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



                                                                   EXHIBIT 10.26



                         -------------------------------
                                LICENSE AGREEMENT
                         -------------------------------



This Agreement is entered this 25th day of March, 1997 (the "EFFECTIVE DATE")
into BY AND AMONG:


     VIRUS RESEARCH INSTITUTE, INC., a company organized and existing under the
     laws of the State of Delaware, having its principal place of business at
     61 Moulton Street, Cambridge, Massachusetts, USA,

     (hereinafter referred to as "VRI")

AND


     MERIEUX ORAVAX S.N.C., a societe en nom collectif organized and existing
     under the laws of the Republic of France, registered at the Registre du
     Commerce et des Societes in Lyon under N[degree symbol] RCS Lyon
     B 404 337 172, with a capital of 52.000.000 French Francs, whose registered
     head-office is located at 58, avenue Leclerc, 69007 Lyon, France,


     ORAVAX MERIEUX CO., a general partnership organized and existing under the
     laws of the State of Massachusetts, having its principal place of business
     at 38 Sidney Street, Cambridge, Massachusetts, USA,

     (the parties numbered and above are individually and collectively
     hereinafter referred to as "LICENSEE" or "HPC")


                                   WITNESSETH
                                   ----------


WHEREAS, VRI has developed certain confidential and/or proprietary information,
patents and patent applications and material relating to the polymer called
polyphosphazene ("PCPP") as an immunoadjuvant which may present an interest in
connection with vaccination against, and immunotherapy of, Helicobacter pylori
infections;


WHEREAS, HPC are joint venture entities created and equally owned and controlled
by OraVax, Inc. of Cambridge, Massachusetts, USA, ("ORAVAX") and Pasteur Merieux
Serums & Vaccins S.A. -a Pasteur Merieux Connaught company- of Lyon, France
("PMC") for the purpose of researching, developing, manufacturing and
distributing products for active immunization against Helicobacter pylori
infections and prevention, treatment and cure of associated diseases and
conditions in humans;


WHEREAS, HPC wishes to acquire from VRI certain licenses in order to have the
right to use PcPP in vaccines against Helicobacter pylori infections, and VRI is
willing to grant such licenses to HPC, subject to the terms of and conditioned
upon this Agreement;




                                       1

<PAGE>   2


NOW, THEREFORE, in consideration of the premises herein and for other good and
valuable consideration, the Parties hereto, intending to be legally bound, agree
as follows:






ARTICLE 1 - DEFINITIONS AND INTERPRETATION


1.1.   DEFINITIONS : For the purposes of this Agreement the following words and
       phrases shall have the following meanings:

       (a)    "AFFILIATE" means, with respect to any Person, (i) any other
              Person of which the securities or other ownership interests
              representing fifty per cent (50%) or more of the equity or fifty
              per cent (50%) or more of the ordinary voting power or fifty per
              cent (50%) or more of the general partnership interest are, at
              the time such determination is being made, owned, Controlled or
              held, directly or indirectly, by such Person (a "SUBSIDIARY"), or
              (ii) any other Person which, at the time such determination is
              being made, is Controlling, or under common Control with, such
              Person. As used herein, the term "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. For the avoidance of doubt,
              it is hereby recorded that, notwithstanding the definition
              contained in this Section 1.1.(a), the two HPC entities are
              Affiliates of both OraVax and PMC and of each other, and that
              OraVax and PMC are each Affiliates of the two HPC entities.

       (b)    "AGREEMENT" means this agreement, all amendments and supplements
              to this Agreement and all schedules to this Agreement, including
              the following:

              SCHEDULE A - LICENSED PATENTS,
              SCHEDULE B - List of HPC Antigens.
              APPENDIX A - Terms and conditions applicable to research contract.
              APPENDIX B - Terms and conditions applicable to COMPOUND supply.

       (c)    "CALENDAR QUARTER" means any of the three-month periods beginning
              January 1, April 1, July 1 and October 1 in any year.

       (d)    "COMPOUND" means a polymer that is a synthetic polyphosphazene
              derivative, including but not limited to the polyphosphazene known
              as Adjumer(TM);

       (e)    "COMPOUND IMPROVEMENTS" means all patentable or non-patentable
              inventions, discoveries, technology and information of any type
              whatsoever, which add to the knowledge of the COMPOUND or its
              properties in general as a delivery system or an immunoadjuvant,
              as the case may be, for use in the Field of Use, including without
              limitation compositions, molecules derived from COMPOUND, methods,
              processes, technical information, knowledge, experience and
              know-how.

       (f)    "CONFIDENTIAL INFORMATION" has the meaning ascribed to it in
              Section 8.1. of this Agreement.



                                       2
<PAGE>   3

       (g)    "EVENT OF FORCE MAJEURE" has the meaning ascribed to it in Article
              12 of this Agreement.

       (h)    "FIELD OF USE" means the use of VRI Technology for the formulation
              of products for active immunization against Helicobacter pylori
              infections in humans and, by such immunization, the prevention,
              treatment and cure of associated diseases and conditions.

       (i)    "FIRST COMMERCIAL SALE" means, in each country of the Territory,
              the first sale of a PRODUCT in commercial quantities by LICENSEE,
              its Affiliates or Sublicensees, to Third-Parties, in each case for
              use or consumption of such PRODUCT in such country by the general
              public.

       (ii)   "JOINT INVENTIONS" has the meaning ascribed to it in Section 9.1
              hereof.

       (j)    "LICENSE" has the meaning ascribed to it in Section 2.1.1. of this
              Agreement.

