrances, restraints, or limitations of any kind which
could adversely affect the rights of Company under this Agreement. CRF EXPRESSLY
DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION
WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, AND PATENT VALIDITY; (c) the
UM/CRF Patent Rights do not constitute the subject matter of any currently
pending litigation, and CRF has not been informed of any related litigation
contemplated by UM, Aventis or any Third Party; and (d) CRF has full legal
right, power and authority to execute, deliver and perform its obligations under
this Agreement.

16.03       Company hereby represents and warrants to UM and CRF that: (a)
Company is authorized to enter into this Agreement without burdens,
encumbrances, restraints, or limitations of any kind which could adversely
affect the rights of UM or CRF under this Agreement, (b) Company has full legal
right, power and authority to execute, deliver and perform its obligations under
this Agreement; and (c) the execution, delivery and performance by Company of
this Agreement do not contravene or constitute a default under any provision of
applicable law or of any agreement, judgment, injunction, order, decree, or
other instrument binding upon Company.

ARTICLE 17. AGREEMENT AMENDMENTS

This Agreement may not be amended, nor may any right or remedy of either party
be waived, unless the amendment or waiver is in writing and signed by a duly
authorized representative of each party.

ARTICLE 18. RECITALS The Recitals in this Agreement will be included as part of
the Agreement.

 
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ARTICLE 19. FORCE MAJEURE

No party is liable for failure or delay in performing any of its obligations
under this Agreement if the failure or delay is required in order to comply with
any governmental regulation, request or order, or necessitated by other
circumstances beyond the reasonable control of the party so failing or delaying,
including but not limited to Acts of God, war (declared or undeclared),
insurrection, fire, flood, accident, labor strikes, work stoppage or slowdown
(whether or not such labor event is within the reasonable control of the
parties), or inability to obtain raw materials, supplies, power or equipment
necessary to enable such party to perform its obligations. Each party will: (a)
promptly notify the other party in writing of an event of force majeure, the
expected duration of the event and its anticipated effect on the ability of the
party to perform its obligations; and (b) make reasonable efforts to remedy the
event of force majeure.

ARTICLE 20. NO WAIVER

A failure or delay bv a party in exercising any of its rights or remedies under
this Agreement docs not constitute a waiver of the rights or remedies, nor docs
any single or partial exercise of any right, or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy. The
rights and remedies of the parties provided t in this Agreement arc cumulative
and not exclusive of any rights or remedies provided by law.
 
 
ARTICLE 21. LEGAL RELATIONSHIP OF PARTIES

21.1           UM, CRF, and Company are not (and nothing in this Agreement may
be construed to constitute them as) partners, joint venturers, agents,
representatives or employees of the other, nor is there any status or
relationship between them other than that of independent contractors. No party
has any responsibility or liability for the actions of the other party except as
specifically provided in this Agreement. No party has any right or authority to
bind or obligate the other party in any manner or make any representation or
warranty on behalf of the other party.

21.2           This Agreement will be only for the benefit of Aventis, the
undersigned parties and their permitted successors and assigns, and no one other
than Indemnitees and only for the purposes described in sub-section 15.03 of
this Agreement, will be deemed to be a third party beneficiary of this
Agreement.

ARTICLE 22. MISCELLANEOUS COSTS
Unless otherwise provided, all costs and expenses incurred in connection with
this Agreement will be paid by the party which incurs the cost or expense, and
the other party has no liability for the cost or expense.

ARTICLE 23. SIGNED IN TRIPLICATE; HEADINGS
This Agreement is signed in three identical originals. The headings used in this
Agreement are for convenience of reference only and do not affect the meaning or
construction of this Agreement.

ARTICLE 24. NO LICENSE
No license or right is granted by implication or otherwise with respect to any
patent application or patent owned by either party, unless specifically set
forth in this Agreement.

ARTICLE 25. EMPLOYMENT OF UM STAFF

25.01       Company will not knowingly employ or compensate, directly or
indirectly, any person working in the Licensed Field while the person is
employed by UM or for 2 years thereafter, unless UM provides Company with prior
written consent of the UM President to the employment or compensation by
Company. "Compensation" includes but is not limited to: stock option or stock
purchase agreements, consulting agreements, any other form of agreement executed
between a UM employee and Company, and cash payments. "Employment" includes both
uncompensated and compensated service to Company. A request to employ or
compensate a UM employee will be considered by UM as provided in the
Public/Private Partnership Act, which is ! Section 15-523 of the Maryland Public
Ethics Law (Title 15, Subtitle 5, State Government Article. Annotated Code of
Maryland).

 
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25.02      This provision is not intended to prevent an inventor employed by UM
("UM Inventor") from owning stock of Company received by UM Inventor from UM, or
from Company at UM's direction, as a distribution of licensing revenues under
the University System of Maryland Patent Policy. As a Company stockholder, UM
Inventor may receive dividends and enjoy other benefits of stock ownership,
subject to any terms and conditions the University may require in order to
satisfy conflict of interest concerns. Should such terms and conditions be
relevant to the relationship of Company to UM Inventor, as a shareholder, the
University will advise Company of them. This provision is not intended to
prevent Company from placing any restrictions upon UM Inventor's stock that may
be necessary to satisfy federal or state laws or regulations applicable to
Company or to development of Licensed Products.

ARTICLE 26. COMPANY PETITION IN BANKRUPTCY
Company will provide written notice to UM at least 90 days prior to the filing
of a petition in bankruptcy of Company's intention to file a voluntary petition
in bankruptcy or, if known by Company through statements or letters from a
creditor or otherwise, of a Third Party's intention to file an involuntary
petition in bankruptcy against Company. Company's failure to perform this
obligation is deemed to be a material pre-petition incurable default and breach
under this Agreement.

ARTICLE 27. DISPUTE RESOLUTION
The parties recognize that disputes may arise from time to time during the term
of this Agreement relating to a party's rights or obligations. In the event of a
dispute, a parly, by notice to the other parties, may have the dispute referred
to the parties' respective officers designated below or their successors for
attempted resolution by good faith negotiations within 30 days after the notice
is received. The designated officers are as follows:

For COMPANY:                                           President and Chief
Executive Officer
For UM:                      Vice President, Academic Affairs
For CRF: President

In the event the designated officers are not able to resolve the dispute within
this 30 day period, or any agreed extension, they will confer in good faith with
respect to the possibility of resolving the matter through mediation with a
mutually acceptable Third Party or a national mediation organization. The
parties agree that they will participate in any mediation sessions in good faith
in an effort to resolve the dispute in an informal and inexpensive manner. All
expenses of the mediator will be shared equally by the parties. The parlies
agree to loll any applicable statute of limitations during the pendency of the
dispute resolution process initiated under this Agreement. The parties agree
that evidence of anything said or any admission made in the course of any
mediation will not be s admissible in evidence in any civil action between them.
In addition, the parties agree that no document prepared for the purpose of, or
in the course of, or pursuant to. the mediation, or copy thereof, will be
admissible in evidence in any civil action between them. However, the parties
agree that this Section does not limit the admissibility of evidence if all
parties who participated in the mediation consent to its disclosure.
 
 
ARTICLE 28. NOTICES AND CORRESPONDENCE

All notices, consents and other communications required or allowed under this
Agreement must be in writing and are effective upon receipt: (a) when delivered
by hand; or (b) when received by the addressee after being mailed by registered
or certified mail (air mail if mailed overseas), return receipt requested; or
(c) when received by the addressee, by Express Mail, Federal Express or other
express delivery service (return receipt requested). Notice in each case must be
addressed to the party's representative at the party's address set forth below
(or to another representative and/or address that a party may later designate as
to itself by notice to the other party):

 
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If to UM;                      Executive Director
Office of Research and Development University of Maryland, Baltimore 515 West
Lombard Street, Suite 500 Baltimore, Maryland 21201-1602

Copy to:                      University Counsel
University of Maryland, Baltimore 520 West Lombard Street, Second Floor
Baltimore, Maryland 21201-1627

If to CRF: President
Cornell Research Foundation, Inc. Cornell Business & Technology Park 20Thornwood
Drive, Suite 105 Ithaca, New York 14850

If to COMPANY: President
Artemis Neuroscience, Inc. 9850 Key West Avenue Suite 400
Rockville, MD 20850
 
 
 Date:

 
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the date set forth above.
 
 
BY:
 
 

ATTEST:
 
 
Allen Cato, M.D., Ph.D. Chairman

Date; _

CORNELL RESEARCH FOUNDATION, INC.
 
 
BY:
 
 

 
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EXHIBIT A UM Patent Rights:

Country                      Application Serial
No.                                                      Filing
Date                                Known
As                      StatusInventorsUMTech ID
Docket No.
US           08/433,339                                5/4/95                      3-HANA
derivatives (compound claim)ISSUED 5,661,183Susanna K.M. Bjork, Sodertalje SE;
Birgitta K. Gotthammar, Stockholm, SE; Mats T. Linderberg, Sodertalje, SE; iohan
P. Luthman, Gnesta, SE; Kcrstin M.l. Persson, Nyvam, SE; Robert Schwartz,
Baltimore, MD156 IRS RS99042
EP           94908556.7                                8/1/95                      3-HANA
derivatives                                           ISSUED 0686144 61Susanna
K.M. Bjork, Sodertalje SE; Birgitta K. Gotmammar, Stockholm, SE; Mats T.
Linderberg, Sodertalje, SE; iohan P. Luthman, Gnesta, SE; Kerstin M.I. Persson,
Nyvam, SE; Robert Schwarcz, Baltimore, MDI56IRS RS99042
CA           2,156,079                      8/1/95                      3-HANA
Uei'iva
lives                                                      PENDING                                Susanna
KM. Bjcirfc, Sodertalje SE; BirgiUn K. Gollhammar, Stockholm, SE; Mais T.
Linderberg, Sodertalje, SE; .fohan P. Luthman, Gnesta, SE; Kerstin M.l. Persson,
Nyvam, SE; Robert Schwarcz, Baltimore, MDI561RS RS99042
US           08/770,488                                12/20/96                      3-HANA
derivatives (compound claim)ISSUED 5,688,945Susanna K.M. Bjork, Sodertalje SE;
Birgitta K. Gotthammar, Stockholm, SE; Mats T. Linderberg. Sodertalje, SE; Johan
V. Luihman. Oncsia, SE; Kerstin M.l. Persson, Nyvarn, SE; Robert Schwarcz,
Baltimore, MD156IRS RS99042

 
-19-

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EXHIBIT B UM/CRF Patent Rights:

Country                      Application Serial
No.                                                      Filing
Date                                Known
As                      StatusInventorsUMTech ID
Dockel No.
US           08/201,213                                2/24/94                      New
Compounds (compound
ciaiml                                                                ISSUED
5,523,475                                           Susanna K.M. Bjork,
Sodertalje SE; Barry K. Carpenter, New York, NY; Birgitla K. Gotthammar,
Stockholm, SE". Mats T. Linderbcrg, Sodertalje, SE; Johan P. Luthman, Gnesta.
SE; Kerstin M.I. Persson, Nyvarn, SE; Robert Schwarcz, Baltimore, MD1560RS
RS99043
US           08/433,337                                5/4/95                      New
Compounds
(compound
claim)                      ISSUED
5,883,129                                           Susanna K.M. Bjork,
Sodertalje SE; Barry K. Carpenter, New York, NY; Birgitta K. Gotthammar,
Stockholm, SE; Mats T. Linderbcrg, Sodertalje, SE; Johan P. Lulhman, Gnesta, SE;
Kerstin M.I. Persson, Nyvarn, SE; Robert Schwarcz, Baltimore, MD1560RS CiP
RS99043
EP
CA
:           94908557.5                                8/1/95                      New
Compounds
(compound
claim)                      ISSUED 0686145
Bl                                           Susanna K.M. Bjork, Sodertalje SE;
Barry K. Carpenter. New York, NY; Birgitta K. Gotthammar, Stockholm, SE; Mats T.
Linderbcrg, Sodertalje, SE; Johan P. Lulhman, Gnesta, SE; Kerstin M.I. Persson,
Nyvarn, SE; Robert Schwarcz, Baltimore, MD1560RS RS99043

2,155,666                      8/1/95                      New
Compounds (compound
claim)                                                                PENDING                                Susanna
K.M. Bjork, Sodertalje SE, Barry K. Carpenter, New York, NY; Birgitta K.
Gotlhammar, Stockholm, SE. Mais T. Linderbcrg, Sodertalje, SE; Johan P. Luthman,
Gnesta, SE; Kerstin M.I. Persson, Nyvarn, SE; Robert Schwarcz, Baltimore,
MDI560RS RS99043

 
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EXHIBITC Aventis Patent Rights:

Country                      Application Serial
No.                                                      Filing
Date                                Known
As                      StatusInventorsUMTech ID
Docket No.
EP           92103066.4                                2/24/92                      NMDA
Antagonists                                           ISSUED 0501378BlMichael G.
Palfreyman, Cincinnati. OH; Ian Alexander McDonald, Loveland OH; Francesco G.
Salituro, Fairfield, OH; Robert Schwarcz, Baltimore. MD1196RS RS94036

GB           92103066.^1                                2/24/92                      NMDA
Antagonists                                           PENDING                                Michael
G. Palfreyman, Cincinnati, OH; Ian Alexander McDonald, Loveland OH; Francesco G.
Salituro, Fairfield, OH; Robert Schwartz, Baltimore, MDM96RS RS94036
CA           2,061,836                      2/25/92                      NMDA
Antagonists                                           PENDING                                Michael
G. Palfreyman, Cincinnati, OH; Ian Alexander McDonald, Loveland OH; Francesco G.
Salituro, Fairfield, OH; Robert Schwarcz, Baltimore, MDII96RS RS94036
US           08/165,144                                12710/93                      NMDA
Antagonists (tnclhod nf using 4 or 4,6 TRP)ISSUED
5,484,814                      Michael G. Palfreyman, Cincinnati, OH; Ian
Alexander McDonald, Loveland OH; Francesco G. Salituro, Fairfield, OH; Robert
Schwarcz, Baltimore, MD1196RS DIV
RS94036
US           08/187,353                                1/25/94                      NMDA
Antagonists (Claims 4.6TRH1ISSUED
5,360,814                      Michael G, Palfreyman, Cincinnati. OH; Ian
Alexander McDonald, Loveland OH; Francesco G. Salituro, Fairfield, OH; Robert
Schwarcz, Baltimore, MD; Bruce M. Baron, Cincinnati, OH1I96RS
CON2
RS94036
US           ^08/261.609                                6/17/94                      NMDA
An (agonists (4.6 KYN & method)ISSUED 5,470,870Michael G. Palfreyman,
Cincinnati, OH; Ian Alexander McDonald, Loveland OH; Francesco G. Salituro,
Fairfield, OH; Roberi Schwarcz, Baltimore, MD; Bruce M. Baron, Cincinnati,
OH1I96RS
DIV2
RS94036
US           08/502,980                                7/17/95                      NMDA
Antagonists (method of using 4,6 KYN)ISSUED 5,547,991Michael G. Palfreyman,
Cincinnati, OH; Ian Alexander McDonald, Loveland OH; Francesco G. Salituro,
Fairfield, OH; Robert Schwarcz. Baltimore, MD1196RS
Div3
RS94036
 
 

 
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EXHIBIT D Contribution Agreement
 
 
CONFIDENTIAL s                                           University ut'Maryland
\           Contribution Aereiimciil
CONTRIBUTION AGREEMENT

This Contribution Agreement ("Agreement" J made effective this _J~f_ day of
March. 200! (the ""Effective Date") by and between the University of Maryland.
Baltimore, a constituent institution of the University System of Maryland, an
agency of the State of Maryland ("UM"), and Cato Holding Company. Incorporated,
a corporation of the State of North Carolina, with its principal place of
business at 200 Westpark Corporate Center, 4364 South Alston Avenue. Durham,
North Carolina 27713 ("CHC").

WITNESSETH:

WHEREAS, UM and CHC wish to coordinate their efforts in support of a new company
("Company") that will be established in order to advance the development of UM\s
rights in patents related to certain NMDA antagonist and 3-HAO inhibitor
technologies in the area of all human and veterinary therapeutic and diagnostic
uses and therapeutic neuroprotective properties of a compound in the treatment
and diagnosis in humans and animals of epilepsy, neurodegenerative diseases,
ischcmic/hypoxic/hypoglycemic damage to cerebral tissue, anxiety, migraines and
pain ("Field''"): and

WHEREAS, CHC is willing to provide to Company certain capital and in-kind
contributions, on certain conditions, including but not limited to. that CHC
receive a majority ownership interest in Company; and

WHEREAS, UM is willing to provide to Company certain UM rights in patents on
certain conditions, including but not limited to. that UM receive an ownership
interest in Company: and

WHEREAS, CHC and UM have previously executed a Confidential Disclosure
Agreement, effective August 24. 1998, which agreement is incorporated herein by
reference (Exhibit A);

NOW THEREFORE, in consideration of the premises and the mutual covenants and
representations hereinafter stated, the parties agree as follows:
.CONl'lDUNTlAl.

ARTICLE 1. FORMATION OF COMPANY

LOI           Company will be established in the state of Maryland. Company will
have as its
principal place of business the office of Cato Research Washington, currently
located at 15020 Shady Grove Road, Suite 301, Rockville, Maryland 20850.
1.2           The structure of Company will be determined by CHC with input from
UM.
1.3           The equity distribution of the Company will be allocated as
follows: (1) 80% to CHC. and (2) 20% to UM. Shares issued to UM will have the
same rights as those issued to other founder shareholders.

