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                                                                   EXHIBIT 10.01

         CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

                                LICENSE AGREEMENT

         THIS LICENSE AGREEMENT (the "Agreement") is effective as of October 1,
1998 (the "Effective Date"), between OraVax, Inc., a corporation organized and
existing under the laws of the State of Delaware, as Licensor ("Licensor") and
Pasteur Merieux Serums & Vaccins S.A., a corporation organized under the laws of
France, as Licensee ("Licensee").

                              W I T N E S S E T H:

         WHEREAS, Licensor possesses certain proprietary rights and know-how
relating to the creation of [**];

         WHEREAS, Licensee desires to obtain from Licensor, and Licensor desires
to grant to Licensee, a license under Licensor's proprietary rights and know-how
to research, develop, manufacture, market, sell and distribute Licensed Products
(as defined below);

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

                                    ARTICLE 1

                                   DEFINITIONS

"Affiliate" shall mean, with respect to any Person, (i) any other Person of
which securities or other ownership interests representing fifty percent (50%)
or more of the voting interests of such other Person are, at the time such
determination is made, owned, Controlled or held directly or indirectly, by such
Person, or (ii) any other Person which, at the time such determination is being
made, is Controlling, Controlled by or under common Control with, such Person.
For the purposes hereof, "Control," whether used as a noun or verb, refers to
the possession directly or indirectly, of the power to direct, or cause the
direction of, the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

"Agency" shall mean any supranational, national, regional, state or local
government regulatory authority in the Territory responsible for granting
approvals for the manufacture or sale of Licensed Products.
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         CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

"Development Costs" shall mean the costs incurred by Licensor in connection with
the performance of Development Work pursuant to the Research and Development
Program, as calculated in accordance with Appendix B hereto.

"Dengue Vaccine" shall mean a vaccine either therapeutically or prophylactically
active against dengue viruses that makes use of, or is based upon, the
Technology, as described in Appendix A.

"Development Work" shall mean the research and development activities to be
performed by Licensor pursuant to Appendix C hereto.

"Field of Use" shall mean the development and commercialization of Dengue
Vaccines.

"Improvements" shall mean any improvements to the Dengue Vaccine which are first
conceived, discovered or actually reduced to practice during and after the
performance of the Development Work under the Research and Development Program.

"Intellectual Property" shall mean, collectively, Inventions and Improvements.

"Inventions" shall mean any inventions, ideas, discoveries which are first
conceived, discovered or actually reduced to practice before, during and after
the performance of the Development Work under the Research and Development
Program and are related to the Dengue Vaccine.

"JEV Vaccine" shall mean a vaccine either therapeutically or prophylactically
active against Japanese encephalitis viruses that makes use of Licensor's
ChimeriVax(TM) technology for the creation of [**].

"Legal Requirements" shall mean all laws, statutes, ordinances, codes, rules,
regulations, published standards, permits, judgments, decrees, writs,
injunctions, rulings, orders and other requirements of all Public Authorities.

"Licensed Know-How" shall mean any biological materials, and any research and
development information, inventions, know-how, pre-clinical, clinical and other
technical data, in each case which are not generally known or available, which
are owned, licensed or otherwise held by Licensor with the right to license or
sublicense the same to Licensee as of the date hereof or at any time hereafter
and which are necessary or useful for the making, using or selling of Licensed
Products as provided in this Agreement.


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"Licensed Product(s)" shall mean any product within the Field of Use.

"Major EC Country" shall mean France, Germany, Italy or the United Kingdom.

"Net Sales" shall mean the gross invoice price to Third Parties of any Licensed
Product, less: (i) retroactive price reductions and rebates customary to the
trade or required by law, credits for returns and allowances, all to the extent
actually allowed, (ii) sales or other excise taxes or duties imposed upon and
paid by Licensee, or any of its Affiliates or Permitted Sublicensees with
respect to such sales, and (iii) transportation charges and insurance for
transportation to the extent separately invoiced or separately reported on the
invoice and paid by the Third Party. Notwithstanding the foregoing, Net Sales
shall not include sales between or among Affiliates for resale by an Affiliate.

"Patent Rights" shall mean:

         (a) all patents and patent applications owned or controlled by
Licensor, or licensed to Licensor with rights to grant sublicenses thereunder,
anywhere in the world as of the date hereof or at any time hereafter relating to
the Field of Use and which are (i) listed on Schedule A, (ii) issued, assigned
or licensed to Licensor at any time hereafter and that are necessary or useful
for the making, using or selling of Licensed Products as provided in this
Agreement, or (iii) based on any Inventions that are necessary or useful for the
making, using or selling of Licensed Products as provided in this Agreement, and

         (b) any improvement patents, reissues, confirmations, renewals,
extensions, counterparts, divisions, continuations, continuations-in-part or
patent-of-addition issued, assigned or licensed to Licensor of or relating to
the patents or patent applications described in clause (a) hereof.

"Permitted Sublicensee" shall mean any Affiliate of Licensee, and any other
Person approved in writing by Licensor prior to the granting of the applicable
sublicense.

"Person" shall mean any natural person, corporation, firm, business trust, joint
venture, association, organization, company, partnership or other business
entity, or any government, or any agency or political subdivision thereof.

"Public Authority" shall mean any supranational, national, regional, state or
local government, court, governmental agency, authority, board, bureau,
instrumentality or regulatory body.

"Research and Development Program" shall have the meaning set forth in Section
4.1(a).


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"Technology" shall mean the Patent Rights and Licensed Know-How.

"Territory" shall mean all countries of the world.

"Third Party" shall mean any Person which is not a party or an Affiliate of a
party hereto.

"Valid Claim" shall mean a claim of an issued and unexpired patent included
within the Patent Rights that has not been held unenforceable or invalid by a
court or other governmental agency of competent jurisdiction in a final
adjudication from which no appeal can be taken and that has not been
specifically admitted by the Licensor to be invalid or unenforceable through
statements or actions that legally bind the Licensor to such admission.

                                    ARTICLE 2

                                 GRANT OF RIGHTS

         2.1 License. Subject to the terms and conditions of this Agreement,
Licensor hereby grants to Licensee a right and license, with the right to grant
sublicenses, under the Technology to research, have researched, make, have made,
use, sell, distribute, import and export Licensed Products in the Territory,
which right and license shall be exclusive even as to Licensor; provided that
Licensor shall retain the right to research, have researched, make, have made
and use Licensed Products for all purposes unrelated to the commercialization of
Licensed Products.

         2.2 Exclusivity. In order to assure Licensee of the exclusive rights
under the Technology to commercialize Licensed Products granted in Section 2.1
hereof, Licensor shall not itself sell, distribute, import or export Licensed
Products in the Territory or grant to a Third Party any rights or licenses to
research, have researched, make, have made, use, sell, distribute, import or
export Licensed Products in the Territory, except as provided by this Agreement
and for so long as the rights and licenses granted in Section 2.1 remain in
force pursuant to this Agreement.

