Exhibit 10.29

Confidential Materials omitted and filed separately with the Securities and
Exchange

Commission. Asterisks denote omissions.

COLLABORATION, DEVELOPMENT AND LICENSE AGREEMENT

This COLLABORATION, DEVELOPMENT AND LICENSE AGREEMENT (the “Agreement”),
effective as of this 8th day of June, 2005 (the “Effective Date”), is made by
and between Trimeris, Inc., having a principal place of business at 3500
Paramount Parkway, Morrisville, North Carolina 27560, U.S.A. (“Trimeris”), and
ChemBridge Research Laboratories, Inc. (together with its Affiliates, “CRL”),
having a principal place of business at 16981 Via Tazon, Suite K, San Diego,
California 92127, U.S.A.

RECITALS

WHEREAS CRL has skills, expertise and experience in the application of discovery
chemistry and biology for use in identifying small molecule modulators for drug
targets, and has identified, developed, rights to and owns proprietary chemistry
and biological technologies suitable for preclinical drug discovery as high
throughput biological screening assays and medicinal chemistry;

WHEREAS Trimeris has identified, developed, rights to and owns proprietary
biological models, assays, and materials that have the potential to be used as
the basis for drug discovery programs for Targets (as defined below) specific
for Trimeris;

WHEREAS Trimeris and CRL desire to collaborate to identify Compounds (as defined
below) with activity as anti-viral agents against the Targets, with the goal of
delivering Compounds with desired activity and selectivity for developing
Products (as defined below) in the Field (as defined below) with the Compounds
and information which result from the Research Collaboration (as defined below).

NOW, THEREFORE, for and in consideration of the covenants, conditions and
undertakings hereinafter set forth, it is agreed by and between the Parties as
follows:

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

TABLE OF CONTENTS

 

ARTICLE 1 DEFINITIONS

   1

ARTICLE 2 RESEARCH COLLABORATION

   9

ARTICLE 3 MANAGEMENT

   28

ARTICLE 4 LICENSES & GRANTS

   31

ARTICLE 5 DEVELOPMENT

   33

ARTICLE 6 PAYMENTS

   34

ARTICLE 7 BOOKS AND RECORDS FOR PAYMENTS

   41

ARTICLE 8 DUE DILIGENCE

   42

ARTICLE 9 INTELLECTUAL PROPERTY

   43

ARTICLE 10 CONFIDENTIALITY

   49

ARTICLE 11 REPRESENTATIONS AND WARRANTIES

   52

ARTICLE 12 INDEMNIFICATION

   53

ARTICLE 13 TERM AND TERMINATION

   55

ARTICLE 14 DISPUTE RESOLUTION

   60

ARTICLE 15 MISCELLANEOUS

   62

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

ARTICLE 1

DEFINITIONS

Unless the context clearly indicates otherwise, the following rules shall govern
the interpretation of this Agreement:

 

  a. The definitions of all terms defined herein shall apply equally to the
singular, plural, and possessive forms of such terms.

 

  b. All references to “Sections,” or “Articles”, or “Exhibits” shall mean the
corresponding Sections of, Articles of and Exhibits to this Agreement.

As used herein, the following terms will have the meanings set forth below:

1.1 “Active” shall mean a compound developed and tested under the Research Plan
which meets potency and selectivity guidelines with respect to a Target, as
provided in the Research Plan. The potency and selectivity guidelines defining
an “Active” may be amended from time to time, based on SAR and available data,
by the Joint Research Committee (“JRC”) in accordance with the JRC
Decision-Making Process.

1.2 “ADMET” shall mean studies that are designed to examine preliminary
adsorption, distribution, metabolism, excretion or toxicology profiles of a
Compound in vitro and/or in animals, which may or nay not be conducted under GLP
conditions.

1.3 Affiliate” shall mean any corporation or other entity, whether de jure or de
facto, which is directly or indirectly controlling, controlled by or under
common control of a Party hereto for so long as such control exists. For the
purposes of this Section 1.3, “control” shall mean the direct or indirect
ownership of at least fifty percent (³50%) of the voting securities, income
interest, a comparable equity in such or other voting rights of such subject
entity having the power to vote on or direct the affairs of the entity, or if
not meeting the preceding, the maximum voting right that may be held by the
particular entity under the laws of the country where such entity exists. In
case of CRL, affiliates shall include ChemBridge Corporation, having a principal
place of business at 16981

 

Page 1

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

Via Tazom, Suite G, San Diego, CA, 92127, U.S.A.; and ChemBridge Ltd., having a
principal place of business at 1 Malya Pyrogovskaya, Moscow, 119435, Russian
Federation.

1.4 “Change of Control” shall have the meaning as set forth in Section 2.15.

1.5 “Chemist” shall mean a scientist with the sufficient knowledge and training
in medicinal and synthetic organic chemistry, including but not limited to the
design and synthesis of chemical entities, and whom possesses unique skills and
expertise, to enable timely performance of the obligations as set out in the
Research Plan, and with scientific qualifications that meets or exceeds industry
standards for a research chemist performing in a drug discovery collaboration
between two companies.

1.6 “Collaboration Technology” shall mean all Inventions and other intellectual
property, including without limitation any Know-How and Patent Rights relating
thereto, made solely by either CRL or solely by Trimeris, or jointly by CRL and
Trimeris in the course of performing or in connection with the Research
Collaboration. It is understood and agreed that Collaboration Technology shall
not include any CRL Technology, or Trimeris Technology, or Development
Technology.

1.6.1 “Know-How” shall mean all ideas, inventions, data, instructions,
processes, formulas, expert opinions and information, including, without
limitation, biological, chemical, pharmacological, toxicological,
pharmaceutical, physical and analytical, clinical, safety, manufacturing and
quality control data and information developed either solely by CRL or Trimeris,
or jointly by CRL and Trimeris during performing and in connection with the
Research Collaboration, in each case, which is necessary for the development,
manufacture, use or sale or commercialization of Compounds and/or Products, to
the extent CRL or Trimeris has the right to license or sublicense the same;
provided, however, that Know-How does not include any CRL Technology, Trimeris
Technology, Development Technology, or any inventions otherwise included in the
Patent Rights.

1.6.2 “Patent Rights” shall mean (i) all patents and patent applications the
subject of which is an invention conceived and reduced to practice either solely
by CRL or Trimeris, or jointly

 

Page 2

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

by CRL and Trimeris in the performance of or in connection with the Research
Collaboration, that claim a Compound (including, but not limited to, their
progeny and derivatives and all non-covalent derivatives, acid addition salts
and cationic salts, and all diastereomeric and enantiomeric forms thereof), and
including without limitation a Focused Library Compound, a Lead Compound,
Development Compound, a Compound, or method of use or process for the synthesis
or manufacture thereof or composition-of-matter containing such Compound, and
(ii) any divisionals, continuations, continuations-in-part, reissues,
reexaminations, extensions or other governmental actions which extend any of the
subject matter of the patent applications or patents in (i) above; provided,
however, that Patent Rights shall not include any CRL Technology, or Trimeris
Technology, or Development Technology.

1.7 “Compound” shall mean any one or more chemical entity(ies) that is
(i) specifically designed by Trimeris and/or CRL in the course of performing or
in connection with the Research Plan; or (ii) designed by Trimeris and/or CRL,
and synthesized by CRL, in the course of performing or in connection with the
Research Plan; or (iii) synthesized by CRL in the course of performing or in
connection with the Research Plan; or (iv) has been designated as a Development
Compound under Section 2.4.4(c) below. Except as expressly provided for in this
Section 1.7, or in Section 2.4.4(c) below, it is understood and agreed that
Library Compounds shall not be deemed Compounds. Compounds shall not include any
Trimeris Technology.

1.8 “CRL Library” shall mean the collection of CRL proprietary chemical entities
and other chemical libraries that CRL makes available on a non-exclusive basis
to Third Parties; provided, however, CRL Library shall not include any
Compounds.

1.9 “CRL Technology” shall mean certain know-how, intellectual property or
patents, as shown by contemporaneous documentation, that is (i) developed,
licensed and/or owned by CRL, prior to the Effective Date, or (ii) developed,
licensed and/or owned by CRL at any time outside of the Research Collaboration,
or (iii) developed during the term of the Research Collaboration and not having
specific application to the Research Plan (i.e. such know-how, intellectual
property, or patents having application only outside of the specific composition
of matter, method of synthesis, manufacture, sale or importation of a Compound
and/or a Product).

 

Page 3

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

1.10 “Database Mining Compound” shall mean a chemical entity that is received by
CRL from a third party vendor or is a Library Compound. A Database Mining
Compound shall not be deemed a Compound unless it is a Library Compound
designated as a Development Compound under Section 2.4.4(c) below.

1.11 “Development Compound” shall mean any Compound that is selected by Trimeris
for preclinical drug development or is entered into IND Enabling Studies,
whichever occurs first.

1.12 “Development Technology” shall mean certain know-how, intellectual property
or patents, as shown by contemporaneous documentation, developed, licensed or
owned by Trimeris, or jointly developed by Trimeris and a Third Party, during
the development by or on behalf of Trimeris of a Development Compound or Product
pursuant to this Agreement.

1.13 “Field” shall mean the discovery, development and commercialization of
small chemical molecules for the diagnosis of, or the therapeutic and/or
prophylactic treatment of all human conditions and/or diseases.

1.14 “Focused Library” shall mean a library of Compounds, consisting of a total
of approximately [**] to approximately [**] Compounds, which is created to
specifically explore the SAR of an Active, the timeline for making and testing
of a Focused Library to be determined by amendment of the Research Plan by the
JRC.

1.15 “Focused Library Compound” shall mean any Compound that is contained in a
Focused Library.

1.16 “FTE” shall mean a full-time person dedicated to the Research Collaboration
or, in the case of a less than full-time, dedicated person, a full-time,
equivalent person year based upon a total of one thousand eight hundred eighty
(1,880) hours per year of work in connection with the Research Plan. [**].

1.17 “GLP” shall mean Good Laboratory Practice, as defined in the U.S. Food,
Drug and Cosmetic Act.

 

Page 4

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

1.18 “IND” shall mean an Investigational New Drug application, as defined in the
U.S. Food, Drug and Cosmetic Act and the regulations promulgated thereunder, for
initiating clinical trials in the United States, or any corresponding foreign
application, registration or certification.

1.19 “IND Enabling Studies” shall mean studies performed specifically for
inclusion in an IND, including without limitation ADMET and GLP toxicology, as
well as formulation and manufacturing development necessary to obtain the
permission of regulatory authorities to begin human clinical testing.
Notwithstanding the foregoing, IND Enabling Studies shall not include any
non-GLP studies, including ADMET or formulation studies, undertaken by Trimeris
pursuant to the Research Plan prior to the designation of a Compound as a
Development Compound.

1.20 “International Territory” shall mean all countries and territories outside
of the U.S. Territory.

1.21 “Invention” shall mean any new and useful process, manufacture, compound or
composition of matter, patentable or unpatentable, or any improvement thereof,
conceived or first reduced to practice, or demonstrated to have utility by a
Party, pursuant to the Research Plan and during the term of the Research
Collaboration.

1.22 “JRC” or “Joint Research Committee” shall have the meaning set forth in
Section 3.1.

1.23 “LC-MS/ELSD” shall mean liquid chromatography mass spectrometry with
evaporative light scattering detector.

1.24 “Lead Compound” shall mean any Focused Library Compound that meets the JRC
guidelines for a Lead Compound and is so designated in writing by the JRC, in
accordance with the JRC Decision-Making Process, for further investigation
pursuant to the Research Collaboration.

1.25 “Library Compound” shall mean any chemical entity that is contained in the
CRL Library.

 

Page 5

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

1.26 “NDA” shall mean a New Drug Application, as defined in the U.S. Food, Drug
and Cosmetic Act and the regulations promulgated therein, or any corresponding
foreign application, registration or certification.

1.27 “Net Sales” shall mean the gross invoice price for all Products sold by
Trimeris, its Affiliates or Sublicensees (“Selling Party”), under this Agreement
in arm’s length sales to Third Parties, less deductions allowed to the Third
Party customer by the Selling Party on such sales that are for: (a) trade,
quantity, and cash discounts, including charge-backs; (b) credits, rebates
(including those to managed-care entities and government agencies), and
allowances or credits to customers on account of rejection or returns
(including, but not limited to, wholesaler and retailer returns) or on account
of retroactive price reductions affecting such Product; (c) freight, postage,
transportation insurance, packaging materials for dispatch of Product, and
duties; and (d) sales and excise taxes, other consumption taxes, customs duties
and compulsory payments to governmental authorities and any other governmental
charges imposed upon the sale of such Product to Third Parties. In addition, the
Selling Party may exclude from Net Sales a reasonable provision for
uncollectible accounts to the extent such reserve is determined in accordance
with generally accepted accounting standards, consistently applied across all
product lines of Selling Party but not to exceed 3% of gross invoiced amounts,
until such amounts are actually collected. Notwithstanding the foregoing, Net
Sales shall not include sales among Trimeris, its Affiliates and Sublicensees
for resale of Product, provided that such resale shall be included within Net
Sales.

1.28 “Party” shall mean CRL or Trimeris individually, and “Parties” shall mean
CRL and Trimeris collectively, unless otherwise specifically indicated.

1.29 “Phase I” shall mean human clinical trials conducted under the approval of
the U.S. Food and Drug Administration (or any corresponding foreign regulatory
counterpart), the principal purpose of which is to establish safety, or safety
and proof of concept of efficacy, wherein the dosing with a Development Compound
or Product is done over a period of thirty (30) days or less, and which is
performed for purposes of supporting an NDA application, or its corresponding
foreign regulatory counterpart.

 

Page 6

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

1.30 “Phase II” shall mean human clinical trials conducted under the approval of
the U.S. Food and Drug Administration (or any corresponding foreign regulatory
counterpart), the principal purpose of which is to establish safety and dose
response activity, wherein the dosing with a Development Compound or Product is
done over a period of at least thirty one (31) days, and which is performed for
purposes of supporting an NDA application, or its corresponding foreign
regulatory counterpart.

1.31 “Phase III” shall mean human clinical trials conducted under the approval
of the U.S. Food and Drug Administration (or any corresponding foreign
regulatory counterpart), the principal purpose of which is to establish
acceptable safety and statistically significant efficacy of one or more
particular doses of a Development Compound or Product in patients being studied,
and which will (or are intended to) satisfy the requirements of a pivotal trial
for purposes of obtaining approval to market a Product in a country by the
health regulatory authority in such country to market such Product.

1.32 “Product” shall mean any human diagnostic, human therapeutic and/or human
prophylactic product for use within the Field and incorporating a Compound.

1.33 “Research Collaboration” shall mean the research activities undertaken by
the Parties pursuant to ARTICLE 2 below.

1.34 “Research Plan” shall mean the written research plan (including a detailed
budget) governing the joint effort of the Parties in conducting the Research
Collaboration, which may be amended in writing from time to time by the Joint
Research Committee, as it deems necessary or appropriate. The initial Research
Plan is attached hereto as APPENDIX A.

1.35 “Research Use License” shall have the meaning set forth in
Section 2.4.4(c).

1.36 “SAR” shall mean the relationship between the biological activity of a
chemical entity and its molecular structure.

1.37 “Stage I Research” shall mean the research activities undertaken by the
Parties pursuant to Sections 2.4.1 and 2.4.2 below.