1.4           Operation of Company will be directed by a Board of Directors, or
another appropriate governing body, consisting of two nominees and one
designated observer selected by CHC, and one nominee and one designated observer
selected by UM. Each nominee will have one vote. Observers will participate at
Board of Director meetings but will not vote.
1.5           Officers of the Company will be determined by the Board of
Directors.
1.6           The Chief Executive Officer of the Company will be chosen by
unanimous vote of the Board of Directors.
1.7           CHC will be responsible for management of day-to-day Company
operations.

 
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1.8           A Scientific Advisory Board (SAB) will be formed. The composition
of the SAB will be determined by the Board of Directors.

ARTICLE 2. ADDITIONAL RECAPITALIZATION OF COMPANY
 
2.1           Company Board of Directors may authorize the issue of additional
shares in
Company.
2.2           UM and CHC will share equally in future dilution of equity
resulting from distribution of shares to other investors.
 
 
ARTICLE 3. UM CONTRIBUTIONS
 
3.1           UM will grant Company exclusive, worldwide rights to UM Patents
("UM Patents". Exhibit B. Table 1) in the Field pursuant to a license agreement
containing appropriate reporting and due diligence requirements related to
product development and business development. License terms will include, but
are not limited to those in Exhibit C.
3.2           UM has obtained rights from the Cornell Research Foundation
("CRFT") to lead in negotiating a license agreement for patents jointly owned by
UM and CRF ("UM/CRF Patents". Exhibit B. Table 2). UM and CRF, respectively,
will grant Company exclusive, worldwide rights to their rights in UM/CRF Patents
in the Field, pursuant to a license agreement containing appropriate reporting
and due diligence requirements related to product development and business
development. License terms will include, but are not limited to those in Exhibit
C.
3.3           UM has obtained rights from Aventis Pharmaceuticals, Inc.
[formerly, Hoescht Marion Roussell, Incorporated] to patents owned by Aventis
("Aventis Patents". Exhibit A, Table 3 and see Exhibit D - "Copy of License
Agreement between UM and Aventis'"). UM will grant Company exclusive, worldwide
rights to Aventis Patents in the Field pursuant to a license agreement
containing appropriate reporting and due diligence recmirements related to
product development and business development. License terms will include, but
arc not limited to those in Exhibit C.
3.4           The license to UM Patents and UM/CRF Patents, and the sublicense
to Aventis Patents (collectively, '"Patents'"), will constitute UM's
consideration for UM's shares in Company.
3.5           UM will use reasonable efforts to assist or provide consultation
at Company's expense in support of the development and commercialization of
Patents, but in
its discretion may limit its resources and assistance.
3.6           UM will assist Company in identifying candidates for Chief
Executive Officer of Company and members of the Scientific Advisory Board.
3.7           UM will provide Company with scientific and technical information
about Patents, as necessary to assist Company in its efforts to access "seed
money"' from various state and local economic development programs.
3.08 When funding is made available by Company to UM, UM will negotiate a
research agreement with Company providing for UM's faculty inventors, including,
but not limited to, Dr. Robert Schwarcz, to conduct research experiments and
preclinical pharmacology and toxicology studies for which UM has existing
in-house expertise, resources, and facilities. Costs of research will be paid by
Company and will be based on UM's actual out-of-pocket expenses, personnel
costs, and overhead.

ARTICLE 4. CHC CONTRIBUTIONS
 
4.1           CHC will contribute $300,000 to Company in cash and in-kind
services, including, but not limited to, the services itemized in sections 4.05
and 4.06 below. Additional cash and in-kind services will be provided by CHC to
Company if they are deemed reasonably necessary by the Company Board of
Directors.
4.2           $300,000 of CHC's cash and in-kind services contribution,
calculated in accordance with section 4.03, will constitute CHC's consideration
for CHC's shares in Company. Cash, in-kind services, and direct expenses paid by
CHC on behalf of Company in excess of $300,000 may be accrued as indebtedness of
Company at the discretion of the Board of Directors.

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

 
 
4.03" Fees for services will be calculated according to CHC's standard hourly
service rates (Exhibit E).

4.04 CHC services and cash expenditures accrued as indebtedness of Company,
prior to Company receiving funding from corporate sponsorship and other sources,
will be at CHC*s risk. CHC will be eligible for reimbursement when adequate
funds, as determined by the Company Board of Directors, are raised by Company.
The amount and timing of reimbursements will depend on terms negotiated with
business partners providing funding to Company.

-t.05 CHC will pay all expenses associated with legal formation of Company. CHC
will prepare documents and do all other work required to form Company in
accordance with this Agreement, including, but not limited to, drafting
organizational documents. All legal documents will be submitted to UM for review
and approval before execution, and UM will respond promptly. CHC will make all
reasonable efforts to establish Company as soon as possible after execution of
this Agreement, in order to expedite application for funding from
Maryland Department.of Business and Economic Development (DBED). UM will receive
evidence from CHC that CHC has caused Company to be legally formed and that the
Company Board of Directors has been constituted, in accordance with Section
1.04.
a)           CHC shares will be issued under the name of "Cato Holding Company.
Incorporated."
b)           UM shares will be issued under the name of'"University System of
Maryland to use of University of Maryland. Baltimore."

4.06        In-kind services to be provided by CHC to Company will include:
a)           Manage the activities necessary to organize and form Company and
provide services to manage the daily operating requirements of the Company,
including legal, accounting, and tax requirements:
b)           Provide the services of professional staff from CMC's subsidiary.
Cato Research, Ltd.. to provide expertise and know-how required to advance the
development of Patents according to U.S. regulatory requirements;
c)           Provide Company with the services of a professional staff member to
serve as interim Chief Executive Officer for Company. When funding becomes
available, CHC and UM will identify a permanent Chief Executive Officer;
d)           Provide Company with the services of a dedicated project team to
manage product development activities, and a business team to manage corporate
development activities;

c) Prepare a complete inventory and assessment of all intellectual property held
by Company and conduct appropriate background research to identify and
compile relevant supporting documentation;

0 Assemble, assess, and summarize all existing and relevant non-clinical,
pre-formulation and formulation information, working with input from UM and Dr.
Robert Schwarcz:
 
 gi Prepare a business plan for Company and a research and development plan, a
technology brochure, and a manufacturing plan for the lead technology, within
180 days of Company formation;

h)           Identify potential investors and/or collaborators for Company;

i)           Initiate efforts to secure adequate funding for Company in the form
of
investments, corporate sponsorships, grants, venture capital, or licensing
opportunities, to commercialize and market Patents;

 
-24-

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

 
 
j) Prepare due diligence evaluation packages and manage assessments by potential
investors, corporate sponsors, or licensing partners;

k) Prepare and manage presentations and lead negotiations with potential
investors, sponsors, and partners;

1) Identify lead technologies and develop indication selection criteria for the
lead technologies;

m) Develop a regulatory strategy for the lead technology;

n) Explore and develop a manufacturing process for cost effective manufacture
and packaging of clinical trial quantities of lead compounds under good
manufacturing practices (GMP) conditions;

o) Identify and initiate additional pharmacology studies required to show
proof-of-concept and identify and initiate appropriate toxicology studies
required for an IND (and subsequent NDA submission).

4.07    During the term of this Agreement and for 5 years after its expiration
or termination. CHC will keep complete, true, and accurate records containing
all the particulars that
may he necessary for UM to determine [hat CMC's contributions have been made in
accordance with this Aercemcnt.
 
ARTICLE 5. STRATEGIC OBJECTIVES
 
5.01        The initial strategic objectives of the Company will be as follows:
 
a)           Establishment of a governing structure for Company and SAB;
b)           Development of a research and development plan to outline the
pathway to demonstrate initial safety and efficacy, and move to clinical trials;
c)           Development of a business plan for nonclinical and clinical phases
in sufficient derail to allow Company io raise funds to pursue early clinical
trials;
d)           Development of a synthesis plan for the trial compounds and
production plan for manufacture of sufficient materials for clinical trials,
under FDA approved GMPs:
e)           Identification of potential partners for the manufacturing and
marketing requirements and negotiations of advantageous business relationships;
f)           Procurement of financing to facilitate the development and
commercialization of UM patents;
g)           Utilization of minimal administrative support to accomplish these
tasks.

ARTICLE 6. ADDITIONAL AGREEMENTS

6.01 Services provided by UM, and by Dr. Schwarcz as an employee of UM, will be
under a separate Research Agreement between UM and Company. The Research
Agreement will provide for UM to assist Company in compiling and analyzing
existing data from non-clinical and pre-formulation and formulation data. Grant
money, corporate sponsorships, and other sources of funding made available to
Company will be used in part to support IJM's work under the research agreement.

. 6.02 Services provided by Dr. Robert Schwarcz to Company as an independent
consultant will be under a separate consulting agreement between Dr. Schwarcz
and Company. The consulting relationship is subject to review and approval bv UM
in accordance with the Maryland Public/Private Partnership Act.
aiNHDHNTIAl.

ARTICLE 7. OBLIGATIONS OF COMPANY
 
7.1           Company will provide evidence to UM and CHC that stock has been
issued and is authorized for delivery to UM and CHC in accordance with Section
1.03. Such evidence will include a certificate, dated no later than 90 days
after the Effective Date of this Agreement, from the Department of Assessments
and Taxation of the S'ate of Maryland io the effect that Company is duly
established and in good standing in the State of Maryland.

 
-25-

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7.2           At the time $500,000 in funding has been raised by Company,
Company will reimburse UM for ali past expenses incurred by UM or CRF on UM
Patents and UM/CRF Patents (See Exhibit F). Additionally, Company will pay UM
for all actual future fees and costs associated with maintenance and prosecution
of UM and UM/CRF Patents in the United States, Canada, and the United Kingdom
and any other countries selected by Company for patent prosecution and
maintenance.

Upon the initiation of a Phase III clinical trial of a Licensed Product by
Company, or a Company Affiliate or Sublicensee, Company will reimburse Aventis
for all past patent expenses incurred by Aventis that are associated with
maintenance and prosecution of Aventis Patents in the United States, Canada, and
the United Kingdom and any other countries selected by Company for patent
prosecution or maintenance, up to the date of initiation of the Phase III
clinical trial, to a maximum amount of $250,000. Additionally, Company will
begin reimbursing Aventis for all actual fees and costs incurred by Aventis that
are associated with maintenance and prosecution of Aventis Patents in the United
States, Canada, and the United Kingdom and any other countries selected by
Company for patent prosecution or maintenance.
7.3           Company will: a) apply for funding from the Maryland Department of
Business and Economic Development (DBED) as soon as reasonably possible after
Company is established, and b) apply for Maryland Industrial Partnerships (MIPS)
funding in cooperation with UM, and in the process commit $5,000 cash plus
£45,000 in-kind services to obtain matching funds of 550,000, by the first MIPS
application deadline occurring more than 90 days after the Effective Date of
this Agreement.
7.04
Company will pay all travel expenses for Company. UM, and CHC personnel
participating in Company fund-raising efforts. Travel expenses must be
pre-authorized by Company.
7.5           Company will make every effort in negotiations with sponsors and
funding sources to assure that all of Company's accrued indebtedness to CHC can
be recovered, but it is understood that CHC may not be reimbursed in full.
7.6           All funds received from federal and state grants awarded to
Company that are designated to be used for research and development will be
allocated to support research and development efforts for technologies covered
by the Patents.
7.7           Company will designate Cato Research. Ltd. as the exclusive source
for all clinical and regulatory development services.
7.8           Company, at Company's expense and with the consent of UM, will
offer to use UM, the University ofMaryland Medical System, or the Maryland
Psychiatric Research Center as an investigational site for any suitable clinical
trials undertaken in the Licensed Field during the term of the Patent license
agreement, subject to agreement on terms and conditions, including compensation,
negotiated in good faith.

ARTICLE 8. CONDITIONS TO OBLIGATIONS OF THE PARTIES

8.01        This Agreement is effective subject to the satisfaction of the
following conditions.
unless waived in writing by the party to whom performance of the obligation is
owed:

a) The representations and warranties made by CHC and UM in this Agreement,
including any corresponding Exhibits, will be true and correct in all material
respects at and as of the Effective Date of this Agreement.
b)           CHC and UM will have performed all obligations required to be
performed by them prior to or upon execution of this Agreement, and complied
with all covenants for which compliance by them is required under this
Agreement, prior to or upon execution.
c)           CHC will receive evidence from UM that UM and CRF have executed a
license agreement granting exclusive rights in UM/CRF Patents to Company.
 
 

 
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The License Agreement will be in the form of, or substantially similar to,
Exhibit C.

d) The form of all instruments, certificates and documents to be executed and
delivered pursuant to this Agreement and all legal matters in respect of the
transactions as herein contemplated will be reasonably satisfactory to UM and
CHC. and Company, none of whose approval will be unreasonably withheld or
delayed.

ARTICLE 9. REPRESENTATIONS AND WARRANTIES
 
9.1           UM hereby represents that to the knowledge of the executing UM
officer, as of the date of execution by the officer: (a) UM has full legal
right, power and authority to execute, deliver and perform its obligations under
this Agreement; and fb) the execution, delivery and performance by UM of this
Agreement do not contravene or constitute a default under any provision of
applicable law or of any agreement, judgment, injunction, order, decree, or
other instrument binding upon UM.
9.2           CMC hereby represents and warrants to UM that: (a) CHC has full
legal right, power and authority to execute, deliver and perform its obligations
under this Agreement; (b) the execution, delivery and performance by CHC of this
Agreement do not contravene or constitute a default under any provision of
applicable law or of any agreement, judgment, injunction, order, decree, or
other instrument binding upon CHC.

9.03 Each party represents that no action, suit or other proceeding is pending
or threatened before any court, tribunal or governmental authority seeking or
threatening to restrain or prohibit the consummation of the transactions
contemplated by this Agreement, or seeking to obtain damages in respect thereof,
or involving a claim that consummation thereof would result in the violation of
any law. decree or regulation of any governmental authority or court will have
been entered challenging the legality, validity or propriety of. or otherwise
relating to. this Agreement or the transactions contemplated hereby, or
prohibiting, restraining or otherwise preventing the consummation of the
transactions contemplated hereby.
 
ARTICLE 10. TERM AND TERMINATION
 
10.1           This agreement may be terminated if any one or more of
thefollowing occur:

a)           The failure of UM or CHC to satisfy all of the conditions of this
Agreement as provided in Article 8 hereof;
b)           The substantial breach, inaccuracy or untruth of any of the
representations or warranties of UM or CHC contained herein; or
c)           The substantial failure of UM or CHC to perform any other covenants
or agreements which they are required to perform hereunder.
10.2           Upon the occurrence of any of the events set forth in Section
10.01 above, the terminating party will give written notice to the other party
of the default, and the non-terminating party will have 30 days in which to cure
the default. If the non-terminating party fails to cure the default within the
30 day period, then this Agreement may be terminated.
10.3           CHC may terminate this Agreement at any time by giving UM 90 days
written notice of termination, and upon payment to UM of all payments maturing
through the effective date of the termination.

ARTICLE II. INDEMNIFICATION AND OTHER REMEDIES
 
11.1           UM and its officers and employees acting within the scope of
their employment by UM are subject to the Maryland Tort Claims Act ("the Act"),
Title 12, Subtitle 1, State Government Article, Annotated Code of Maryland,
which permits claims in tort against the State of Maryland under certain
circumstances. In order to file a claim under the Act, a claimant must submit a
written claim to the Treasurer of the State of Maryland or a designee of that
office within one year after (he injury to the person or property that is the
basis of the claim.

 
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11.2           CHC hereby agrees to defend, indemnify, and hold harmless UM, the
University System of Maryland, and the State of Maryland, the regents, officers,
employees, students, and agents of UM (collectively "Indemnitees") against any
and all claims, costs, or liabilities, including attorney's fees and court costs
at both trial and appellate levels, for any loss, damage, personal injury, or
loss of life caused by negligence in the actions oi~ CHC or its officers,
servants, or agents, or third

parties acting on behalf of or under authorization from CHC in the performance
of this Agreement; and to defend, indemnify and hold Indemnitees harmless from
any liability arising out of or caused by any negligence in actions or omissions
of CHC with respect to obligations incurred under this Agreement. The foregoing
obligation will not apply to any claim, cost, or liability attributable solely
to the negligence of Indemnitee personnel.

11.03 UM and CHC further agree that nothing in this Agreement will be
interpreted as: (a) a denial to either party of any remedy or defense available
to it under the laws of the States of Maryland or North Carolina; (b) the
consent of the State of Maryland or its agents and agencies to be sued; or (c) a
waiver of sovereign immunity or any other governmental immunity of the State of
Maryland and UM beyond the extent of any waiver provided by law.

ARTICLE 12. MISCELLANEOUS
 
12.1           This Agreement constitutes the entire understanding and agreement
between the parties hereto with respect to the subject matter hereof, and there
are no agreements or warranties between the parties other than those set forth
herein.
12.2           This Agreement, including Exhibits, may not be amended, nor may
any right or remedy of either party be waived, unless the amendment or waiver is
in writing and signed by a duly authorized representative of each party.
12.3           This Agreement will be construed and enforced under the laws of
the State of Maryland.
12.4           The parties will cooperate fully with each other and with their
respective counsel in connection with any steps required to be taken as part of
their respective obligations under this Agreement, and agree that they will
execute instruments and documents as are or may become reasonably necessary to
effectuate and carry
out she purposes of this Agreement.
12.5           Unless otherwise provided, all costs and expenses incurred in
connection with this Agreement will be paid by the party which incurs the cost
or expense, and the other party has no liability for such cost or expense.
12.6           Neither party will use the name of the other or any of its
employees or personnel, ur any adaptation thereof- in any advertising,
promotional, or sales literaturewithout prior written consent obtained from the
other party. Either party may publicize the fact that the parties have made this
Agreement.