       (k)    "LICENSED KNOW-HOW" means any and all technical information,
              discoveries, improvements, processes, formulae, data, engineering,
              technical and shop drawings, inventions, Materials, shop-rights,
              know-how and trade secrets, in each case which is Confidential
              Information at the time of disclosure according to Article 8, is
              identified in accordance with Section 2.3.3. of this Agreement as
              related to COMPOUND and which is useful or necessary to make, have
              made, use or sell PRODUCTS or to practice under the LICENSED
              PATENTS in the Field of Use, which have been, or hereafter are,
              either developed by VRI or its Affiliates, or the rights to which
              in the Field of Use have been acquired by VRI or its Affiliates
              and to which VRI or its Affiliates have a transferable interest.
              Without prejudice to the generality of the foregoing, LICENSED
              KNOW-HOW shall include, with respect to COMPOUND, chemical and
              analytical methods and data, COMPOUND specifications, and
              pharmacological and toxicological methods and data.

       (l)    "LICENSED PATENTS" means:

              (i)    any existing patents and patent applications listed in
                     SCHEDULE A to this Agreement;

              (ii)   any future patents issued from any patent applications
                     referred to in Paragraph 1.1.(l).(i) above and any future
                     patents issued from a patent application filed in any
                     country in the Territory which corresponds to a patent or
                     patent application identified in Paragraph 1.1.(l).(i)
                     above;

              (iii)  any reissues, confirmations, renewals, extensions,
                     counterparts, divisions or continuations issued, assigned
                     or licensed to VRI or its Affiliates of or relating to the
                     patents or patent applications identified in Paragraph
                     1.1.(l).(i) and (ii) above;



                                       3
<PAGE>   4


              (iv)   any future patents and patent applications covering VRI
                     COMPOUND Improvements SOLELY OR JOINTLY owned or licensed
                     by VRI or its Affiliates with the right to sublicense.

       (m)    "LICENSEE COMPOUND IMPROVEMENTS" means COMPOUND Improvements which
              are conceived, developed or reduced to practice during the term of
              this Agreement solely or jointly by employees or contractors
              acting on behalf of LICENSEE, its Affiliates or Sublicensees, to
              the extent and only to the extent that LICENSEE now has or
              hereafter shall have the right to grant licenses, immunities or
              other rights thereon. For avoidance of doubt, any technology
              developed by LICENSEE during the term and pursuant to this
              Agreement which relates to any HPC Antigen or Other Hp Antigen
              (rather than antigens in general), or to the combination of such
              specific antigen with COMPOUND, or to the manufacturing of
              PRODUCTS shall not be included in LICENSEE COMPOUND Improvements.
              LICENSEE COMPOUND Improvements shall be deemed to include
              LICENSEE's interest in any Joint Inventions.

       (mm)   "LPS" means Helicobacter pylori antigens which are
              lipopolysaccharides.

       (n)    "MANUFACTURING KNOW-HOW" means any and all technical information,
              discoveries, improvements, processes, formulae, data, engineering,
              technical and shop drawings, inventions, shop-rights, know-how and
              trade secrets, in each case which is Confidential Information at
              the time of disclosure in the meaning of Article 8 hereof, is
              identified in accordance with Section 2.3.3., which is owned or
              otherwise possessed by VRI or VRI's Affiliates and to which VRI or
              its Affiliates have a transferable interest, and which is useful
              or necessary to make and have made COMPOUND or to use COMPOUND for
              the formulation of PRODUCTS or to practice under the LICENSED
              PATENTS to the extent such Patents relates to the manufacturing of
              COMPOUND; in particular, but without limiting the generality of
              the foregoing, Manufacturing Know-How shall include any and all
              information regarding the synthesis, manufacture, up-scaling and
              handling of COMPOUND, any and all analytical procedures,
              procedures for and specifications of quality-assurance and
              quality-control.

       (o)    "MATERIALS" shall mean any biological materials and chemical
              compound including but not limited to structural genes, genetic
              sequences, promoters, enhancers, probes, linkage probes, vectors,
              hosts, plasmids, peptides, polypeptides, transformed cell lines,
              transgenic animals, proteins, biological modifiers, antigens,
              reagents, hybridomas, antibodies, toxins, lectins, enzymes,
              lipids, hormones, viruses, cells or parts of cells, cell lines,
              fragments of any of the foregoing and any other biologically
              active material or compound, whether or not occurring naturally or
              howsoever derived, modified, conjugated, cross-linked,
              immobilized, reduced, purified or produced, whether by recombinant
              DNA techniques and/or otherwise.

       (p)    "NET SALES" shall mean gross sales of PRODUCTS sold by LICENSEE,
              its Affiliates and Sublicensees to Third-Parties (including
              unaffiliated Third-Party distributors, except in the circumstances
              referred to in Section 6.3 hereof, and provided further that where
              a distributor is an Affiliate, but neither a



                                       4
<PAGE>   5

              Subsidiary of LICENSEE nor a Subsidiary of OraVax or PMC (other
              than HPC), such distributor shall be deemed a Third-Party for the
              purpose of calculating Net Sales hereunder) less, to the extent
              actually incurred or allowed:

              (i)    customary trade discounts, credits, rebates, returns
                     (including, but not limited to, wholesaler and retailer
                     returns);

              (ii)   excise taxes, other consumption taxes, customs duties and
                     compulsory payments made to governmental authorities;

              (iii)  transportation, transit and insurance for transportation
                     each to the extent separately invoiced and paid by
                     LICENSEE.