         2.3 Sublicenses.

         (a) The rights granted under Section 2.1 may be sublicensed by Licensee
(or any Permitted Sublicensee) to any Permitted Sublicensee. In the event that
Licensee (or any Permitted Sublicensee) desires to sublicense any rights granted
under Section 2.1 to any Third Party, Licensee shall furnish to Licensor for its
approval, which shall not be unreasonably withheld or delayed, a prior draft of
the proposed sublicense agreement, which shall be on substantially the same
terms (other than Section 3.3) as this Agreement and (y) provide Licensor with
an executed copy of any such approved sublicense agreement. In the event that
Licensee (or any Permitted


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Sublicensee) desires to amend any sublicense agreement theretofore approved by
Licensor, such amendment shall similarly require Licensor's prior approval,
which similarly shall not be unreasonably withheld or delayed.

         (b) Each sublicense agreement concluded by Licensee hereunder shall
include a requirement that the Permitted Sublicensee maintain records and permit
inspection on terms similar to those set forth in Section 10.4 of this
Agreement. At Licensor's request and subject to the terms of the applicable
sublicense agreement, Licensee shall arrange for an independent public
accountant selected by Licensor to inspect the records of its Permitted
Sublicensee(s) for the purpose of verifying payments due to Licensor and shall
cause such accountant to report the results thereof to Licensor.

         (c) Each sublicense agreement concluded by Licensee hereunder will
include indemnification provisions similar to those set forth in Section 8.3
hereof naming Licensee and Licensor (and their respective officers, directors,
employees and agents) as indemnified parties.

         (d) All sublicenses granted hereunder shall terminate upon termination
of this Agreement; provided that upon expiration of the Term pursuant to Section
5.1 hereof (prior to any termination hereunder), Licensee (or the applicable
Permitted Sublicensee) shall have a fully paid-up, royalty-free, non-cancelable
license, subject (in the case of Licensee's Permitted Sublicensees) to the terms
of the applicable sublicense and the payment by Licensee of amounts accrued
prior to such expiration.

         2.5 Disclosure of Technology. Upon the execution of this Agreement, and
periodically thereafter as such information becomes available to Licensor,
Licensor shall provide to Licensee copies of all information and materials in
tangible form related to the Technology that are reasonably necessary to or
useful in the researching, making, using, selling, distributing, importing or
exporting of Licensed Products. Without limiting the generality of the
foregoing, if at any time Licensee elects to manufacture a Licensed Product,
Licensor shall, upon notice from Licensee, transfer Licensed Know-How relating
to manufacturing of the Licensed Product to Licensee, together with seed stock
or other biological materials within the definition of Licensed Know-How.

         2.6 JEV Vaccine. It is understood and anticipated by both parties that
the development of JEV Vaccine will precede the development of Dengue Vaccine,
and that due to certain similarities in these products, the regulatory strategy
employed by Licensor (or its sublicensees) for JEV Vaccine will impact the
regulatory strategy for Dengue Vaccine. Licensor therefore agrees for so long as
Licensee funds the Development Costs for the JEV Vaccine pursuant to this
Agreement to keep Licensee informed of its actions and strategies relating to
regulatory approval of JEV Vaccine through a Phase I clinical study in adults
and to provide, or cause to be provided, to


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AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

Licensee an opportunity to comment upon such actions and strategies as they may
relate to the development of the technology underlying both JEV Vaccine and
Dengue Vaccine. Licensor shall keep Licensee informed of safety issues beyond
such Phase I clinical study in adults. Licensor and Licensee agree to enter into
good faith negotiations for a collaboration on the development of a JEV Vaccine.
In consideration of the agreement of Licensee to fund the Development Costs
relating to the development of JEV Vaccine, Licensor agrees not to negotiate or
enter into any agreement (whether or not binding) with a Third Party (other than
[**], with whom Licensor shall be free to negotiate and execute such an
agreement, provided that (i) any agreement so executed grants only rights that
are limited to the territory of Korea, (ii) if any entity established by
Licensor for the purpose of conducting the development work for JEV Vaccine in
Korea pursuant to any agreement so executed seeks a marketing partner for JEV
Vaccine in Korea, then such entity shall provide to Licensee an opportunity to
negotiate for such relationship commensurate with any such opportunity provided
to Third Parties and (iii) any agreement so executed provides that if Licensor's
Korean partners market JEV Vaccine outside of Korea, Licensee shall have a
remedy for such breach directly against Licensor) for the field of JEV Vaccine
[**] without the prior written consent of Licensee. This right of first
negotiation may be terminated by mutual agreement of Licensor and Licensee and
shall automatically terminate on [**].

                                    ARTICLE 3

                                  COMPENSATION

         3.1 Compensation for Past Research and Development Expenses Relating to
Licensor's Dengue Vaccine Know-How. Licensee shall pay to Licensor compensation
of [**].

         3.2 Milestone Fees. Licensee shall pay to Licensor the amounts
specified below within [**] following the accomplishment of the corresponding
events specified below (each, a "Milestone"):

                  (i)      [**].

                  (ii)     [**].

                  (iii)    [**].

                  (iv)     [**].


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         CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

                  (v)      [**].

                  (vi)     [**].

                  (vii)    [**].

         The foregoing amounts shall be paid by Licensee (on behalf of itself,
         its Affiliates and Permitted Sublicensees) only once.

         3.3 Royalties.

         (a) Royalty Rates.

                  (i) Licensee shall pay Licensor a royalty of [**] (the "Patent
         Royalty") on quarterly Net Sales of Licensed Product by Licensee, its
         Affiliates and Permitted Sublicensees in countries where at least one
         Valid Claim exists during all periods of such existence. Such royalty
         shall be payable on a country-by-country basis until the expiration of
         the last remaining Valid Claim in any such country.

                  (ii) In the case of countries in which the Patent Rights
         consist solely of patent applications, Licensee shall pay Licensor the
         Patent Royalty on quarterly Net Sales of Licensed Product by Licensee,
         its Affiliates and Permitted Sublicensees in such countries until the
         first to occur of [**], Licensee shall pay Licensor a royalty of [**]
         (the "Know-How Royalty") on quarterly Net Sales of Licensed Product by
         Licensee, its Affiliates and Permitted Sublicensees in such country for
         [**]; provided, however, that upon issuance of a Valid Claim in such
         country at any time thereafter, Licensee shall pay Licensor in
         accordance with subsection (i) above.

                  (iii) Licensee shall pay Licensor the Know-How Royalty on
         quarterly Net Sales of Licensed Product by Licensee, its Affiliates and
         Permitted Sublicensees, in countries where no Patent Rights exist and
         in countries where the only existing Patent Rights have, for a period
         of [**] or longer, been patent applications, for a period of [**] from
         the date of first commercial sale of Licensed Product in any such
         country; provided, however, that if at any time thereafter Patent
         Rights come to exist in any such country, Licensee shall pay royalties
         to Licensor in accordance with subsection (i) or (ii) above as
         appropriate. In no event shall the Know-How Royalty be payable in
         respect of any Net Sales upon which the Patent Royalty is payable.