12.07       Neither party may assign or transfer this Agreement without the
prior written consent of the other party.
12.8           This Agreement will be only for the benefit of the undersigned
parties and their permitted successors and assigns, and no one will be deemed to
be a third party beneficiary of this Agreement.
12.9           UM and CHC are not (and nothing in this Agreement may be
construed to constitute them as) partners, joint venturers, agents,
representatives or employees of the other, nor is there any status or
relationship between them other than that of independent contractors. Neither
party has any responsibility or liability for the actions of the other party
except as specifically provided in this Agreement. Neither party has any right
or authority to bind or obligate the other party in any manner or make any
representation or warranty on behalf of the other party.
12.10                      This Agreement is signed in duplicate originals. The
headings used in this Agreement are for convenience of reference only and do not
affect the meaning or construction of this Agreement.

 
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12.11                      All notices, consents and other communications
required or allowed under this Agreement must be in writing and are elective
upon receipt: (a) when delivered by hand; or (b) when received by the addressee
after being mailed by registered or certified mail (air mail if mailed
overseas), return receipt requested; or (c) when received by the addressee, by
delivery service (return receipt requested), in each case addressed to the party
at its address set forth below (or to another address that a party may later
designate by notice to the other parry):

If to UM:                      Executive Director
Office of Research and Development University of Maryland, Baltimore 515 West
Lombard Street. Suite 500 Baltimore. Mary land 21201 -1602

Copy to:                      University Counsel
University ofMaryland, Baltimore 520 West Lombard Street. Second Floor
Baltimore. Maryland 21201-1 627
 
 
 
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EXHIBIT A
 
CONFIDENTIALITY AGREEMENT
 
CONFIDENTIAL DISCLOSURE AGREEMENT

THIS AGREEMENT is made effective the 2-3 ^ day of August, 1998, by and between
the University of Maryland, Baltimore ("UM"), a public institution of higher
education of the State of Maryland, and Cato Holding Company ("Company"), a
corporation organized under the laws of the State of North Carolina.

Recitals
 
UM is in possession of information which UM considers confidential and in which
UM has a proprietary interest, which is generally described as Dr. Schwarcz's
"NMDA Antagonists" Company is in possession of information which Company
considers confidential relating to the proposed business dealings of UM with
Company. (Hereinafter the proprietary information of each party is collectively
termed the "Information.") UM and Company each wish to receive a disclosure of
the Information from the other and agrees to hold that disclosure in confidence
during the term of this Agreement subject to the conditions set forth herein. UM
is willing to make its disclosure in order to permit the Company to evaluate its
opportunities to support research at UM involving the Information, to license UM
intellectual property comprising or related to the Information, and/or to
support applications for letters patent and other legal protection for its
Information. Company is willing to make its disclosure in order to permit UM to
better evaluate business opportunities for UM technology.

NOW THEREFORE, the parries agree as follows:
 
1.           The respective Information of each parry is a valuable asset of
such party. Each party has an exclusive proprietary right and interest in its
respective Information. The Information includes any documents, drawings,
sketches, models, designs, data, memoranda, tapes, records, and other material
provided by UM to Company or by Company to UM.
2.           Each party will use the other's Information only during the term of
the agreement and only for technical and economic evaluation as described in the
Recitals and not for its commercial benefit. Neither party will use the
Information for any other purpose.
3.           The parties will disclose the Information to each other upon the
following conditions, which are accepted by both:

(a)           Each party's Information shall be held in confidence by the other
for a five (5) year period (the "Term") beginning on the effective date of this
Agreement. The Company shall have the right to disclose the Information to its
subsidiaries or parent company subject to the obligations of this Agreement.

 
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(b)           The Company shall take such steps as may be reasonably necessary
to protect all documents, drawings, sketches, models, designs, data, memoranda,
tapes, records and other material provided by UM as part of the Information, or
made by Company containing Information, from being made available in any form to
any person other than authorized Company or UM employees without prior written
consent from UM during the term of the Agreement.
(c)           The Company agrees to obligate any and all employees who may have
access to any portion of the Information, in any form, to protect the
confidential and proprietary nature of the Information.
(d)           The Company recognizes that UM is an educational institution with
standards and practices for protection of confidential information which differ
from Company's standards and practices. By this Agreement UM undertakes to use
reasonable efforts to protect the confidentiality of Company's information.
(e)           All Information disclosed to either party in written form shall be
clearly marked as confidential. AU Information disclosed orally or in any other
form shall be clearly identified as confidential and summarized in a written
document provided to the receiving party within thirty (30) days of initial
_ disclosure clearly marked as confidential.
4.           The obligations of confidentiality set forth in paragraph 3 shall
not apply to any part of the Information:

(a)           which at the time of disclosure is information already generally
available to the public or which after disclosure becomes generally available to
the public. other than through a party hereto who received it under this
Agreement; or
(b)           which either party can show by reliable written evidence was
acquired by such party on a non-conii den rial basis from any third party having
a bona fide right to disclose it to said party; or
(c)           which either party can demonstrate by written record was or is
subsequently developed by such party independently of the disclosure of the
Information by the other party.
5.           Following the expiration of the Term, neither party shall have an
obligation pursuant to this Agreement restricting its disclosure and use of the
Information.
6.           The Company shall notify UM within one hundred eighty (180) days
from the date it receives LfM's Information whether or not the Company has any
interest in pursuing a research or licensing agreement with UM. If (a) the
Company notifies UM that the Company has no such interest, or (b) the Company
later determines that it has no such interest, and notifies UM of such
determination, both parties shall, upon
,» written request, will return all documents, drawings, sketches, models,
designs, data, memoranda, tapes, records, and other material provided as part of
the Information
 
Lombard^Building, Fifth Floor 515 W. Lombard Street Baltimore, Maryland
21201-1691 Tel. (410) 706-6631 FAX (410)706-6630
11.           This Agreement shall be governed by the laws of the State of
Maryland and, to the extent applicable, by the laws of the United States. Any
dispute between the parties concerning the terms of this Agreement shall be
decided in a court of competent jurisdiction over the parties and subject matter
located in Baltimore City, Maryland.
12.           This Agreement constitutes the entire agreement of the parries
concerning the matters discussed herein. This Agreement may be amended only by a
written instrument executed by authorized representatives of the parties.

 
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their authorized representatives as of the date first above written.

CATO HOLDING COMPANY
BY:
Allen Cato, M.D., Ph.D. President
DATE: _
UNIVERSITY OF MARYLAND, BALTIMORE
B Y:     
Marjorie Forster Executive Director Office of Research and Development
DATE:

 University of Maryland 
 
 

 
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EXHIBIT B
 
PATENTS
 
 

 
 

 
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EXHIBIT C
 
DRAFT LICENSE BETWEEN UiVI, CRF AND NEW COMPANY ("ARTEMIS")
LICENSE AGREEMENT between
UNIVERSITY OF MARYLAND. BALTIMORE and
CORNELL RESEARCH FOUNDATION, INC. and
ARTEMIS NEUROSCIENCE, INC.

This License Agreement ("Agreement") made effective
this                                                                                                                                day
of,
2001 (the "Effective Date") by and between the University ofMaryland, Baltimore,
a constituent institution of the University System ofMaryland, an agency of the
State of Maryland ("UM"), CORNELL RESEARCH FOUNDATION, INC., a wholly owned
subsidiary of Cornell University, located at Cornell Business & Technology Park,
20 Thornwood Drive, Suite 105, Ithaca, NY 14850 ("CRF') and ARTEMIS
NEUROSC1ENCE, INC., (ARTEMIS) a corporation of the State ofMaryland, U.S.A.,
with its principal place of business at
("Company"),

WITNESSETH:

 
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WHEREAS, as a public research and education institution, UM is interested in
licensing Patent Rights (as defined below) in a manner that will benefit the
public by facilitating the distribution of useful products and the utilization
of new methods, and lacks capacity to commercially develop, manufacture, and
distribute such products or methods: and

WHEREAS, subject to certain rights retained by the federal government in
federally sponsored research, UM and Astra Aktiebolag of S-151 85 Sodertalje,
Sweden ("Astra"), were joint owners by assignment from the Inventors, listed in
Exhibit A, of the entire right, title, arid interest in the U.S. Patents and
Patent Applications listed in Exhibit A and in any foreign patent applications
and patents corresponding thereto, and in the inventions described and claimed
therein, and any divisions, continuations, continuations in part,
re-examinations, or reissues thereof ("UM Patent Rights"); and

WHEREAS, by an assignment agreement executed October 19, 1998, Astra granted UM
all of Astra*s right, title, and interest in UM Patent Rights; and

WHEREAS, subject to certain rights retained by the federal government in
federally sponsored research, UM and CRF are joint owners by assignment from the
Inventors, listed in Exhibit B, of the entire right, title, and interest in the
U.S. Patents and Patent Applications listed in Exhibit B and in any foreign
patent applications and patents corresponding thereto, and in the inventions
described and claimed therein, and any divisions, continuations, continuations
in part, re-examinations, or reissues thereof ("UM/CRF Patent Rights"); and

WHEREAS, by an Inter-Institutional Agreement executed May 11. 1990, UM and CRF
have agreed to act jointly in licensing UM/CRF Patent Rights; and

WHEREAS. Aventis Pharmaceuticals, Incorporated (formerly Hoescht Marion RousscH
of Route 202 206, Bridgewater, N.J. 08807 ("Aventis"), is the owner by
assignment from the Inventors, listed in Exhibit C, of the entire right, title,
and interest in the U.S. Patents and Patent Applications listed in Exhibit C and
in any foreign patent applications and patents corresponding thereto, and in the
inventions described and
claimed therein, and any divisions, continuations, continuations in part, re-ex
ami nations, or reissues thereof ("Aventis Patent Rights"); and

WHEREAS, by an agreement effective September 28, 2000, Aventis has granted UM a
license with rights to exclusively sublicense Aventis Patent Rights to a third
party licensee ("Aventis License", Exhibit C in the Contribution Agreement,
defined below); and
 
WHEREAS, Company desires to obtain a worldwide, exclusive, royalty-bearing
license to the aforementioned UM Patent Rights, UM/CRF Patent Rights, and
Aventis Patent Rights (all, collectively, "Patent Rights"), to make, have made,
use, lease, offer to self, sell, and import products embodying the Patent
Rights; and
 
WHEREAS, by a Contribution Agreement executed
on                                                                                                                     ,
UM and
Cato Holding Company ("CHC"), of 200 WestPark Corporate Center, 4364 S. Alston
Avenue, Durham, NC 27713, have agreed to support Company in its efforts to
develop Patent Rights, which Contribution Agreement is incorporated herein by
reference as Exhibit D;

NOW, THEREFORE, in consideration of the foregoing premises and the following
mutual agreements, and other good and valuable consideration, the parties agree
as follows:

 
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ARTICLE 1. DEFINITIONS
 
For the purpose of this Agreement, the following words and phrases have the
following meanings:
1.1           "Affiliate" means any entity which directly or indirectly
controls, is controlled by, or is under common control with Company. "Control"
means the right to exercise more than 50% of the voting rights of a controlled
corporation or limited liability company or the power to direct or cause the
direction of the management or policies of any other controlled entity.
1.2           "Aventis Improvement" means any Improvement (as defined below)
made solely by one or more employees ofT or owned solely by, Aventis or Aventis'
Affiliates.
1.3           "Combination Product" means a product in a form containing a
Licensed Product (as defined below) and one or more component(s) that is not a
Licensed Product and is sold separately by Company or its Affiliate in at least
one country.
1.4           "Company Improvement" means any Improvement (as defined below).
made solely by one or more employees of, or owned solely by. Company or
Company's
, i Affiliates.
1.5           "Confidential Information'' means information relating to the
subject matter of the Patent Rights (as defined below) which has not been made
public or which is not generaily known and includes, without limitation, any
documents, drawings.
sketches, models, designs, data, memoranda, tapes, records, formulae and
algorithms, either orally, in hard copy form or in electronic form, which
Company receives from UM. CHC. or CRF. or UM. CHC. or CRF. receives from Company
1.6           "First Commercial Sale" means the initial transfer of a Licensed
Product for compensation by Company, an Affiliate or a Sublicensee to a Third
Party (defined below).
1.7           "Improvement" means any patentable discoveries or inventions
related to Patent Rights in the Licensed Field, reasonably necessary for the
practice of Patent Rights by Company under this Agreement, which is or may be
patentable or otherwise protected under law.
1.8           "Joint Improvement" means an Improvement made by one or more
employees of, or owned by, Company or Company's Affiliates, and: 1) one or more
employees of, or owned by, UM and/or, 2) one or more employees of, or owned by,
Aventis and/or, 3) one or more employees of, or owned by CRF.
1.9           "Licensed Field" means ail human and veterinary therapeutic and
diagnostic uses and therapeutic neuroprotective properties of a compound in the
treatment and diagnosis in humans and animals of epilepsy, neurodegenerative
diseases, ischemic/hypoxic/hypoglycemic damage to cerebral tissue, anxiety,
migraines and pain.
1.10           "Licensed Product" means any product, including but not limited
to a Combination Product, using any Patent Rights, including any product
containing a compound that is covered by Patent Rights.

1.11           "Net Sales" means the gross sales revenues and fees billed by
Company,
an Affiliate or a Sublicensee for the sale of Licensed Products, less the sum of
the
following;
(a)           customary trade, quantity and cash discounts actually allowed and
taken;
(b)           sales or use taxes, excise taxes and customs duties included in
the invoiced amount;
(c)           outbound transportation prepared or allowed if separately itemized
on the invoice to the customer; and
(d)           amounts actually allowed or credited on returns of Licensed
Products.
(e)           "Net Sales" does not include any further downstream sales of a
Licensed Product after the first sale thereof by Company, an Affiliate or a
Sublicensee to a Third Party purchaser. No deductions will be made for
commissions paid to individuals, whether they be with independent safes agencies
or regularly employed on the payroll by Company, its Affiliate(s) or
Sublicensee(s), or for cost of collections. Licensed Products will be considered
sold when billed out or invoiced, whichever is firsi.
1.12           "Patent Rights" means:

(a)           U.S. and foreign patent applications and patents listed in
Exhibits A, B, and C as they may be amended from time to time in accordance with
Article 17;

 
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(b)           U.S. and foreign patents issuing from the applications listed in
Exhibits A, B, and C, and as they may be amended, and from all divisions and
continuations of these applications;
(c)           claims of U.S. and foreign continuation-in-part applications, and
of the resulting patents, which are directed to subject matter specifically
described in the U.S. and foreign applications listed in Exhibits A, B, and C.
as amended;
(d)           claims of all foreign patent applications, and of the resulting
patents, which are directed to subject matter specifically described in the U.S.
patents and patent applications described in (a), (b), or (c) above; and
(e)           any reissues, reexaminations and extensions, or the foreign
equivalent of these of U.S. and foreign patents described in (a), (b), or (c)
above.
1.13           "Research Agreement" means a separate agreement between Company
and UM under which UM will assist Company in conducting unspecified research.
1.14           "Sublicensee" means a person or entity, including an Affiliate,
to which Company transfers all or some of the Patent Rights through a
sublicense.
1.15           "Third Party" means any entity or person other than UM, Company,
an Affiliate, Sublicensee, the inventors, CRF, or Aventis.
1.16           "UM Improvement" means any Improvement, made solely by one or
more employees of, or owned solely by, UM.

ARTICLE 2. GRANT OF LICENSE
 
2.1           Subject to the rights of the United States under its earlier grant
to UM and pursuant to 35 U.S.C. Section 201 et seq. and all implementing
regulations, UM grants to Company, and Company accepts, a sole and exclusive
worldwide license, with rights to sublicense, under UM rights in Patent Rights
to make, have made, use, lease, offer to sell, sell and import the Licensed
Products within the Licensed Field for the term of this Agreement.
2.2           Subject to the rights of the United States under its earlier grant
to CRF and pursuant to 35 U.S.C. Section 201 et seq, and all implementing
regulations, CR.F granK to Company, and Company accepts, a sole and exclusive
worldwide license, with rights
t to sublicense, under CRF rights in Patent Rights to make, have made, use,
lease, offer to sell, sell and import the Licensed Products within the Licensed
Field for the term of this Agreement.
2.03           Company may transfer its rights to an Affiliate through
agreements that
are consistent with this Agreement, provided Company is responsible for the
operation of
its Affiliate relevant to this Agreement as if operations were carried out by
Company,
including the payment of royalties, whether or not paid to Company by Affiliate.

2.04           Company may grant sublicenses consistent with this Agreement
provided Company is responsible for the operation of its Sublicensees relevant
to this
Agreement as if the operations were carried out by Company, including the
payment of
royalties, whether or not paid.to Company by Sublicensees.
2.5           Company will identify its Affiliates and its Sublicensees
hereunder to UM by name, address and field of sublicense (both as to geography
and subject matter), and will promptly provide to UM a copy of each sublicense
and a copy of each agreement or document designating or establishing an
Affiliate.
2.6           If Company intends to accept from Affiliates or Sublicensees
anything of value in lieu of cash in consideration for any sublicense or other
transfer of rights under this Agreement, Company must first obtain UM's written
approval.
2.7           UM specifically reserves the rights:

(a)           to practice Patent Rights and to make and use the Licensed
Products on a royalty-free basis solely for research and education, and to
license other non-profit educational and research institutions to practice
Patent Rights for the same purposes:
(b)           to provide information and materia! covered by Patent Rights to
universities, colleges and other research or educational institutions, but only
for noncommercial research and educational purposes and uses and not for any
commercial purposes or uses; and
(c)           to publish the general scientific Findings from research related
to Patent Rights.