       (q)    "NOTICE OF DISPUTE" has the meaning ascribed to it in Section
              17.4.(a) of this Agreement.

       (r)    "OTHER HP ANTIGENS" means any antigens of Helicobacter pylori and
              genes encoding such antigens other than HPC Antigens and LPS.

       (s)    "PARTIES" means LICENSEE and VRI, and "Party" means any one of
              them.

       (t)    "PERSON" means an individual, corporation, partnership, trust,
              business trust, association, joint stock company, pool, syndicate,
              sole proprietorship, unincorporated organization, governmental
              authority or any other form of entity not specifically listed
              herein.

       (u)    "PHASE III" means the first large scale safety and efficacy
              clinical trial relating to a PRODUCT.

       (v)    "PLA" means a product license application filed with the European
              Medicines Evaluation Agency or its successor in the European
              Union, or any analogous or corresponding application filed with
              the governing health authority of any country or region (such as
              the Food and Drug Administration in the United States of America
              or the Agence du Medicament in France), for approval to market any
              PRODUCT for use or consumption in such country or region.

       (vv)   "HPC ANTIGENS" means antigens of Helicobacter pylori (other than
              LPS), and genes encoding such antigens, which are listed in
              SCHEDULE B as being included in LICENSEE's research & development
              program, which list may be amended from time to time by written
              notice by LICENSEE to VRI (i) to add antigens which are included
              in LICENSEE's research & development program, in which case such
              antigens shall then become HPC Antigens and be treated as such for
              the purpose of this Agreement, PROVIDED, HOWEVER, that VRI has not
              previously granted a non-exclusive license to a Third-Party with
              respect to the use of COMPOUND in combination with such antigens,
              or (ii) to delete antigens which are excluded from such program,
              in which case such antigens shall become Other Hp Antigens and be
              treated as such for the purpose of this Agreement;

       (w)    "PRODUCTS" means any and all vaccines for active immunization
              intended for use in the Field of Use which contain HPC Antigens
              (either alone,





                                       5
<PAGE>   6

              combined with each other or combined with Other Hp Antigens) or
              Other Hp Antigens (either alone or combined with each other), in
              each case formulated in combination with COMPOUND.

       (ww)   "RESEARCH INVENTIONS" has the meaning ascribed to it in Section
              9.1 hereof which refers to Section 9 of APPENDIX A to this
              Agreement.

       (x)    "ROYALTY TERM" means, with respect to each PRODUCT in each country
              in the Territory, the period of time equal to the longer of (a)
              ten (10) years from the date of First Commercial Sale of such
              PRODUCT in such country or (b) the term for which a Valid Patent
              Claim in such country remains in effect and, but for a license
              granted by this Agreement, would be infringed by the manufacture,
              use or sale of such PRODUCT in the Field of Use in such country.

       (xx)   "SUBLICENSEE" means any Person acting pursuant to a sublicense
              granted to it by LICENSEE under the terms of this Agreement.

       (xxx)  "TERRITORY" means all countries in the world.

       (y)    "THIRD-PARTY" means any Person other than LICENSEE, VRI and their
              respective Affiliates.

       (yy)   "VALID PATENT CLAIM" means a claim of an issued and unexpired
              patent or patent application included in LICENSED PATENTS which
              has not been held permanently revoked, unenforceable or invalid by
              a decision of a court or other governmental agency of competent
              jurisdiction, unappealable or unappealed within the time allowed
              for appeal, and which has not been admitted to be invalid or
              unenforceable through reissue or disclaimer or otherwise.

       (z)    "VRI COMPOUND IMPROVEMENTS" means COMPOUND Improvements which are
              conceived, developed or reduced to practice during the term of
              this Agreement solely or jointly by employees or contractors
              acting on behalf of VRI or its Affiliates, to the extent that VRI
              has now or hereafter shall have the right to grant licenses,
              immunities or other rights thereon. VRI COMPOUND Improvements
              shall be deemed to include VRI's interest in any Joint Inventions.

       (zz)   "VRI TECHNOLOGY" means the LICENSED PATENTS, the COMPOUND, the
              Manufacturing Know-How, the LICENSED KNOW-HOW and the VRI COMPOUND
              Improvements.

ARTICLE 2 - LICENSES


2.1.   GRANT OF LICENSES TO LICENSEE


2.1.1. GRANT:

       Subject to and conditioned upon the provisions of this Agreement, VRI
       hereby grants to LICENSEE, and LICENSEE hereby accepts, the following
       licenses (collectively, the "LICENSE"):



                                       6
<PAGE>   7

       (i)    a license in the Territory to make, have made, use and sell
              PRODUCTS under the LICENSED PATENTS and by using LICENSED KNOW-HOW
              and VRI COMPOUND Improvements; and

       (ii)   a license in the Territory to make, have made and use the COMPOUND
              under the LICENSED PATENTS, and by using the Manufacturing
              Know-How and VRI COMPOUND Improvements, in each case solely for
              the purpose of formulating PRODUCTS in the Field of Use.


2.1.2. EXCLUSIVITY

       (i)    HPC ANTIGENS. Subject to and conditioned upon the provisions of
              this Agreement, the LICENSE granted pursuant to this Article II
              shall be exclusive (exclusive even as to VRI) to LICENSEE in the
              Field of Use with respect to PRODUCTS combining any COMPOUND with
              any HPC Antigens (either alone, combined with each other or
              combined with Other Hp Antigens). Without limiting the generality
              of the foregoing, VRI covenants that during the term of this
              Agreement, neither VRI nor its Affiliates shall grant to any other
              Person any right , license or privilege to make, have made, use or
              sell PRODUCTS containing HPC Antigens (alone, or in combination
              with each other, or in combination with Other Hp Antigens), or to
              make, have made or use COMPOUND, or to otherwise use or exploit
              VRI Technology, in connection with such PRODUCTS containing HPC
              Antigens (alone, or in combination with each other, or in
              combination with Other Hp Antigens).