 

Page 7

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

1.38 “Sublicensee” shall mean, with respect to a particular Product, a Third
Party to whom Trimeris has granted a license or sublicense under CRL Technology
pursuant to Section 4.2.1 to either make, have made, offer for sale, import,
export or sell such Product. As used in this Agreement, “Sublicensee” shall also
include a Third Party to whom Trimeris has granted the right to distribute such
Product, provided that such Third Party has responsibility for marketing and
promotion of such Product within the Field and country for which such
distribution rights are granted.

1.39 “Target(s)” shall mean any one or more of (a) the HIV gp120 glycoprotein,
including all genetic variants of such glycoprotein, or (b) the HIV gp41
glycoprotein, including all genetic variants of such glycoprotein.

1.40 “Target Screening Assay” shall mean an in vitro assay utilized by or on
behalf of Trimeris to detect or measure the modulation of a Target by
interaction with a Library Compound or Compound.

1.41 “Third Party” shall mean any person or entity other than CRL and Trimeris,
and their respective Affiliates.

1.42 “Trimeris Technology” shall mean certain know-how, intellectual property or
patents, as shown by contemporaneous documentation, that is (i) developed,
licensed and/or owned by Trimeris, prior to the Effective Date; or
(ii) developed, licensed and/or owned by Trimeris at any time outside of the
Research Collaboration; or (iii) developed during the term of the Research
Collaboration and not having specific application to the Research Plan (i.e.
such know-how, intellectual property, or patents having application only outside
of the specific composition of matter, method of synthesis, manufacture, sale or
importation of Compounds and/or Products); or (iv) Development Technology
developed, licensed or owned solely by Trimeris, or by Trimeris and a Third
Party.

1.43 “U.S. Territory” shall mean the United States of America, excluding Puerto
Rico and the U.S. Virgin Islands.

 

Page 8

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

1.44 “Valid Claim” shall mean a claim of an issued, unexpired and unabandoned
patent within the Patent Rights, which has not been held invalid in a final
decision of a court of competent jurisdiction, which has not been appealed or
from which no appeal may be taken, and which has not been disclaimed or admitted
to be invalid or unenforceable through reissue or otherwise, and such that
making, having made, offering for sale, importing, exporting or selling a
Product would infringe such claim.

ARTICLE 2

RESEARCH COLLABORATION

2.1 Goals. The goal of the Research Collaboration is to develop Products for use
in the Field pursuant to a Research Plan, which Research Plan is expected to
consist of multiple steps, as the research under the Research Plan progresses.

2.2 Conduct of the Research Collaboration. Subject to the terms and conditions
set forth herein, the Parties agree to conduct research under the Research
Collaboration, which shall be funded as set forth in Section 2.8 below. During
the term of the Research Collaboration, CRL and Trimeris shall collaborate and
shall each use their commercially reasonable efforts to conduct the Research
Collaboration in accordance with the Research Plan within the time schedules
contemplated therein, and to keep the other Party informed as to the progress
and results of the Research Collaboration hereunder.

2.3 Research Plan. The Research Collaboration shall be carried out in accordance
with a mutually agreed upon written Research Plan, which shall establish
specific research objectives and the research tasks to be performed and
resources to be provided by each Party according to the terms and conditions
specified in Section 2.4. The Research Plan shall, among other things,
establish: (i) the scope of the research activities which will be performed;
(ii) the research objectives, work plan activities and time schedules with
respect to the Research Collaboration; (iii) the respective obligations of the
Parties with respect to the Research Collaboration; and (iv) guidelines for
determining when a Compound shall be deemed an Active or a Lead Compound. As of
the Effective Date, the initial “Research Plan” shall be attached and
incorporated herein as APPENDIX A. The

 

Page 9

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

Research Plan shall be reviewed on an ongoing basis, and may be amended during
Stage I Research by the JRC, provided that any changes or adjustments in the
allocation of CRL resources to a Target research program that are recommended by
the JRC be made in accordance with the provisions outlined in Section 2.7.2 and
ARTICLE 3, such adjustments to fall within the specific CRL resource allocation
specified therein.

2.4 Research Collaboration Activities.

2.4.1 Stage I Research for the gp41 Target: Identification of inhibitors of HIV
gp41-mediated fusion as a Lead Compound.

(a) CRL Responsibilities. In accordance with the Research Plan, CRL shall
(i) supply Database Mining Compounds, as selected by the JRC to Trimeris for
analysis, providing that the total number of Database Mining Compounds provided
by CRL free of charge in accordance with this Section will not exceed [**]; and
(ii) consult with Trimeris on the design of, and be subsequently responsible for
the chemical synthesis of Focused Library Compounds. In addition, at Trimeris’
request, CRL shall make available to Trimeris a copy of any and all quality
control data, methods used for characterization of, and the complete chemical
structure of, Database Mining Compounds delivered to Trimeris which are
designated as “Actives” by the JRC and pursuant to the Research Plan. CRL shall
provide Trimeris with such Database Mining Compounds and Focused Library
Compounds according to the specifications (including quantities degree of
purity, and timelines) agreed upon by the Parties in the Research Plan, so as to
facilitate the implementation of the Research Plan. CRL shall also provide to
Trimeris the complete chemical structure for each Focused Library Compound. In
addition, at Trimeris’ request, CRL shall make available to Trimeris a copy of
any and all quality control data and methods used for characterization of the
Focused Library Compounds delivered to Trimeris. The Parties recognize that
during Stage I Research CRL will create at least one (1) Initial Focused Library
, as defined in the Research Plan under APPENDIX A and approved by the JRC; and
that subsequent Stage I Research may comprise the creation and subsequent
analysis of more than one (1) Focused Library and/or the creation of multiple
Focused Libraries for different Actives, provided however that any changes or
adjustments in the allocation of CRL resources to the gp41 Target research
program for

 

Page 10

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

the purpose of generating one or more Focused Libraries as recommended by the
JRC be made in accordance with the provisions outlined in Section 2.7.2 and
ARTICLE 3, such adjustments to fall within the specific CRL resource allocation
specified therein.

(b) Trimeris Responsibilities. In accordance with the Research Plan, Trimeris
shall assay the Database Mining Compounds and Focused Library Compounds, made
available to it pursuant to this Section 2.4.1(a), for in vitro activity in the
Target Screening Assay(s) in accordance with the Research Plan, and for purposes
of establishing SAR data with respect to such Database Mining Compounds and
Focused Library Compounds.

(c) Designation of Lead Compounds. In accordance with the responsibilities of
the JRC and its decision making process in accordance with Section 3.1, the JRC
shall designate Lead Compounds which will be further evaluated under the
Research Plan for possible designation as Development Compounds.

2.4.2 Stage I Research for the gp120 Target: Identification of inhibitors of HIV
entry as a Lead Compound.

(a) CRL Responsibilities. In accordance with the Research Plan, CRL shall
(i) supply up to [**] Database Mining Compounds, as selected by the JRC to
Trimeris for analysis; (ii) synthesize and supply Compounds based on the initial
chemistry plan as agreed on between the Parties and incorporated into the
Initial Research Plan; and (iii) consult with Trimeris on the design of, and be
subsequently responsible for the chemical synthesis of, Focused Library
Compounds. In addition, at Trimeris’ request, CRL shall make available to
Trimeris a copy of any and all quality control data, methods used for
characterization of, and the complete chemical structure of, Database Mining
Compounds and Compounds delivered to Trimeris which are designated as “Actives”
pursuant to the Research Plan. CRL shall provide Trimeris with such Database
Mining Compounds, Compounds, and Focused Library Compounds according to the
specifications (including quantities degree of purity, and timelines) agreed
upon by the Parties in the Research Plan, so as to facilitate the implementation
of the Research Plan. CRL shall also provide to Trimeris the complete chemical
structure for each Compound and Focused Library Compound. In

 

Page 11

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

addition, at Trimeris’ request, CRL shall make available to Trimeris a copy of
any and all quality control data and methods used for characterization of the
Compounds and Focused Library Compounds delivered to Trimeris. The Parties
recognize that during Stage I Research CRL will create at least one (1) Initial
Focused Library , as defined in the Research Plan under APPENDIX A and approved
by the JRC; and that subsequent Stage I Research may comprise the creation and
subsequent analysis of more than one (1) Focused Library and/or the creation of
multiple Focused Libraries, provided however that any changes or adjustments in
the allocation of CRL resources to the gp120 Target research program for the
purpose of generating one or more Focused Libraries as recommended by the JRC be
made in accordance with the provisions outlined in Section 2.7.2 and ARTICLE 3,
such adjustments to fall within the specific CRL resource allocation specified
therein.

(b) Trimeris Responsibilities. In accordance with the Research Plan, Trimeris
shall assay the Database Mining Compounds, Compounds, and Focused Library
Compounds, made available to it pursuant to this Section 2.4.2(a), for in vitro
activity in the Target Screening Assay(s) in accordance with the Research Plan,
and for purposes of establishing SAR data with respect to such Database Mining
Compounds, Compounds, and Focused Library Compounds.

(c) Designation of Lead Compounds. In accordance with the responsibilities of
the JRC and its decision making process in accordance with Section 3.1, the JRC
shall designate Lead Compounds which will be further evaluated under the
Research Plan for possible designation as Development Compounds.

2.4.3 Focused Library Exclusivity. All Focused Library Compounds made for either
the gp120 Target or the gp41 Target pursuant to this Agreement shall be deemed
Compounds, and shall be made solely available to Trimeris on an exclusive basis,
and such Focused Library Compounds shall not be included in any CRL Library
supplied to a Third Party by CRL under a separate agreement.

 

Page 12

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

2.4.4 Development Compound Identification.

(a) General. Using the data and information regarding Actives, Focused
Libraries, Lead Compounds, structures thereof, and SAR data obtained from Stage
I Research, the Parties shall define the properties desired of a Development
Compound to be pursued, and conduct research activities in accordance with an
updated Research Plan directed to validating and optimizing Lead Compounds for
each Target for the purpose of determining whether a Lead Compound can be
declared a Development Compound appropriate for further development and possible
commercialization into a Product.

(b) Selection of Development Compounds. Based upon the results generated during
the Research Collaboration and the evaluation of Focused Library Compounds and
Lead Compounds, the JRC may, from time to time, nominate a Focused Library
Compound, Lead Compound or Compound for consideration by Trimeris as a potential
Development Compound, and shall inform Trimeris of such recommendation.
Notwithstanding the recommendation of the JRC, Trimeris shall have the right, in
its sole discretion, to designate any Active, Focused Library Compound, Lead
Compound or Compound as a Development Compound during the term of this
Agreement. CRL acknowledges and agrees that the final decision as to whether or
not to designate any Active, Focused Library Compound, Lead Compound or Compound
as a Development Compound shall rest with Trimeris, and that such decision will
be made by Trimeris in accordance with Trimeris’ standard internal procedures
for the nomination and selection of a Development Compound. Trimeris shall give
CRL written notice of its designation of a Compound as a Development Compound;
and a Focused Library Compound, Lead Compound or a Compound shall not be deemed
a Development Compound unless so designated by Trimeris by such written notice.
Trimeris agrees not to undertake any IND-Enabling Studies with respect to a
particular Focused Library Compound, Lead Compound or Compound until such
compound has been designated a Development Compound in accordance with this
Section 2.4.4(b); provided however, that Trimeris may undertake to perform
non-GLP ADMET studies on Compounds in order to determine whether or not it shall
designate a Compound as a Development Compound. All Development Compounds shall
be made solely available to Trimeris on an exclusive basis, and such Development
Compounds shall not be, unless the prior written consent of Trimeris is
obtained, included in any CRL Library supplied to a Third Party by CRL under a
separate agreement.

 

Page 13

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

(c) It is understood between the Parties that CRL is in the business of
providing compound libraries to Third Parties, and except as expressly provided
herein, nothing herein shall prevent or restrict CRL from providing Library
Compounds to Third Parties, or from using the Library Compounds for any purposes
for other than to screen against the Targets to its best knowledge. It is
further understood that CRL may grant to Third Parties rights to acquire
licenses in the Library Compounds similar to those granted to Trimeris hereunder
except to screen against the Targets (as specified in 2.11.1); accordingly,
Trimeris’ right to designate any particular Library Compound as a Development
Compound, and CRL’s grant of rights to Trimeris thereto under Section 4.2, are
limited to the extent that CRL has, prior to Trimeris’ request, granted a Third
Party a license or other right with respect to such a Library Compound. In the
event that Trimeris wishes to designate a Library Compound as a Development
Compound pursuant to Section 2.4.4(c), CRL must inform Trimeris within five
(5) business days whether or not CRL has previously granted a Third Party rights
that would prevent CRL from granting Trimeris an exclusive license to such
Library Compound and designation by Trimeris of such Library Compound as a
Development Compound. In the event that CRL informs Trimeris that CRL has not
granted to a Third Party rights that would prevent CRL from granting Trimeris an
exclusive license to such Library Compound as a Development Compound, such
Library Compound shall be deemed a Development Compound under this Agreement. In
the event CRL informs Trimeris that CRL has granted a Third Party rights that
would prevent CRL from granting Trimeris an exclusive license to such Library
Compound as a Development Compound, and within five (5) business days of so
informing Trimeris, Trimeris shall automatically be granted by CRL a
nonexclusive, sublicensable, royalty-free, non-transferable license and right to
use such Library Compound solely for research purposes by Trimeris or its Third
Party contractors, for a term of ten (10) years (“Research Use License”), as
long as the rights to such Library Compound granted by CRL to the Third Party
does not preclude the granting by CRL to Trimeris of such Research Use License.
A chemical entity or entities developed by Trimeris as a result of such Research
Use License which does not infringe a Valid Claim of a CRL patent existing as of
the date of granting of such Research Use License to Trimeris shall: (i) be
solely owned by Trimeris, including all right, title, interest, and intellectual
property to any such chemical entity; and (ii) constitute Trimeris Technology.
It is understood and agreed that so long as CRL complies with this
Section 2.4.4(c), CRL shall have no liability with respect to any

 

Page 14

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

conflict of Trimeris’ rights and those rights granted to Third Parties by CRL
regarding such Library Compound. A Research Use License granted under this
Section 2.4.4(c), shall be separate and distinct from the license rights granted
to Trimeris by CRL under Section 4.1.2 of this Agreement. CRL makes no
representation or warranty that any Library Compound designated by Trimeris as a
Development Compound does not or will not infringe the intellectual property
rights of any Third Party.

2.5 General Resources and Responsibilities.

2.5.1 CRL Responsibilities. During the term of the Research Collaboration, CRL
shall be primarily responsible for the following activities, in connection with
the Research Collaboration as specified in the Research Plan:

(a) Supply of Database Mining Compounds to Trimeris as specified under Sections
2.4.1 and 2.4.2;

(b) Design, chemical synthesis, purification, and analysis of Compounds and
Focused Library Compounds;

(c) Computational chemistry and structure-based drug design and pharmacophore
mapping as well as de novo virtual library generation;

(d) Transfer protocols and materials, and provide assistance to Trimeris,
pursuant to this Agreement, and also as specified in the Research Plan; and

(e) Medicinal chemistry in support of the generation of Focused Libraries,
chemical optimization of Lead Compound(s).