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         CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

         (b) Reduction for Third Party Royalties. In the event that Licensee,
its Affiliate(s) or Permitted Sublicensee(s), in its reasonable judgment,
determines it to be necessary or desirable to license in Third Party patents or
technology relating to the Licensed Product and is required to pay royalties to
one or more Third Parties in respect of such patents or technology (that in the
absence of such royalty payments would be infringed by the researching, making,
using, selling, distributing, importing or exporting of Dengue Vaccines) in
order to enable Licensee, such Affiliate or such Permitted Sublicensee to
realize Net Sales, then the royalties otherwise payable to Licensor in respect
of such Net Sales shall be reduced by [**] the royalties paid to such Third
Parties; provided, however, that in no event shall such reduction exceed [**] of
the royalties on such Net Sales otherwise due to Licensor.

         (c) Right to Cure Certain Third Party Obligations; Offset. Licensee
acknowledges that the patent applications set forth on Schedule A hereto are
co-owned by Licensor with St. Louis University, in accordance with the agreement
attached hereto as Schedule B. In the event that Licensor defaults on its
obligations under the agreement attached hereto as Schedule B, Licensor shall
promptly notify Licensee of such default and shall, at Licensee's request,
cooperate with Licensee to enable Licensee to cure such breach on behalf of
Licensor. Licensee shall be entitled to deduct from the royalties otherwise
payable to Licensor in respect of Net Sales hereunder all royalties and other
expenses incurred under this Section 3.3(c) that are reasonably necessary to
ensure that Licensee's rights under this Agreement are not compromised by such
default.

         3.4 Funding of Research and Development Program. Licensee shall
reimburse Licensor for the Development Costs, including the development program
costs for the JEV Vaccine development program to be carried out by Licensor
through the completion of a Phase I clinical study in adults, in accordance with
Section 4.2 below.

         3.5 Single Royalty; Non-Royalty Sales. It is understood that in no
event shall more than one royalty be payable under Section 3.3 with respect to a
particular unit of Licensed Product. No royalty shall be payable under this
Article 3 with respect to sales of Licensed Products among Licensee, its
Affiliates, Permitted Sublicensees and their Affiliates (provided that such
sales are for the purpose of facilitating resales to Third Parties), but a
royalty shall be due upon the subsequent sale of the Licensed Product to a Third
Party. No royalty shall be payable for (i) Licensed Product used in clinical
trials, or (ii) Licensed Product used by Licensee, its Affiliates or Permitted
Sublicensees for research, or (iii) customary quantities of Licensed Product
distributed as free samples.


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AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

                                    ARTICLE 4

                            RESEARCH AND DEVELOPMENT

         4.1 Research and Development Program.

         (a) General. Licensor agrees to perform or have performed for the
Licensee the Development Work set forth in the Research and Development Program
attached hereto as Appendix C (the "Research and Development Program"), and
Licensee hereby agrees to fund the Research and Development Program in
accordance with the terms and conditions set forth below.

         (b) Subcontracting. Licensor may subcontract any or all of its
obligations under this Article 4, subject to obtaining the prior written consent
of Licensee, which consent shall not be unreasonably withheld. In the event that
Licensor desires to subcontract any material part of its obligations under this
Article 4 to any Third Party, Licensor shall (x) furnish to Licensee for its
approval a prior draft of the proposed subcontract agreement, which shall be in
form and substance satisfactory to Licensee, (y) provide Licensee with an
executed copy of any such approved subcontract agreement, and (z) keep Licensee
informed of the status of any such subcontracting arrangements. In the event
that Licensor desires to amend any subcontract agreement theretofore approved by
Licensee, such amendment shall similarly require Licensee's prior approval. No
such subcontract shall relieve Licensor of its obligations under this Agreement.

         (c) Research and Development Committee, Principal Investigator. The
Development Work shall be performed under the supervision and direction of the
Principal Investigator who shall be an employee of Licensor (initially,
Licensor's Vice President of Research) and shall be chosen by the Research and
Development Committee. The Research and Development Committee shall consist of
three individuals nominated by Licensor and three individuals nominated by
Licensee. The Research and Development Committee shall review the progress of
the Development Work and will approve or reject material changes to the
Development Work plan. The Research and Development Committee can change its
number of members (maintaining equal representation of both Licensee and
Licensor) and its membership upon the decision of a majority of its members. The
Research and Development Committee shall survive the term of the Research and
Development Program in an advisory role until a time mutually agreeable to
Licensee and Licensor or, in the absence of mutual agreement, until [**]
following product licensure of a Dengue Vaccine in the United States or a Major
EC Country. The members of the Research and Development Committee shall be
senior executives from the various


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AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

research and development disciplines of Licensor and Licensee. The initial
members of the Research and Development Committee are indicated in Appendix D
hereto.

         (d) Replacement of Principal Investigator. In the event that the
Principal Investigator is unwilling or unable to perform his or her duties
hereunder, Licensor shall promptly appoint a successor mutually agreeable to the
parties.

         (e) Reports. The Principal Investigator shall provide written progress
reports, summarizing in reasonable detail the current status and progress of the
Research and Development Program (i) within thirty (30) days after the end of
each calendar quarter and (ii) as soon as practicable whenever, in the Principal
Investigator's judgment, an Invention has been created or reduced to practice.

         (f) Visitation. Duly authorized representatives of Licensee shall have
the right at reasonable times and upon reasonable notice to visit the facilities
where any Development Work is being performed in order to monitor progress of
the Development Work.

         4.2 Funding.

         (a) General. Licensor shall provide (or cause to be provided) to
Licensee, prior to the beginning of each quarter, an invoice setting forth the
projected Development Costs to be incurred for such quarter in accordance with
the Research and Development Program. Licensee shall pay such invoice within
[**] of receipt thereof to the extent that such Development Costs are included
in Appendix B hereto (as modified from time to time by the Research and
Development Committee). Licensor hereby covenants and agrees that any funding
provided to Licensor under this Section 4.2 shall be used as contemplated by the
Research and Development Program. Services provided by Licensor at Licensee's
request that are outside the scope of the Research and Development Program shall
be separately invoiced by Licensor and separately funded by Licensee on the
basis for determining costs set forth in Appendix B hereto.

         (b) Reconciliation. Within [**] after the end of each quarter, Licensor
shall provide (or cause to be provided) to Licensee a statement reconciling the
projected Development Costs previously paid by Licensee for such quarter against
the actual Development Costs incurred by Licensor for such quarter. In the event
that such reconciliation demonstrates that such previous payment exceeded such
actual Development Costs, Licensee shall be entitled to recoup the excess from
Licensor. In the event that such reconciliation demonstrates that such actual
Development Costs exceeded such previous payment, Licensor shall be entitled to
reimbursement of the


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         CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

excess from Licensee. At the option of the party to whom any such adjustment is
owed, such excess shall be paid to such party by the other party within [**]
after such statement is provided or an appropriate adjustment shall be made to
the next invoice provided to Licensee setting forth projected Development Costs
(in which case such adjustment shall be subtracted from or added to actual
Development Costs, as appropriate, for purposes of the subsequent reconciliation
relating to the quarter to which such invoice relates).