       (ii)   OTHER HP ANTIGENS. Subject to and conditioned upon the provisions
              of this Agreement, the LICENSE granted pursuant to this Article II
              shall be non-exclusive to LICENSEE in the Field of Use with
              respect to PRODUCTS combining any COMPOUND with any Other Hp
              Antigens (alone or combined with each other), but only with such
              Other Hp Antigens. Such license shall be non-transferable and
              non-sub-licensable.

       (iii)  For greater certainty, VRI has and retains all rights in and to
              the VRI Technology outside the Field of Use and LICENSEE has no
              rights in the VRI Technology outside the Field of Use. Further,
              the LICENSE shall not apply to nor cover any combination of an
              Helicobacter pylori vaccine with any other vaccine, or any
              Helicobacter pylori vaccine containing LPS.


2.1.3. LICENSEE'S RIGHTS TO SUBLICENSE

       (i)    LICENSEE shall have the right, with VRI's prior written consent
              (which consent shall not be unreasonably withheld), to sublicense
              in the Field of Use to Third-Parties all or any portion of the
              rights to LICENSED PATENTS and LICENSED KNOW-HOW and VRI COMPOUND
              Improvements granted to it pursuant to this Agreement under the
              exclusive LICENSE.

       (ii)   LICENSEE shall have the right, without obtaining the further
              consent of VRI, to sublicense in the Field of Use all or any
              portion of the rights to the LICENSED PATENTS, the LICENSED
              KNOW-HOW, VRI COMPOUND Improvements and/or the Manufacturing
              Know-How granted to it pursuant to this Agreement under both the
              exclusive and the non-exclusive LICENSE (i) to any or all of its
              Affiliates, and (ii) to any Person in any country of the




                                       7

<PAGE>   8

              Territory if required to do so by any governmental authority
              having jurisdiction in such country.

       (iii)  LICENSEE agrees that all sublicenses granted by LICENSEE hereunder
              shall expressly bind Sublicensees to the terms of Article 8,
              "Confidentiality" and to all other relevant provisions of this
              Agreement. In the event LICENSEE grants sublicenses, LICENSEE
              shall pay royalties to VRI as if Net Sales of the Sublicensees
              were Net Sales of LICENSEE and VRI shall be expressly made a
              third-party beneficiary thereof. LICENSEE shall be responsible for
              the performance by any Sub-licensee of all such terms, conditions
              and obligations.

       (iv)   Any sublicenses granted by LICENSEE shall include a requirement
              that the Sublicensee maintains records and permits inspection on
              terms essentially identical to Section 5.2 hereof. At VRI's
              request, LICENSEE shall arrange for an independent certified
              public accountant selected by VRI to inspect the records of
              Sublicensees, at VRI's expense, for the purpose of verifying
              royalties due to VRI and shall cause such accountant to report the
              results thereof to VRI.

       (v)    Any sublicenses granted by LICENSEE shall provide for the
              termination of the sublicense, or, if the Sublicensee is a
              Third-Party, at the option of such Sublicensee, the conversion to
              a license directly between such Sublicensee and VRI, upon
              termination of this Agreement under Article 10 (other than
              expiration under Section 10.1). Such conversion shall be subject
              to VRI's approval and contingent upon acceptance by the
              Sublicensee of the remaining provisions of this Agreement.

       (vi)   LICENSEE shall notify VRI of each sublicense granted to
              Third-Parties and shall provide VRI with the name and address of
              each Sublicensee and a description of the PRODUCTS and territory
              covered by each sublicenses.


2.1.4. SUBLICENSES TO LICENSEE.

       To the extent LICENSED PATENTS have been, or shall be, licensed by VRI
       from a Third-Party under an agreement with such Third-Party (a
       "Third-Party In-license"), HPC understands and agrees as follows:

       (i)-   The rights sub-licensed to HPC by VRI are subject to the terms and
              conditions, restrictions, limitations and obligations of the
              relevant Third-Party In-license;

       (ii)-  HPC shall comply with the terms and conditions, restrictions,
              limitations and obligations of such Third-Party In-license(s) to
              the extent HPC has been permitted to review such terms,
              conditions, restrictions, limitations and obligations. VRI shall
              give HPC, upon request, a reasonable opportunity to review the
              same except to the extent that confidentiality obligations towards
              Third-Parties may prevent VRI from doing so. In any event, VRI
              shall act reasonably in advising HPC of the scope of HPC's
              obligations pursuant to any relevant Third-Party In-license.

2.1.5  SUBCONTRACTING.

       Notwithstanding anything herein provided for to the contrary, LICENSEE
       shall be allowed to (i) sub-contract in whole or in part PRODUCTS
       development to Third-Parties such as, without limitation, clinical
       research organizations, (ii) appoint sales agents and distributors to
       promote, market and distribute PRODUCTS and (iii) sub-



                                       8
<PAGE>   9

       contract manufacturing of PRODUCTS and/or COMPOUND with Affiliates,
       Third-Parties or with VRI, or VRI's Affiliates.

2.2.   LICENSES TO VRI.

       Subject to and conditional upon the provisions of this Agreement,
       LICENSEE shall grant to VRI a non-exclusive, sublicenseable,
       royalty-free, worldwide license to LICENSEE COMPOUND Improvements for
       commercial use outside the Field of Use.