2.5.2 Trimeris Responsibilities. During the Research Term, Trimeris shall be
primarily responsible for the following activities, among others, as specified
in the Research Plan or in connection with the Research Collaboration:

(a) Pursuant to the Initial Chemistry Plan, design of the initial set of
Compounds for the gp120 Target;

 

Page 15

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

(b) Assist CRL in the design of additional Compounds and/or Focused Libraries
for the gp120 target and the gp41 Target as needed;

(c) Primary and secondary analysis for activity and selectivity;

(d) Anti-viral activity assays;

(e) Dose-response titrations in viral inhibition assays;

(f) ADMET studies on Compounds;

(g) In vivo proof of concept;

(h) In vitro and ex vivo metabolite profiling;

(i) Providing information for structural biology; and

(j) Initiation of pre-clinical studies.

2.6 Conduct of Research Collaboration. During the term of the Research
Collaboration, each Party shall:

2.6.1 undertake its obligations under the Research Collaboration as set forth in
the Research Plan, provided however that any changes or adjustments in the
allocation of CRL resources to the gp120 Target research program and/or the gp41
Target research program or within such programs as recommended by the JRC be
made in accordance with the provisions outlined in Section 2.7.2 and ARTICLE 3,
such adjustments to fall within the specific CRL resource allocation specified
therein;

2.6.2 use all reasonable efforts and proceed diligently to perform the work set
out for such Party to perform the Research Plan, including without limitation by
using personnel with such sufficient skills and experience, together with
sufficient equipment and facilities to perform its obligations under the
Research Plan;

2.6.3 conduct the Research Plan in good scientific manner and in compliance in
all material respects with the requirements of applicable laws, rules and
regulations, and all other requirements of any applicable good laboratory
practices to attempt to achieve its objectives efficiently and expeditiously;

 

Page 16

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

2.6.4 within thirty (30) days following the end of each calendar month during
the first six months of the term of the Research Collaboration furnish the other
Party with a reasonably detailed written report summarizing the activities
conducted by such Party under the Research Plan during such month; and

2.6.5 provide reasonable and informal access to, and communication with, any and
all of such Party’s FTEs assigned to the Research Collaboration, as well as to
records pertaining to research activities under the Research Plan on a
need-to-know basis and in accordance with Section 2.10 herein.

2.7 Staffing of the Research Collaboration

2.7.1 For the first [**] of the term of the Research Collaboration, CRL shall
devote [**] FTEs to the Research Plan as follows:

(a) [**], located at CRL’s San Diego facility, each of whose efforts under the
Research Collaboration will be considered a [**] for billing purposes;

(b) [**], located at CRL’s facility in the Russian Federation, each of whose
efforts under the Research Collaboration will be considered a [**] for billing
purposes; and

(c) [**] located at CRL’s San Diego facility, responsible for senior level
project management, molecular modeling, analytical, purification and any other
chemistry support as necessary for CRL to meet its obligations and perform its
activities pursuant to the Research Plan and whose efforts under the Research
Collaboration will be considered a [**] for billing purposes.

2.7.2 FTE adjustments [**] after the Effective Date. For the term of the
Research Collaboration beyond the first [**] of the Research Collaboration, the
Parties agree as follows:

(a) Trimeris, in its sole discretion and at its sole option, can adjust by
either increasing or decreasing the level of CRL’s FTEs from the initial level
of [**] FTEs to an adjusted level of between [**] FTEs; provided, however, that
the number of CRL FTEs shall in any event be

 

Page 17

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

reasonable in light of CRL’s Research Collaboration responsibilities. Trimeris
shall give CRL [**] written notice of the desire to make such adjustment of FTE
levels, with such adjusted level of FTEs taking effect at the end of the [**]
notice period. Trimeris can opt to adjust the level of FTEs multiple times
during the term of the Research Collaboration, so long as Trimeris provides CRL
with [**] written notice of such adjustment. The JRC shall be timely advised of
any such adjustment in the FTE level so that the JRC can then re-apportion FTE
allocation with respect to CRL’s obligations and activities under the Research
Plan. CRL shall then adapt the skill set of CRL’s FTEs to facilitate such
re-apportioned FTE allocation between its San Diego Facility and its Russian
Federation facility, provided that CRL must maintain at least [**] FTE within
the San Diego Facility covering senior level project management as long as the
FTE level set by Trimeris is at least [**] FTE. All such CRL FTE’s shall be
billable to Trimeris [**] unless otherwise determined in writing by CRL as
specified in Section 2.8.3(d).

(b) At a time no later than [**] from the Effective Date of this Agreement, the
JRC shall convene to review the progress made under the Research Plan, and to
determine whether or not Stage I Research for each Target is timely attaining
the specific objectives set forth in the Research Plan. Based on the results of
the JRC review process, Trimeris will then determine whether to terminate the
Agreement as specified in ARTICLE 13 or to continue with the Research
Collaboration.

(c) At any time after [**] from the Effective Date of the Agreement, Trimeris,
in its sole discretion and at its sole option, can terminate the Research
Collaboration activities under the Research Plan with respect to either the gp41
Target or the gp120 Target, and then adjust the level of CRL’s FTEs for
performing research related to the remaining Target according to the process set
forth in Section 2.7.2(a) herein. CRL shall then adapt the skill set of CRL’s
FTEs to facilitate such adjustment in FTE allocation.

2.7.3 For the term of the Research Collaboration, Trimeris will provide, at its
own costs, the personnel as necessary for Trimeris to meet its obligations and
perform its activities pursuant to the Research Plan.

 

Page 18

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

2.8 Research Collaboration Funding.

2.8.1 Research Tax Credits. To the extent permitted by law, Trimeris shall have
the sole right to claim any tax credits due on account of research expenses and
milestone payments Trimeris incurs under this Agreement.

2.8.2 Equipment, Supplies, and Capital Expenditures. Unless the Parties
otherwise agree in writing, or as specified below under Section 2.8.2(a), the
Parties acknowledge and agree that CRL is solely responsible for the cost of all
equipment, supplies, chemicals, solvents, laboratory scale reagents, materials,
handling, disposal, and capital items that CRL uses (or is required to use) in
connection with the obligations of CRL under the Research Collaboration. Unless
the Parties otherwise agree in writing, the Parties acknowledge and agree that
Trimeris is solely responsible for the cost of all equipment, supplies,
chemicals, solvents, reagents, materials, handling, disposal, and capital items
that Trimeris uses (or is required to use) in connection with the obligations of
Trimeris under the Research Collaboration.

(a) Costs for Extraordinary Research Use Reagents. The Parties agree that if
Trimeris makes a request for CRL to synthesize one or more particular Compounds
either individually or collectively as part of a Focused Library to support the
Research Plan and CRL would need to purchase a research reagent from a Third
Party that costs more than [**] dollars ($[**]) to effect such Compound
synthesis (“Extraordinary Research Use Reagent”), then CRL will ask the JRC to
approve in advance such expense in writing. Upon receiving JRC written approval
to proceed with the purchase of the Extraordinary Research Use Reagent, Trimeris
will reimburse CRL for [**] percent ([**]%) of the costs of such Extraordinary
Research Use Reagent in accordance with the terms and conditions specified in
Section 2.8.4 .

(b) Reagent costs for synthesis of bulk amounts of Compounds by CRL. The Parties
hereby agree that if the JRC makes a request in writing for CRL to synthesize
more than [**] of any individual Compound to support the Research Plan, then
Trimeris will reimburse CRL for [**] percent ([**]%) the cost of any and all
Third Party reagents purchased by CRL to effect the synthesis of more than [**]
of any individual Compound to support the Research Plan.

 

Page 19

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

2.8.3 Research Payments to CRL by Trimeris.

(a) [**]. For the [**] of the term of the Research Collaboration, Trimeris shall
pay to CRL the sum of [**] dollars ($[**]) covering the cost of [**]. Payment to
CRL of such [**] costs will be in accordance with Section 7.2. If Trimeris
terminates this Agreement at the end of [**] after the Effective Date by
providing written notice to CRL pursuant to ARTICLE 13, Trimeris shall pay to
CRL the additional sum of [**] dollars ($[**]) as compensation for the remaining
[**] period. Trimeris shall be under no further obligation to make any further
payments to CRL after the effective Termination Date.

(b) During the period between [**]and [**] after the Effective Date. If Trimeris
does not terminate the Agreement after [**], then for the period between [**]
and [**] Trimeris shall pay CRL [**] for the FTEs allocated by the JRC to the
Research Plan, as specified under Section 2.7.2. Payment to CRL of such [**]
costs will be in accordance with Section 7.2. CRL shall make available a minimum
of [**] FTEs and a maximum of [**] FTEs for sourcing the needs identified by the
JRC under the Research Plan during this period.

(c) During the period starting [**] after the Effective Date. If Trimeris does
not terminate the Agreement after [**], then for the period after [**] Trimeris
shall pay CRL for the FTEs allocated by the JRC to the Research Plan [**] unless
CRL elects to [**] as specified in Section 2.8.3(d) below. Payment to CRL of
such [**] will be in accordance with Section 7.2. CRL shall make available a
minimum of [**] FTEs and a maximum of [**] FTEs for sourcing the needs
identified by the JRC under the Research Plan during this period until such time
a Development Compound is declared by Trimeris.

(d) CRL [**] Option [**] after the Effective Date. At least [**] before the
beginning of the [**] of the term of the Research Collaboration, CRL shall have
the option to [**] by providing Trimeris written notice of such election. If CRL
elects this option, Trimeris will pay CRL for CRL FTEs allocated to the Research
Plan [**] at the beginning of the [**] of the term of the Research
Collaboration, and in doing so the provisions of Section 6.2 will immediately
take effect. If CRL does not elect to [**] by the date specified herein, then
Trimeris will continue to [**] allocated to the Research Plan [**], and CRL
shall forego its option to [**] at any time thereafter.

 

Page 20

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

2.8.4 Payment Terms for Research Payments to CRL. CRL shall provide Trimeris
with an invoice at the end of each calendar quarter detailing any and all
amounts due CRL for costs incurred under the Research Plan during the
immediately preceding calendar quarter which are in accordance with the terms
and conditions specified in this Section 2.8. Trimeris shall make payments to
CRL within 30 days of receipt of an invoice specifying such costs in accordance
with Section 7.2.

2.9 Term and Termination of Research Collaboration. The term of the Research
Collaboration shall commence on the Effective Date and shall end by a
termination of the Research Collaboration or this Agreement pursuant to Article
13.

2.10 Records; Inspection.

2.10.1 Records. CRL and Trimeris shall each maintain records of the Research
Collaboration (or cause such records to be maintained) in sufficient detail and
in good scientific manner as will properly reflect: (a) all work done and
results achieved by the respective Party in the performance of the Research Plan
(including all data in the form required under any applicable governmental
regulations and as directed by the JRC); and (b) all FTEs used in connection
with, including the number of FTEs utilized in performing its activities related
to each of the two Targets under, the Research Plan. Each Party shall have the
right, during normal business hours and upon reasonable notice, to inspect and
copy all such records of the other Party to the extent reasonably required in
connection with the performance of its obligations or exercise of its rights
under this Agreement; however such inspection may be made no more than once per
calendar year. Each Party shall maintain such records and the information of the
other Party contained therein in confidence in accordance with ARTICLE 10.

2.10.2 Reports and Information Exchange. Each of Trimeris and CRL shall use
commercially reasonable and diligent efforts to disclose to the other Party all
material information relating to the Research Collaboration, including without
limitation any Actives, Focused Library

 

Page 21

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

Compounds, Lead Compounds, Development Compound, or Compound promptly after such
information is learned or its materiality is appreciated. In addition to the
exchange of reports under Section 2.6.4, during the term of the Research
Collaboration each Party shall keep the JRC informed as to its progress under
the Research Plan by means of written reports to the JRC. Such written reports
shall be provided to the JRC at least seven (7) days in advance of each
bimonthly meeting of the JRC, and shall contain in reasonable detail a
description of the work done and include all results achieved and data generated
in performance of the Research Plan since the last report. The written reports
submitted to the JRC shall be forwarded by the JRC to senior management
representatives of the respective Parties, as determined by the JRC.

(a) Within thirty (30) days following June 30th and December 30th in a calendar
year during the Research Collaboration, CRL shall provide Trimeris with a
reasonably detailed written report describing the progress to date of all
activities for which CRL was allocated responsibility during such six (6) month
period under the Research Plan. Each written report by CRL shall summarize the
results and experimental procedures of the activities conducted by CRL and
include a description of all Collaboration Technology and Compound structures,
except that CRL will not disclose the chemical structure of a Database Mining
Compound which was not designated as an Active by the JRC. CRL shall make
available to Trimeris: analytical data related to Compounds; physical chemical
characterization data of Compounds; Compound numbers, lot numbers, names of
Compound, and dates when Compounds were prepared; full details of synthesis
methods (especially new methods or modifications and new applications of
existing methods) for all Actives, Lead Compounds, and Development Compounds;
Compound purification conditions and protocols, chemical reaction schemes,
conditions, protocols, yields, and certificate of analysis; and such other
matters as Trimeris may reasonably request. CRL shall provide a final report to
Trimeris within thirty (30) days after the earlier of (i) completion of the
Research Plan, or (ii) termination or expiration of this Agreement. In no event
shall CRL be required to disclose to Trimeris any CRL Technology, except as
provided for in this ARTICLE 2.

(b) Within thirty (30) days following June 30th and December 30th in a calendar
year during the Research Collaboration, Trimeris shall provide CRL with a
reasonably detailed written report describing the progress to date of all
activities for which Trimeris was

 

Page 22

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

allocated responsibility during such six (6) month period under the Research
Plan. Each written report by Trimeris shall summarize the results and
experimental procedures of the activities conducted by Trimeris that include
hits generated from Target Screening Assays, analysis, toxicology studies, in
vitro activity studies, and SAR. Each such written report will contain the
results and general protocols for all experiments performed by Trimeris using
Database Mining Compounds, Compounds and any other compound derived from active
substances generated under the Research Plan, including, but not limited to,
Target Screening Assays, in-vitro activity studies, SAR, in-vivo activity,
toxicity, ADME, non-GLP pharmacokinetic and/or pharmacodynamic studies. Trimeris
shall not be required to disclose to CRL any Trimeris Technology, except as
provided for in this ARTICLE 2.

2.11 Exclusivity pertaining to the gp41 Target and the gp120 Target.

2.11.1 CRL. Except as set forth herein, prior to termination of this Agreement
pursuant to Section 13.1, CRL shall not knowingly conduct, participate in, or
fund, directly or indirectly, alone or with a Third Party, drug discovery
research and/or drug development efforts directed to the identification of, or
grant any right to exploit, chemical entities for use against either the gp41
Target or the gp120 Target, except pursuant to this Agreement. The provisions of
this Section 2.11.1 shall apply so long as Trimeris is utilizing commercially
reasonable efforts (as described in Section 8.1) to pursue the research,
development and/or commercialization of Compound(s) or Product(s) pursuant to
the terms and conditions specified in this Agreement.

2.11.2 Trimeris. Except as provided in Sections 2.11.2 (a) and (b) herein,
nothing in this Agreement shall prevent or restrict Trimeris from using its
screening assays and analytical methods to assay compound libraries provided by
Third Parties, and/or to do any one or more of develop, commercialize, make,
have made, use (for any purpose), own or license compounds provided by Third
Parties related to the gp41 Target or the gp120 Target.