         (c) Cost of Components. Any component that, by mutual agreement of
Licensee and Licensor, is supplied by Licensee to Licensor in connection with
the Development Work to performed hereunder shall be supplied to Licensor at no
cost.

         4.3 Sublicense and License.

         (a) Licensee hereby grants to Licensor a fully paid, non-exclusive,
royalty-free sublicense, with the right to grant sublicenses (subject to Section
4.1(b) hereof), under the rights and licenses granted pursuant to Section 2.1
above to research, develop, make and have made the Licensed Products in the
Territory solely for the purposes of performing the Development Work pursuant to
the Research and Development Program.

         (b) Licensee hereby grants to Licensor a fully paid, non-exclusive,
royalty-free license, with the right to grant sublicenses (subject to Section
4.1(b) hereof), under the Intellectual Property owned by Licensee as specified
in Sections 4.4(d) and 4.4(e) hereof to research, develop, make and have made
the Licensed Products in the Territory solely for the purposes of performing the
Development Work pursuant to the Research and Development Program.

         4.4 Ownership of Inventions and Improvements.

         (a) All Intellectual Property developed solely by Licensor pursuant to
the Research and Development Program shall be owned solely by Licensor, and such
Intellectual Property shall be deemed to be included in the Technology.

         (b) All Intellectual Property developed jointly by Licensor and
Licensee pursuant to the Research and Development Program and solely relating to
Dengue Vaccine shall be owned jointly by the parties and Licensee shall have an
exclusive right and license to Licensor's interest in such Intellectual Property
pursuant to Section 2.1 above.


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         (c) All Intellectual Property developed jointly by Licensor and
Licensee pursuant to the Research and Development Program and not solely
relating to Dengue Vaccine shall be owned jointly by the parties and both
parties shall have the right to use and exploit such Intellectual Property
freely without accounting to one another for such use and exploitation.

         (d) All Intellectual Property developed solely by Licensee pursuant to
the Research and Development Program and solely relating to Dengue Vaccine shall
be owned solely by Licensee.

         (e) All Intellectual Property developed solely by Licensee and which is
not solely related to Dengue Vaccine shall be owned by Licensee. The parties
shall, at Licensor's request, enter into good faith negotiations for a grant of
licenses to such Intellectual Property from Licensee to Licensor for use outside
of the Field of Use.

         (f) Licensor agrees to include provisions assuring Licensee's rights
under this Section 4.4 in every sublicense granted pursuant to Section 4.3
above.

         4.5 Term of Research and Development Program. The term of the Research
and Development Program shall run from [**]. Upon expiration of such term, the
parties may in good faith discuss extending their collaborative relationship to
later stages of development of JEV Vaccine and Dengue Vaccine.

         4.6 Dispute Resolution.

         (a) The parties agree to use their best efforts to resolve amicably any
deadlock between the parties or their respective representatives, with respect
to any scientific matter and will not take any action inconsistent therewith.
The resolution of any deadlock pursuant to this Section 4.6 shall be binding on
the parties for all purposes.

         (b) In the event that the parties or their respective representatives
are deadlocked concerning any scientific matter, the parties shall thereupon
consult with each other in good faith on a regular basis (including at least one
meeting between the Chief Scientific Officer of Licensor and the Chief
Scientific Officer of Licensee for their consideration and resolution, and if no
decision is then reached, at least one meeting between the Chief Executive
Officer of Licensor and the Chief Executive Officer of Licensee) to attempt to
resolve such matters as promptly as practicable and each party hereby agrees to
use its best efforts to schedule such meetings within sixty (60) days after the
occurrence of the deadlock.


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         (c) In the event that, following the aforementioned consultations, the
parties remain deadlocked regarding any scientific matter, such deadlock shall
be referred, at the election of either party and by notice in writing to the
other party, to a panel of scientific mediators as provided in this paragraph
(c) ("Scientific Mediation"). In any Scientific Mediation, there shall be three
scientific experts in the pharmaceuticals area (without regard to nationality)
who shall act as the mediators (the "Scientific Mediators"). The party
requesting Scientific Mediation shall appoint one individual to serve as one of
the Scientific Mediators, and shall notify the other party of such appointment
in the aforementioned notice. Within fifteen (15) days after receipt of such
notice, the other party shall appoint one individual to serve as a Scientific
Mediator, but if the other party shall fail to make such appointment within such
period, such party may request the Swedish Arbitration Committee of the ICC to
make such appointment. The two Scientific Mediators shall, within fifteen (15)
days of the appointment of the second Scientific Mediator appoint a third
individual to serve as a Scientific Mediator and chairperson of the mediation
board, but if the two Scientific Mediators shall fail to make such appointment
within such period, then such party or the other party may request the Swedish
Arbitration Committee of the ICC to make such appointment. No Confidential
Information shall be disclosed to such Scientific Mediators unless and until
each such Scientific Mediator has entered into a confidentiality agreement, in
form and substance satisfactory to both parties. The Scientific Mediators shall
be advised of the positions taken by each of the parties to such mediation and
shall work with them in an effort to resolve the scientific deadlock within
sixty (60) days after the appointment of the third Scientific Mediator. If the
scientific deadlock is not resolved within such period, there shall be no
further Scientific Mediation, but the Chief Executive Officer of Licensor and
the Chief Executive Officer of Licensee shall consult one more time in an effort
to resolve the deadlock.

                                    ARTICLE 5

                              TERM AND TERMINATION

         5.1 Term. This Agreement shall become effective as of the Effective
Date and, subject to the other provisions of this Article 5, shall continue in
full force and effect on a country-by-country basis until the later of [**] (the
"Term"). Upon the expiration of the Term on a country-by-country basis, Licensee
will have a fully paid, royalty-free, freely sublicensable license to make, have
made, use, sell, distribute, import and export Licensed Products in each such
country, and Licensee shall have no further payment obligation to Licensor,
other than for payments that accrue prior to such expiration, for milestone
payments that may accrue after such expiration and for Development Costs that
may be incurred after such expiration.


                                       13
<PAGE>   14
         CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

         5.2 Termination for Breach. In the event of a material breach of this
Agreement (including the breach of a representation or warranty), which breach
is not cured within sixty (60) days after written notice is given by the
non-breaching party to the breaching party specifying the breach, the
non-breaching party, in addition to any other remedy which it may have, shall be
entitled to terminate this Agreement.

         5.3 Optional Termination by Licensee. Licensee may terminate this
Agreement at any time by giving Licensor at least [**] prior written notice.

         5.4 Termination Standstill. Notwithstanding anything to the contrary
contained herein, Licensee may not terminate this Agreement for any reason
before the earlier of [**].