2.3.   PROCEDURES FOR PROVISION OF KNOW-HOW.


2.3.1. DISCLOSURE OF TECHNOLOGY.

       (a)    BY VRI.

              From time to time during the term of this Agreement, VRI shall
              disclose or cause its Affiliates to disclose to LICENSEE such VRI
              Technology as reasonably necessary to enable LICENSEE to develop,
              manufacture and commercialize PRODUCTS and to manufacture, have
              manufactured or use COMPOUND for the formulation of PRODUCTS in
              the Field of Use on the terms and subject to the conditions of
              this Agreement. In addition, during the term of this Agreement,
              VRI shall, upon LICENSEE's reasonable request and with adequate
              notice to VRI, make available to LICENSEE at LICENSEE's or its
              Affiliates' manufacturing facilities or the facility of a
              Third-Party manufacturer who shall have contracted with LICENSEE
              to manufacture PRODUCTS or COMPOUND, VRI's or VRI Affiliate's
              personnel to provide technical assistance to LICENSEE's personnel,
              or LICENSEE Affiliates' personnel or Third-Party manufacturer's
              personnel.

              LICENSEE shall pay or have paid by its concerned Affiliates all
              expenses incurred by VRI or its Affiliates in connection with such
              technical assistance.

              The technical assistance to be rendered by VRI and its Affiliates
              hereunder may include, upon reasonable request by LICENSEE,
              demonstration of Manufacturing Know-How at a VRI's or a VRI
              Affiliate's facility and disclosure of any and all sources of raw
              material and list and specifications of equipment and machinery
              used in the production of COMPOUND according to the Manufacturing
              Know-How.

       (b)    BY LICENSEE.

              From time to time during the term of this Agreement, LICENSEE
              shall disclose to VRI all LICENSEE COMPOUND Improvements on the
              terms and subject to the conditions of the Agreement and in
              particular in accordance with Section 2.2. hereof.


2.3.2. COMMUNICATION AMONG PARTIES.

       Each of LICENSEE and VRI shall appoint (a) specific individual(s) who
       shall be available and shall act as (a) liaison person(s) to facilitate
       the day-to-day



                                       9
<PAGE>   10

       communications among the Parties. The names and addresses of the liaison
       persons who shall act on behalf of each of the Parties shall be provided
       by each of the Parties to the other immediately following the execution
       of this Agreement. Each of LICENSEE and VRI agrees to notify the other in
       accordance with the terms of Section 17.1. of this Agreement in the event
       of a change in liaison person.

2.3.3. IDENTIFICATION OF KNOW-HOW.

       The Parties agree that all information, COMPOUNDS and Materials comprised
       in the Licensed Know-How to be transferred to LICENSEE pursuant to this
       Agreement shall be so transferred in the case of written information, by
       memoranda bearing the mention "Confidential", and, in the case of
       Materials, by clearly marked and numbered containers. LICENSEE shall
       designate an individual who shall be responsible for receiving
       information and Materials from VRI and/or its Affiliates and the Parties
       agree that such information and Materials shall in all cases (except
       where the Parties agree otherwise) be sent solely to the attention of
       such individual. Upon receipt of information and/or Materials, the
       designated individual shall, on behalf of LICENSEE, send an
       acknowledgement to VRI and/or its Affiliates confirming receipt of
       information and/or Materials. The Parties agree that they shall in good
       faith work together to establish and maintain a system to record the
       transmission of information and/or Materials under this Agreement and
       make all commercially reasonable efforts to ensure such system is
       followed.

2.3.4. CONFIDENTIALITY.

       All information transferred pursuant to this Agreement shall be deemed to
       be "Confidential Information" in accordance with Section 8.1.


2.3.5. SUPPLY OF COMPOUND.

       VRI hereby represents and warrants that any and all quantities of
       COMPOUND which may be supplied hereunder by VRI or its Affiliates to
       LICENSEE for use in clinical trials in humans shall be manufactured in
       accordance with current Good Manufacturing Practices (cGMP) as in force
       in the country where such COMPOUND shall be manufactured and shall meet
       COMPOUND specifications as shall be agreed otherwise by the Parties. The
       sole and exclusive remedy for LICENSEE under this paragraph shall be for
       VRI to provide replacement COMPOUND complying with agreed-upon
       specifications, free of any charge, in quantity equal to LICENSEE's
       original order, except where VRI liability is established to be gross
       negligence or willful misconduct (and LICENSEE did not use COMPOUND with
       knowledge of the non-compliance hereunder), in which case VRI shall
       indemnify LICENSEE as provided herein.


                                       10
<PAGE>   11


ARTICLE 3 - DEVELOPMENT AND COMMERCIALIZATION.


3.1.   DEVELOPMENT AND COMMERCIALIZATION EFFORTS.

       LICENSEE (i) shall use commercially reasonable efforts to diligently
       conduct such preclinical and clinical trials that are necessary or
       desirable to obtain all regulatory approvals to develop and commercialize
       such PRODUCTS, (ii) shall diligently develop and obtain necessary
       approval to market such PRODUCTS (including, as the case may be, pricing
       approval), and (iii) shall commence marketing and market such PRODUCTS in
       each country in which LICENSEE has received all applicable regulatory
       approvals therefor. LICENSEE shall comply with all applicable good
       laboratory, clinical and manufacturing practices in the development and
       commercialization of such PRODUCTS, and shall cause its Affiliates and
       subcontractors to do the same. LICENSEE shall be solely responsible for
       funding all costs of the development and commercialization of each such
       PRODUCTS.