 
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2.8           CRF specifically reserves the rights;

(a)           to practice under the UM/CRF Patent Rights and to make and use the
Licensed Products on a royalty-free basis solely for research and education, and
to license other non-profit educational and research institutions to practice
the UM/CRF Patent Rights for the same purposes;
(b)           to provide information and material covered by the UM/CRF Patent
Rights to universities, colleges and other research or educational institutions,
but only for noncommercial research and educational purposes and uses and not
for any commercial purposes or uses; and
(c)           to publish the general scientific findings from research related
to UM/CRF Patent Rights.
2.9           Aventis specifically reserves the rights to use Aventis Patent
Rights in the Field of Use for research purposes only. Aventis retains all
rights to use Aventis Patent Rights for applications not included in the Field
of Use.
2.10        UM Improvements are owned by UM. Aventis Improvements are owned by
Aventis. Joint Improvements are owned jointly. Company Improvements are owned by
Company, subject to a grant to UM_of a non-exclusive, non-transferable,
irrevocable, and royalty-free license to practice Company Improvements in any
field of use for research and education but not for commercial purposes.

ARTICLE 3. COMPANY'S OBLIGATIONS
 
3.1           Within 180 days of the date of legal formation of Company in the
State of Maryland, Company will deliver to UM a research and development plan
and a business plan. The research and development plan will show the amount of
money and time budgeted and planned for technical development of Patent Rights,
and a proposed commercialization scheme for Patent Rights. The business plan
will show the amount of money, time, number and kind of personnel budgeted, and
activities planned, for each phase of commercialization of Patent Rights and
Licensed Product development, including but not limited to: clinical studies,
regulatory approval, marketing, manufacturing and further sub-licensing of
Licensed Products. Prior to the First Commercial Sale of a Licensed Product,
Company will provide progress reports to UM once every 3 months comparing actual
progress to the research and development plan, and the business plan. UM will
provide the research and development plan to Aventis as confidential
information. UM may provide the progress reports, research and development plan,
and the business plan to CRF as confidential information.
3.2           Company will use commercially reasonable efforts to bring one or
more Licensed Products to market in each country in which Licensed Products are
licensed if ,in the reasonable judgement of the Company's management, there is
sufficient commercial justification to do so.
3.3           Company will have full legal and financial responsibility for all
costs that are incurred and all activities that are undertaken after the signing
of this Agreement which are related to development, safety, and required
periodic reporting to the FDA and such equivalent regulatory agencies,
marketing, regulatory approvals, price registrations, compliance with all
applicable laws and regulations and other activities required by or of Company
or its Affiliates or Sublicensees (or their respective agents or distributors)
elsewhere to obtain appropriate governmental approvals for, and to
commercialize, Licensed Product.
3.4           The use and disclosure of technical information acquired pursuant
to this Agreement and the exercise of Patent Rights granted by this Agreement
are subject to the export, assets, and financial control regulations of the
United States of America, including, but not limited to, restrictions under
regulations of the United States that may
j be applicable to direct or indirect re-exportation of such technical
information or of equipment, products, or services directly produced by use of
such technical information. Company is responsible for taking any steps
necessary to comply with such regulations.
3.5           Company assumes all "Obligations of Company" in the Contribution
Agreement (Exhibit D). The 20% ownership stake in Company granted to UM by
Company is given in partial consideration for the license of Patent Rights under
this Agreement.
3.6           Company, Affiliates, and Sublicensees will provide prompt notice
to UM of any inquiries as to any Patent Rights which have claims to
manufacturing processes, which inquiries are provided pursuant to 35 USC §
271(g), and will cooperate with respect to responses thereto.

 
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ARTICLE 4.  EQUITY TRANSACTION AND MANAGEMENT OF COMPANY
 
4.1           Within 60 days after the Effective Date, Company will deliver to
UM a number of common shares sufficient to provide UM 20% ownership stake in the
Company following such issuance, for and in consideration of this Agreement.
Shares issued to UM will have the same rights as those issued to other founder
shareholders and in the event of future dilution of equity, founders' shares
will be diluted equally. UM shares will be issued under the name of "University
System of Maryland to use of University of Maryland, Baltimore."
4.2           No later than the Effective Date, UM will designate 1 voting
director and 1 non-voting observer who will serve on the Board of Directors of
Company. UM will have the right to designate I director and 1 observer for so
long as this Agreement is in effect.

ARTICLE 5.  PAYMENTS AND ROYALTIES

5.01           No up-front license fee. milestone fee, or license maintenance
fees will
be paid for Patent Rights.
5.2           There will be no minimum royalties paid for Patent Rights.
5.3           A royalty rate of 2% will be paid by Company for Net Sales of
Licensed Products excluding Combination Products and a royalty rate of 1% will
be paid by Company for Net Sales of Combination Products.
5.4           Running royally payments due and payable for each calendar quarter
will be made within 30 days after the close of each calendar quarter. If no
royalties are due for any quarter, Company will send a statement to such effect
to UM.
5.5           Company will pay running royalties on a country-by-country basts
as provided in paragraph 5.03 \* MERGEFORMAT in each country for Licensed
Products covered in that country under Patent Rights, until the later of: (i)
disallowance, expiration or invalidation of all claims in the Patent Rights of
that country lhat cover the Licensed
Products or (ii) 10 years following First Commercial Sale of the first Licensed
Product in any country.

5.06
(a)           Royalties are payable from the country in which they are earned
and are subject to foreign exchange regulations then prevailing in that country.
Royalty payments must be paid to UM in United States Dollars by check or checks
drawn to the order of UM or by electronic funds transfers to an account
designated by UM. To the extent sales may have been made by Company, its
Affiliates or Sublicensees in a foreign country, those royalties will be first
determined in the currency of the country in which the royalties are earned and
then converted to their equivalent in United States Dollars. The buying rates of
exchange for converting the currencies involved into the currency of the United
States will be based on rates as quoted by the Morgan Guaranty Trust Company of
New York, New York, averaged on the last business day of each of 3 eonsecutive
calendar months constituting the calendar quarter in which the royalties were
earned, will be used to determine any such conversion. Company will bear any
loss of exchange or value and pay any expenses incurred in the transfer or
conversion to U.S. dollars.
(b)           To the extent that statutes, laws, codes, or government
regulations (including currency exchange regulations) prevent or limit royalty
payments by Company, its Affiliates or its Sublicensees in any country, Company
will render to UM annual reports of sales of the Licensed Product in such
country. AH monies due and owing UM as provided in the annual reports at UM's
option (1) will promptly be deposited by Company, its Affiliates or its
Sublicensees, as the case may be, in a local bank in such country in an account
to be designated by UM in writing or (2) will be paid promptly to UM or
deposited in its account, as directed in writing by UM in any other country
where the payment or deposit is lawful under the currency restrictions.

5.7           Interest is due on any payments to UM required by any Section of
this Agreement that are more than 30 days late. The interest rate is 6% simple
interest per annum.

 
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5.8           Royalties received by UM on Net Sales of Licensed Product
incorporating UM/CRF Patent Rights will be divided with UM receiving a 60% share
and CRF receiving a 40% share-. On March 31, June 30, September 30, and December
31 of each year, UM will pay to CRF an amount equal to 40% of all royalties
received by UM on Net Sales of Licensed Product incorporating UM/CRF Patent
Rights. If no royalties are earned during a calendar quarter, UM will so report.
Each party is responsible for paying to iis inventors, colleges, schools or
departments such share of royalties attributable to the inventor's invention as
is customary under the party's policies and
, practices.
 
ARTICLE 6.  PATENT PROSECUTION AND PUBLICATIONS
 
6.1           UM is responsible for Filing patent applications for UM Patent
Rights and UM/CRF Patent Rights. Aventis is responsible for filing patent
applications for Aventis Patent Rights.
6.2           Company will promptly report to UM in writing each Company
Improvement. AH reports of Company Improvements are Confidential Information.
Such reports will be in sufficient detail to determine inventorship.
Inventorship will be determined in accordance with the patent laws of the United
States. UM is responsible for filing patent applications on UM Improvements,
Company Improvements, and Joint Improvements arising out of UM Patent Rights,
UM/CRF Patent Rights and Aventis Patent Rights. Aventis is responsible for
filing patent applications for Aventis Improvements.
6.3           When UM is responsible for filing a patent application, Company
must reimburse to UM within 30 days of UM's request all reasonable costs and
fees incurred by UM and CRF in connection with the prosecution and maintenance
of the application, including all costs associated with preparation, filing,
prosecution, issuance, reissuance, reexamination, interference, and maintenance
of all United States applications, patents, divisions, etc. and those reasonable
costs and fees associated with corresponding foreign applications and patent
fees, including all costs and fees associated with the preparation, filing,
prosecution, opposition proceedings and revocation proceedings and further
including fees or costs incurred by UM prior to the Effective Date. Within 30
days after the Effective Date, Company will designate foreign countries in which
patent applications are to be filed, such filings to be made by UM and UM's
choice of patent counsel with concurring approval by Company, not to be
unreasonably withheld, at Company's expense. The foreign countries will
specifically include Canada and the UK. However, in accordance with Section 7.2
of the Contribution Agreement (Exhibit D), so long as .Company performs its
obligations under the Contribution Agreement, UM will not request reimbursement
from Company for any patent costs or fees incurred by UM or CRF until 5500,000
in funding has been raised by Company.  UM may file, at its own expense,
applications in foreign countries not designated by Company, and Company's
license of Patent Rights will not extend to those countries."
6.4           Company, UM and Aventis will cooperate to limit the expenditures
associated with filing patent applications, while ensuring that the Patent
Rights coverall items oi" commercial interest and importance. The party
responsible for filing a patent application, ("Filing Parly") is solely
responsible for making decisions regarding whether or not a patent application
is to be filed, scope and content of U.S. and foreign patent
. applications and prosecution of the applications, but when the Filing Party is
UM, UM will give Company reasonable opportunity to advise UM. Company will
cooperate with the Filing Party in the prosecution, filing, and maintenance of
any patent applications and when the Filing Party is UM, UM will promptly advise
Company as to all developments with respect to the applications and prosecution
and copies of all papers received and
filed in connection with such prosecution.will be provided promptly to enable
Company to advise UM thereon, but only as to those countries designated by
Company pursuant to Section 6.03.
6.5           The scope of patent coverage within Patent Rights will not be
significantly modified by UM without prior review by Company, but any
modification will not require the approval of Company, and Company will not
control the prosecution of Patent Rights. Company may wish to relieve itself of
any obligation to pay for the future expenses of preparation, filing,
prosecution, issuance, reissuance, reexamination, interferences, or maintenance
of any Patent Rights in any country or countries except the U.S., Canada and the
UK, by giving 90 days advance notice to UM. Thereafter this license and any
sublicenses hereunder are terminated with respect to those Patent Rights in each
country where Company has elected to discontinue support of such Patent Rights,
but only with respect to the Patent Rights Company has elected to discontinue.
This license and any sublicenses hereunder will continue in full force and
effect with respect to all other Patent Rights. Company will reimburse the
Filing Party for all expenses incurred prior to, or as a result of, irrevocable
action taken prior to its notice to the Filing Party.

 
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6.6           In order to safeguard Patent Rights, CRF and Company will take
reasonable steps to postpone the publication of any results or other public
disclosure of research performed by inventors who are their employees, relating
to the licensed Patent Rights, until such time as materials containing those
results are first submitted by the party employing the inventor to UM for
review, comment, and consideration of appropriate patent action. UM will take
reasonable steps to postpone the publication of any results or other public
disclosure of the results of research performed by inventors who are its
employees, relating to Patent Rights, until such time as the materials
containing those results are first submitted by UM to Company for review,
comment, and consideration of appropriate patent action, and, if the publication
or other disclosure relates to CRF rights in Patent Rights, to CRF. Such
materials relating to a planned written publication or other public disclosure
will be submitted by the party that plans to publish or disclose for review at
least 60 days prior to the date of the planned submission for written
publication. The party receiving the materials will notify the party that has
submitted the materials, within 30 days after receipt of the materials,
indicating whether or not patent applications need to be filed in connection
with obtaining or maintaining Patent Rights. Written publication or public
disclosure by UM, CRF and Company will be deferred up to a maximum of 90 days
after the date the receiving party receives the materials to enable patent
applications to be filed as deemed necessary by the Filing Party.

6.07           Upon the initiation of a Phase 111 clinical trial of" a Licensed
Product by
f Company, an Affiliate, or Sublicensee, Company will reimburse Aventis for any
patent expenses incurred by Aventis up to the date of initiation of the Phase
III clinical trial, to a maximum amount of two hundred fifty thousand dollars
($250,000), and will reimburse Aventis for all paient expenses subsequently
incurred for Aventis Patents.
 
ARTICLE 7. ABATEMENT OF INFRINGEMENT
 
7.1           Company will enforce UM and UM/CRF Patents within licensed Patent
Rights against any infringement or alleged infringement, and will at all times
keep UM informed as to the status of the infringement claims. Company may, in
its sole judgment and at its own expense, institute suit against any infringer
or alleged infringer and control, settle, and defend such suit in a manner
consistent with the terms and provisions of this Agreement and recover any
resulting damages, awards, or settlements, subject to Section 7.03. This right
to sue for infringement will not be used in an arbitrary or capricious manner.
UM will reasonably cooperate in the litigation with prior approval of Company,
at Company's expense.
7.2           If Company is aware of any patent infringement. Company will
advise UM of the infringement. If UM is aware of any patent infringement, UM
will advise Company of the infringement. If CRF is aware of any patent
infringement, CRF will advise UM. If Company does not enforce any UM or UM/CRF
patent within Patent Rights, the patent owner in its sole judgment and at its
own expense may do so, and may control, settle, and defend such suit in a manner
consistent with the terms and provisions of this Agreement, and recover, for its
own account, any resulting damages, awards, or settlements. Company will
reasonably cooperate in the litigation.
7.3           Any compensatory damages received by Company as a judicial award
and any cash or non-cash settlement received by Company to resolve a claim or
litigation as discussed under Section 7.01 will be deemed to reflect loss of Net
Sales of Licensed Products, and Company will pay UM a royalty on the lost Net
Sales of Licensed Products in accordance with this Agreement, net of all
reasonable costs and expenses (including but not limited to reasonable
attorneys' fees and disbursements, experts' fees and disbursements, court costs,
stenographers' fees and disbursements, and any other such reasonable fees and
disbursements associated with the suit and pre-Iitigation activities and legal
opinions in connection therewith). However, if punitive damages are awarded to
Company, then the reasonable costs and expenses will be deducted first from
punitive damages and any balance will be deducted from compensatory damages. If
there are punitive damages remaining after the deduction of the litigation
expenses, UM and Company will share equally in the remaining funds.
7.4           Any compensatory damages received by Company in an action as
described in Section 7.01 that are specified by court order of damages as
compensation for injury other than loss of Net Sales of Licensed Products will
not be considered part of Net Sales of Licensed Product.

 
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7.05           Aventis has the first option, but not the obligation, to enforce
Aventis
i 'Patent Rights against any infringement or alleged infringement. If Aventis
declines to enforce Aventis Patent Rights. UM has the option to enforce such
rights. If UM declines, Company has the option to enforce such rights at its own
expense. The party enforcing Aventis Patent Rights may, in its sole judgment and
at its own expense, institute suit against any infringer or alleged infringer
and control, settle, and defend such suit in a
manner consistent with the terms and provisions of this Agreement and recover
any resulting damages, awards, or settlements. Aventis, UM and Company will
recover their respective actual out-of-pocket expenses, or equitable proportions
thereof associated with any litigation or settlement made by any party. This
right to sue for infringement will not be used in an arbitrary or capricious
manner. Aventis, UM and Company will keep each other informed of the status of
and of their respective activities regarding any litigation or settlement
thereof concerning Aventis Patent Rights and will reasonably cooperate in the
litigation at the request of the party enforcing Aventis Patent Rights, without
expense to the requesting party.

7.06.       Company will defend, indemnify and hold harmless UM. CRF, the State
of Maryland, and inventors of Patent Rights and Improvements with respect to
costs of defense and any and all liabilities resulting from suits, countersuits.
or legal actions of any nature that may be asserted against UM, CRF, the State
of Maryland, and the Inventors in response to or as a result of the filing of an
action by Company pursuant to Section 7.01.

7.07        Company will provide UM (i) notice of patents relevant to a U.S. NDA
prior to the time the NDA is filed and (ii) immediate notice of the issuance of
any other patents relevant to a U.S. NDA and Company, UM and Aventis will
jointly decide within 30 days of the patent date, if the patent is to be listed
pursuant to any Drug Approval Application (particularly in Canada) and any
pending or approved Health Registration or NDA in the U.S. for Licensed Product.