         5.5 Rights on Termination.

         (a) In the event that this Agreement is terminated pursuant to Section
5.2 due to a material breach by Licensor, (i) the rights and licenses granted to
Licensee in Section 2.1 hereof shall remain in effect, subject to Licensee's
payment of [**] of the royalties and [**] of the milestone payments that that
would otherwise accrue after such termination, (ii) the rights and licenses
granted to Licensor in Section 4.3 shall terminate, (iii) subject to Article 7
hereof, any Confidential Information provided to Licensor in tangible form shall
be promptly returned to Licensee or destroyed, at Licensee's option and (iv)
Licensee shall have the rights set forth in Section 8.3 in respect of such
breach.

         (b) In the event that this Agreement is terminated pursuant to Section
5.2 due to a material breach by Licensee, (i) all licenses granted hereunder,
except the license granted to Licensor pursuant to Section 4.3(b), shall
terminate, (ii) the license granted to Licensor pursuant to Section 4.3(b) shall
be [**], (iii) subject to Article 7 hereof, any Confidential Information and
Licensed Know-How provided to Licensee in tangible form shall be promptly
returned to Licensor or destroyed, at Licensor's option, and (iv) Licensor shall
have the rights set forth in Section 8.3 in respect of such breach.

         (c) In the event that this Agreement is terminated pursuant to Section
5.3 at Licensee's option, (i) all licenses granted hereunder, except the license
granted to Licensor pursuant to Section 4.3(b), shall terminate, (ii) the
license granted to Licensor pursuant to Section 4.3(b) shall be [**], (iii)
subject to Article 7 hereof, any Confidential Information and Licensed Know-How
provided to Licensee in tangible


                                       14
<PAGE>   15
         CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

form shall be promptly returned to Licensor or destroyed, at Licensor's option,
and (iv) Licensor and Licensee shall negotiate in good faith a percentage
royalty to be paid by Licensor to Licensee, based upon the commercialization of
Dengue Vaccine subsequently undertaken by Licensor, that compensates Licensee
for Licensor's exploitation of Intellectual Property developed during the course
of the Research and Development Program using Licensee's funding at a level
commensurate with the level of royalties Licensor pays to Third Parties in
arm's-length transactions for licenses of intellectual property with similar
commercial value.

         (d) In the event that the Research and Development Program is
terminated by Licensee prior to the completion of the term set forth in Section
4.5 above for any reason, Licensee shall, in addition to any other payments due
hereunder, make a payment equal to the [**]. Also in the event of such
termination, Licensor shall, and shall cause its employees, agents and
subcontractors (including, without limitation, the Principal Investigator)
performing any Development Work to, wind up as expeditiously as possible all
Development Work that is in progress at the date of such termination. Following
such termination and winding up, Licensor shall submit to Licensee a final
invoice setting forth the [**].

         (e) In the event Licensee terminates this Agreement, all rights to
Intellectual Property owned jointly pursuant to Section 4.4(c) shall remain the
property of both Licensor and Licensee with divided control and the parties
shall enter into good faith negotiations for the grant of an exclusive right and
license to Licensee's interest in such Intellectual Property from Licensee to
Licensor. In the event of Licensee's termination of this Agreement, the parties
shall also enter into good faith negotiations for the grant of a license to
Intellectual Property owned by Licensee pursuant to Section 4.4(d) from Licensee
to Licensor.

         (f) Articles 7 and 11, and Sections 2.3, 5.1, 5.5, 5.6, 8.3, 10.3 and
10.4, shall survive the expiration and any termination of this Agreement. Except
as otherwise provided in this Section 5.5(f), all rights and obligations of the
parties under this Agreement shall terminate upon the expiration or termination
of this Agreement.

         (g) 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.

         5.6 In the event that Licensee terminates this Agreement for any
reason, and Licensee decides to continue the development of a dengue vaccine
other than the Dengue Vaccine, Licensee shall in good faith, but with no legal
obligation, consider maintaining a collaborative relationship with Licensor
relating to such development.


                                       15
<PAGE>   16
         5.7 Subject to applicable law to the contrary, Licensee or Licensor may
terminate this Agreement upon written notice to the other party if the other
party makes a general assignment for the benefit of creditors, is the subject of
proceedings in voluntary or involuntary bankruptcy or has a receiver or trustee
appointed for substantially all of its property; provided that in the case of an
involuntary bankruptcy proceeding such right to terminate shall only become
effective if the other party consents thereto or such proceeding is not
dismissed within sixty (60) days after the filing thereof. Each of the parties
hereto acknowledges and agrees, subject to applicable law to the contrary, that
this Agreement (i) constitutes a license of Intellectual Property (as such term
is defined in the United States Bankruptcy Code, as amended (the "Code")), and
(ii) is an executory contract, with significant obligations to be performed by
each party hereto. The parties agree that Licensee may fully exercise all of its
rights and elections under the Code, if any, including, without limitation,
those set forth in Section 365(n) of the Code. The parties further agree that,
in the event that Licensee retains its rights as a licensee under the Code
pursuant to such an exercise, Licensee shall be entitled to complete access to
any technology licensed to it hereunder and all embodiments of such technology.
Subject to applicable law to the contrary, such embodiments of the technology
shall be delivered to Licensee not later than (a) the commencement of bankruptcy
proceedings against Licensor, unless Licensor elects to perform its obligations
under this Agreement, or (b) if not delivered under (a) above, upon the
rejection of this Agreement by or on behalf of Licensor.

                                    ARTICLE 6

                            PATENTS AND INFRINGEMENTS

         6.1 Pursuit and Maintenance of Patent Rights. Licensor shall, at its
own expense, file, prosecute and maintain Patent Rights. Licensor agrees to keep
Licensee informed as to the status of the Patent Rights and shall provide
Licensee with copies of all filings and correspondence of a substantive nature
with respect to patents or patent applications relating to the Patent Rights to
be made or sent to the United States Patent and Trademark Office or its
counterpart in any country of the Territory and copies of all correspondence of
a substantive nature that Licensor receives from such Persons with respect to
the Patent Rights. In the event that Licensor chooses not to prosecute a patent
in the Territory in the case of certain Intellectual Property or chooses not to
prosecute a patent in a certain country in the Territory that is based upon the
same patentable subject matter upon which Patent Rights are based, then Licensee
shall be entitled to prosecute such patent and Licensor shall reasonably
cooperate with Licensee in such prosecution; provided however that the
prosecution by Licensee of any patent pursuant to this Section shall not create
any ownership interest in such Intellectual Property or in such patentable
subject matter by Licensee that Licensee would not otherwise have hereunder.


                                       16
<PAGE>   17
         6.2 Notice of Infringement. Each party shall promptly notify the other
of any conflicting use or any act of infringement or appropriation of any Patent
Right by unauthorized Persons which comes to its attention.