(a) During the first [**] of the term of Research Collaboration, nothing in this
Agreement shall prevent or restrict Trimeris from using its screening assays and
analytical methods to assay compound libraries provided by Third Parties, and/or
to do any one or more of

 

Page 23

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

develop, commercialize, make, use (for any purpose), have made, own, sell or
license compounds provided by Third Parties related to the gp120 Target, except
that Trimeris will not knowingly work with a Third Party with a compound which
is identified to be in the same chemical family as a chemical entity provided to
Trimeris by CRL.

(b) During the Limited Exclusivity Period (as defined below in
Section 2.11.2(c)) applicable to Trimeris only, Trimeris shall not knowingly
conduct, participate in, or fund, directly or indirectly, with a Third Party,
drug discovery research and/or drug development efforts directed to the
identification of small molecule chemical entities with a molecular size of [**]
for use against the gp120 Target, except pursuant to this Agreement.

(c) Limited Exclusivity Period. For purposes of this Agreement, the “Limited
Exclusivity Period” shall mean the period beginning [**] after the Effective
Date of the Agreement and terminating by the earlier of either: (i) exercise by
Trimeris’ of its option to terminate the Limited Exclusivity Period pursuant to
Section 2.11.2(d) herein; or (ii) [**] from the Effective Date; or
(iii) termination of this Agreement.

(d) Trimeris can, at its sole discretion and option, terminate the Limited
Exclusivity Period by giving written notice to CRL of Trimeris’ termination of
the Limited Exclusivity Period. If Trimeris elects the option to terminate the
Limited Exclusivity Period prior to its expiration, CRL shall remain bound by
the exclusivity provisions specified in Section 2.11.1.

2.12 Effect of Termination of Limited Exclusivity Period.

2.12.1 If Trimeris terminates the Limited Exclusivity Period prior to its
expiration (as specified in Section 2.11.2(c)(ii)) and Trimeris then terminates
the Agreement prior to Trimeris’ selection of a Development Compound for the
gp120 Target, and if during the Limited Exclusivity Period CRL provided FTEs to
the Research Collaboration funded [**], Trimeris shall pay to CRL at the time
the Agreement is terminated a Limited Exclusivity Period termination fee
(“Limited Exclusivity Period Termination Fee”) equal to [**] percent ([**]%) of
the aggregate FTE payments made by Trimeris to CRL after the [**] of the term of
the Research Collaboration, provided, however, that in no event shall the
Limited Exclusivity Period Termination Fee due and payable to CRL exceed [**]
dollars ($[**]).

 

Page 24

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

2.12.2 If Trimeris terminates the Limited Exclusivity Period prior to its
expiration, and Trimeris subsequently declares a first Development Compound for
the gp120 Target, Trimeris shall pay CRL the applicable milestone after
selection of such Development Compound, and no Limited Exclusivity Period
Termination Fee shall be due and payable to CRL by Trimeris.

2.12.3 If Trimeris terminates the Limited Exclusivity Period prior to its
expiration and CRL had elected to provide [**] to the Research Collaboration
after the [**] pursuant to Section 2.8.3(d), then no Limited Exclusivity Period
Termination Fee shall be due and payable to CRL by Trimeris upon termination of
the Agreement by Trimeris.

2.13 Certain Matters Relating to Acquisition of CRL. If (i) this Agreement is
assigned upon a Change of Control of CRL, and (ii) at the time of such Change of
Control, the surviving entity had ongoing, or subsequently undertakes, a program
for drug discovery research and/or drug development efforts specifically
directed to the identification of chemical entities for use against a Target,
then subject to the provisions of Section 2.11.1, then:

2.13.1 The entity that CRL becomes immediately subsequent to such Change of
Control shall not disclose Trimeris Confidential Information and shall not
disclose non-public Collaboration Technology and shall not utilize Collaboration
Technology except pursuant to the terms and conditions of this Agreement;

2.13.2 The Parties shall put procedures in place to prevent the unauthorized
disclosure or use of Trimeris Confidential Information or non-public
Collaboration Technology prohibited under paragraph (a) above;

2.13.3 CRL Technology and Collaboration Technology shall not include any
intellectual property or subject matter of the acquiring party existing as of
the date of the Change of Control. CRL Technology and Collaboration Technology
shall not include any intellectual property or subject matter created or
acquired by the surviving entity following the Change of Control, unless

 

Page 25

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

(i) such intellectual property or subject matter would otherwise be within CRL
Technology or Collaboration Technology, and (ii) was so created after the Change
of Control in the course of activities performed under the Research Plan.
Subject to the foregoing and Sections 2.13.1 and 2.13.2 above, Section 2.11.1
shall not apply with respect to the activities of the surviving entity;

2.13.4 CRL shall provide Trimeris a written notice of such Change of Control on
the date of first public announcement of such Change in Control. Trimeris shall
have the right, in its sole discretion, at any time following receipt of such
notice to terminate the Research Plan, the Research Collaboration, or this
Agreement.

2.14 Certain Matters Relating to Acquisition of Trimeris. If (i) this Agreement
is assigned upon a Change of Control of Trimeris, and (ii) at the time of such
Change of Control, the surviving entity had ongoing, or subsequently undertakes,
a program for drug discovery research and/or drug development efforts
specifically directed to the identification of chemical entities for use in the
Field, then subject to the provisions of Section 2.11.1, then:

2.14.1 The entity that Trimeris becomes immediately subsequent to such Change of
Control shall not disclose CRL Confidential Information shall not disclose
non-public Collaboration Technology and shall not utilize Collaboration
Technology except pursuant to the terms and conditions of this Agreement;

2.14.2 The Parties shall put procedures in place to prevent the unauthorized
disclosure or use of CRL Confidential Information or non-public Collaboration
Technology prohibited under Section 2.14.1 above.

2.14.3 Trimeris Technology and Collaboration Technology shall not include any
intellectual property or subject matter of the acquiring party existing as of
the date of the Change of Control. Trimeris Technology and Collaboration
Technology shall not include any intellectual property or subject matter created
or acquired by the surviving entity following the Change of Control, unless
(i) such intellectual property or subject matter would otherwise be within
Trimeris Technology or Collaboration Technology, and (ii) was so created after
the Change of Control in the course of activities performed under the Research
Plan. Subject to the foregoing and paragraphs Sections 2.14.1 and 2.14.2 above,
Section 2.11.1 shall not apply with respect to the activities of the surviving
entity.

 

Page 26

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

2.14.4 Trimeris shall provide CRL a written notice of such Change of Control on
the date of first public announcement of such Change in Control. CRL shall have
the right, in its sole discretion, at any time following receipt of such notice,
to terminate the exclusivity provision of Section 2.11.1 of this Agreement.

2.15 For purposes of Sections 2.13 and 2.14, a “Change of Control” shall mean if
any one of the following occurs as of the Effective Date:

2.15.1 any “Person” or “Group” (as such terms are defined below) is or becomes
the “Beneficial Owner” (as defined below), directly or indirectly, of shares of
capital stock or other interests (including partnership interests) of such Party
then outstanding and normally entitled without regard to the occurrence of any
contingency) to vote in the election of the directors, managers or similarly
supervisory positions (“Voting Stock”) of such Party representing fifty percent
(50%) or more of the total voting power of all outstanding classes of Voting
Stock of such Party or has the power, directly or indirectly, to elect a
majority of the members of the Board of Directors; or

2.15.2 such Party enters into a merger, consolidation or similar transaction
with another Person (whether or not such Party is the surviving entity) and as a
result of such merger, consolidation or similar transaction (i) the members of
the Board of Directors of such Party or the surviving Person immediately prior
to such transaction constitute less than a majority of the members of the Board
of Directors of such Party immediately following such transaction, or (ii) the
Persons that “Beneficially Owned” (as defined below), directly or indirectly,
the shares of Voting Stock of such Party immediately prior to such transaction
cease to “Beneficially Own” (as defined below), directly or indirectly, shares
of Voting Stock of such Party representing at least a majority of the total
voting power of all outstanding classes of Voting Stock of the surviving Person
in substantially the same proportions as their ownership of Voting Stock of such
Party immediately prior to such transaction; or

 

Page 27

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

2.15.3 such Party sells or transfers to any Third Party(ies), in one or more
related transactions, properties or assets representing all or substantially all
of such Party’s consolidated total assets; or

2.15.4 the holders of capital stock of such Party approve any plan or proposal
for the liquidation or dissolution of such Party (whether or not otherwise in
compliance with the terms hereof).

2.15.5 For the purpose of the definition of “Change in Control”, (i) “Person”
and “Group” have the meanings given such terms under Sections 13(d) and 14(d) of
the Exchange Act or any successor provision to either of the foregoing, and the
term “Group” includes any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act (or any successor provision thereto), (ii) a “Beneficial Owner”
shall be determined in accordance with Rule 13d-3 under the Exchange Act, as in
effect on the Effective Date, except that the number of shares of Voting Stock
of such Party shall be deemed to include, in addition to all outstanding shares
of Voting Stock of such Party, all shares of Voting Stock not outstanding that
are subject to options, warrants, rights to purchase or conversion privileges
exercisable within sixty (60) days of the date of determination of a Change in
Control (“Unissued Shares”) deemed to be held by the Person or Group or other
Person with respect to which the Change in Control determination is being made
and all Unissued Shares deemed to be held by all other Persons, and (iii) the
terms “Beneficially Owned” and “Beneficially Own” shall have meanings
correlative to that of “Beneficial Owner.”

ARTICLE 3

MANAGEMENT

3.1 Joint Research Committee. Within [**] of the Effective Date, Trimeris and
CRL will establish a Joint Research Committee to oversee, review and recommend
direction of the Research Collaboration. The responsibilities of the Joint
Research Committee shall include, among other things:

3.1.1 amending the Research Plan as necessary to reflect the Parties mutually
agreed upon Research Collaboration activities, and to reflect any changes in the
level and/or allocation of FTE resources made pursuant to this Agreement;

 

Page 28

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

3.1.2 monitoring and reporting research progress and ensuring open and frequent
exchange between the Parties regarding Research Collaboration activities;

3.1.3 coordinating of a collaborative chemical validation and optimization
program to create Focused Library Compounds and identify Lead Compounds for each
Target;

3.1.4 establishing subcommittees, as deemed appropriate by the JRC, to
facilitate the activities under the Research Plan;

3.1.5 designation of a Library Compound as a Compound;

3.1.6 amending the Research Plan to include guidelines for qualifying a Compound
as an Active or Lead Compound, and designation of Lead Compounds;

3.1.7 nominating of a Focused Library Compound, Lead Compound or Compound for
consideration by Trimeris as a Development Compound;

3.1.8 amending the Research Plan as necessary for defining the properties
desired of a Development Compound for each Target consistent with the provisions
as specified in Section 2.4.4(a) herein; and

3.1.9 sourcing a supply of each Development Compound in quantities sufficient to
perform IND-Enabling Studies.

3.2 Membership. The JRC shall include two (2) representatives of each of
Trimeris and CRL, each Party’s members selected by that Party, provided however
that CRL must designate one senior level representative from its San Diego
Facility. CRL and Trimeris may each replace its JRC representatives at any time,
upon written notice to the other Party. From time to time, the JRC may establish
subcommittees, to oversee particular projects or activities under the Research
Plan, and such subcommittees will be constituted as the JRC agrees.

 

Page 29

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

3.3 Meetings. During the first six months of the term of the Research
Collaboration, the JRC shall meet at least once per month either in person or by
telephone or video conferencing. After the first six months of the term of the
Research Collaboration, the JRC shall meet at least quarterly or as agreed by
the Parties, at such locations as the Parties agree, and will otherwise
communicate regularly by telephone, electronic mail, facsimile and/or video
conference. With the consent of the Parties, other representatives of CRL or
Trimeris may attend JRC meetings as nonvoting observers. Each Party shall be
responsible for all of its own expenses associated with attendance of such
meetings. The first meeting of the JRC shall occur within [**] after the
Effective Date.

3.4 Minutes. The JRC shall keep accurate minutes of its deliberations, which
shall record all proposed decisions and all actions recommended or taken. The
secretary of the JRC shall be a designee from and chosen by Trimeris and shall
be responsible for the preparation of draft minutes. Draft minutes shall be sent
to all members of the JRC within ten (10) business days after each meeting. Each
JRC member shall have thirty (30) days, from the date the draft minutes were
sent to the JRC, to provide comments in writing to the secretary of the JRC on
such draft minutes. The secretary of the JRC shall incorporate any changes to
the minutes that are reasonably requested by any member of the JRC unless such
change is not unanimously supported by all the JRC members, in which case the
provisions of Section 3.5 shall take effect. The failure of a JRC member to
provide comments on the draft minutes to the secretary of the JRC within the
thirty (30) day period to do so shall be deemed an approval of those draft
minutes. All records of the JRC shall at all times be available to both CRL and
Trimeris.

3.5 Decision Making. Except as otherwise provided for in this Agreement,
decisions of the JRC regarding activities under the Research Plan shall be made
by unanimous agreement among the JRC members. In the event that the matter
cannot be resolved because unanimity is not achieved within the JRC, the matter
will be referred to CRL’s Chief Executive Officer and Trimeris’ Chief Executive
Officer, who shall promptly discuss the matter and endeavor in good faith to
resolve such matter within ten (10) days from the date of such referral to such
officers. If such officers are unable to resolve such matter, Trimeris shall
have the final vote in the JRC in making such decision, thereby resolving the
matter; provided, however, that any changes or adjustments in the allocation of
CRL

 

Page 30

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

resources to either the gp120 Target research program or the gp41 Target
research program or within such programs as recommended by the JRC be made in
accordance with the provisions outlined in Section 2.7.2 and ARTICLE 3, such
adjustments to fall within the specific CRL resource allocation specified
therein.

ARTICLE 4

LICENSES & GRANTS

4.1 Research Licenses.

4.1.1 Grant from Trimeris. Trimeris hereby grants CRL a worldwide,
non-exclusive, non-transferable, non-sublicensable, royalty-free, right and
license under the Trimeris Technology and Trimeris’ interest in the
Collaboration Technology solely to conduct activities assigned to CRL under the
Research Plan during the term of the Research Collaboration.

4.1.2 Grant from CRL. CRL hereby grants Trimeris a worldwide, non-exclusive,
non-transferable, non-sublicensable, royalty-free, right and license under the
CRL Technology solely to conduct activities assigned to Trimeris under the
Research Plan during the term of the Research Collaboration.

4.1.3 Limitations on Licenses under this Section 4.1. The licenses granted under
this Section 4.1 shall not include the right to grant or authorize sublicenses;
provided, however, that the use by Trimeris of subcontractors to conduct
non-clinical development activities shall not be construed as a sublicense.
Neither CRL nor Trimeris shall have any right to sell or otherwise distribute
any Product by virtue of the licenses set forth in this Section 4.1, and no such
sale or distribution right shall be implied. The licenses set forth in this
Section 4.1 shall expire immediately upon expiration or termination of the
Research Collaboration or this Agreement for any reason.

4.2 Licenses to Trimeris.

4.2.1 Subject to the terms and conditions of this Agreement, CRL hereby grants
to Trimeris a nonexclusive, royalty-free, worldwide, transferable and
sublicensable right and license to

 

Page 31

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

CRL Technology to the extent that it is necessary for Trimeris, to develop,
make, have made, use, import, export, offer for sale, have sold and sell
Development Compound(s) and/or Product(s).