ARTICLE 8. CONFIDENTIALITY

8.£M           It may be necessary for UM, Company and CRF to disclose to each
other
certain Confidential Information. Confidential Information received from another
party may be disclosed by the receiving party only in accordance with the
following provisions:
(a)           'Except as hereafter specifically authorized in writing by the
disclosing party, the receiving party will not, for a period of 5 years after
the date of receipt of Confidential Information, disclose Confidential
Information to a person not bound to confidentiality under this Agreement, or
use the Confidential Information for any purpose outside the scope of this
Agreement.
(b)           These obligations of non-disclosure and non-use will not apply to
any Confidential Information which the receiving party can demonstrate by
reliable written evidence:
(i)           was generally available to 'he public at the time of disclosure to
the receiving
party; or
(ii)           was already in the possession of the receiving parly at the time
of the disclosure, other than pursuant to a confidential disclosure agreement
between the parties and not due to any unauthorized act by the receiving party;
or
(iii)           was developed by the receiving party prior to the disclosure: or
(iv)           the receiving party is required by law to disclose.
(c)           These obligations of non-disclosure and non-use will not continue
to apply to any Confidential Information which the receiving party can
demonstrate by reliable written evidence:

(i)           has become generally available to the public other than through a
breach of this Agreement by the receiving party;
(ii)           has been acquired by the receiving party on a nonconfidential
basis from any third party having a lawful right to disclose it to the receiving
party; or
(iii)           corresponds to information developed by the receiving party
(iv)           independent of and with no reliance upon the disclosing party's
Confidential Information.

 
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(d)           If a party relies upon a fact or facts described in part (b) or
(c) of this Seciion as justification for disclosure of Confidential Information
during the Confidential Period, that party bears the burden of proof with
respect to the fact or facts relied upon.

8.2           Each party will use that level of care to prevent the use or
disclosure of another party's Confidential Information as it exercises in
protecting its own Confidential Information. Company recognizes that UM and CRF
are educational institutions with standards and practices for protection of
Confidential Information which differs from Company's standards and practices.
By this Agreement UM and CRF undertake to use reasonable efforts to protect the
confidentiality of Company's Confidential Information. Company agrees that,
provided such efforts are made, it will not seek to hold UM, CRF or their
personnel liable in the event of disclosure of Company's Confidential
Information notwithstanding reasonable efforts to prevent the occurrences.
8.3           Company recognizes that the recordsof UM are subject to the
Maryland Access to Public Records Law. Company asserts that any Confidential
Information of Company provided to UM under this Agreement is confidential,
proprietary, and trade secret information, not subject to disclosure under
Maryland's Access to Public Records Law. UM will assert this position in
response to any request for public information applicable to Company's
Confidential Information, and will promptly notify Company upon receipt of any
requests for the information. The Maryland Access to Public Records Law is at
Title 10, Subtitle 6, Part II, State Government Article, Annotated Code of
Maryland.
8.4           All Confidential Information disclosed in written form will be
clearly marked by the disclosing party as "Confidential." All Confidential
Information disclosed orally or in any other form will be summarized by the
disclosing party and delivered to the receiving party within 30 days, in a
written document clearly marked as "Confidential", or will otherwise be clearly
identified in writing by the disclosing party as confidential.
8.5           Upon termination of this Agreement for any reason other than a
material breach, each party will return to the other all material received which
is Confidential Information, together with all copies and other forms of
reproduction, except that a single archive copy may be kept in the receiving
party's legal files. Each party agrees that
termination of this Agreement does not alter the 5 year obligation of
confidentiality set forth in this Section.

ARTICLE 9. REPORTS AND ACCOUNTING
 
9.1           During, the term of this Agreement and for 5 years after its
termination, Company will keep, and require each Affiliate and Sublicensee to
keep, complete, true, and accurate records containing all the particulars that
may be necessary to enable consideration payable to UM to be determined, and
permit said records to be inspected at any time during regular business hours,
upon reasonable notice, by an independent auditor appointed by UM for this
purpose and reasonably acceptable to Company. The auditor will report to UM only
the amount of consideration payable under this Agreement. This audit will be at
UM's expense unless the audit shows an underpayment in amounts due to UM in
relation to amounts paid to UM by 5% or more for any 3 month royalty period in
the periods subject to audit, in which case the audit expense will be bome by
Company.
9.2           Within 20 calendar days after each March 31, June 30, September 30
and December 31, Company will deliver to UM a true and accurate report, giving
particulars of the business conducted by Company, its Affiliates and its
Sublicensees, if any, in the preceding 3 month period that are pertinent to any
accounting for royalty or other payments under this Agreement. These reports
will include at least the following information for the 3 month reporting
period:

(a)           number of Licensed Products manufactured and sold by Company and
by each Affiliate and each Sublicensee;
(b)           total billings for Licensed Products sold by Company and by each
Affiliate and by each Sublicensee;
(c)           total billings for Combination Products sold by each Affiliate and
each Sublicensee.
(d)           accounting for all Licensed Products used or sold;
(e)           deductions as provided in Section 1.11; and
(f)           names and addresses of all Affiliates and Sublicensees of Company.

 
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For items (a), (b), (c>, and (dj above, Company will specify the Patent Right or
Rights that cover each Licensed Product manufactured, sold, or used.
9.3           Within 30 days after each March 31, June 30, September 30, and
December 31, Company must pay to UM the royalties due and payable under this
Agreement for the calendar quarter covered by the report required by Section
9.02. If no royalties are due, Company will so report.

■    9.04        Company will forward to UM a copy of each report received by
Company from an Affiliate or Sublicensee promptly after Company's receipt of
such report. In no event will Affiliate or Sublicensee reports be due to Company
less often than quarterly.
9.5           Any tax required to be withheld under the laws of any country on
royalties payable to UM by Company or its Sublicensees under this Agreement will
be promptly paid by Company or its Affiliates and .its Sublicensees for and on
behalf of UM to the appropriate governmental authority, and Company will furnish
UM with proof of payment of the tax together with official or other appropriate
evidence issued by the competent governmental authority sufficient to enable UM
to support a claim for tax credit with respect to any sum so withheld. Any tax
required to be withheld on payments by Company to UM will be an expense of and
be borne solely by UM, and Company's royalty payment(s) to UM following the
withholding of the tax will be decreased by the amount of such tax withholding.
Company will cooperate with UM in the event UM elects to assert, at its own
expense, exemption from any tax.
9.6           Company will report to UM the date of First Commercial Sale by
Company and each Affiliate and Sublicensee within 20 calendar days of the First
Commercial Sale.

ARTICLE 10. TERM AND TERMINATION
 
10.1           Urdess sooner terminated in accordance with any of the succeeding
provisions of this Article 10, this Agreement will continue in full force and
effect until the later of: (a) expiration or invalidation of the last Patent
Right anywhere which is licensed under this Agreement, or (b) 10 years after the
First Commercial Sale of the first Licensed Product.
10.2           Should Company fail to pay UM any sum due and payable under this
Agreement or the Contribution Agreement. UM may terminate this Agreement on 30
days written notice, unless Company pays UM within the 30 day period all
delinquent sums together with interest due and unpaid. Upon expiration of the 30
day period, if Company has not paid all sums and interest due and payable, the
rights, privileges, and license granted hereunder terminate.
10.3           If the Contribution Agreement is terminated, UM may terminate
this Agreement on 30 days written notice.
10.4           If by November 9, 2002, Company has not started development
activities for a Licensed Product covered by Avemis Patent Rights or sublicensed
its rights in Aventis Patent Rights to a Sublicensee that has started
development activities of Aventis Patent Rights, this Agreement is terminated
and all rights will revert to the respective
grantors of Patent Rights.
10.5           Prior to the First Commercial Sale of a Licensed Product, Company
is considered diligent with regard to development of a Licensed Product if
Company provides updates and reports as described in Section 3.0[ and in Article
9 and Company continues to provide the necessary financial and other resources
which arc required to develop or maintain availability of Licensed Products.
10.6           If UM declares Company not diligent in development or sales of
Licensed Product based upon the criteria set forth in Section 10.05 for any
reason other than the withholding by a regulatory agency of marketing approval
in spite of Company's diligent effort to obtain such approval, then UM may
terminate this Agreement as to the Patent Rights in question upon 30 days
written notice.
10.7           Company and UM anticipate entering into a separate research
agreement under which UM will assist Company in compiling and analyzing existing
data from non¬clinical and pre-formulation and formulation data. Provided UM and
Company execute such a research agreement, if Company fails to fulfill its
obligations to UM under the research agreement, UM may terminate this Agreement
on 30 days written notice, unless Company cures its breach of the research
agreement within the 30 day period. Upon expiration of the 30 day period, if
Company has not cured its breach of the research agreement, UM may terminate the
rights, privileges, and license granted hereunder.

 
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10.8           Company's failure to perform its obligations in accordance with
Article 26 of this Agreement is deemed to be a material pre-petition incurable
default and breach under this Agreement upon which UM may terminate this
Agreement and any sublicense granted hereunder, with no option to cure and no
notice to Company.
10.9           Except as set forth in Sections 10.02, 10.03, [0.04, 10.06,
10.07, and 10.08, in the event that any provision of this Agreement is breached
by Company, any Affiliate or any Sublicensee, UM may terminate this Agreement
and any sublicenses granted hereunder upon 90 days written notice to Company.
However, if the breach is corrected within the 90 day period and UM is
reimbursed for all damages directly resulting from the breach, the Agreement and
any sublicenses will continue in full force and effect and UM will so notify
Company in writing.
10.10                      Company may terminate this Agreement at any time by
giving UM 90 days written notice of termination, and upon payment to UM of all
payments maturing through the effective date of the termination.
10.11                      Termination does not relieve either party of any
obligation which arises' before termination including obligations under Article
4, Article 5, Article 6, Article 7, Article 8, Article 11, Article 13, Article
14, Article 15, Article 25, and Article 27.
10.12                      Upon termination of this Agreement for any reason,
any Sublicensee that is not in default may seek a license from UM.
10.13                      Upon and effective as of the date of termination of
this Agreement. Company grants to UM a non-exclusive royalty-free license, with
the right to sublicense
•' others, with respect to Company Improvements and Company's interest in Joint
Improvements.
10.14                      Within 120 days of the date of the termination of
this Agreement for any reason, UM may make written request to Company for
transfer to UM or its designee of
Company's rights to trademarks and trade names associated solely with Licensed
Products. Upon UM's request. Company will provide to UM all written document(s)
necessary to accomplish such a transfer.
10.15                      Upon termination of this Agreement, except as
provided in Section 10.16, Company, Affiliates and Sublicensees must discontinue
the use, distribution and sale of Licensed Products and upon direction of UM,
return or destroy any remaining Licensed Products.
10.16                      Subject to all terms and conditions of the license,
including payment of royalties, tor a period of 60 days after expiration or
termination of this Agreement, Company may market any Licensed Products on hand
at the time of expiration or termination.

ARTICLE 11. CONSENT FOR ADVERTISING
 
Neither Company, CRF or UM will use the name of the other or of Aventis or CHC.
or any adaptation thereof, or the names of employees of the other, in any
advertising, promotional, or sales literature without prior written consent
obtained from the other party, of from the entity whose name will be used.
Either patty may publicize the fact that the parties have made this Agreement
and the general nature of the license.

ARTICLE 12. ASSIGNABILITY
 
12.1           This Agreement and the rights granted to Company are not
assignable or otherwise transferable by Company without the prior written
consent of UM, which will not be unreasonably withheld.
12.2           This Agreement is not assignable or otherwise transferable by UM
or CRF without the prior written consent of Company, which will not be
unreasonably withheld.

ARTICLE 13. APPLICABLE LAW; SEVERABILITY
 
13.1           This Agreement is made and construed in accordance with the laws
of the State of Maryland without regard to choice of law issues, except that all
questions concerning the construction or effect of patents will be decided in
accordance with the laws of the country in which the particular patent concerned
has been granted.
13.2           Company submits itself to the jurisdiction of the State courts of
the State of Maryland and Federal courts within the State of Maryland for
purposes of any suit relating \o 'his Agreement and agrees that the State and
Federal courts located in Baltimore City, Maryland provide a proper venue for
determining any legal action relating to this Agreement.

 
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ARTICLE 14. INTEGRATION AND INTERPRETATION
 
14.1           This Agreement, together with any Exhibits specifically
referenced and attached, embodies the entire understanding between Company and
UM, and Company and CRF. There are no contracts, understandings, conditions,
warranties or representations, oral or written, express or implied, with
reference to the subject matter hereof which are not merged herein.
14.2           This Agreement is negotiated as an arm's-length business
transaction. Draftsmanship will not be taken into account in construing the
Agreement.
14.3           If any condition or provision in any Article of this Agreement is
held to be invalid or illegal or contrary to public policy by a court of
competent jurisdiction from which there is no appeal, this Agreement will be
construed as though the provision or condition did not appear. The remaining
provisions of this Agreement will continue in full force and effect.

ARTICLE 15. INDEMNITY/INSURANCE
 
15.1           UM and its officers and employees acting within the scope of
their employment by UM are subject to the Maryland Tort Claims Act ("the Act"),
Title 12, Subtitle 1, State Government Article, Annotated Code of Maryland,
which permits claims in tort against the State of Maryland under certain
circumstances. In order to file a claim under the Act, a claimant must submit a
written claim to the Treasurer of the State of Maryland or a designee of that
office within one year after the injury to the person or property that is the
basis of the claim.
15.2           Company warrants and represents that comprehensive liability and
property damage insurance coverage is, or will be, in place for itself and its
officers, employees and agents by the Effective Date. Prior to Licensed Product
entering clinical trials, Company will acquire additional insurance coverage as
necessary to maintain the following minimum amounts per policy period:

(a)           Comprehensive liability (including product liability): (bodily
injury and loss of life) $1,000,000 per claim; $2,000,000 in the aggregate;
(b)           Property damage: $ 1 ;500,000 in the aggregate.
15.3           Company will defend, indemnify, and hold harmless UM. the
University System of Maryland, and the State of Maryland, the regents, officers,
employees, students, and agents of UM; CRF. its officers, employees and agents;
and Aventis, its officers, employees and agents (ail, collectively
"Indemnitees") against any and all
t claims, costs, or liabilities, including attorney's fees and court costs at
both trial and appellate levels, for any loss, damage, personal injury, or loss
of life, (a) caused by the actions of Company or its officers, servants, or
agents, or third parties acting on behalf of or under authorization from Company
in the performance of this Agreement; (h) arising out of use by Company or by
any third party acting on behalf of or under authorization
from Company of products or processes (including licensed Patent Rights) or
arising from sales and use of Licensed Products; or (c) arising out of useT by
UM, CRF, or Aventis or their personnel, of products, processes, or protocols
developed by Company or its officers, servants, or agents, or by third parties
acting on behalf of or under authorization from Company; provided, that (a) the
Indemnitee receiving notice of any claim promptly notifies Company in writing
after receiving notice of a claim; and (b) the Indemnitee subject to the claim
fully cooperates with Company in the defense of any such claim. The foregoing
obligation will not apply to any claim, cost, or liability attributable solely
to the negligence of Indemnitee personnel. ■
15.4           UM, CRF and Company further agree that nothing in this Agreement
will be interpreted as: (a) a denial to either party of any remedy or defense
available to it under the laws of the State of Maryland; (b) the consent of the
State of Maryland or its agents and agencies to be sued; or (c) a waiver of
sovereign immunity or any other governmental immunity of the State of Maryland
and the UM beyond the extent of any waiver provided by law.
15.5           Company will require all of its Affiliates and Sublicensees using
licensed Patent Rights to Indemnify the Indemnitees and insure for that
obligation, consistent with the requirements of Section 15.02 and 15.03.

 
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ARTICLE 16. REPRESENTATIONS AND WARRANTIES
 
16.1           UM represents that as of the date its officer executes this
Agreement, that officer believes on the basis of facts reported to UM that (a)
UM is authorized to license UM Patent Rights (subject to the rights of the
United States under its earlier contract with UM and pursuant to 35 U.S.C.
Section 201 ejLsejj.. and all implementing regulations), UM rights in UM/CRF
Patent Rights, and Aventis Patent Rights; and (b) UM is authorized to enter into
this Agreement without burdens, encumbrances, restraints, or limitations of any
kind which could adversely affect the rights of Company under this Agreement. UM
EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT, AND PATENT VALIDITY; (c) the Patent Rights do not constitute
the subject matter of any currently pending litigation, and UM has not been
informed of any related litigation contemplated by CRF, Aventis or any Third
Party; and (d) UM has full legal right, power and authority to execute, deliver
and perform its obligations under this Agreement.
16.2           CRF represents that as of the date its officer executes this
Agreement, that officer believes on the basis of facts reported to CRF that (a)
CRF is authorized to license CRF rights in Patent Rights (subject to the rights
of the United States pursuant to 35
► U.S.C. Section 201 et seq, and all implementing regulations) and (b) CRF is
authorized to enter into this Agreement without burdens, encumbrances,
restraints, or limitations of any kind which could adversely affect the rights
of Company under this Agreement. CRF EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY.
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, AND PATENT VALIDITY; (c) the
UM/CRF Patent Rights do not constitute the subject matter of any currently
pending litigation, and CRF has not been informed of any related litigation
contemplated by UM, Aventis or any Third Party; and (d) CRF has full legal
right, power and authority to execute, deliver and perform its obligations under
this Agreement.

16.03      Company hereby represents and warrants to UM and CRF that; (a)
Company is authorized to enter into this Agreement without burdens,
encumbrances, restraints, or limitations of any kind which could adversely
affect the rights of UM or CRF under this Agreement, (b) Company has full legal
right, power and authority to execute, deliver and perform its obligations under
this Agreement; and (c) the execution, delivery and performance by Company of
this Agreement do not contravene or constitute a default under any provision of
applicable law or of any agreement, judgment, injunction, order, decree, or
other instrument binding upon Company.