3.2.   SUB-CONTRACTS TO VRI.

       LICENSEE and VRI may agree to have part of the research and development
       work with respect to PRODUCTS sub-contracted to VRI, in which case such
       research contract shall be subject to the terms and conditions set forth
       in APPENDIX A.

       LICENSEE and VRI may agree to have COMPOUND manufacturing sub-contracted
       to VRI, in which case such contract manufacturing shall be subject to
       terms and conditions set forth in APPENDIX B.


3.3.   DEVELOPMENT AND COMMERCIALIZATION REPORTS.

       During the term of this Agreement, LICENSEE shall keep VRI reasonably
       informed as to the progress of the development of PRODUCTS by notifying
       VRI of completion of each significant step.

       In addition, LICENSEE agrees to update the list of HPC Antigens which
       constitute the SCHEDULE B to this Agreement, on a quarterly basis, by
       indicating in writing which Other Hp Antigens, if any, are included in
       such list and which HPC Antigens, if any, are excluded therefrom and then
       become Other Hp Antigens.

       All information disclosed by LICENSEE pursuant to this Section 3.3 shall
       be subject to Article 8 hereof.

ARTICLE 4 - ROYALTIES AND MILESTONES.




                                       11
<PAGE>   12
                                                         CONFIDENTIAL TREATMENT


4.1.   EARNED ROYALTIES.

       During the Royalty Term, LICENSEE shall pay to VRI a royalty of [*]

4.2.   THIRD-PARTY ROYALTIES.

       If LICENSEE, its Affiliates or Sublicensees is required to pay royalties
       to any Third-Party in order to make, have made, use or sell a PRODUCT in
       a country or to make, have made or use COMPOUND for use in such PRODUCT
       in such country, then the royalty set-forth in Section 4.1 hereof for
       such PRODUCT in such country shall be reduced by [*].

4.3.   SINGLE ROYALTY: NON-ROYALTY SALES.

       In no event shall more than one royalty be payable under Section 4.1.
       hereof with respect to a particular unit of PRODUCTS. No royalty shall be
       payable under this Article 4 with respect to sales of PRODUCTS among
       LICENSEE and its Affiliates (provided that where a distributor is an
       Affiliate, but neither a Subsidiary of LICENSEE nor a Subsidiary of
       OraVax or PMC -other than HPC-, such distributor shall be deemed a
       Third-Party), or among Sublicensees and their Affiliates, or among
       LICENSEE and its Affiliates, but a royalty shall be due upon the
       subsequent sale of the PRODUCTS to a Third-Party. No royalty shall be
       payable for (i) PRODUCTS used by LICENSEE, its Affiliates or
       Sublicensees, for research including, without limitation, in clinical
       trials, or (ii) customary quantities of PRODUCTS distributed as free
       samples.

4.4.   MILESTONE PAYMENTS.

       As additional consideration for the LICENSE, rights and privileges
       granted to it hereunder, LICENSEE shall pay to VRI the following
       milestone payments within thirty (30) days of the occurrence of each
       event set forth below (unless otherwise specified below), whether such
       events are achieved by LICENSEE, its Affiliates or Sublicensees:

       (a) [*]



       (b) [*]




/*/ Confidential material omitted and filed separately with the Securities and
    Exchange Commission.



                                       12



<PAGE>   13
                                                         CONFIDENTIAL TREATMENT



       (c) [*]



       (d) [*]



       (e) [*]



       (f) [*]




       The above-mentioned milestone payments shall be payable only once each.

ARTICLE 5 - ROYALTY REPORTS AND ACCOUNTING.

5.1.   REPORTS, EXCHANGE RATES.

       During the term of this Agreement following the First Commercial Sale,
       LICENSEE shall furnish to VRI, with respect to each Calendar Quarter, a
       written report showing in reasonably specific detail, on a
       country-by-country basis, (a) the gross sales of PRODUCTS sold by
       LICENSEE, its Subsidiaries and its Sublicensees in the Territory during
       the corresponding Calendar Quarter and the calculation of Net Sales from
       such gross sales; (b) the royalties payable in United States dollars, if
       any, which shall have accrued hereunder based upon Net Sales of PRODUCTS;
       (c) the withholding taxes, if any, required by law to be deducted in
       respect of such royalties; (d) the date of the First Commercial Sale of
       PRODUCTS having occurred in each country in the Territory during the
       corresponding Calendar Quarter; and (e) the exchange rates used in
       determining the royalty amount expressed in United States dollars.

       With respect to sales (if any) of PRODUCTS invoiced in United States
       dollars, the gross sales, Net Sales, and royalties payable shall be
       expressed in United Sates dollars. With respect to sales of PRODUCTS
       invoiced in a currency other than United Sates dollars, the gross sales,
       Net Sales and royalties payable shall be expressed in the currency of the
       invoice issued by the Party making the sale together with the United
       States dollars equivalent of the royalty payable, calculated using the
       rate of exchange published in the WALL STREET JOURNAL for such currency
       on the last business day of the concerned Calendar Quarter.

       Reports and payments shall be due on the forty fifth (45th) day following
       the close of each Calendar Quarter. LICENSEE shall keep complete and
       accurate records in sufficient detail to properly reflect all gross sales
       and Net Sales and to enable the royalties payable hereunder to be
       determined.


5.2.   AUDITS.



/*/ Confidential material omitted and filed separately with the Securities and
    Exchange Commission.