4.2.2 Sublicenses. Subject to the terms and conditions of this Agreement,
Trimeris shall have the right to sublicense the rights granted in Section 4.2.1
above upon prior written notice to CRL. Within sixty (60) days following the
execution of a sublicense for a Development Compound and/ or a Product, Trimeris
shall provide CRL with a full copy of such sublicense agreement, which shall be
treated as Confidential Information of Trimeris. Each sublicense granted by
Trimeris shall be consistent with all the terms and conditions of this
Agreement, and subordinate thereto, and Trimeris shall remain responsible to CRL
for the compliance of each such Sublicensee with the financial and other
obligations due under this Agreement.

4.3 Grants to Trimeris

4.3.1 Marketing Rights for Products. Subject to compliance with all applicable
milestone and royalty payment obligations under this Agreement, Trimeris shall
solely own all marketing rights to Products, including, not limited to, the
exclusive, worldwide, transferable rights to market, sell, have sold, import,
export and distribute solely Products. In exercising such rights, Trimeris shall
have the sole right to select trademarks for Products, and Trimeris shall own
all right, title or interest in such trademarks (subject to any pre-existing
rights of CRL or Third Parties).

4.3.2 Trimeris Exclusive Use of Compounds. CRL hereby acknowledges and agrees
that CRL will provide all Compounds described in Sections 1.7, 1.11, 1.14, 1.15,
1.24, and 1.32 above to Trimeris on an exclusive basis, and CRL is expressly
prohibited from providing any and all such Compounds to a Third Party as part of
the CRL Library, without the prior written consent of Trimeris.

4.4 No Implied Licenses. Only the licenses granted pursuant to the express terms
of this Agreement shall be of any legal force or effect. No other license or
rights, including without limitation any license or right to CRL Technology or
Trimeris Technology or Development Technology, shall be created by implication,
estoppel or otherwise.

 

Page 32

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

ARTICLE 5

DEVELOPMENT

5.1 Development of Compounds and Products.

5.1.1 Development Compound Funding and Decisions. Once a Development Compound
has been designated by Trimeris pursuant to Sections 2.4.4(b) or 2.4.4(c),
Trimeris shall be solely responsible for all costs and decisions associated with
further development of such Development Compound, and for conducting all
activities related to non-clinical and human clinical development of such
Development Compound or Product resulting from such Development Compound,
including manufacture, formulation, packaging and commercialization of such
Development Compound on a worldwide basis

5.1.2 Opt-In Opportunity. At any time up until [**] following Trimeris’
designation of a Development Compound according to Sections 2.4.4(a) or
2.4.4(c), CRL shall have the opportunity to notify Trimeris in writing that CRL
wishes to enter into good faith negotiations with Trimeris for the purpose of
co-funding a portion of the future development costs associated with such
Development Compound, including all internal and external Third Party costs
associated with the further development of such declared Development Compound,
through and to the conclusion of any and all Phase I clinical trials for that
particular Development Compound (“Opt-In Opportunity”). CRL must notify Trimeris
of CRL desire to enter such negotiations by delivering written notification to
Trimeris within [**] of Trimeris’ designation of a Development Compound. CRL may
elect to enter such negotiations on a Development Compound-by-Development
Compound basis, at its sole discretion. Upon Trimeris’ receipt of such written
notification by CRL within the applicable period set forth herein, Trimeris and
CRL agree to begin good-faith negotiations for the purpose of determining the
conditions under which CRL could pay for a portion of the internal and external
costs associated with the further development of such declared Development
Compound, through and to the conclusion of any and all Phase I clinical trials
for that particular Development Compound in exchange for a positive adjustment
in either the milestone package or royalty due CRL for such Development
Compound. The parties will endeavor to reach an agreement on such negotiation
within 90 days after initiating discussions, provided however that

 

Page 33

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

Trimeris shall have the final say as to whether such negotiations culminate in a
written amendment to this Agreement signed by both Parties specifying the terms
and conditions related to this matter.

5.1.3 Ownership of Regulatory Filings & Regulatory Cooperation

(a) General. All INDs, NDAs and other regulatory filings (both in the US and in
all other countries) made or filed by Trimeris for any Development Compound or
Product shall be owned solely by Trimeris.

(b) Cooperation. CRL shall cooperate with Trimeris in a reasonable manner and in
good faith with respect to such regulatory filings, including providing to
Trimeris access to and copies of all data, information and results in the
possession of CRL relating to such Compounds that would facilitate any one or
more of the preparation, filing, and approval of such regulatory filings.
Trimeris shall pay any out-of-pocket costs incurred by CRL in providing such
cooperation.

ARTICLE 6

PAYMENTS

6.1 Development Milestones and Royalties for a Development Compound and a
Product Based on [**]

6.1.1 Subject to Sections 6.1.2 and 6.3, for a Development Compound and a
Product resulting from the Research Collaboration during which CRL is paid for
its FTE contributions [**] pursuant to Section 2.8.3(c), Trimeris shall pay to
CRL the following milestone payments.

 

Page 34

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

Milestones

   Payment Amount      [**] $US

1. Designation by Trimeris of the first Development Compound

   $  [**]

2. Dosing first patient in first human clinical trial in any country with the
first Development Compound or Product (Phase I clinical trial)

   $ [**]

3. Initiation of the first Phase II clinical trial with the first Development
Compound or Product

   $ [**]

4. Initiation of the first Pivotal (Phase III) clinical trial with the first
Development Compound or Product

   $ [**]

5. Approval of an NDA for any Product in the U.S.

   $ [**]

6. First EU major country launch of the first Product (first launch in either
the UK, France, Germany, Italy, or Spain), including pricing approval in such
country.*

   $ [**]       

Total Milestones

   $ 5.25 M

 

* In the event that pricing approval is not required for commercialization of
Product in such country, then this milestone will be deemed to have been
achieved upon Product launch in such country.

6.1.2 If a first Development Compound for a particular Target has been granted
NDA approval in the U.S., then for a second and each subsequent Development
Compounds and Products for the same Target, and resulting from the Research
Collaboration during which is paid for its FTE contributions [**] pursuant to
Section 2.8.3(c), Trimeris shall pay to CRL only the following milestone
payment, on a Product-by-Product basis, as applicable.

 

Page 35

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

Milestones

   Payment Amount      M = million $US

1. Approval of an NDA for a Product in the U.S.

   $ 1.25 M

Total Milestones

   $ 1.25 M

6.1.3 Royalties on Net Sales of Product under [**]. For Net Sales of a Product
resulting from the Research Collaboration during which CRL is paid for its FTE
contributions [**] pursuant to Section 2.8.3(c), Trimeris shall pay to CRL the
following annual royalty on Net Sales of such Product in the respective
territory.

 

Annual Net Sales per Product, on a Product-by-Product basis  

Territory of Sales

   Royalty Rate  

U.S. Territory

   [**] %

International Territory

   [**] %

6.1.4 [**] Royalty Structure For Net Sales of a Product resulting from the
Research Collaboration during which CRL is paid for its FTE contributions [**]
pursuant to Section 2.8.3(c), and where CRL has contributed more than [**]
during the term of the Research Collaboration, Trimeris shall pay to CRL the
following annual royalty on Net Sales of such Product in the respective
territory (in lieu of the royalty rate provided in Section 6.1.3).

 

Annual Net Sales per Product, on a Product-by-Product basis  

Territory of Sales

   Royalty Rate  

U.S. Territory

   [**] %

International Territory

   [**] %

 

Page 36

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

6.2 Development Milestones for a Development Compound and a Product Based on
[**].

6.2.1 Subject to Sections 6.2.2 and 6.3, for a Development Compound and a
Product resulting from the Research Collaboration during which CRL is paid for
its FTE contributions [**] pursuant to Section 2.8.3(d), Trimeris shall pay to
CRL the following milestone payments.

 

Milestones

   Payment Amount      [**]$US

1. Designation by Trimeris of the first Development Compound

   $ [**]

2. Dosing first patient in the first human clinical trial in any country with
the first Development Compound or Product (Phase I clinical trial)

   $ [**]

3. Initiation of the first Phase II clinical trial with the first Development
Compound or Product

   $ [**]

4. Initiation of the first Pivotal (Phase III) clinical trial with the
Development Compound or Product

   $ [**]

5. Approval of any NDA for a Product in the U.S.

   $ [**]

6. First EU major country launch of a Product (first launch in either the UK,
France, Germany, Italy, or Spain), including pricing approval in such country.*

   $ [**]       

Total Milestones

   $ 5.25 M

 

* In the event that pricing approval is not required for commercialization of
Product in such country, then this milestone will be deemed to have been
achieved upon Product launch in such country.

6.2.2 If the first Development Compound for a particular Target has been granted
NDA approval in the U.S., then for a second and all subsequent Development
Compounds and Products for the same Target, and resulting from the Research
Collaboration during which CRL is

 

Page 37

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

paid for its FTE contributions [**] pursuant to Section 2.8.3(d), Trimeris shall
pay to CRL only the following milestone payment, on a Product-by-Product basis,
as applicable.

 

Milestones

   Payment Amount      M = million $US

1. Approval of first NDA for a Product in the U.S.

   $ 1.25 M

Total Milestones

   $ 1.25 M

6.2.3 For a Product resulting from the Research Collaboration during which CRL
is paid for its FTE contributions [**] pursuant to Section 2.8.3(d), no
royalties shall be due and payable to CRL by Trimeris for Net Sales of such
Product.

6.3 Milestones Paid Only Once. The applicable milestone payments set forth in
this ARTICLE 6 that shall be due with respect to each Development Compound (on a
Development Compound-by- Development Compound basis) and Product (on a
Product-by-Product basis), shall be paid only once per Development Compound or
Product. Should all development of a particular Development Compound or Product
for a particular Target be discontinued for any reason by Trimeris, and Trimeris
replaces the discontinued Development Compound or Product with another Compound
or Product for the same Target, then, upon the next such Development Compound or
Product achieving a milestone for which a corresponding milestone payment was
made for the discontinued Development Compound or Product, no payment shall be
due CRL with respect to such alternative Development Compound or Product with
respect to such milestone.

6.4 Milestone Payments. The applicable milestone payments identified in this
ARTICLE 6 shall be due upon the first achievement of that milestone by the
Trimeris or its Affiliates, Sublicensees or other designees, as the case may be.
Trimeris shall provide CRL with written notice of the achievement of each such
milestone within thirty (30) days after such achievement. The applicable
milestone payments shall be paid by Trimeris to CRL within thirty (30) days of
receipt by Trimeris of an invoice from CRL reflecting such amount.

 

Page 38

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

6.5 Royalties. The applicable royalty payments identified in and due under this
ARTICLE 6 shall be paid by Trimeris to CRL within ninety (90) days after the end
of each calendar quarter, and shall be based on a running royalty amount on Net
Sales of Product sold by or under authority of Trimeris or its Affiliates,
Sublicensees or other designees, as the case may be.

6.5.1 Payment of Royalties following Sublicense. In the event that Trimeris
sublicenses rights to a Sublicensee to commercialize a Product(s) to a Third
Party in a given territory or country, then the applicable royalty payments
identified in and due under this ARTICLE 6 for that territory or country shall
be paid by Trimeris to CRL within ninety (90) days after the end of each
calendar quarter. The applicable royalty amount shall be based on a running
royalty amount on Net Sales of a Product sold by or under authority of Trimeris’
Sublicensee during that calendar quarter. The royalty amount due to CRL for a
Product in a given calendar quarter shall be determined by calculating the total
Net Sales of that particular Product for the particular calendar quarter in the
U.S. Territory or the International Territory on a calendar quarter basis, and
applying the appropriate royalty rate to the total Net Sales for that calendar
quarter in the respective territory according to the appropriate schedule set
forth in this ARTICLE 6.

6.5.2 Royalty Term. Trimeris’ obligation to pay royalties to CRL under this
ARTICLE 6 shall continue for each Product, on a country-by-country basis, until
the later of (i) the expiration of the last to expire Valid Claim claiming a
composition of matter comprising such Product, or a method of using such Product
covering the specific indication for which the Product has been approved for
marketing and sale in such country, or (b) 10 years from the first date of
Product Launch in such country. In the event that no such patent has issued
within one (1) year of the initial sale of the Product in a country in which
such Product is being sold, Trimeris’ obligations to pay royalties to CRL under
this ARTICLE 6 will be suspended until such time as a patent containing a Valid
Claim claiming a composition of matter comprising such Product, or claiming a
method of using such Product for the specific indication for which the Product
has been approved for marketing and sale, issues in such country.

(a) Expiration of the Royalty Term. Upon expiration of the royalty term for each
Product, on a country-by-country basis, Trimeris will have a no further monetary
obligations

 

Page 39

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

to CRL with respect to such Products, and Trimeris will have a fully paid up,
perpetual, royalty-free, worldwide, non-exclusive, sublicensable, irrevocable
license right to CRL Technology granted pursuant to Section 4.2.1 to develop,
make, have made, use, import, export, offer for sale, have sold and sell such
Products.

6.6 Calendar Quarter. For the purposes of this Agreement, a calendar quarter is
considered to be a 3 month time period selected from the group consisting of
(a) from January 01st to March 31st, (b) from April 01st to June 30th, (c) from
July 01st to September 30th, and (d) October 01st to December 31st.

6.7 Initiation of a Clinical Trial. For purposes of this ARTICLE 6, a clinical
trial shall be deemed initiated upon the first dosing of the first patient in
such trial.

6.8 Product Launch. For purposes of this ARTICLE 6, a Product Launch by
Trimeris, its Affiliate or its respective Sublicensee for such Product :

(a) in the United States, its territories, commonwealths, and possessions
(“U.S.”), is the first date of commercial sale of a Product to a Third Party
wholesaler at an arms length transaction in the U.S.;

(b) in a major European Union country shall be deemed achieved upon receipt of
the first written approval to market a Product from a major European country
(i.e., France, Germany, Italy, Spain, or the United Kingdom), including the
written receipt of pricing approval from such country; and

(c) in a country other than provided for in Sections 6.8(a)& (b), is the first
date of commercial sale of a Product to a Third Party wholesaler at an arms
length transaction in such other country including the written receipt of
pricing approval from such country if so required by the governing authority in
such country.

 

Page 40

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

ARTICLE 7

BOOKS AND RECORDS FOR PAYMENTS

7.1 Royalty Reports and Payments.

7.1.1 Trimeris. After the first sale of a Product on which royalties are payable
by Trimeris or its Affiliates or Sublicensees hereunder, Trimeris shall make
quarterly written reports to CRL, with each quarterly report being accompanied
by any royalty payment due for that calendar quarter. Each quarterly written
report shall state, separately for Trimeris and each Affiliate and Sublicensee,
the number and description of Products sold, aggregate Net Sales by country, of
each Product sold during the calendar quarter upon which a royalty is payable
under ARTICLE 6 above, the total deductions taken in calculating such Net Sales,
and the exchange rates used to calculate payment. Trimeris shall also provide to
CRL informal monthly reports stating, separately for Trimeris and each Affiliate
and Sublicensee, the number, description, and aggregate Net Sales, by country,
of each Product sold during that month upon which a royalty is payable.