ARTICLE 17. AGREEMENT AMENDMENTS
 
This Agreement may not be amended, nor may any right or remedy of either party
be waived, unless the amendment or waiver is in writing and signed by a duly
authorized representative of each party.
ARTICLE 18. RECITALS The Recitals in this Agreement will be included as part of
the Agreement.

ARTICLE 19. FORCE MAJEURE
 
No party is liable for failure or delay in performing any of its obligations
under this Agreement if the failure or delay is required in order to comply with
any governmental regulation, request or order, or necessitated by other
circumstances beyond the reasonable control of the party so failing or delaying,
including but not limited to Acts of God, war (declared or undeclared),
insurrection, fire, flood, accident, labor strikes, work stoppage or slowdown
(whether or not such labor event is within the reasonable control of the
parties), or inability to obtain raw materials, supplies, power or equipment
necessary to enable such party to perform its obligations. Each party will: (a)
promptly notify the other party in writing of an event of force majeure, the
expected duration of the event and its anticipated effect on the ability of the
party to perform its obligations; and (b) make reasonable efforts to remedy the
event of force majeure.

ARTICLE 20. NO WAIVER
 
A failure or delay by a party in exercising any of its rights or remedies under
this Agreement does not constitute a waiver of the rights or remedies, nor does
any single or partial exercise of any right or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy. The
rights and remedies of the parties provided t in this Agreement are cumulative
and not exclusive of any rights or remedies provided by law.

 
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ARTICLE 21. LEGAL RELATIONSHIP OF PARTIES
 
21.1           UM, CRF, and Company are not (and nothing in this Agreement may
be construed to constitute them as) partners, joint venturers, agents,
representatives or employees of the other, nor is there any status or
relationship between them other than that of independent contractors. No party
has any responsibility or liability for the actions of the other party except as
specifically provided in this Agreement. No party has any right or authority to
bind or obligate the other party in any manner or make any representation or
warranty on behalf of the other party.
21.2           This Agreement will be only for the benefit of Aventis, the
undersigned parties and their permitted successors and assigns, and no one other
than Indemnitees and only for the purposes described in sub-section 15.03 of
this Agreement, will be deemed to be a third party beneficiary of this
Agreement.

ARTICLE 22. MISCELLANEOUS COSTS
 
Unless otherwise provided, all costs and expenses incurred in connection with
this Agreement will be paid by the party which incurs the cost or expense, and
the other party has no liability for the cost or expense.

ARTICLE 23. SIGNED IN QUADRUPLICATE; HEADINGS
 
This Agreement is signed in four identical originals. The headings used in this
Agreement are for convenience of reference only and do not affect the meaning or
construction of this Agreement.

ARTICLE 24. NO LICENSE
 
No license or right is granted by implication or otherwise with respect to any
patent application or patent owned by either party, unless specifically set
forth in this Agreement.

ARTICLE 25. EMPLOYMENT OF UM STAFF

25.01       Company will not knowingly employ or compensate, directly or
indirectly, any person working in the Licensed Field while the person is
employed by UM or for 2 years thereafter, unless UM provides Company with prior
written consent of the UM President to the employment or compensation by
Company. "Compensation" includes but is not limited to: stock option or stock
purchase agreements, consulting agreements, any other form of agreement executed
between a UM employee and Company, and cash payments. "Employment" includes both
uncompensated and compensated service to Company. A request to employ or
compensate a UM employee will be considered by UM as provided in the
Public/Private Partnership Act,'which is Section 15-523 of the Maryland Public
Ethics Law (Title 15, Subtitle 5, State Government Article. Annotated Code of
Maryland).
25.02      This provision is not" intended to prevent an inventor employed by UM
("UM Inventor") from owning stock of Company received by UM Inventor from UM, or
from Company at UM's direction,- as a distribution of licensing revenues under
the University System of Maryland Patent Policy. As a Company stockholder, UM
Inventor may receive dividends and enjoy other benefits of stock ownership,
subject to any terms and conditions the University may require in order to
satisfy conflict of interest concerns. Should such terms and conditions be
relevant to the relationship of Company to UM Inventor, as a shareholder, the
University will advise Company of them. This provision is not intended to
prevent Company from placing any restrictions upon UM Inventor's slock that may
be necessary to satisfy federal or state laws or regulations applicable to
Company or to development of Licensed Products.

ARTICLE 26. COMPANY PETITION IN BANKRUPTCY
 
Company will provide written notice to UM at least 90 days prior to the filing
of a petition in bankruptcy of Company's intention to file a voluntary petition
in bankruptcy or,.if known by Company through statements or letters from a
creditor or otherwise, of a Third Party's intention to file an involuntary
petition in bankruptcy against Company. Company's failure to perform this
obligation is deemed to be a material pre-petition incurable defaulrand breach
under this Agreement.

 
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ARTICLE 27. DISPUTE RESOLUTION
 
The parties recognize that disputes may arise from time to time during the term
of this Agreement relating to a party's rights or obligations. In the event of a
dispute, a party, by notice to the other parties, may have the dispute referred
to the parties' respective officers designated below or their successors for
attempted resolution by good faith negotiations within 30 days after the notice
is received. The designated officers are as follows:

For COMPANY:                                           President and Chief
Executive Officer
For UM:                      Vice President, Academic Affairs
For CRF: President

In the event the designated officers are not able to.resolve the dispute within
this 30 day period, or any agreed extension, they will confer in good faith with
respect to the possibility of resolving the matter through mediation with a
mutually acceptable Third Party or a national mediation organization. The
parties agree that they will participate in any mediation sessions in good faith
in an effort to resolve the dispute in an informal and inexpensive manner. All
expenses of the mediator will be shared equally by the parties. The parties
agree to toll any applicable statute of limitations during the pendency of the
dispute resolution process initiated under this Agreement. The parties agree
that evidence of anything said or any admission made in the course of any
mediation will not be admissible in evidence in any civil action between them.
In addition, the parties agree that no document prepared for the purpose of. or
in the course of, or pursuant to, the mediation, or copy thereof, will be
admissible in evidence in any civil action between them. However, the parties
agree that this Section does not limit the admissibility of evidence if all
parties who participated in the mediation consent to its disclosure.
 
ARTICLE 28. NOTICES AND CORRESPONDENCE
 
All notices, consents and other communications required or allowed under this
Agreement must be in writing and are effective upon receipt: (a) when delivered
by hand; or (b) when received by the addressee after being mailed by registered
or certified mail (air mail if mailed overseas), return receipt requested; or
(c) when received by the addressee, by Express Mail, Federal Express or other
express delivery service (return receipt requested). Notice in each case must be
addressed to the party's representative at the party's address set forth below
(or to another representative and/or address that a party may later designate as
to itself by notice to the other party):

If to UM;                      Executive Director
Office of Research and Development University of Maryland, Baltimore 515 West
Lombard Street, Suite 500 Baltimore, Maryland 21201-1602

Copy to:

University Counsel University of Maryland, Baltimore 520 West Lombard Street,
Second Floor Baltimore. Maryland 21201-1627
 
 
If to CRF:

President
Cornell Research Foundation, Inc. Cornell Business & Technology Park 20Thornwood
Drive. Suite 105 Ithaca, New York 14850
 
 
If to COMPANY:

President
Artemis Neuroscience, Inc.

 
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the date set forth above.

UNIVERSITY OFMARYLAND, BALTIMORE
BY:           ,            WITNESS:
David J. Ramsay, D.M,. D. Phil.
President
Date:

ARTEMIS, INC.
BY:           ;            ATTEST:
Allen Cato
President & CEO
Corporate Secretary
Date:                      .

CORNELL RESEARCH FOUNDATION. INC.
BY:           .
[NameJ [Title]

Date

LICENSE AGREEMENT APPROVED: FOR CATO HOLDING COMPANY
BY:           .
(Name) [Title}

Date

 
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EXHIBIT A UM Patent Rights:

Country                      Application Serial
No.                                                      Filing
Dale                                Known As                      StatusUM Tech
ID Docket No.
US           08/433.339                                5/4/95                      3-HANA
derivatives (compound claim)ISSUED156 IRS RS99042
EP           94908556.7                                8/1/95                      3-HANA
derivatives                                           ISSUED                      1561RS
RS99042
CA           2,156,079                      y\m           3-HANA
derivatives                                           PEND                      156
IRS RS99042
US           08/770.488                                12720/96                      S-HANA
derivatives (compound claim)ISSUEDI561RS RS99042
EXHIBIT B UM/CRF Patent Rights:

Country                      Application Serial
No.                                                      Filing
Dale                                Known As                      StatusUM Tech
ID Docket No.
US           08/210.213                                2/24/94                      New
Compounds (compound
claim)                                                                           ISSUEDJ560RS
RS99043
US           08/433.337                                5/4/95                      New
Compounds (compound
claim)                                                                           ISSUEDI560RS
CiP RS99043
EP           94908557.5                                8/1/95                      New
Compounds (compound
claim)                                                                           ISSUEDI560RS
RS99043
CA           2.155.666                      8/1/95                      New
Compounds (compound
claim)                                                                           PENDI560RS
RS99043
EXHIBIT C Aventis Patent Rights:

Country                      Application Serial
No.                                                      Filing
Date                                Known As                      StatusUM Tech
ID Docket No.
EP           92103066.4                                2/24/92                      NMDA
Antagonists                                           ISSUED                      1196RS
GB           92103066.4                                2/24/92                      NMDA
Antagonists                                           PEND                      II96RS
CA           2,061,836                      2/25/92                      NMDA
Antagonists                                           PEND                      H96RS
US           08/(6.1144                                12/10/93                      NMDA
Antagonists (method of" using 4 or 4.6" TRP)ISSUED1196RS D1V
US           08/187.353                                1/25/94                      NMDA
Antagonists (Claims 4.6TRP1ISSUED1196RS CON2
US           08/261,609                                6/17/94                      NMDA
Antagonists (4,6 KYN & method}ISSUED1196RS DIV2
EP           94110261.8                                6/30/94                      NMDA
Antagonists                                           ISSUED                      1196RS
US           08/502.980                                7/17/95                      NMDA
Antagonists (method of usin_4 KYN)ISSUED1196RS Div3
 
 
University or Maryland Coniritiuiian Agreement
 
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EXHIBIT
COPY OF LICENSE AGREEMENT BETWEEN UM AND AVENTIS
 
LICENSE AGREEMENT between UNIVERSITY OF MARYLAND, BALTIMORE and AVENTIS
PHARMACEUTICALS INC.

THIS AGREEMENT effective
this                                                                           day
of &kt. 2000, by and between Aventis
Pharmaceuticals Inc., Route 202-206, Bridgewatef, NJ 08807-6747 ("COMPANY), a
corporation organized under the laws of the State of Delaware, and the
University of Maryland, Baltimore ("UM"), a constituent institution of the
University System of Maryland, an agency of the State of Maryland.

BACKGROUND

On June 30. 1995, UM and Marion Merrell Dow, Inc. (MMD) a corporation organized
under the laws of Ohio, having its principal office at 2110 East Galbraith Road,
Cincinnati, Ohio 45215, entered into an Option Agreement which is incorporated
here by reference ("Option Agreement", Attachment A) as extended effective Nov.
20, 1998 for MMD rights to certain 4,6 disubstituted tryptophan derivatives and
4,6,-disubstituted kynurenines ("Compounds"), which have NMDA antagonistic
effects and that possess certain therapeutic neuroprotective properties.
Under the terms of the Option Agreement, MMD granted UM the option to enter into
an exclusive license agreement in order to facilitate UM obtaining a third party
licensee to assist in development of the Compounds and related patent rights.
Company is the successor to Marion Merrell Dow, Inc., and is the owner of all
rights formerly owned by MMD in Compounds, the entire right, title, and interest
in the U.S. Patents and Patent Applications listed in Attachment B and in any
foreign patent applications and patents corresponding thereto, and in the
inventions described and claimed therein, and in any division, continuations,
continuations-in-art, re-examinations, or reissues thereof.
UM wishes to exercise its exclusive rights to license Patent Rights (as defined
below) under the Option Agreement in order to sublicense to Patent Rights.
Therefore, UM and Company enter into this License Agreement.

1. DEFINITIONS

For the purposes of this Agreement:
1.1           "Affiliate" means any entity which directly or indirectly
controls, is controlled by, or is under common control with UM or a Sublicensee.
"Control" means the right to exercise mors than 50% of the voting rights of a
controlled corporation or limited company or the power to direct or cause the
direction of the management or policies of any other controlled entity.
1.2           "Combination Product" means a product containing a Licensed
Compound and one or more component(s) that is not a Licensed Compound and is
sold separately in at least one country.
1.3           "ConfidentiaJ Information" means information relating to the
subject matter of the Patent Rights (as defined below) and which is not
generally known and includes, without limitation, any documents, drawing,
sketches, models, designs, data, memoranda, tapes, records, formulae and
algorithms, conveyed either orally, in hard copy form or in electronic form,
which Company received from UM or UM receives from Company.
1.4           "First Commercial Sale" means the initial transfer of a Licensed
Product for compensation to a Third Party (as defined below) by UM, a
Sublicensee or an Affiliate.
1.5           "Improvements" means any patentable discoveries or inventions,
which are developed within the scope of this Agreement, during the term of this
Agreement.
1.6           "Licensed Compound" means any compound covered by the Patent
Rights.
1.7           "Licensed Field" means all human and veterinary therapeutic and
diagnostic uses of the NMDA antagonist effects and therapeutic neuroprotective
properties of a compound in the treatment and diagnosis in humans and animals of
epilepsy, neurodegenerative diseases, ischemic/hypoxic/hypoglycemic damage to
cerebral tissue, anxiety, migraines and pain.

 
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1.8           "Licensed Product" means any product, including but not limited to
a Combination Product, containing a Licensed Compound.
1.9           "Net Sales" means the gross sales revenues and fees billed by UM,
its successors and assigns, its Affiliates or Sublicensee(s) for the sale of
Licensed Products, less the sum of the following:

(a)           customary trade, quantity and cash discounts actually allowed and
taken;
(b)           sales or use taxes, excise taxes and customs duties included in
the invoiced amount;
(c)           outbound transportation prepaid or allowed if separately itemized
on the invoice to the customer;
and
(d)           amounts actually allowed or credited on returns of Licensed
Products.
"Net Sales" does not include any further downstream sales of a Licensed Product
after the first sate thereof by UM, its successors and assigns, its Affliates of
Sublicense(s) to a Third Party purchaser.

1.10    "Patent Rights" means:
(a)           U.S. and foreign patent applications and patents listed in
Attachment B of this Agreement and as it may be amended from time to time in
accordance with Section 18;
(b)           U.S. and foreign patents issuing from the applications listed in
Attachment B and as it may be amended, and from all divisions and continuations
of these applications;
(c)           claims of U.S. and foreign continuation-in-part applications, and
of the resulting patents, which are directed to subject matter specifically
described in the U.S. and foreign applications listed in Attachment B and as it
may be amended;
(d)           claims of all foreign patent applications, and of the resulting
patents, which are directed to subject matter specifically described in the U.S.
patents and patent applications described in (a), (b), or (c) above; and
(e)           any reissues, reexaminations and extensions, or the foreign
equivalent of these, of U.S. and foreign patents described in (a), (b), or (c)
above.

1.11           "Sublicensee" means a person or entity to which UM transfers all
or part of Patent Rights under this Agreement, an Affiliate of the Sublicensee,
or a Third Party who enters into an agreement with a Sublicensee for Patent
Rights.
1.12           "Third Party" means any entity or person other than UM, COMPANY,
or a Sublicensee.
 
2.       GRANT OF LICENSE
2.1           Company grants to UM, and UM accepts, a sole and exclusive
worldwide license, under Patent Rights to make, have made, use, lease, offer to
sell, sell and import Licensed Products within the Licensed Field for the term
of this Agreement.
2.2           Company specifically reserves the rights to use Patent Rights in
the Licensed Field for research purposes only. Company will retain all rights to
use Patent Rights for those applications not included in the Licensed Field.
2.3           UM may transfer its rights under this Agreement to one or more
Sublicensees through agreements that are consistent with this Agreement. UM has
identified one Sublicensee, to be incorporated and named Artemis Neurosciences,
and Company consents to the transfer of rights to this Sublicensee. Prior to
entering into any agreement with any other Sublicensee, UM shall seek Company's
consent and such consent shall not be unreasonably withheld.
2.4           UM wiJ! identify its Sublicensee to Company by name, address and
field of sublicense (as to both geography and subject matter), and will promptly
provide to Company a copy of each sublicense agreement.
 
 
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3.       AGREEMENT WITH SUBLICENSEE

An agreement between UM and Sublicensee shall include the following terms;

(a) Prior to the effective date of the sublicense agreement. Sublicensee will
deliver to UM a research and development plan reasonably acceptable to UM. The
research and development plan will show the amount of money and time budgeted
and planned for technical development of Patent Rights, and a proposed
commercialization scheme for Licensed Products. UM will provide the research and
development plan to Company as Confidential Information.
Within 90 days after the effective date of the sublicense agreement, Sublicensee
will deliver to UM a business plan. The business plan will show the amount of
money, time, number and kind of personnel, and time budgeted and planned for
each phase of Licensed Product development, clinical studies, marketing,
manLffacturing and further sublicensing of Licensed Products.