         6.3 Enforcement and Defense. Upon becoming aware of a conflicting use
or an act of infringement, and communicating about the same pursuant to Section
6.2 above, Licensee shall discuss with Licensor the nature of and circumstances
surrounding such conflicting use or act of infringement. Subject to the consent
of Licensor, which consent shall not be unreasonably withheld, Licensee shall
thereafter, at its own expense, have the right but not the obligation to
initiate actions and take steps relating to such conflicting use or act of
infringement. Licensee may settle any dispute with a Third Party regarding such
conflicting use or act of infringement; provided that Licensee shall not have
the right to settle, compromise or take any action in any dispute which
diminishes, limits or inhibits the scope, validity or enforceability of the
Patent Rights without the express written consent of Licensor. In the event that
Licensee exercises its rights under this Section 6.3, Licensee agrees to keep
Licensor fully informed of all developments in connection with any settlements
and negotiations and to consult with Licensor prior to making any final
settlement, consent judgment or other voluntary disposition of the matter. If
Licensee chooses not to take or continue any action or step relating to such
conflicting use or act of infringement, Licensor shall have the right to engage
in negotiations and proceedings relating to such conflicting use or act of
infringement solely at its own expense; provided that it keeps Licensee fully
informed of the progress of such negotiations and proceedings and consults with
Licensee prior to making any final settlement, consent judgment or other
voluntary disposition of the matter. Each party agrees to cooperate with the
other to the fullest extent possible with respect to any negotiations or
proceedings under this Section 6.3.

         6.4 Equitable Division of Recoveries by Licensee. In the event that
Licensee elects to initiate actions or take steps relating to a conflicting use
or act of infringement pursuant to Section 6.3 above, and Licensee is thereby
able to recover from a Third Party by settlement or otherwise any damages or
other compensation in respect of such conflicting use or act of infringement,
such damages and other compensation shall be divided equitably between Licensee
and Licensor in a manner commensurate with the division of economic benefits
relating to sales of Licensed Products contemplated by this Agreement.

                                    ARTICLE 7

                                 CONFIDENTIALITY

         7.1 Except as expressly set forth in this Article 7, each party shall,
and shall cause its Affiliates and its and their respective officers, directors,
employees, agents


                                       17
<PAGE>   18
and subcontractors (collectively, "Representatives") to, keep confidential any
and all technical, commercial, scientific and other proprietary data, processes,
documents or other information (whether in oral, written or electronic form) or
physical object (including, without limitation, intellectual property, marketing
data, agreements between any party and a Third Party, license applications, and
business plans and projections of any party) acquired from the other party, its
Affiliates or any of their respective Representatives in respect of the
transactions contemplated by this Agreement and which relate (in the case of a
party) to the other party or any of its Affiliates or their respective
businesses or products ("Confidential Information"), and each party shall not
disclose directly or indirectly, and shall cause its respective Affiliates and
Representatives not to disclose directly or indirectly, any Confidential
Information to anyone outside such Person, such Affiliates and their respective
Representatives, except that the foregoing restriction shall not apply to any
information disclosed hereunder to any Person if such Person (the "Receiving
Person") can demonstrate that such Confidential Information:

         (a) is or hereafter becomes generally available to the trade or public
other than by reason of any breach hereof;

         (b) was already known to the Receiving Person or such Affiliate or
Representative as shown by written records;

         (c) is disclosed to the Receiving Person or such Affiliate or
Representative by a third party who has the right to disclose such information;

         (d) is developed by or on behalf of the Receiving Person or any of its
Affiliates independently, without reliance on Confidential Information received
hereunder; or

         (e) is, based on such Person's good faith judgment with the advice of
counsel, otherwise required to be disclosed in compliance with applicable Legal
Requirements by a Public Authority (and, in such case, such information shall
remain Confidential Information for all other purposes unless and until
subparagraphs (a) through (d) above otherwise apply).

         7.2 Except in furtherance of their respective rights and obligations
hereunder, each party agrees that it shall not (and shall not permit any of its
Affiliates to) at any time use any Confidential Information in the conduct of
its businesses without the prior written consent of the other party. The
obligations set forth in this Article 7 shall extend to copies, if any, of
Confidential Information made by any of the Persons referred to in Section 7.1
and to documents prepared by such Persons which embody or contain Confidential
Information, and to any electronic data files containing Confidential
Information.


                                       18
<PAGE>   19
         CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

         7.3 Each party shall deal with Confidential Information so as to
protect it from disclosure with a degree of care not less than that used by it
in dealing with its own information intended to remain exclusively within its
knowledge and shall take reasonable steps to minimize the risk of disclosure of
Confidential Information.

         7.4 The obligations set forth in this Article 7 shall survive the
expiration, termination or assignment of this Agreement for a period of [**]
thereafter.

         7.5 Within thirty (30) days after the termination of this Agreement,
any Receiving Person shall (and shall cause its Affiliates and Representatives
to), at the option of the person making disclosure (the "Disclosing Person"),
return to the Disclosing Person or destroy all Confidential Information in its
or their possession; provided, however, that the Receiving Person may, upon
notice to the Disclosing Person, retain in its legal files or in the office of
outside legal counsel one copy of any document solely for use in legal
proceedings to which such document relates and for archival purposes. Such
notice shall set forth, in reasonable detail, a list of the documents so
retained.

         7.6 Licensor agrees to use reasonable efforts to protect the
confidentiality, if applicable, of Technology that it licenses outside the Field
of Use in a manner commensurate with the manner in which such confidentiality is
protected hereunder.

                                    ARTICLE 8

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

         8.1 Representations and Warranties of Licensee.

         (a) Licensee is a corporation duly incorporated and validly existing
and (to the extent applicable) in good standing under the laws of its
jurisdiction of organization, with the corporate power to own, lease and operate
its properties and to carry on its business as now conducted.

         (b) Licensee has all necessary corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby.

         (c) The execution, delivery and performance of this Agreement by
License does not conflict with or contravene the articles or certificate of
incorporation or by-laws, regulations or partnership agreement (or other
comparable governing instruments with different names) of Licensee, nor will the
execution, delivery or performance of this Agreement conflict with or result in
a breach of, or entitle any


                                       19
<PAGE>   20
party thereto to terminate, any material agreement or instrument to which
Licensee is a party, or by which any of its assets or properties is bound.

         (d) This Agreement has been duly authorized, executed and delivered by
Licensee and constitutes a legal, valid and binding agreement of Licensee,
enforceable against Licensee in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting creditors' rights generally.

         8.2 Representations, Warranties and Covenants of Licensor.

         (a) Licensor is a corporation duly incorporated and validly existing as
a corporation and in good standing under the laws of the State of Delaware, with
the corporate power to own, lease and operate its properties and to carry on its
business as now conducted.

         (b) Licensor has all necessary corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby.

         (c) The execution, delivery and performance of this Agreement by
Licensor does not conflict with or contravene its articles or certificate of
incorporation or by-laws, nor will the execution, delivery or performance of
this Agreement conflict with or result in a breach of, or entitle any party
thereto to terminate, any material agreement or instrument to which Licensor is
a party, or by which any of its assets or properties is bound. To Licensor's
knowledge, no Third Party has any right, title or interest in or to any
Technology in the Field of Use.

         (d) This Agreement has been duly authorized, executed and delivered by
Licensor and constitutes a legal, valid and binding agreement of Licensor,
enforceable against Licensor in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting creditors' rights generally.