7.2 Payment Method. All payments due to CRL under this Agreement shall be made
from a bank located in the United States by bank wire transfer in immediately
available funds to a bank account designated by CRL. All payments hereunder
shall be made in U.S. dollars. In the event that the due date of any payment
subject to ARTICLE 6 hereof is a Saturday, Sunday or national holiday, such
payment may be paid on the following business day. Any payments that are not
paid on the date such payments are due under this Agreement shall bear interest
to the extent permitted by applicable law at the prime rate as reported by the
Chase Manhattan Bank, New York, New York, on the date such payment is due, plus
an additional two percent (2%), calculated on the number of days such payment is
delinquent.

7.3 Place of Royalty Payment; Currency Conversion. If any currency conversion
shall be required in connection with the calculation of royalties hereunder,
such conversion shall be made using the selling exchange rate for conversion of
the foreign currency into U.S. Dollars, quoted for current transactions reported
in The Wall Street Journal for the average over the calendar quarter to which
such payment pertains.

 

Page 41

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

7.4 Records; Inspection. Trimeris and its Affiliates and Sublicensees shall keep
complete, true and accurate books of account and records for the purpose of
determining the royalty amounts payable under this Agreement. Such books and
records shall be kept at the principal place of business of Trimeris for at
least three (3) years following the end of the calendar year to which they
pertain. Such records will be open for inspection during such three (3) year
period by a public accounting firm, representing CRL, to whom Trimeris has no
reasonable objection, solely for the purpose of verifying royalty statements
hereunder; and such records shall be treated and maintained as Confidential
Information of Trimeris, as defined in ARTICLE 10 herein. Such inspections may
be made no more than once each calendar year, at reasonable times and on
reasonable notice. Inspections conducted under this Section 7.4 shall be at the
expense of CRL, unless an inspection reveals an underpayment or underreporting
by Trimeris exceeding five percent (5%) of the amount paid or reported for any
period covered by the inspection is established in the course of any such
inspection, whereupon all reasonable costs relating to the inspection for such
period and any unpaid amounts that are discovered will be paid promptly by
Trimeris to CRL together with interest thereon from the date such payments were
due at the lesser of the prime rate as reported by the Chase Manhattan Bank, New
York, New York, plus an additional two percent (2%). The interest payable to CRL
pursuant to this Section 7.4 shall in no way limit any other remedies available
to CRL for such underpayment or underreporting.

7.5 Withholding Taxes. CRL will pay any and all taxes levied on account of such
payment. If any taxes are required to be withheld by Trimeris, Trimeris will
(a) deduct such taxes from the payment made to CRL, (b) timely pay the taxes to
the proper taxing authority, and (c) send proof of payment to CRL and certify
its receipt by the taxing authority within 30 days following such payment.

ARTICLE 8

DUE DILIGENCE

8.1 Due Diligence. CRL and Trimeris shall each use commercially reasonable
efforts consistent with prudent business practices to fulfill their respective
obligations under the Research

 

Page 42

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

Collaboration. “Commercially reasonable efforts” for CRL shall mean the standard
of effort consistent with the efforts that private biotechnology companies (or,
in the event that CRL becomes a publicly traded biotechnology company, a public
biotechnology company) devote to significant general practice of research,
development and commercialization of products having similar market potential
which are derived from internal research programs. “Commercially reasonable
efforts” for Trimeris shall mean the standard of effort consistent with the
efforts that public biotechnology companies devote to significant general
practice of research, development and commercialization of products having
similar market potential which are derived from internal research programs. In
addition, Trimeris shall develop and commercialize Development Compound(s), and
corresponding Product(s) using efforts comparable to those efforts it uses (or
would use) for its own development candidates and products of comparable value,
based on its own judgment and criteria for determining the potential technical
and/or commercial success of such Development Compound(s), and corresponding
Product(s).

ARTICLE 9

INTELLECTUAL PROPERTY

9.1 Inventorship and Disclosure.

9.1.1 Inventorship. Inventorship of any Invention and other intellectual
property conceived and/or reduced to practice pursuant to this Agreement shall
be determined in accordance with the patent laws of the country(ies) in which
the invention was invented. CRL warrants that it has the necessary agreements
executed with the Chemists it uses, including those of its Affiliates, which
obligates them, if deemed inventors of Inventions, to assign complete ownership
of such Inventions to CRL. CRL is solely responsible for any and all costs
necessary to effect transfer to, and assignment of, such Inventions from such
Chemists to CRL.

9.1.2 Disclosure of Inventions. Each Party shall promptly disclose to the other
Party any inventions made in performance of, and in connection with this
Agreement.

 

Page 43

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

9.2 Ownership of Inventions.

9.2.1 Collaboration Technology.

(a) All right, title and interest in and to all Collaboration Technology shall
be owned solely by Trimeris. CRL shall reasonably cooperate with Trimeris, at no
additional expense to Trimeris, and promptly execute and provide all reasonably
necessary information, data, paperwork or other documents necessary to transfer
and effect all right, title, interest and sole ownership of Collaboration
Technology to Trimeris. The Parties agree that any such Inventions are subject
to, and patent application(s) filed claiming such Inventions will comply with
the requirements of, the CREATE Act (The Cooperative Research and Technology
Enhancement Act of 2004). Other than as expressly provided for in this
Agreement, CRL shall have the right to exploit the Collaboration Technology
without the express prior written consent of Trimeris.

(b) The Parties recognize that there may be commercialization of Product(s) by
Trimeris or its Sublicensee in a dosage form combined with an active drug
substance other than Product which active drug substance is licensed to Trimeris
by a Third Party (“Combination Drug”). In such event, the Parties shall
negotiate in good faith to successfully complete negotiation of the operative
and financial terms between the Parties for such commercialization, such
operative and financial terms shall in no event exceed payment terms provided
for such Product according to Article 6. If the Parties fail to successfully
complete such negotiation within a reasonable time period, the Parties agree
that the operative and financial terms for such commercialization shall be
determined and settled by binding arbitration in an arbitration process set
forth in Article 14 herein.

(c) In the event that a Third Party asserts that commercialization of a Product
by Trimeris would infringe the intellectual property rights of such Third Party,
then a Party receiving such assertion will promptly give written notice to the
other Party of such assertion. In such event, the Parties shall negotiate in
good faith a plan of action with respect to such Third Party assertions. If the
plan of action is to license such Third Party intellectual property rights, the
Parties shall negotiate in good faith to successfully complete negotiation of
the operative and financial terms between the Parties for such commercialization
in taking into account any payments made or to be made to the Third Party for
such license, such operative and financial terms shall in no event exceed
payment terms provided for such Product according to Article 6. If the Parties
fail to

 

Page 44

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

successfully complete such negotiation within a reasonable time period, the
Parties agree that the operative and financial terms for such plan of action or
commercialization shall be determined and settled by binding arbitration in an
arbitration process set forth in Article 14 herein.

9.2.2 CRL Technology and Trimeris Technology. Notwithstanding Section 9.2.1
above or any other provision of this Agreement: (a) all right, title and
interest in and to CRL Technology shall be owned by CRL; and (b) all right,
title and interest in and to Trimeris Technology shall be owned by Trimeris.

9.3 Development Technology. With respect to the rights of Trimeris to develop a
Development Compound or Product, Trimeris shall have the right to engage a Third
Party contractor in formulation technology or delivery technology or product
criteria maximization to the extent Trimeris deems necessary for achieving a
Product it desires to commercialize. A written agreement of Trimeris with such
Third Party subcontractor shall have provisions regarding confidentiality and
prohibitions on transfer of information, and non-use and ownership of
intellectual property, consistent with those contained herein. If, during the
Third Party subcontracting a new invention not covered by Collaboration
Technology is conceived and/or reduced to practice (“Development Technology”)
relating to the formulated or deliverable Product (“Modified Product”), Trimeris
shall use its best efforts to negotiate sole ownership of Modified Product, or
at least joint ownership with the Third Party contractor. In such event, the
Parties shall negotiate in good faith to successfully complete negotiation of
the operative and financial terms between the Parties for such commercialization
of a Modified Product, such operative and financial terms shall in no instance
exceed payment terms provided for such Product according to Article 6. If the
Parties fail to successfully complete such negotiation within a reasonable time
period, the Parties agree that the operative and financial terms for such
commercialization shall be determined and settled by binding arbitration in an
arbitration process set forth in Article 14 herein.

 

Page 45

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

9.4 Patent Prosecution.

9.4.1 Collaboration Technology.

(a) Trimeris shall be solely responsible, at its expense, for preparing, filing,
prosecuting and maintaining patent applications and patents directed to
Collaboration Technology, and conducting any interferences, re-examinations,
reissues and oppositions relating thereto. CRL shall reasonably cooperate with
Trimeris, at no additional expense to Trimeris, and promptly execute and provide
all reasonably necessary information, data, paperwork or other documents
requested by Trimeris, and making scientists and scientific records reasonably
available to Trimeris, in order to enable Trimeris to file, prosecute and
maintain such patent applications and to conduct any such proceedings.

(b) Trimeris may elect, upon ninety (90) days’ prior notice, to discontinue
prosecution of any such patent applications and/or not to file or conduct any
further activities with respect to any such patent applications or patents
related to Collaboration Technology. In the event Trimeris declines to file or,
having filed, fails to further prosecute or maintain any such patent
applications or patents, or conduct any proceedings including, but not limited
to, interferences, re-examinations, reissues, oppositions relating thereto, then
CRL shall have the right to prepare, file, prosecute and maintain such patent
applications and patents in such countries as it deems appropriate, and conduct
such proceedings, at its sole expense. In such case, Trimeris shall immediately
execute all necessary documents that may be required in order to enable CRL to
file, prosecute and maintain such patent applications and to conduct any such
proceedings.

9.4.2 Other Technology. Except as provided in Section 9.4.1, each Party shall be
responsible, at its own expense and in its sole discretion, for preparing,
filing, prosecuting and maintaining, in such countries as it deems appropriate,
any and all patent applications and patents directed to inventions owned or
controlled by such Party (Trimeris Technology in the case of Trimeris, and CRL
Technology in the case of CRL) and conducting any interferences,
re-examinations, reissues and oppositions relating to such patent applications
and patents.

9.5 Reports. Trimeris shall keep CRL informed as to the status of patent matters
described in Section 9.4.1(a) by providing CRL with a semi-annual report
containing a list of the patent applications and patents, which Trimeris is
prosecuting and maintaining according to Section 9.4.1(a), that minimally
includes the number assigned to each application or patent, the applicable

 

Page 46

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

filing date and/or issue date, and the current status of each application or
patent. Accompanying the semi-annual report, Trimeris will provide to CRL copies
of patent applications which have been filed by Trimeris according to
Section 9.4.1(a) during the six month period covered by the semi-annual report.

9.6 Enforcement and Defense.

9.6.1 Notice. Each Party shall promptly notify the other of any knowledge it
acquires of any material infringement or reasonable belief of such material
infringement by a Third Party of the rights licensed to it according to
Section 4.1 and Section 4.2.

9.6.2 Trimeris. Trimeris shall have the initial right, but not the obligation,
to take reasonable legal action to enforce against infringements by Third
Parties or defend any declaratory judgment action relating to any patent filed
by it pursuant to Section 9.4.1(a) using counsel of its choice, provided that
CRL has the right to join the action as a matter of law. CRL shall have the
right to participate, at its own expense which is not subject to recovery
pursuant to Section 9.6.4, and with counsel of its choice, in any such legal
action initiated by Trimeris, to the extent permitted by applicable law, and CRL
shall give to Trimeris all authority, information and assistance necessary to
defend or settle any such suit, action or proceeding. If, within six (6) months
following receipt of information pertaining to a possible infringement by a
Third Party, or within three (3) months following receipt of a notice of any
declaratory judgment action relating to any patent filed by Trimeris pursuant to
Section 9.4.1(a), Trimeris fails to take such action to halt a commercially
significant infringement or defend any declaratory judgment action related to
any patent filed pursuant to Section 9.4.1(a) within a timeframe so as not to
jeopardize the following right of CRL, CRL shall, in its sole discretion, have
the right, at its sole expense, to take such action.

9.6.3 CRL. CRL shall have the initial right, but not the obligation, to take
reasonable legal action to enforce against infringements by Third Parties of CRL
Technology licensed to Trimeris according to Section 4.1 and Section 4.2, or
defend any declaratory judgment action relating to any patent filed by CRL
pursuant to Section 9.4.1(b), using counsel if its choice. If, within six (6)
months following receipt of information pertaining to a possible infringement by
a

 

Page 47

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

Third Party, or within three (3) months following receipt of a notice of any
declaratory judgment action relating to any patent filed by CRL pursuant to
Section 9.4.1(b), CRL fails to take such action to halt a commercially
significant infringement or defend any declaratory judgment action related to
any patent filed pursuant to Section 9.4.1(b) within a timeframe so as not to
jeopardize the following right of Trimeris, Trimeris shall, in its sole
discretion, have the right, at its sole expense, to take such action.

9.6.4 Cooperation; Costs and Recoveries. Each Party agrees to render such
reasonable assistance as the enforcing Party may request, at the enforcing
Party’s expense. Unless as otherwise provided for in this Agreement, amounts
recovered from enforcing a patent filed pursuant to Section 9.4.1 and
Section 9.6.2, whether as payment in settlement or otherwise, shall first be
applied to expenses of such litigation, including reasonable attorneys’ fees,
incurred by the Parties, with any remaining amounts recovered belonging to the
Party bringing the action, except that any recovery realized by a Party as a
result of such litigation, after reimbursement of the Parties’ litigation
expenses, shall, only to the extent directly attributable to lost sales or lost
profits with respect to Products, be treated as Net Sales of the applicable
Product for purposes of this Agreement. The costs in bringing any action to
enforce a patent filed pursuant to Section 9.4.2, 9.6.2 or 9.6.3 relating to CRL
Technology or Collaboration Technology shall be paid by, and all recoveries
therefrom belong to the Party bring the action.

9.7 Infringement Claims. If the manufacture, sale or use of any Product pursuant
to this Agreement because of the practice of the Collaboration Technology
results in any claim, suit or proceeding alleging patent infringement against
CRL or Trimeris (or either’s Affiliates or Sublicensees), such Party shall
promptly notify the other Party hereto in writing setting forth the facts of
such claim in reasonable detail. The defendant shall have the exclusive right
and obligation to defend and control the defense of any such claim, suit or
proceeding, at its own expense, using counsel of its own choice; provided,
however, it shall not enter into any settlement which admits or concedes that
any aspect of the Collaboration Technology is invalid or unenforceable, without
the prior written consent of such other Party, such consent not to be
unreasonably withheld. The defendant shall keep the other Party hereto
reasonably informed of all material developments in connection with any such
claim, suit or proceeding.

 

Page 48

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

ARTICLE 10

CONFIDENTIALITY

10.1 Confidential Information. Except as otherwise expressly provided herein,
the Parties agree that, for the term of this Agreement and for ten (10) years
thereafter, the receiving Party shall not, except as expressly provided in this
ARTICLE 10, disclose to any Third Party or use for any purpose any Confidential
Information furnished to it by the disclosing Party hereto pursuant to this
Agreement, or any results of the Research Collaboration (“Results”). For
purposes of this ARTICLE 10, “Confidential Information” shall mean any
information, which if disclosed in tangible form is marked “Confidential” or
with other similar designation to indicate its confidential or proprietary
nature, or, if disclosed orally, is indicated orally to be confidential or
proprietary at the time of such disclosure and is confirmed in writing as
Confidential Information within forty-five (45) days after such disclosure.
Notwithstanding the foregoing, Confidential Information shall not include any
information that can be established by the receiving Party by competent proof
that such information:

10.1.1 was already known to the receiving Party, other than under an obligation
of confidentiality, at the time of disclosure;

10.1.2 was generally available to the public or otherwise part of the public
domain at the time of its disclosure to the receiving Party;

10.1.3 became generally available to the public or otherwise part of the public
domain after its disclosure and other than through any act or omission of the
receiving Party in breach of this Agreement;

10.1.4 was independently developed by the receiving Party as demonstrated by
documented evidence prepared contemporaneously with such independent
development; or

10.1.5 was disclosed to the receiving Party, other than under an obligation of
confidentiality, by a Third Party who had no obligation to the disclosing Party
not to disclose such information to others.