                                       13
<PAGE>   14


5.2.1. Upon the written request of VRI and not more than once in each calendar
       year, LICENSEE shall permit an independent certified public accounting
       firm of internationally recognized standing, selected by VRI and
       reasonably acceptable to LICENSEE, at VRI's expense, to have access
       during normal business hours to such of the records of LICENSEE as may be
       reasonably necessary to verify the accuracy of the royalty reports
       hereunder for any year ending not more than three (3) years prior to the
       date of such request. The accounting firm shall disclose to VRI only
       whether the records are correct or not and the specific details
       concerning any discrepancies. No other information shall be shared.


5.2.2. If such accounting firm concludes that additional royalties were owed
       during such period, LICENSEE shall pay the additional royalties within
       thirty (30) days of the date VRI delivers to LICENSEE such accounting
       firm's written report so concluding. The fees charged by such accounting
       firm shall be paid by VRI ; PROVIDED, HOWEVER, if the audit discloses
       that the royalties payable by LICENSEE for the audited period are more
       than one hundred and two percent (102%) of the royalties actually paid
       for such period, then LICENSEE shall pay the reasonable fees and expenses
       charged by such accounting firm.


5.2.3. LICENSEE shall include in each permitted sublicense granted by it
       pursuant to the Agreement a provision requiring the Sublicensee to make
       reports to LICENSEE, to keep and maintain records of sales made pursuant
       to such sublicense and to grant access to such records by VRI's
       independent accountant to the same extent required with respect to
       LICENSEE's records under this Agreement.


5.2.4. Except in the case of circumstances which would have prevented an error
       or anomaly from being disclosed during the audit hereabove mentioned,
       such as fraud or other failure to provide accurate information, upon the
       expiration of three (3) years following the end of any calendar year, the
       calculation of royalties payable with respect to such year shall be
       binding and conclusive upon VRI, and LICENSEE, its Affiliates and
       Sublicensees shall be released from any liability or accountability with
       respect to royalties for such year.


5.3.   CONFIDENTIAL FINANCIAL INFORMATION.

       VRI shall treat all financial information subject to review under this
       Article 5 or under any sublicense as confidential, and shall cause its
       accounting firm to retain all such financial information in confidence.

ARTICLE 6 - PAYMENTS.

6.1.   PAYMENT TERMS.

       Royalties shown to have accrued by each royalty report provided for under
       Article 5 of this Agreement shall be due on the date such royalty report
       is due. Payment of royalties in whole or in part may be made in advance
       of such due date.




                                       14
<PAGE>   15
                                                         CONFIDENTIAL TREATMENT



6.2.   PAYMENT METHOD.

       Except as provided in this Section 6.2., all payments by LICENSEE to VRI
       under this Agreement shall be paid in United States dollars, and all such
       payments shall be made without deduction of bank transfer fees by bank
       wire transfer in immediately available funds to the following bank
       account :

       -------------------------------------------------------
       Bank        : [*]

       Account N[degree symbol]: [*]
       Account name: [*]
       -------------------------------------------------------

       or to any other bank account designated in writing from time to time by
       VRI to LICENSEE.


6.3.   EXCHANGE CONTROL.

       If at any time legal restrictions prevent the prompt remittance of part
       or all royalties with respect to any country in the Territory where
       PRODUCTS are sold, payment shall be made through such lawful means or
       method as the Parties reasonably shall determine or, at VRI's discretion,
       royalties shall be based on HPC sales (if any) to HPC's Subsidiary or
       Sublicensee in such country.


6.4.   WITHHOLDING TAXES.

       Royalties and milestone payments shall be paid by LICENSEE to VRI, after
       deduction of any applicable withholding taxes. Prior to any payment by
       LICENSEE to VRI, LICENSEE shall provide to VRI any forms required to
       attest VRI's fiscal domiciliation in order to allow LICENSEE to claim
       application of the reduced rate of withholding tax provided for in any
       applicable bilateral fiscal convention. VRI shall promptly return such
       forms to LICENSEE. In the event VRI fails to promptly return such forms
       duly filled and signed, LICENSEE shall declare and pay withholding tax at
       the common law rate of the applicable corporate income tax, and such tax
       shall then be deducted from the corresponding payment by LICENSEE to VRI.
       LICENSEE shall pay withholding tax to the proper taxing authority and
       proof of payment of such tax shall be secured and sent to VRI as evidence
       of such payment.



ARTICLE 7 - INFRINGEMENT ACTIONS BY THIRD-PARTIES.

If LICENSEE, VRI or their respective Affiliates, or LICENSEE's Sublicensees, is
sued by a Third-Party for infringement of a Third-Party's patent because of the
manufacture, use or sale of PRODUCTS or manufacture or use of COMPOUND, the
Party which has been sued shall promptly notify the other Party in writing of
the institution of such suit, in which event the other Party shall have the
right to be represented by advisory counsel of its own selection, at its own
expense, and shall cooperate fully in the defense of such suit and furnish to
the Party(ies) that is (are) sued all evidences and assistance in its control.

The Party controlling the suit may not settle the suit or otherwise consent to
an adverse judgment in such suit that diminishes the rights or interests of the
non-controlling Party without the express written consent of the non-controlling
Party. Any judgments, awards,




/*/ Confidential material omitted and filed separately with the Securities and
    Exchange Commission.




                                       15




<PAGE>   16
settlements or damages payable with respect to legal proceedings covered by
this Article 7 shall be paid by the Party against whom the award has been made.

ARTICLE 8 - CONFIDENTIALITY.