         (e) Licensor owns or has rights to use and exploit under licenses (and
to license or sublicense) all its rights under the Technology. There have been
no material claims made against Licensor asserting the invalidity or
unenforceability of, or with respect to the Patent Rights, the misuse of, the
Patent Rights or Licensed Know-How, nor is Licensor aware that any such claims
exist. Licensor has not received a notice of conflict of the Technology with the
asserted rights of others, or otherwise challenging its rights to use any of the
Technology. None of the rights of Licensor under the Patent Rights or Licensed
Know-How will be adversely affected by the execution, delivery or performance of
this Agreement, or the consummation of the transactions contemplated herein.


                                       20
<PAGE>   21
         CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

         (f) Licensor has not filed for protection under the United States
Bankruptcy Code, as amended (the "Code"), nor does it have any intention of
doing so. No Third Party has filed or commenced, nor to the knowledge of
Licensor has any Third Party threatened to file or commence, a proceeding under
the Code against Licensor.

         8.3 Indemnification.

         (a) Indemnity by Licensee. Licensee hereby agrees to [**].

         (b) Indemnity by Licensor. Licensor hereby agrees to [**].

         (c) Indemnification Procedures.

                  (i) Any party entitled to indemnification under paragraph (a)
         or (b) of this Section 8.3 (an "Indemnified Party") shall promptly
         notify the party potentially responsible for such indemnification (the
         "Indemnifying Party") upon becoming aware of any claim or claims
         asserted or threatened against such Indemnified Party which could give
         rise to a right of indemnification under this Agreement; provided,
         however, that the failure to give such notice shall not relieve the
         Indemnifying Party of its indemnity obligation hereunder except to the
         extent that such failure prejudices its rights hereunder.

                  (ii) the Indemnifying Party shall have the right to defend, at
         its sole cost and expense, such claim by all appropriate proceedings,
         which proceedings shall be prosecuted diligently by the Indemnifying
         Party to a final conclusion or settled at the discretion of the
         Indemnifying Party; provided, however, that the Indemnifying Party may
         not enter into any compromise or settlement unless (x) the Indemnified
         Party consents thereto, which consent shall not be unreasonably
         withheld, or (y) such compromise or settlement includes as an
         unconditional term thereof the giving by each claimant or plaintiff to
         the Indemnified Party of a release from all liability in respect of
         such claim.

                  (iii) The Indemnified Party may participate in, but not
         control, any defense or settlement of any claim by the Indemnifying
         Party pursuant to this Section 8.3 and shall bear its own costs and
         expenses with respect to such participation; provided, however, that
         the Indemnifying Party shall bear such costs and expenses if counsel
         for the Indemnifying Party shall have reasonably


                                       21
<PAGE>   22
         CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

         determined that such counsel may not properly represent both the
         Indemnifying Party and the Indemnified Party.

                  (iv) If the Indemnifying Party fails to notify the Indemnified
         Party within twenty (20) days after receipt of notice of a claim in
         accordance with Section 8.3(c)(i) hereof that it elects to defend the
         Indemnified Party pursuant to this Section 8.3(c), or if the
         Indemnifying Party elects to defend the Indemnified Party but fails to
         prosecute or settle the claim diligently, then the Indemnified Party
         shall have the right to defend, at the sole cost and expense of the
         Indemnifying Party, the claim by all appropriate proceedings, which
         proceedings shall be diligently prosecuted by the Indemnified Party to
         a final conclusion or settled; provided, however, that in no event
         shall the Indemnifying Party be required to indemnify the Indemnified
         Party for any amount paid or payable by the Indemnified Party in the
         settlement of any such claim agreed to without the consent of the
         Indemnifying Party, which shall not be unreasonably withheld.

                                    ARTICLE 9

                 DILIGENCE IN COMMERCIALIZING LICENSED PRODUCTS

         9.1 General. Licensee shall use commercially reasonable efforts to
promptly and fully research, develop, register, market and sell and to continue
to market and sell Licensed Product in each country in which Licensee reasonably
determines that there is a market potential for such Licensed Product.

         9.2 Notification. Licensee shall promptly notify Licensor in writing if
at any time Licensee ceases to promptly and fully research, develop and/or
obtain regulatory approval for and/or market and sell a Licensed Product in any
country.

         9.3 Reversion of Rights to Licensor. If Licensee fails to use
commercially reasonable efforts to promptly and fully research, develop,
register, market and sell and to continue to market and sell Licensed Product in
any country, the rights and licenses granted to Licensee with respect to such
country shall terminate, upon [**] prior written notice to Licensee from
Licensor, subject to Licensee's right to reestablish in good faith its efforts
pursuant to Section 9.1 above with respect to such country within such [**].


                                       22
<PAGE>   23
                                   ARTICLE 10

                             ACCOUNTING AND RECORDS

         10.1 Reports. Licensee agrees to make quarterly written reports to
Licensor within ninety (90) days after the end of each calendar quarter in which
royalties are due under this Agreement, stating in each such report with respect
to Licensed Products, the number, description, and aggregate Net Sales of
Licensed Products sold during the calendar quarter and upon which a royalty is
payable under Article 3 above.

         10.2 Payment. Concurrently with the making of each such report of
Section 10.1, Licensee shall pay to Licensor the royalties at the rate specified
in Section 3.3, if any such royalties are due. All payments by Licensee to
Licensor hereunder shall be made in United States dollars. If any currency
conversion shall be required in connection with the calculation of royalties or
the payment of other compensation hereunder, such conversion shall be made by
using the rate of exchange published in The Wall Street Journal for the last
business day of the applicable calendar quarter.

         10.3 Withholding Taxes. The payments referred to in Article 3 above
shall be net of all withholding taxes and other taxes that Licensee or any of
its Affiliates are required by law to withhold or pay; provided, however, that
if, in regard to any withholding tax paid by Licensee, Licensor is able to
realize a benefit in the form of a corresponding tax credit that it is actually
able to use to reduce its tax payments, then Licensor shall reimburse Licensee
for such withholding tax to the extent of such realized benefit. Licensor shall
furnish Licensee with appropriate documents supporting application of the most
favorable rate of withholding tax available under applicable tax treaties and
shall use commercially reasonable efforts to secure all tax credits in respect
of withholding taxes paid by Licensee hereunder available to it.

         10.4 Records; Inspection.

         (a) Licensee shall keep complete, true and accurate books of account
and records for the purpose of determining the amounts payable to Licensor under
this Agreement. Such books and records shall be kept at Licensee's principal
place of business for at least three (3) years following the end of the calendar
quarter to which they pertain, and will be open for inspection during such three
(3) year period by an independent public accountant not providing accounting
services to Licensor, Licensee or any of their respective Affiliates that is
reasonably acceptable to both parties, for the purpose of verifying Licensee's
quarterly written reports. Such inspections may be made no more than once each
calendar year, during normal business hours and upon thirty (30) days prior
notice. Any such information shall be considered to be Confidential Information
of Licensee.