 

Page 49

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

10.1.6 Notwithstanding anything to the contrary in this Agreement, the chemical
structures of, Compounds, and synthetic methods specific to Compounds, shall be
deemed Confidential Information of Trimeris, whether or not so marked. The
chemical structures of Library Compounds and synthetic methods specific to
Library Compounds shall be deemed Confidential Information of CRL, whether or
not so marked.

10.2 Permitted Use and Disclosures. Each Party hereto may use or disclose
Confidential Information disclosed to it by the other Party or Results only to
the extent such use or disclosure is reasonably necessary and permitted in the
exercise of the rights granted hereunder to the Party seeking to use or disclose
Confidential Information, including: in filing or prosecuting patent
applications; prosecuting or defending litigation; complying with applicable
governmental laws, regulations or court order or otherwise submitting
information to tax or other governmental authorities; optimizing a Product;
conducting clinical trials; or making a permitted sublicense, or otherwise
exercising license rights expressly granted by the other Party to it pursuant to
the terms of this Agreement; provided that if a Party is required to make any
such disclosure, other than pursuant to a confidentiality agreement, it will
give reasonable advance notice to the other Party of such disclosure and, save
to the extent inappropriate in the case of patent applications, will use its
commercially reasonable efforts to secure confidential treatment of such
information in consultation with the other Party prior to its disclosure
(whether through protective orders or otherwise). Notwithstanding anything
contrary in this Agreement, without advance notice to the other Party, either
Party may make reports to or filings with the Securities and Exchange Commission
as it determines, based on advice of counsel, are reasonably necessary to comply
with applicable laws and regulations, while limiting disclosure of Confidential
Information to that which the Party reasonably believes is required to be
disclosed by such applicable laws and regulations.

10.3 Termination of Prior Agreement. Notwithstanding anything contrary in this
Agreement, all information exchanged between the Parties under the Mutual
Nondisclosure Agreement dated 08 July 2004 between the Parties shall be deemed
Confidential Information and shall be subject to the terms of this ARTICLE 10.

 

Page 50

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

10.4 Nondisclosure of Terms. Each of the Parties hereto agrees not to disclose
the terms of this Agreement to any Third Party without the prior written consent
of the other Party hereto, which consent shall not be unreasonably withheld,
except to such Party’s attorneys, advisors, investors and others on a need to
know basis under circumstances that reasonably ensure the confidentiality
thereof, or to the extent required by law or applicable governmental regulation.
Notwithstanding the foregoing, the Parties agree upon a joint press release as
expressly provided in APPENDIX B of this Agreement and shall announce the
execution of this Agreement after the Effective Date. Thereafter, CRL and
Trimeris may each disclose to Third Parties the information contained in such
press release without the need for further approval by the other. However,
Trimeris and CRL shall not make public statements regarding the receipt by CRL
of milestone and royalty payments made by Trimeris as specified in ARTICLE 6,
unless such Party believes that such disclosure is required by applicable law.
Notwithstanding the foregoing, CRL may not make public statements about
Compounds delivered to Trimeris under the Research Collaboration without the
expressed written consent of Trimeris. Trimeris may, in its sole discretion,
make public statements about progress of the Research Collaboration and may
communicate information regarding the status of a Compound or Product.

10.5 Publication. Notwithstanding any term in this Agreement that may state or
imply to the contrary, but subject to Section 10.1 hereof, results and data
generated by the Parties in performing the Research Collaboration may be
submitted for publication through Trimeris in accordance with Trimeris’
customary practices regarding public dissemination of such information. Except
as otherwise specifically provided for herein, Trimeris has the sole right to
determine when and if to publicly disclose any non-public information regarding
(a) the status of the Research Collaboration or the Agreement, (b) the status or
research data obtained on Compounds, (c) the data from preclinical evaluation of
Compounds, (d) the status of any clinical trial utilizing Compounds (including
all data from such trials), (e) progress in development of the Compounds, or
(f) any other business and technical information directly relating to the
Agreement or to Compounds. CRL shall not make any public statements or make any
other disclosures in writing regarding any aspect of the Agreement or any
business or technical information directly relating to the Compounds or studies
using such Compounds without the express written consent of Trimeris. Any
scientific publication

 

Page 51

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

by either Party, which is first approved pursuant to this Section 10.5 for
publication, shall acknowledge the other Party’s contribution to the extent
consistent with standard practice for scientific publications.

ARTICLE 11

REPRESENTATIONS AND WARRANTIES

11.1 Trimeris. Trimeris represents and warrants on its own behalf and on behalf
of its Affiliates that: (i) it has the legal power, authority and right to enter
into this Agreement and to perform all of its obligations hereunder; (ii) this
Agreement is a legal and valid obligation binding upon it and enforceable in
accordance with its terms; (iii) it has the full right to enter into this
Agreement, and to fully perform its obligations hereunder; (iv) it has not
previously granted, and during the term of this Agreement will not knowingly
make any commitment or grant any rights which are in conflict in any material
way with the rights and licenses granted herein; and (v) to the best of its
knowledge as of the Effective Date, there are no existing or threatened actions,
suits or claims pending against it that would materially impair the Trimeris
Technology.

11.2 CRL. CRL represents and warrants on its own behalf and on behalf of its
Affiliates that: (i) it has the legal power, authority and right to enter into
this Agreement and to perform all of its obligations hereunder; (ii) this
Agreement is a legal and valid obligation binding upon it and enforceable in
accordance with its terms; (iii) it has the full right to enter into this
Agreement, and to fully perform its obligations hereunder; (iv) it has not
previously granted, and during the term of this Agreement will not knowingly
make any commitment or grant any rights which are in conflict in any material
way with the rights and licenses granted herein; and (v) to the best of its
knowledge as of the Effective Date, there are no existing or threatened actions,
suits or claims pending against it that would materially impair the CRL
Technology.

11.3 Disclaimer. Trimeris and CRL specifically disclaim any guarantee that the
Research Collaboration will be successful, in whole or in part. The failure of
Trimeris to successfully develop Actives, Focused Library Compounds, Lead
Compounds, Development Compounds, or Products will not constitute a breach of
any representation or warranty or other obligation under this

 

Page 52

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

Agreement. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, CRL AND
TRIMERIS MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OR CONDITIONS OF ANY
KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE COLLABORATION TECHNOLOGY,
TRIMERIS TECHNOLOGY, LIBRARY COMPOUNDS, FOCUSED LIBRARY COMPOUNDS, ACTIVES, LEAD
COMPOUNDS, DEVELOPMENT COMPOUNDS, INFORMATION DISCLOSED HEREUNDER OR PRODUCTS
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, VALIDITY OF ANY COLLABORATION TECHNOLOGY, PATENTED OR
UNPATENTED, OR NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES.

11.4 Limitation of Liability. EXCEPT FOR PAYMENTS UNDER ARTICLE 6 AND LIABILITY
FOR BREACH OF ANY OF ARTICLES 9 AND 10, NEITHER PARTY SHALL BE ENTITLED TO
RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES IN CONNECTION WITH THIS AGREEMENT OR ANY LICENSE GRANTED HEREUNDER;
provided, however, that this Section 11.4 shall not be construed to limit either
party’s indemnification obligations under Article 12.

ARTICLE 12

INDEMNIFICATION

12.1 Trimeris. Trimeris agrees to indemnify, defend and hold CRL and its
Affiliates and their respective directors, officers, employees, agents and their
respective successors, heirs and assigns (the “CRL Indemnitees”) harmless from
and against any losses, costs, claims, damages, liabilities or expense
(including reasonable attorneys’ and professional fees and other expenses of
litigation) (collectively, “Liabilities”) arising, directly or indirectly out of
or in connection with Third Party claims, suits, actions, demands or judgments,
relating to (i) any Products developed, manufactured, used, sold or otherwise
distributed by or on behalf of Trimeris, its Affiliates or Sublicensees or other
designees (including, without limitation, product liability and patent

 

Page 53

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

infringement claims), (ii) the performance of the Research Collaboration by
Trimeris, (iii) with respect to Trimeris’ activities to commercialize a
Product, the use of the Targets which are involved in the conduct of the
Research Collaboration, and the making or use of modulators of such Targets, and
(iv) any breach by Trimeris of the covenants, representations and warranties
made in this Agreement; except, in each case, to the extent such Liabilities
result from the gross negligence or intentional misconduct of CRL.

12.2 CRL. CRL agrees to indemnify, defend and hold Trimeris and its Affiliates
and their respective directors, officers, employees, agents and their respective
successors, heirs and assigns (the “Trimeris Indemnitees”) harmless from and
against any losses, costs, claims, damages, liabilities or expense (including
reasonable attorneys’ and professional fees and other expenses of litigation)
(collectively, “Liabilities”) arising, directly or indirectly out of or in
connection with Third Party claims, suits, actions, demands or judgments,
relating to (i) the performance of the Research Collaboration by CRL, and
(ii) any breach by CRL of its covenants, representations and warranties made in
this Agreement; except, in each case, to the extent such Liabilities result from
the gross negligence or intentional misconduct of Trimeris.

12.3 Indemnification Procedure. A Party that intends to claim indemnification
(the “Indemnitee”) under this ARTICLE 12 shall promptly notify the other Party
(the “Indemnitor”) in writing of any claim, complaint, suit, proceeding or cause
of action with respect to which the Indemnitee intends to claim such
indemnification (for purposes of this Section 12.3, each a “Claim”), and the
Indemnitor shall have sole control of the defense and/or settlement thereof;
provided that the Indemnitee shall have the right to participate, at its own
expense, with counsel of its own choosing in the defense and/or settlement of
such Claim. The indemnification obligations of the Parties under this ARTICLE 12
shall not apply to amounts paid in settlement of any Claim if such settlement is
effected without the consent of the Indemnitor, which consent shall not be
withheld or delayed unreasonably. The failure to deliver written notice to the
Indemnitor within a reasonable time after the commencement of any such Claim, if
prejudicial to its ability to defend such action, shall relieve such Indemnitor
of any liability to the Indemnitee under this ARTICLE 12, but the omission so to
deliver written notice to the Indemnitor shall not relieve the Indemnitor of any
liability to any Indemnitee otherwise than under this ARTICLE 12. The Indemnitee
under this

 

Page 54

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

ARTICLE 12, and its employees, at the Indemnitor’s request and expense, shall
provide full information and reasonable assistance to Indemnitor and its legal
representatives with respect to such Claims covered by this indemnification. It
is understood that only Trimeris may claim indemnity under this ARTICLE 12 (on
its own behalf or on behalf of a Trimeris Indemnitee), and other Trimeris
Indemnitees may not directly claim indemnity hereunder. Likewise, it is
understood that only CRL may claim indemnity under this ARTICLE 12 (on its own
behalf or on behalf of a CRL Indemnitee), and other CRL Indemnitees may not
directly claim indemnity hereunder.

ARTICLE 13

TERM AND TERMINATION

13.1 Term. Unless terminated earlier as provided in this ARTICLE 13, the term of
this Agreement shall commence on the Effective Date, and shall continue in full
force and effect on a country-by-country and Product-by-Product basis until
Trimeris and its Sublicensees have no remaining payment obligations in a country
as described in ARTICLE 6.

13.2 Termination for Breach. Either Party to this Agreement may terminate the
Research Collaboration and this Agreement in the event the other Party hereto
shall have materially breached or defaulted in the performance of any of its
material obligations hereunder, and such default shall have continued for
sixty (60) days after written notice thereof was provided to the breaching Party
by the non-breaching Party. Any termination shall become effective at the end of
such sixty (60) day period unless: (a) the breaching Party (or any other Party
on its behalf) has cured any such breach or default prior to the expiration of
the sixty (60) day period; or (b) the Party alleged to be in breach disputes in
good faith such termination pursuant to ARTICLE 14, or such other dispute
resolution as the Parties may agree, whereupon such right to terminate shall be
tolled for so long as such dispute resolution procedures are being pursued by
such Party in good faith and if it is finally and conclusively determined
pursuant to such procedures that such Party is in breach, then such Party shall
have the right to cure within a sixty (60) day period following such
determination.

13.3 Termination for Insolvency. If voluntary or involuntary proceedings by or
against a Party are instituted in bankruptcy under any insolvency law, or a
receiver or custodian is appointed

 

Page 55

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

for such Party, or proceedings are instituted by or against such Party for
corporate reorganization, dissolution, liquidation or winding-up of such Party,
which proceedings, if involuntary, shall not have been dismissed within
sixty (60) days after the date of filing, or if such Party makes an assignment
for the benefit of creditors, or substantially all of the assets of such Party
are seized or attached and not released within sixty (60) days thereafter, the
other Party may immediately terminate the Research Collaboration and/or this
Agreement, effective upon notice of such termination.

13.4 Permissive Termination

13.4.1 Termination of the Research Collaboration by Trimeris.

(a) At six (6) months from the Effective Date, Trimeris shall have the right, in
its sole discretion and option, to terminate this Agreement and/or the Research
Collaboration, by giving CRL thirty days written notice. Termination shall
become effective as of the end of the thirty (30) day notification period.

(b) At any time after six (6) months from the Effective Date, Trimeris shall
have the right, in its sole discretion and option, to terminate this Agreement
and/or the Research Collaboration, by giving CRL sixty (60) days written notice.
Termination shall become effective as of the end of the sixty (60) day
notification period.

13.4.2 Termination of The Research Collaboration on a Target by Trimeris.
Pursuant to Section 2.7.2(b), at any time during the term of the Research
Collaboration, Trimeris may elect to discontinue its research and/or development
activities with respect to a particular Target, and may elect to proceed with
Research Collaboration activities with respect to the remaining Target. Trimeris
shall have the right to discontinue any of its research, development and/or
commercialization of either Target without prejudice to: (a) Trimeris’ rights
under the Research Collaboration to develop and commercialize a remaining
Target; and (b) Trimeris’ rights under the Research Collaboration to develop and
commercialize a Product according to the terms of this Agreement.

 

Page 56

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

13.4.3 Termination of Development and/or Commercialization of a Product by
Trimeris for Safety Reasons. If Trimeris determines, in good faith, that it is
not feasible for Trimeris or its sublicensess to pursue the research and/or
development of a Compound or a Development Compound, or the launch or sale of a
Product due to safety concerns, including due to adverse events of such Product
(or a Development Compound being advanced towards a Product) or due to other
health and safety concerns, then Trimeris shall promptly notify CRL in writing
of its determination, and of its decision to terminate its obligations with
respect to pursuing the research, development, launch or sale such Product or
such Development Compound. Termination of a Development Compound or Product by
Trimeris pursuant to this Section 13.4.3 shall not be considered a breach of
Trimeris’ Commercially reasonable efforts under Section 8.1.