CONSIDERATION

UM, its successors and assigns, its Affiliates or Sublicensee will pay to
Company a royalty on Net Sales of Licensed Products, as follows:
(a)           2% for Licensed Products, excluding Combination Products,
(b)           1% for Combination Products
Royalties will be paid directly to Company by the party that has made the sale
of Licensed Products. No multiple fees are payable because any Licensed Product,
its manufacture, use, sale, or lease is or will be covered by more than one
patent application or patent licensed under this Agreement as part of Patent
Rights.
In the event UM sells to a third party other than a Sublicensee any Licensed
Compound, UM will pay to Company a royalty on Net Sales as follows:
(a)           5% for Licensed Products, excluding Combination Products;
(b)           21/2 % for Combination Products

UM will pay Company within 30 days after the close of each calendar year along
with a statement as set forth in section 10. If no payment is due for any year,
UM wilt send Company a statement to that effect.

PATENT LITIGATION
 
In the event of the institution of any suit by a Third Party against Company, UM
and or its Sublicensee for patent infringement involving the manufacture, use,
sale, distribution or marketing of Licensed Compound or Licensed Product
anywhere, the-party sued shall have the right but not the obligation to defend
such suit at its own expense. Company and UM shall assist one another and
cooperate in any such litigation at the other's request without expense lo the
requesting party.

In the event that Company or UM becomes aware of actual or threatened
infringement of any patent in the Patent Rights related to Licensed Compound or
Licensed Product, anywhere or any alleged patent invalidity or non-infringement
of patent or patents pursuant to a paragraph IV patent certification by a party
filing an Abbreviated New Drug Application ("ANDA"), that party shall promptly
notify the other party in writing, but in any event no later than ten (10)
business days after receipt of notice of such action. Company shall have the
first right but not the obligation to bring, at its own expense, an infringement
action or file any other appropriate action or claim directly, related to
infringement of a patent in the Patent Rights owned in whole or in part by
Company wherein such infringement relates to Licensed Compound or Licensed
Product, against any Third Party and to use UM's name in connection therewith.
If Company does not commence a particular infringement action within ninety (90)
days after it received such written notice, UM, after notifying Company in
writing, shall be entitled to bring such infringement action or any other
appropriate action or claim at its own expense. The party conducting such action
shall have full control over its conduct, including settlement thereof. In any
event. Company and UM shall assist one another and cooperate in any such
litigation at the other's request without expense to the requesting party.

 
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5.3           Company and UM shall recover their respective actual out-of-pocket
expenses,
or equitable proportions thereof, associated with any litigation or settlement
thereof from any recovery made by any party. Any excess amount shall be
shared between UM and Company with each party receiving an amount
proportional to the amount spent by such party on such litigation or settlement
thereof.
5.4           The Parties shall keep one another informed of the status of and
of their respective activities regarding any litigation or settlement thereof
concerning Licensed Compound or Licensed Product.
5.5           Each party shall provide prompt notice to the other of any
inquiries as to any patent which have claims to manufacturing processes, which
inquiries are provided pursuant to 35 USC § 271(g), and shall cooperate with
respect to responses thereto.
5.6           Each party shall provide (i) notice of patents relevant to a US
NDA, prior to the
time the NDA is filed, and (ii) immediate notice of the issuance of any other
patents relevant to a US NDA and the parties shall jointly decide within thirty
(30)
days of the patent date, if the patent is to be listed pursuant to any Drug
Approval
Application {particularly in Canada) and any pending or approved Health
Registration or NDA in the United States for Licensed Product.
 
6.       RIGHTS IN IMPROVEMENTS
6.1           UM will require Sublicensee to promptly report any Sublicensee
Improvements to UM and Company will promptly report any Company Improvements to
UM and Sublicensee. Reports will be in writing, in sufficient detail to
determine inventorship. Such reports will be treated as Confidential Information
in accordance with Section 8 of this Agreement.
6.2           An Improvement made by one or more employees or other personnel of
UM is an UM Improvement owned by UM. An Improvement made by one or more
employees of a Sublicensee is a Sublicensee Improvement owned by Sublicensee. An
Improvement made by one or more employees or other personnel of Company is a
Company Improvement owned by Company, improvements made by employees or other
personnel of more than one entity will be Joint Improvements, jointly owned by
the entities that employed the inventing personnel. Inventorship will be
determined in accordance with the patent laws of the United States.
 
7.       PATENT PROSECUTION AND FEES
7.1           Company is responsible for preparation, filing, prosecution,
issuance, reissuance, reexamination, interference, and maintenance of all Patent
Rights. Upon the initiation of a Phase III clinical trial of a Licensed Product
by Sublicensee, Sublicensee shall reimburse Company for any past patent expenses
in any countries covered by any such sublicense up to a maximum amount of two
hundred fifty thousand dollars ($250,000) and shall reimburse company for all
patent expenses incurred subsequently. If Company does no! prosecute and
maintain Patent Rights, it shall notify UM which may, at its own expense or
through its sublicensees, assume responsibility for prosecution and maintenance
of Patent Rights. Company agrees to promptly provide access to all necessary
documents and to render reasonable assistance to UM if UM assumes responsibility
for prosecution and maintenance of Patent Rights.
7.2           UM is responsible for filing any patent applications for UM or
Sublicensee Improvements. UM also is responsible for filing any patent
applications for Joint Improvements. If Company has rights in a Joint
Improvement, Company may approve outside patent counsel chosen by UM, which
approval must not be unreasonably withheld. If UM does not prosecute and
maintain patent applications for Joint Improvements, Company may, at its own
expense, assume responsibility for prosecution and maintenance.

 
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7.3           Company and UM will cooperate to limit the expenditures described
in Section 7.1 and 7.2 while ensuring that the Patent Rights cover all items of
commercial interest and importance. When UM is responsible for filing a patent
application, the party filing the application is solely responsible for making
decisions regarding scope and content of U.S. and foreign patent applications
and prosecution of the applications, but will give Company reasonable
opportunity to provide advice. Company will cooperate with UM in the
prosecution, filing, and maintenance of any patent applications. The party
filing the application will promptly advise the other parties as to all
developments with respect to the applications and prosecution and copies of all
papers received and filed in connection with such prosecution will be provided
promptly to enable the parties to advise thereon.
7.4           The scope of patent coverage within Patent Rights will not be
significantly modified by Company without prior review by UM.
7.5           In order to safeguard Patent Rights. UM will not and will cause
any of its Sublicensees to not publish any results or otherwise publicly
disclose the results of research performed relating to the licensed Patent
Rights unless any materials containing those results are first submitted to
Company for review, comment, and consideration of appropriate patent action., UM
will submit such materials relating to a planned written publication or other
public disclosure to Company for review at least 60 days prior to the date of
the planned submission for written publication. Company will notify UM within 30
days after receipt of the materials as to whether or not patent applications
need to be filed in connection with obtaining or maintaining-Patent Rights.
Written publication or public disclosure by UM or any of its Sublicensees will
be deferred up to a maximum of 90 days after the date Company receives the
materials to enable filing of any patent applications deemed necessary by
Company

CONFIDENTIALITY

It may be necessary for either party to disclose to the other certain
Confidential Information. Confidential Information received from another party
may be disclosed by the receiving party only in accordance with the following
provisions:
(a)           Except as hereafter specifically authorized in writing by the
other party, a party will not, for a period of 5 years after the date of receipt
of Confidential information, disclose Confidential Information to a person not
bound to confidentiality under this Agreement, or use the Confidential
Information for any purpose outside the scope of this Agreement.
(b)           These obligations of non-disclosure and non-use will not apply to
any "Confidential Information which the receiving party can demonstrate by
reliable written evidence:

(1)           was generally available to the public at the time of disclosure to
the receiving party; or
(2)           was already in the possession of the receiving party at the time
of the disclosure, other than pursuant to a confidential disclosure agreement
between the parties and not due to any unauthorized act by the receiving party;
or
(3)           was developed by the receiving party prior to the disclosure; or
(4)           the receiving party is required by to disclose.
(c)           These obligations of non-disclosure and non-use will not continue
to apply to any Confidential Information which the receiving parry can
demonstrate by reliable written evidence:

(1)           has become generally available to the public other than through a
breach of this Agreement by the receiving party after disclosure;
(2)           has been acquired by the receiving party on a nonconfidential
basis from any third party having a lawful right to disclose it to the receiving
party; or
(3)           corresponds to information developed by the receiving party
independent of and with no reliance upon the disclosing party's Confidential
Information.

 
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(d)           If a party relies upon a fact or facts described in part (b) or
(c) of this paragraph as justification for disclosure of Confidential
Information during the Confidential Period, that party bears the burden of proof
with respect to the fact or facts relied upon.
Each party will use that level of care to prevent the use or disclosure of the
other party's Confidential Information as it exercises in protecting its own
Confidential Information. Company-recognizes that UM is an educational
institution with standards and practices for protection of Confidential
Information which may differ from Company's standards and practices. By this
Agreement UM undertakes to use reasonable efforts to protect the confidentiality
of Company's Confidential Information. Company agrees that, provided such
efforts are made, it will not seek to hold UM or its personnel liable in the
event of disclosure of Company's Confidential Information notwithstanding
reasonable efforts to prevent the occurrences.

Company recognizes that the records of UM are subject to the Maryland Access to
Public Records Law. Company asserts that any Confidential Information of Company
provided to UM under this Agreement is confidential, proprietary, and trade
secret information, not subject to disclosure under Maryland's Access to Public
Records Law. UM will assert this position in response to any request for public
information applicable to Company's Confidential Information, and will promptly
notify Company upon receipt of any requests for the information. The Maryland
Access to Public Records Law is at Title 10, Subtitle 6, Part II, State
Government Article. Annotated Code of Maryland.
All confidential Information disclosed in written form will be clearly marked by
the disclosing party as "Confidential." All Confidential Information disclosed
orally or in any other form will be summarized by the disclosing party in a
written document clearly marked as "Confidential", or will otherwise be clearly
identified in writing by the disclosing party as confidential.
Upon termination of this Agreement for any reason other than a materia) breach,
each party will return to the other all material received which is Confidential
Information, together with all copies and other forms of reproduction, except
that a single archive copy may be kept in the receiving party's legal files.
Each party agrees that termination of this Agreement does not alter the five (5)
year obligation of confidentiality set forth in this section.
 
DEVELOPMENT
 
UM shall have full legal and financial responsibility for all costs that are
incurred and all activities that are undertaken after the signing of this
Agreement, which are related to Development, safety, and required periodic
reporting to the FDA and such equivalent regulatory agency, marketing,
regulatory approvals, price registrations, compliance with all applicable laws
and regulations, and other activities required by or of UM or its Subiicensee(s)
(or their respective agents or distributors) elsewhere to obtain appropriate
government approvals for, and to commercialize, Licensed Product. Other than as
expressly provided for herein UM shall not assume, nor shall UM be liable for,
any costs or activities (whether scientific, financial or otherwise) relating to
the Licensed Compound or Licensed Product that were incurred or undertaken prior
to the signing, of this Agreement (including without limitation any costs,
expenses, damages, losses, fines, penalties or the like that may be awarded or
assessed after the signing of this
Agreement, but which arise out of events and activities that occurred prior to
the signing of this Agreement).
9.2           Provided that the Sublicenses and other Third Parties agree to
substantially the same terms of confidentiality in Article 8 hereof, UM may
appoint such Sub)icensee(s) and other Third Parties to perform any and all
Development activities necessary to obtain government approvals for Licensed
Product.
9.3           UM shall, in a manner consistent with the effort UM devotes to its
own products having the same or similar potential value as Licensed Product,
exercise its reasonable commercial efforts and diligence in developing and
commercializing Licensed Product, and in undertaking those investigations and
actions required to obtain appropriate governmental approvals to market Licensed
Product or shall employ a Sublicensee that will exercise its reasonable
commercial efforts in developing and commercializing Licensed Product. Company
shall use reasonable efforts to assist or provide consultation at UM's expense
in support of the development of Licensed Product, but in its discretion may
limit its resources and assistance. If within 24 months of the signing of this
agreement UM has not started development activities for a development compound
or sublicensed its rights to a partner that has started development activities,
all rights will revert to Company.
 
 
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10.      REPORTS AND ACCOUNTING
10.1           During the term of this Agreement and for 5 years after its
termination, UM will keep and require each Sublicensee to keep, complete, true,
and accurate records containing all the particulars that may be necessary to
enable consideration payable to Company to be determined, and permit said
records to be inspected at any time during regular business hours, upon
reasonable notice, by an independent auditor appointed by Company for this
purpose and reasonably acceptable to UM. The auditor will report to Company only
the amount of consideration payable under this Agreement. This audit will be at
Company's expense unless the audit shows an underpayment in amounts due to
Company in relation to amounts paid to Company by 15% or more for any year
subject to audit, in which case the audit expense will be borne by UM.
10.2           Within 30 days after each December 31, UM will deliver to Company
a true and accurate report, giving particulars of the business conducted by UM
and its Sublicensees, if any, in the preceding year that are pertinent to any
accounting for payments under this Agreement. These reports will include at
least the following information for the year:

(a)           number of Licensed  Products manufactured and sold by each
Sublicensee
(b)           total billings for Licensed products sold by each Sublicensee
(c)           total billings for Combination products sold by each Sublicensee
(d)           names and addresses of all Affiliates and Sublicensees of Company.
10.3 With each report submitted in accordance with Section 10.2, UM must pay to
Company the amounts due and payable under this Agreement for the year covered by
the report. If no amount if due, UM will so report.
10..4 UM will report to Company the date of First Commercial Sale by each
Sublicensee within 30 days after it is reported to UM.

11.     TERM AND TERMINATION
11.1           Unless sooner terminated in accordance with any of the succeeding
provisions of this Article 11, this Agreement will continue in full force and
effect until the later of: (a) expiration or invalidation of the last Patent
Right anywhere which is licensed under this Agreement, or (b) 10 years after the
First Commercial Sale of the First Licensed Product by the first Sublicensee,
whichever is later.
11.2           Should UM fail to pay Company any sum due and payable under this
Agreement, Company may terminate this Agreement on 30 days written notice,
unless UM pays Company within the 30 day period all delinquent sums. Upon
expiration of the 30 day period. If UM has not paid all sums due and payable,
the rights, privileges, and license granted hereunder terminate.
11.3           Except as set forth in Section 11.2 in the event that any
provision of this Agreement is breached by UM, Company may terminate this
Agreement and any subliceases granted hereunder upon 180 days written notice to
UM. However, if the breach is corrected within the 180 day period, the Agreement
and any sublicenses will continue in full force and effect and Company will so
notify UM in writing.
11.4           UM may terminate this Agreement at any time by giving Company 90
days written notice of termination, and upon payment to Company of all payments
maturing through the effective date of the termination. Provided proper written
notice is received from UM by Company, at least 90 days before payment of a
patent expense is due, UM will have no obligation to pay for such future patent
expenses incurred by Company.
11.5           Termination does not relieve either party of any obligation which
arises before termination including obligations under ARTICLE 4, ARTICLE 6,
ARTICLE 8, ARTICLE 9, ARTICLE 12, ARTICLE 13, ARTICLE 15, ARTICLE 16 and ARTICLE
26.
11.6           Upon termination of this Agreement for any reason, any
Sublicensee that is not in default may seek a license from Company and such
right to a license shall not be unreasonably withheld.
11.7           Upon and effective as of the date of the termination of this
Agreement for any reason, UM will direct Sublicensees to discontinue use of
Patent Rights and, upon direction from Company, to return or destroy any
remaining Licensed products except as provided in Section 11.7.
11.8 Subject to all terms and conditions of the License, including payments, for
a period of 60 days after expiration or termination of this Agreement,
Sublicensees may market any Licensed Products on hand at the time of expiration
of this Agreement.
 
 
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12.      CONSENT FOR ADVERTISING

Neither Company nor UM will use the name of the other or any adaptation thereof,
or the names of employees of the others, in any advertising, promotional, or
sales literature without prior written consent obtained from the other party.
Company or UM may publicize the fact that the parties have made this Agreement
and the general nature of the license.

13. ASSIGNABILITY

This Agreement is not assignable by either party without the prior written
consent of the other party, which will not be unreasonably withheld.

14      APPLICABLE LAW; SEVERABILITY
14.1           This Agreement is made and construed in accordance with the laws
of the State of Maryland without regard to choice of law issues, except that all
questions concerning the construction or effect of patents will be decided in
accordance with the laws of the country in which the particular patent concerned
has been granted.
14.2           Company submits itself lo (he jurisdiction of the State courts of
the State of Maryland and Federal courts within the State of Maryland for
purposes of any suit relating to this Agreement and agrees that the State and
Federal courts located in Baltimore City. Maryland provide a proper venue for
determining any legal action relating to this Agreement.

15.      INTEGRATION AND INTERPRETATION
15.1           This Agreement, together with any Appendices specifically
referenced and attached, embodies the entire understanding between Company and
UM. There are no contracts, understandings, conditions, warranties or
representations, oral or written, expressed or implied, with reference to the
subject matter hereof which are not merged herein.
15.2           This Agreement is negotiated as an arm's-length business
transaction. Draftsmanship will not be taken into account in construing the
Agreement.
15.3           If any condition or provision in any Article of this Agreement is
held to be invalid or illegal or contrary to public policy by a court of
competent jurisdiction from which there is no appeal, this Agreement will be
construed as though the provision or condition did not appear. The remaining
provisions of this Agreement will continue in full force and effect.