                                       23
<PAGE>   24
         (b) Inspections conducted under this Section 10.4 shall be at the
expense of Licensor, unless an underpayment exceeding five percent (5%) of the
royalties paid during the period covered by the inspection is established in the
course of any such inspection, whereupon all costs relating thereto, as well as
any unpaid royalties due and owing to Licensor, shall be paid by Licensee within
thirty (30) days after the notification by Licensor to Licensee that an
underpayment has been discovered.

                                   ARTICLE 11

                                  MISCELLANEOUS

         11.1 Publicity. Licensee and Licensor shall cooperate in the
preparation of a mutually-agreeable press release and other publicity disclosing
the existence of this Agreement and their business relationship. Except for the
information disclosed in such press release or publicity, neither Licensee nor
Licensor shall disclose the existence or any terms of this Agreement without the
prior written consent of the other party (which consent shall not be
unreasonably withheld), except for such limited disclosure as may be reasonably
necessary to either party's bankers, investors, attorneys or other professional
advisors, or in connection with a merger or acquisition, or as may be required
by law in the offering of securities or in securities or regulatory filings or
otherwise.

         11.2 Waiver. It is agreed that no waiver by any 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.

         11.3 Independent Contractors. The relationship of the parties hereto is
that of independent contractors. Neither Licensor nor Licensee hereto is an
agent, partner or joint venturer of the other for any purpose.

         11.4 Compliance with Laws. In exercising their rights under this
Agreement, both parties shall fully comply 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 Agreement.

         11.5 Notices. Any notice required or permitted to be given to the
parties hereto shall be deemed to have been properly given if delivered in
person or when received if mailed by first class certified mail or sent by
facsimile to the other party at the address or facsimile number, as applicable,
indicated below or to such other addresses or facsimile numbers as may be
designated in writing by the parties from time to time during the term of this
Agreement.


                                       24
<PAGE>   25
     Licensor:          OraVax, Inc.
                        38 Sidney Street
                        Cambridge, MA 02139
                        Attention: Hitesh R. Bhagat, Ph.D.

                        Telephone: (617) 494-1339
                        Facsimile: (617) 577-1152

     with a copy to:    John M. Westcott, Jr., Esq.
                        Hale and Dorr LLP
                        60 State Street
                        Boston, Massachusetts 02109

                        Telephone: (617) 526-6000
                        Facsimile: (617) 526-5000

     Licensee:          Pasteur Merieux Serums & Vaccins S.A.
                        58 Avenue Leclerc, 69007
                        Lyon, France
                        Attention:  Senior Vice President, Corporate and Legal
                                    Affairs, and General Counsel

                        Telephone:  011.33.4.72.73.77.84
                        Facsimile:  011.33.4.72.73.70.61

     with a copy to:    L. Kevin O'Mara, Jr.
                        Akin, Gump, Strauss, Hauer & Feld, L.L.P.
                        590 Madison Avenue
                        New York, NY 10022

                        Telephone: (212) 872-1021
                        Facsimile: (212) 872-100211.6

         11.6 Complete Agreement. It is understood and agreed among the parties
that this Agreement constitutes the entire agreement with respect to the subject
matter of this Agreement, both written and oral, among the parties, and that all
prior agreements respecting the subject matter hereof, either written or oral,
expressed 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 any of the parties hereto unless reduced to writing and executed
by the respective duly authorized representatives of each of the parties hereto.

         11.7 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void,


                                       25
<PAGE>   26
this Agreement shall continue in full force and effect without said provision
and the parties shall exert their best efforts to amend this Agreement to
include a provision which is valid, legal and enforceable and which carries out
the original intent of the parties.

         11.8 Counterparts and Headings. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and both together
shall be deemed to be one and the same agreement. All headings and any cover
page or table of contents are inserted for convenience of reference only and
shall not affect the Agreement's meaning or interpretation.

         11.9 Governing Law. All matters affecting the interpretation, validity
and performance under this Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard for its conflict of laws
principles.

         11.10 Force Majeure. No party shall be liable to the other, or be in
default under the terms of this Agreement, for its failure to fulfill its
obligations hereunder to the extent such failure arises for any reason beyond
its control including, without limitation, strikes, lockouts, labor disputes,
acts of God, acts of nature, acts of governments or their agencies, fire, flood,
storm, power shortages or power failure, war, sabotage, inability to obtain
sufficient labor, raw materials, fuel or utilities, or inability to obtain
transportation (each, an "Event of Force Majeure"); provided that the party
relying on the provisions of this Section 11.10 shall forthwith give to the
other notice of its inability to observe or perform the provisions of this
Agreement and the reasons therefor; and provided further that the suspension of
the obligations of the party so affected shall continue only for so long as such
Event of Force Majeure continues.

         11.11 Assignment. This Agreement shall not be assignable by any party
without the prior written consent of the other (which consent shall not be
unreasonably withheld), except that any party may assign this Agreement to an
Affiliate or to a successor in interest or transferee of all or substantially
all of its assets.

         11.12 Successors. Subject to the limitations on assignment herein, this
Agreement shall be binding upon and inure to the benefit of the successors in
interest and assigns of Licensor and Licensee. In order for such assignment to
be effective any such successor or assignee of a party's interest shall
expressly assume in writing the performance of all the terms and conditions of
this Agreement to be performed by said party and such assignment shall not
relieve the assignor of any of its obligations under this Agreement.

         11.13 Expenses. Licensee and Licensor shall each bear its own expenses,
including, without limitation, the fees and disbursements of its respective
counsel and


                                       26
<PAGE>   27
accountants, in connection with the negotiation and execution of this Agreement
and the consummation of the transactions contemplated hereby.


                                       27
<PAGE>   28
         IN WITNESS WHEREOF, the parties hereto have executed this Agreement, in
one or more counterparts, on the day and year first above written.

ORAVAX, INC.                        PASTEUR MERIEUX SERUMS & VACCINS S.A.

By: /s/ Lance Gordon                By: /s/ Herve Tainturier
    ---------------------------         ----------------------------------
    Name:  Lance Gordon                 Name:  Herve Tainturier
    Title:  President & CEO             Title:  Senior Vice-President & General 
                                                Counsel


                                       28
<PAGE>   29
         CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.


                                   APPENDIX A

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                                        1
<PAGE>   30
         CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

                                   APPENDIX B

                                DEVELOPMENT COSTS

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                                        1
<PAGE>   31
         CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

                                   APPENDIX C
                         RESEARCH & DEVELOPMENT PROGRAM

          WORKSCOPE AND BUDGET FOR RESEARCH, DEVELOPMENT AND EVALUATION
              OF TETRAVALENT DENGUE CHIMERIVAX(TM) THROUGH PHASE 1
                           CLINICAL TRIALS IN ADULTS.

[**]


                                        1
<PAGE>   32
         CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

                                   APPENDIX D

            INITIAL MEMBERSHIP OF RESEARCH AND DEVELOPMENT COMMITTEE*

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                                        1
<PAGE>   33
         CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

                                   SCHEDULE A

                                  PATENT RIGHTS

[**]


                                        1