13.4.4 Termination of the Research Collaboration by CRL. At any time after two
(2) years from the Effective Date, CRL may terminate the Research Collaboration,
for any reason or no reason, upon ninety (90) days’ written notice to Trimeris.
In the event of termination by CRL of the Research Collaboration pursuant to
this Section 13.4.4:

(a) after such termination, CRL shall have no further obligation to perform
Research Plan activities and Trimeris shall have no further obligation to
provide FTE funding, research payments, or costs to CRL under Section 2.8; and
upon termination, CRL shall cease all Research Plan activities;

(b) all licenses granted by Trimeris to CRL hereunder shall terminate and revert
to Trimeris;

(c) Section 5.1.2 shall terminate and be of no further force or effect;

(d) except as set forth above in this Section 13.4.4, this Agreement shall
otherwise remain in full force and effect in accordance with its terms
(including, without limitation, the licenses granted to Trimeris under Article 4
and the provisions of Article 6); provided, however, that if CRL terminates the
Research Collaboration prior to designation of the first Development Compound,
then Trimeris shall not be obligated to pay milestones or royalties to CRL under
Article 6 with respect to any Focused Library Compound, Lead Compound or
Compound that Trimeris subsequently designates as a Development Compound or
otherwise clinically develops or commercializes as Product.

 

Page 57

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

13.5 Effect of Breach or Termination.

13.5.1 Accrued Rights and Obligations. Termination of this Agreement for any
reason shall not release either Party hereto from any liability which, at the
time of such termination, has already accrued to the other Party or which is
attributable to a period prior to such termination, nor preclude either Party
from pursuing any rights and remedies it may have hereunder or at law or in
equity with respect to any breach of this Agreement.

13.5.2 Return of Materials. Upon any termination of this Agreement, Trimeris and
CRL shall promptly return to the other Party all Confidential Information
(including, without limitation, all Know-How) received from the other Party and
to which the Party does not retain rights hereunder, except one copy of which
may be retained for archival purposes only.

13.5.3 Licenses & Grants.

(a) Research Licenses.

(1) The Research Licenses granted to each of Trimeris and CRL under Section 4.1
shall terminate in the event of any termination of the Agreement by either Party
pursuant to Section 13.2, or upon expiration of this Agreement.

(2) The Research License granted to CRL under Section 4.1 shall terminate in the
event of any termination of the Agreement by Trimeris pursuant to
Sections 2.13.4, or 13.4.1.

(3) In the event of termination of this Agreement by Trimeris pursuant to
Sections 2.13.4, 13.2 or 13.3, any Research Use License granted to Trimeris
under Section 2.4.4(c) shall survive.

 

Page 58

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

(b) Commercial Licenses.

(1) In the event of any termination of this Agreement by Trimeris pursuant to
Sections 2.13.4, 13.3 (to the extent allowed by law), or 13.4, the Licenses and
Grants granted to Trimeris pursuant to Section 4.2 and 4.3 shall remain in
effect; and, if following such termination Trimeris continues to develop
Compounds and/or sell Products, any milestone or royalty payments that would
have become due and payable to CRL according to ARTICLE 6 but for such
termination by Trimeris, shall continued to be paid by Trimeris pursuant to, and
for only for the duration as specified in, ARTICLE 6.

(2) In the event that Trimeris terminates this Agreement pursuant to
Section 13.2, the Licenses and Grants granted to Trimeris pursuant to Sections
4.2 and 4.3 shall remain in effect; and, if following such termination Trimeris
continues to develop Compounds and/or sell Products, any milestone or royalty
payments that would have become due and payable to CRL according to ARTICLE 6
but for such termination by Trimeris, shall be escrowed by Trimeris (“Escrowed
Amounts”) using an escrow agent (“Escrow Agent”) of Trimeris’ choice, such
Escrow Agent being suitably qualified to perform such duties as are customary
for such matters, until final resolution by an arbitrator pursuant to ARTICLE 14
related to such breach, and the arbitrator’s determination of the release and
proper distribution of the Escrowed Amounts.

13.5.4 Exclusivity of Compounds

(a) In the event of any termination of this Agreement and/or of the Research
Collaboration pursuant to Sections 2.13.4, 13.2 or 13.3 (the latter with respect
to applicable law) by Trimeris, or pursuant to Section 13.4.4 by CRL, Trimeris
shall have the right in and to, and for the use of, any and all Compounds
described in Sections 1.7, 1.11, 1.14, 1.15, 1.24, and 1.32, and associated
regulatory filings and marketing rights. CRL or its Affiliates or its
Sublicensees shall not develop, sell, or otherwise transfer any or all of such
Compounds, or information about such compounds (including, but not limited to,
Compound structure, methods of synthesis, physical characteristics,
formulations, etc.) for any use without the prior written consent of Trimeris;
nor shall CRL provide any or all of such Compounds to a Third Party as part of
the CRL Library, without the prior written consent of Trimeris.

 

Page 59

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

(b) In the event of any termination of this Agreement by CRL pursuant to
Sections 13.2 or 13.3 (the latter with respect to the extent allowed by law),
the exclusivity provision pursuant to Section 2.11.1 shall expire.

13.5.5 Survival Sections. Sections 4.3.2, 9.2.1(a), 9.2.2, 9.4, 13.5 and
ARTICLES 1, 10, 12, 14 and 15 of this Agreement shall survive the expiration or
termination of this Agreement for any reason.

ARTICLE 14

DISPUTE RESOLUTION

14.1 Initiation of Arbitration. Unless otherwise explicitly set forth in this
Agreement, in the event that the Parties are unable to resolve any dispute,
controversy or claim arising out of, or in relation to this Agreement, or the
breach, termination or invalidity thereof (collectively “Issue”), the Parties
shall attempt in good faith to resolve such Issue by referring such Issue to the
Consultation process pursuant to Section 15.13 herein. In the event that the
Issue remains unresolved following such Consultation process, either Party may
initiate arbitration in accordance with this subsection under the guidelines of
the American Arbitration Association (“AAA”) in Wilmington, Delaware , under the
commercial rules then in effect for AAA, except as provided herein.

14.1.1 A Party shall notify the other Party in writing should it intend to
initiate arbitration. The Parties shall select, by mutual agreement, one
arbitrator within a time period of thirty (30) days after receipt of such
notice. Should no arbitrator be chosen within the thirty (30) days period, the
AAA shall appoint the arbitrator within thirty (30) days after the end of such
period. The arbitrator shall be a lawyer knowledgeable and experienced in the
law concerning the subject matter of the dispute, and shall not be an Affiliate,
employee, consultant, officer, director or stockholder of any Party.

 

Page 60

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

14.1.2 Within thirty (30) days after selection of such arbitrator, each Party
shall Parties shall be required to set forth in writing all disputed Issues and
a proposed resolution on the merits of each such Issue, and the reasons for
proposing and supporting the resolution.

14.1.3 Should either Party desire a joint meeting before the arbitrator, then
such meeting shall be held within forty five (45) days after the end of the
above resolution submission period. The arbitrator shall set a date for a
hearing within the forty five (45) day period to discuss each of the issues
identified by the Parties. The Parties shall have the right to be represented by
counsel. Except as provided herein, the arbitration shall be governed by the
Commercial Arbitration Rules of the AAA; provided, however, that the Federal
Rules of Evidence shall apply with regard to the admissibility of evidence and
the arbitration shall be conducted by a single arbitrator.

(a) Within thirty (30) days after the later of (i) the end of the resolution
submission period, or (ii) holding of the joint meeting with the arbitrator, the
arbitrator shall decide the matter by selecting either (a) one of such
resolutions submitted by either Party, or (b) creating a compromise solution
incorporating elements of both Parties submitted resolutions. The arbitrator
shall have sole discretion as to how best to resolve the Issue using his best
reasonable judgment and capacity. All rulings of the arbitrator shall be in
writing and shall be delivered to the Parties

(b) Unless otherwise agreed by the Parties, the arbitrator shall make such
decision based on the following factors in descending order of importance:
(i) consistency with the provisions of this Agreement; (ii) consistency with the
intent of the Parties as reflected in this Agreement; and (iii) customary and
reasonable provisions included in agreements of comparable subject matter. The
decision of the arbitrator will be binding upon the Parties without the right of
appeal, and judgment upon the decision rendered by the arbitrator may be entered
in any court(s) having jurisdiction thereof.

(c) The Parties shall share equally the reasonable documented cost of such
arbitration proceeding, but not the individual cost of the Parties in
participating in such proceeding.

 

Page 61

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

ARTICLE 15

MISCELLANEOUS

15.1 Governing Laws. This Agreement and any dispute arising from the
construction, performance or breach hereof shall be governed by and construed,
and enforced in accordance with, the laws of the State of Delaware, without
reference to conflicts of laws principles, and the Parties agree and accept to
be subject to the jurisdiction of the State of Delaware.

15.2 Waiver. It is agreed that no waiver by either Party hereto of any breach or
default of any of the covenants or agreements herein set forth shall be deemed a
waiver as to any subsequent and/or similar breach or default.

15.3 Assignment. Unless otherwise expressly permitted hereunder, neither Party
may assign any of its rights or delegate any of its duties under this Agreement
without the prior written consent of the other Party, except that either Party
may assign its rights and responsibilities hereunder without the other Party’s
consent as part of either: (i) the sale of all or substantially all of the
assets or the entire business to which this Agreement relates, or a merger,
consolidation, reorganization or other combination with or into another person
or entity; or (ii) the transfer or assignment to an Affiliate, in each case,
pursuant to which the surviving entity or assignee assumes the assigning or
merging Party’s obligations hereunder. Any assignment made in violation of this
Section 15.3 shall be null and void.

15.4 Independent Contractors. The relationship of the Parties hereto is that of
independent contractors. The Parties hereto are not deemed to be agents,
partners or joint venturers of the others for any purpose as a result of this
Agreement or the transactions contemplated thereby.

15.5 Compliance with Laws. In exercising their rights under this license, the
Parties shall fully comply in all material respects with the requirements of any
and all applicable laws, regulations, rules and orders of any governmental body
having jurisdiction over the exercise of rights under this license including,
without limitation, those applicable to the discovery, development, manufacture,
distribution, import and export and sale of Products pursuant to this Agreement.

 

Page 62

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

15.6 Patent Marking. Trimeris agrees to mark and have its Affiliates and
Sublicensees mark all Products sold by Trimeris and its Affiliates and
Sublicensees pursuant to this Agreement in accordance with the applicable
statute or regulations relating to patent marking in the country or countries of
manufacture and sale thereof.

15.7 Notices. All notices, requests and other communications hereunder shall be
in writing and shall be personally delivered or by registered or certified mail,
return receipt requested, postage prepaid, in each case to the respective
address specified below, or such other address as may be specified in writing to
the other Parties hereto and shall be deemed to have been given upon receipt:

 

If to Trimeris:    Trimeris, Inc.    3500 Paramount Parkway    Morrisville, NC
27560    Attention: Vice President, Corporate Development    Facsimile:
(919) 419-1816    with copy to: Legal Counsel If to CRL:    ChemBridge Research
Laboratories, LLC    16981 Via Tazon, Suite K    San Diego, CA 92127    U.S.A.
   Attention: Chief Executive Officer    Facsimile: (858) 451-7402    with copy
to: Legal Counsel

 

Page 63

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

15.8 Severability. Each Party hereby agrees that it does not intend to violate
any public policy, statutory or common laws, rules, regulations, treaty or
decision of any government agency or executive body thereof of any country or
community or association of countries. Should one or more provisions of this
Agreement be or become invalid, the Parties hereto shall substitute, by mutual
consent, valid provisions for such invalid provisions which valid provisions in
their economic effect are sufficiently similar to the invalid provisions that it
can be reasonably assumed that the Parties would have entered into this
Agreement with such valid provisions. In case such valid provisions cannot be
agreed upon, the invalidity of one or several provisions of this Agreement shall
not affect the validity of this Agreement as a whole, unless the invalid
provisions are of such essential importance to this Agreement that it is to be
reasonably assumed that the Parties would not have entered into this Agreement
without the invalid provisions. In the event a Party seeks to avoid a material
provision of this Agreement upon an assertion that such provision is invalid,
illegal or otherwise unenforceable, the other Party shall have the right to
terminate this Agreement upon sixty (60) days prior written notice to the
asserting Party, unless such assertion is eliminated and cured within such sixty
(60) day period. Such a termination shall be deemed a termination by such Party
for breach pursuant to Section 13.2.

15.9 Advice of Counsel. CRL and Trimeris have each consulted counsel of their
choice regarding this Agreement, and each acknowledges and agrees that this
Agreement shall not be deemed to have been drafted by one Party or another and
will be construed accordingly.

15.10 Performance Warranty. Each Party hereby warrants and guarantees the
performance of any and all rights and obligations of this Agreement by its
Affiliates and Sublicensees and permitted Third Party subcontractors.

15.11 Force Majeure. Neither Party shall lose any rights hereunder or be liable
to the other Party for damages or losses (except for payment obligations) on
account of failure of performance by the defaulting Party if the failure is
occasioned by war, strike, fire, Act of God, earthquake, flood, lockout,
embargo, governmental acts or orders or restrictions, failure of suppliers, or
any other

 

Page 64

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

reason where failure to perform is beyond the reasonable control and not caused
by the negligence, intentional conduct or misconduct of the non-performing Party
and such Party has exerted all reasonable efforts to avoid or remedy such force
majeure; provided, however, that in no event shall a Party be required to settle
any labor dispute or disturbance.

15.12 Complete Agreement. This Agreement with its Exhibits, constitutes the
entire agreement, both written and oral, between the Parties with respect to the
subject matter hereof, and all prior agreements respecting the subject matter
hereof, either written or oral, express or implied, shall be abrogated,
canceled, and are null and void and of no effect. No amendment or change hereof
or addition hereto shall be effective or binding on either of the Parties hereto
unless reduced to writing and executed by the respective duly authorized
representatives of CRL and Trimeris.

15.13 Consultation. Except as otherwise provided in this Agreement, if an
unresolved dispute arises out of or relates to this Agreement, or the breach
thereof, either Party may refer such dispute to the Chief Executive Officer of
Trimeris and the Chief Executive Officer of CRL, who shall meet in person or by
telephone within forty-five (45) days after such referral to attempt in good
faith to resolve such dispute.

15.14 Headings. The captions to the several Sections hereof are not a part of
this Agreement, but are included merely for convenience of reference and shall
not affect its meaning or interpretation.

15.15 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original and all of which together shall be
deemed to be one and the same agreement.

REST OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE TO FOLLOW

 

Page 65

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

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed by their authorized representatives and delivered in duplicate
originals as of the Effective Date.

 

TRIMERIS, INC.

   

CHEMBRIDGE RESEARCH LABORATORIES, INC.

By:   /s/ Steven D. Skolsky     By:   /s/ Eugene Vaisberg Name: Steven D.
Skolsky     Name: Eugene Vaisberg Title: CEO     Title: CEO

 

Page 66

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

APPENDIX A

INITIAL RESEARCH PLAN

1. gp120 TARGET

The objective of the Stage I Research for the gp120 Target is to identify potent
and selective inhibitors of HIV fusion/entry as Lead Compounds.

[**]

 

Page 67

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

APPENDIX B

PRESS RELEASE

(To be attached)

 

Page 68