16. INDEMNITY/INSURANCE
16.1           UM and its officers and employees acting within the scope of
their employment by UM are subject to the Maryland Tort Claims Act ("the Act"),
Title 12, Subtitle 1, State Government Article, Annotated Code of Maryland,
which permits claims in tort against the State of Maryland under certain
circumstances. In order to file a claim under the Act, a claimant must submit a
written claim to the Treasurer of the State of Maryland or a designee of that
office within one year after the injury to the person or property that is the
basis of the claim.
16.2           UM and Company agree that nothing in this Agreement shall be
interpreted as; (a) a denial to either party of any remedy or defense available
to it under the laws of the State of Maryland; (b) the consent of the State of
Maryland or its agents and agencies to be sued; or (c) a waiver of sovereign
immunity or any other governmental immunity of the State of Maryland and the UM
beyond the extent of any waiver provided by law.

17.      REPRESENTATIONS AND WARRANTIES
17.1           UM represents that as of the date its officer executes this
Agreement, that officer believes on the basis of facts reported to UM that UM is
authorized to enter into this Agreement without burdens, encumbrances,
restraints, or limitations of any kind which could adversely affect the rights
of Company under this Agreement.

 
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17.2           Company hereby represents and warrants to UM that: (a) Company
has full right, title, and interest in and to the Patent Rights, (b) the Patent
Rights do not constitute the subject matter of any currently pending litigation,
and Company has not been informed of any related litigation contemplated either
by Company or any Third Party, (c) Company is authorized to enter into this
Agreement without burdens, encumbrances, restraints, or limitations of any kind
which could adversely affect the rights of UM under this Agreement, (d) Company
has full legal right, power and authority to execute, deliver and perform its
obligations under contravene or constitute a default under any provision of
applicable law or of any agreement, judgment, injunction, order, decree, or
other instrument binding upon Company. COMPANY EXPRESSELY DISCLAIMS ALL
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, AND PATENT
VALDITY.

18.      AGREEMENT MODIFICATIONS
This Agreement may not be amended or modified, nor may any right or remedy of
either party be waived, unless the same is in writing and signed by such party
or a duly authorized representative of such party.  A waiver of breach of any
terms or provision hereof will not be construed as a waiver of any other
subsequent breach.

19 RECITALS

The Recitals in this Agreement will be included as part of the Agreement.

20.     FORCE MAJEURE

Neither party is liable for failure or delay in performing any of its
obligations under this Agreement if the failure or delay is required in order to
comply with any governmental regulation, request or order, or necessitated by
other circumstances beyond the reasonable control of the party so failing or
delaying, including but not limited to Acts of God, war (declared or
undeclared), insurrection, fire, flood, accident, labor strikes, work stoppages
or slowdown (whether or not such labor event is within the reasonable control of
the parties), or inability to obtain raw materials, supplies, power or equipment
necessary to enable such party to perform its obligations. Each party will: (a)
promptly notify the other party in writing of an event of force majeure, the
expected duration of the event and its anticipated effect on the ability of the
party to perform its obligations; and (b) make reasonable efforts to remedy the
event of force majeure.

21.      NO WAIVER
■A failure or delay by a party in exercising any of its rights or remedies under
this Agreement does not constitute a waiver of the rights or remedies, nor does
any single or partial exercise of any right or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy. The
rights and remedies of the parties provided in this Agreement are cumulative and
not exclusive of any rights or remedies provided by law.

22.      LEGAL RELATIONSHIP OF PARTIES
UM and Company are not (and nothing in this Agreement may be construed to
constitute them as) partners, joint venturers, agents, representatives or
employees of the other, nor is there any status or relationship between them
other than that of independent contractors. Neither party has any responsibility
or liability for the actions of the other party except as specifically provided
in this Agreement. Neither party has any right or authority to bind or obligate
the other party in any manner of make any representation or warranty on behalf
of the other party.
Unless otherwise provided, any cost or expense incurred in connection with this
Agreement will be paid* by the party which incurs the cost or expense, and the
other party has no liability for the cost or expense.

24.     SIGNED IN DUPLICATE; HEADINGS

This Agreement is signed in duplicate originals. The headings used in this
Agreement are for convenience of reference only and do not affect the meaning or
construction of this Agreement.

 
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25.     NO LICENSE

No license or right is granted by implication or otherwise with respect to any
patent application or patent owned by either party, unless specifically set
forth in this Agreement.

26.      EMPLOYMENT OF UM STAFF
Company will not knowingly employ or compensate, directly or indirectly, any
person working in the Licensed Field while the person is employed by UM or for 2
years thereafter, unless UM provides Company with prior written consent of the
UM President to the employment or compensation by Company. "Compensation"
includes but is not limited to: stock option or stock purchase agreements,
consulting agreements, any other form of agreement executed between a UM
employee and Company, and cash payments. "Employment" includes both
uncompensated and compensated service to Company. A request to employ or
compensate a UM employee will be considered by UM as provided in the
Public/Private Partnership Act, which is Section 15-523 of the Maryland Public
Ethics Law (Title 15, Subtitle 5, State Government Article, Annotated Code of
Maryland).

27.     DISPUTE RESOLUTION
The parties recognize that disputes may arise from time to time during the term
of this Agreement relating to either party's rights or obligations. In the event
of a dispute, either party, by notice to the other party, may have the dispute
referred to the parties' respective officers designated below or their
successors for attempted resolution by good faith negotiations within 30 days
after the notice is received. The designated officers are as follows;
For Company:                                Charles Dalton or Designee Officer
For UM:                      Vice President, Academic Affairs
 
 
In the event the designated officers are not able to resolve the dispute within
this 30 day period, or any agreed extension, they will confer in good faith with
respect to the possibility of resolving the matter through mediation with a
mutually acceptable Third Party or a national mediation organization. The
parties agree that they will participate in any mediation sessions in good faith
in an effort to resolve the dispute in an informal and inexpensive manner. All
expenses of the mediator will be shared equally by the parties. The parties
agree to toll any applicable statute of limitations during the pendency of the
dispute resolution process initiated under this agreement. The parties agree
that evidence of anything said or any admission made in the course of any
mediation will not be admissible in evidence in any civil action between them.
In addition, the parties agree that no document prepared for the purpose of, or
in the course of, or pursuant to, the mediation, or copy thereof, will be
admissible in evidence in any civil action between them. However the parties
agree that this Section does not limit the admissibility of evidence if all
parties who participated in the mediation consent to its disclosure.
28.     NOTICES AND CORRESPONDENCE

All notices required to be given hereunder will be in writing and will be sent
by certified mail, return receipt requested, postage prepaid, or by overnight
delivery service providing receipt of delivery, addressed as follows:
To UM:                      Office of Research and Development
University of Maryland, Baltimore 515 West Lombard Street, 5,fl Floor Baltimore,
MD 21201 Attention: Majorie Forster

To Company;                                Stephen L. Nesbitt, Esq.
Vice President, Patent Administration Aventis Pharmaceuticals Inc. Route 202-206
Bridgewater, New Jersey 08807

 
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IN WITNESS HEREOF, the parties hereto have caused this instrument to be signeH
in duplicate by their duly authorized officers.
 
 
Attachment A ' for License Agreement between University of Maryland, Baltimore
and
Aventis Pharmaceuticals, Inc.

Option Agreement

This Option Agreement executed on this      day of June, 1995 by and between
Marion Merrell Dow, Inc., a corporation'organized and existing under the laws of
Ohio, having its principal office at 2110 East Galbraith Road, Cincinnati, Ohio
45215, ("MMD") and the University of Maryland System, acting by and through the
University of Maryland at Baltimore ("UMAB"), a constituent of the system,
having an office at 511 West Lombard Street, Baltimore, Maryland, 21201.

RECITALS
WHEREAS, MMD has rights to certain 4,6-disubstituted tryptophan derivatives and
4,6-disubstituted kynurenines {the "Compounds"), which have NMDA antagonistic
effects and that possess certain therapeutic neuroprotective properties, and
 
WHEREAS, these Compounds are protected in part by U.S. Patent No. 5,360,814 (the
"814 patent") and European patent EP 0 501 378 Bl ("the European patent) and
also by U.S. patent applications S.N. 08/165,144, filed December 10, 1993 (the
"144 application"), S.N. 08 /261,609, filed June 17, 1994 (the "6G9
application") and European application EP 624 569 Al, filed February 2,1992
("the European application"), and may be the subject of other subsequently filed
divisional patent applications, with equivalent patent applications having been
filed worldwide (hereinafter referred to collectively as the "Patents"); and
 
WHEREAS, Dr. Robert Schwartz, Professor, Ln the School of Medicine Department of
Psychiatry at UMAB, is named as a co-inventor on the Patents; and
 
WHEREAS, UMAB, is an educational institution that carries out scientific
research through its faculty, staff, and students, and is committed to bringing
the results of that research into widespread use; and x
 
WHEREAS, UMAB is interested in developing the Compounds through collaboration
with an independent corporate partner that has the financial means and the
technical know-how and expertise to develop, obtain regulatory approval for and
market the Compounds (hereinafter referred to as "Development"); and
 
WHEREAS. MMD is willing to grant to UMAB an option to an exclusive license in
order to facilitate UMAB obtaining a corporate partner (the "Third Party
Licensee") to assist in Development of the Compounds.
 
NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein, the parries hereto agree as follows:
 
1)       GRANT. MMD hereby grants to UMAB an option to license the Patents in
order to negotiate a royalty-bearing, limited-term, worldwide exclusive
sub-license of the Patents with a Tmrd-Party Licensee. The Third-Party Licensee
shall be responsible for and permitted to implement Development of the Compounds
as protected by the Patents for use of the NMDA antagonistic effects and
therapeutic neuroprotective properties (the "Field Of Use"). Development in said
Field of Use to be utilized in pharmaceutical compositions for treatments of,
inter alia, epilepsy, neurodegenerative diseases,
isd\erruc/hypoxic/hypog[ycernic damage to cerebral tissue, anxiety, migrainesand
pain. During the Option Period (defined below), MMD shall have the right to use
the Patents in the Field Of Use for research purposes only. MMD shall retain all
rights to use the Patents for those applications not included in the Field of
Use.
2)           OPTION PERIOD. This Option shall commence on the date of execution
of this agreement and shall terminate two (2) years therefrom, unless sooner
terminated by the execution of a sub-license agreement between UMAB and a Third
Party Licensee (the "Option Term"). If UMAB obtains a letter of intent to
negotiate with a Third Party
J    Licensee within the Option Term then the Option Term may be extended by
mutual written agreement between UMAB and MMD for one (1) year pending
negotiation of a sub-license agreement.

 
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3)           EXERCISE OF OPTION. UMAB shall exercise its option hereunder by
written notice to MMD within the Option Term that it has secured a Third Party
Licensee. UMAB shall inform MMD at least semi-annually as to any progress made
in securing a Third Party Licensee.
4)           UMAB RESPONSIBILITIES, (a) UMAB shall use good faith efforts to
negotiate a license agreement for Patents in the Field Of Use with MMD by the
end of the Option Term, or any renewal thereof. Said license shall contain
provisions for, including but not limited to,
(i)           termination;
(ii)           ,   patent enforcement;
(iii)           audit rights and indemnities; and
(iv)           a royalty rate, not to exceed 40% of the sub-license royalty, a
portion of which is to be applied to reimbursement of MMD patent expenses.

(b)      UMAB shall use good faith efforts to negotiate a sub-license agreement
for Patents in the Field Of Use with Third Party Licensee by the end of the
Option Term, or any renewal thereof. Said license shall contain, in addition to
customary terms and conditions such as provisions for ternunation, patent
enforcement, audit rights and indemnities, at least the following:
(i)           commercially reasonable fees and royalties; and
(ii)           a reversion to MMD of right, title and interest of the Patents if
the Third Party Licensee discontinues development of the Patents in said Field
of Use.

5)           NO LICENSE. Nothing in this agreement shall be construed to grant a
license.
6)           NO ASSIGNMENT. The Option Rights shall not be assignable, and any
attempt to do so shall be void.
7)           MODIFICATIONS. This Agreement may not be amended or modified, nor
may any right or remedy of either party be waived, unless the same is in writing
and signed by such party to be charged or a duly authorized representative of
such party. A waiver of breach of any terms or provision hereof shall not be
construed as a waiver of any other subsequent breach.
8) APPLICABLE LAfV. This Agreement shall be construed and the rights of the
parties determined in accordance with the laws of the State of Maryland.
9)      NOTICES AND CORRESPONDENCE. All notices required or permitted to be
given under this Agreement shall be in writing and shall be deemed to have been
sufficiently given for all purposes hereof when mailed by certified mail return
receipt requested to the party to be notified as evidenced by the postmark at
the point of mailing.
All notices to UMAB and any correspondence respecting this Agreement shall be
addressed as follows:
To UMAB:    Steven L. Fritz, Ph.D. Interim Director
Office of Technology Development University of" Maryland at Baltimore 511
WestLombard Street Baltimore, Maryland 21201 Tel. (410) 706-1874 Fax. (410)
706-5035
To MMD:
 

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed
in duplicate by their duly authorized officers.
UMAB                      Marion Merrell Dow. Inc.
Marjorie Forster
Director
 
 
Signature
Office of Sponsored Programs Administration
 
CONFIDENTIAL                                           University or Maryland
Contribuiion Agreement
 

 
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EXHIBIT E
 
CHC STANDARD HOURLY SERVICE RATES
 
 
For any services and expenses requested and authorized by Company, CHC shall be
entitled to the following compensation:

1.   Service Fees. At the end of each month, all time will be calculated at the
rate of

Data Entry Technician, Project Document
Specialist                                                                                                           $48.00
Clinical Research Associate. Data Entry Technician II, Data Specialist,
Information Services Assistant, Professional Support, Project Coordinator,
Regulator Affairs Assistant, Sr. Project Document Specialist, Technical
Editor$75.00
Audit Specialist, Clinical Research Associate I, Data Specialist II, Information
Services Specialist. Project Coordinator II, Sr. Technical Editor$95.00
Clinical Data Coordinator, Clinical Research Associate 11. Compliance
Specialist, Pharmaceutical Development Specialist, Professional Support II,
Programmer, Regulatory Affairs Associate. Sr. Data Specialist, Sr. Project
CoordinatorSI 20.00
Associate Biostatisfician, Scientist, Clinical Research Manager, Project
Manager, Senior Auditor, Senior Clinical Research Associate, Statistical
Programmer$145.00
Associate Biostatistician II, Clinical Research Manager 11, Scientist I, Senior
Clinical Research Associate II, Sr. Regulatory Affairs Associate, Sr. Project
Manager$170.00
Associate Director, Biostatistician, Physician, Professional Support III.
Scientist 11, Sr. Statistical Programmer, Sr. Clinical Research Manager$195.00
Director, Research Physician, Sr. Biostatistician, Sr.
Scientist                                                                                                                                $220.00
Senior Research Physician, Sr. Scientist
II                                                                                     $255.00
Principal Scientist, Medical director. Vice
President                                                                                                           $275.00
Senior Vice
President                                                      $300.00
President                      S400.00
Travel time shall be billed as work time, with [he understanding, that to the
extent practical CHC shall utilize travel time to complete project work for
Company.
2.           Expenses. Company shall reimburse CHC at a rate of 18% of
chargeable hours for the following expenses: long distance telephone, messenger,
mail, reproduction, secretarial or clerical services, and supplies.
Any unusual expenses such as international communications may be billed
separately.
3.           Travel Expenses. In addition to the above expenses Company shall
reimburse CHC for actual, reasonable and necessary transportation, lodging, and
subsistence expenses for visits to sites away from CHC's office, provided that
Company has authorized such visits. This reimbursement shall be limited by the
following:

(a)           Airline travel shall be via. commercial airline at no more than
full coach fare or business class for transoceanic travel.
(b)           Local travel IO sites other than CHC's office shall be by personal
car at a rate not to exceed the prevailing maximum reimbursement rate allowed by
the federal government; and
(c)           Local travel at locations remote from CHC's office shall be by
personal ear, or taxi, whichever is more cost efficient.
 
4. Adjustment of Rates. The standard hourly billing rates outlined in paragraph
1 above may, at CHC's option, be adjusted annually to reflect an increase for
service fees, provided however, that Company be given 60 days notice of any
intended increase and the opportunity to review increases before implementation.
 
 
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UM Patent fees - Astra Portfolio
 
 
Date           Expense                      Income
2/3/99                      S3 50.00                      -
2/3/99                      S3 50.00
2/22/99                      $2,106.22
3/30/99                      S165.82
3/30/99                      SI 65.82
3/30/99                      S297.65
3/30/99                      $360.00
1/30/99                      S3 60.00
4/l4'99                      $151.88
4/27/99                      5375.17
5/12/99                      SI,459.57
5/12/99                      SI.660.08
6/24-'99                      SI 1.27
6/24/99                      S429.90
8/23/99                      S387.94
8^5/99                      £389.83
8/25/99                      S62.95
8/25 '99                      S326.88
10/22/99                      SI 39.95
11/15/99                      S389.44

Date           Expense                      Income
1/13/00                      $30.60
1/13/00                      $30.00
1/28/00                      $3,656.81
1/28/00                      $4,171.75
2/2/00                      $136.40
2/28/00                      $176.80
2/28/00                      SI 76.80
4/5.00                      $1,034.56 -
5/1/00                                $76.67
5/1/00                                S76.67
5/17/00                      $48.33
6/16/00                      $167.00
6/16/00                      $68.95
7/24/00                      $105.23
7/24/00                      $978.00
urc/on                      $660.00
11/8/00                      $660.00

 i