8.1.   NON-DISCLOSURE AND RESTRICTION-OF-USE OBLIGATIONS.

       Except as otherwise provided in this Article 8, during the term of this
       Agreement and for a period of ten (10) years after termination of this
       Agreement under Sections 10.3. or 10.4., each Party shall maintain in
       confidence, and use only for purposes as expressly authorized and
       contemplated by this Agreement, all information and data supplied by the
       other Party under this Agreement, including but not limited to LICENSED
       KNOW-HOW, Manufacturing Know-How and COMPOUND Improvements. For purposes
       of this Article 8, information and data described above shall be
       hereinafter referred to as "CONFIDENTIAL INFORMATION".


8.2.   PERMITTED DISCLOSURES.

       To the extent it is reasonably necessary or appropriate to fulfill its
       obligations or exercise its rights under this Agreement, (i) a Party may
       disclose Confidential Information it is otherwise obligated under this
       Article 8 not to disclose, to its Affiliates, Sublicensees, consultants,
       outside contractors and clinical investigators, on a need-to-know basis,
       provided that such Persons agree to keep the Confidential Information
       confidential and not use the Information for the same time period and to
       the same extent as such Party is required; and (ii) a Party may disclose
       such Confidential Information to governmental or other regulatory
       authorities to the extent that such disclosure is required by applicable
       law, regulation or court order, or is reasonably necessary to obtain
       patents, copyrights or authorizations to conduct clinical trials with, or
       to commercially market PRODUCTS, provided that the disclosing Party shall
       provide written notice to the other Party and sufficient opportunity to
       object to such disclosure or to request confidential treatment thereof.

       The obligation not to disclose or use Confidential Information shall not
       apply to any part of such Information (including LICENSED KNOW-HOW,
       Manufacturing Know-How and COMPOUND Improvements) that (i) is or becomes
       patented, published or otherwise part of the public domain or publicly
       available other than by acts of the Party obligated not to disclose such
       Information, or of its Affiliates or Sublicensees, in contravention of
       this Agreement; (ii) is disclosed to the receiving Party or its
       Affiliates or Sublicensees by a Third Party, provided such Information
       was not obtained by such Third-Party directly or indirectly from the
       other Party, its Affiliates or Sublicensees, under or pursuant to this
       Agrement on a confidential basis and otherwise had a lawful right to
       disclose the information; (iii) prior to disclosure under the Agreement,
       was already in the possession of the receiving Party or its Affiliates or
       Sublicensees, provided such Information was not obtained directly or
       indirectly from the other Party under this Agreement; (iv) is
       independently developed by the receiving Party without reliance on the
       Confidential Information disclosed by the other Party hereunder, (v) is
       disclosed in a press release agreed to by both Parties hereto in
       accordance with Section 8.4. hereinafter or (vi) both Parties have agreed
       to publish.




                                       16
<PAGE>   17


8.3.   TERMS OF THE AGREEMENT.

       LICENSEE and VRI shall not disclose any terms or conditions of this
       Agreement to any Third-Party without the prior consent of the other
       Party, except (a) to Persons with whom LICENSEE or VRI has entered into
       or proposes to enter into a business relationship to which this Agreement
       is relevant and substantial, provided that such Persons shall enter into
       the required confidentiality agreement, or (b) as required by applicable
       laws, regulations or a court order, provided that the disclosing Party
       shall provide written notice to the other Party and sufficient
       opportunity to object to such disclosure or to request confidential
       treatment thereof.


8.4.   PRESS RELEASES AND OTHER DISCLOSURES TO THIRD-PARTIES

       Neither VRI nor HPC shall, without the prior written consent of the
       other, issue any press release or make any other public announcement or
       furnish any statement to any Person (other than either Parties'
       respective Affiliates) concerning the existence of this Agreement and the
       transactions contemplated by this Agreement, except for (i) general
       statement referring to the existence of this Agreement, specifying the
       Field of Use and identity of the Parties but no other details, (ii)
       disclosures made in compliance with sections 8.2. and 8.3. hereof, (iii)
       attorneys, consultants, and accountants retained to represent them in
       connection with the transactions contemplated hereby or as may be
       reasonably necessary to either Party's bankers, investors, attorneys or
       other professional advisors in connection with a merger or acquisition,
       provided such advisors are bound by confidentiality obligations
       essentially identical to those provided for herein, and (iv) occasional,
       brief comments by the respective officers of HPC, OraVax, PMC and VRI
       consistent with such guidelines for public statements as may be mutually
       agreed by HPC and VRI made in connection with routine interviews with
       analysts or members of the financial press. In addition, either Party
       (after consultation with counsel) in its own right may make such further
       announcements and disclosures, if any, as may be required by applicable
       laws and regulations, in which case the Party making the announcement or
       disclosure shall use its best efforts to give advance notice to, and
       discuss such announcement or disclosure with, the other Party.


8.5.   Notwithstanding anything else to the contrary, LICENSEE agrees that
       VRI Technology shall be used only for the research, development,
       manufacture, use and sale of PRODUCTS and that in the event that the
       LICENSE is terminated, LICENSEE agrees not to use VRI Technology and
       LICENSEE COMPOUND Improvements for the research, development,
       manufacture, use or sale of any product or process including but not
       limited to PRODUCTS.



                                       17
<PAGE>   18


ARTICLE 9 - INVENTIONS AND PATENTS.


9.1.   OWNERSHIP OF INVENTIONS.

       The entire right and title to technology, whether or not patentable, and
       any patent applications or patents based thereon, made or conceived
       during the term of this Agreement (other than Research Inventions as
       defined in APPENDIX A attached hereto, if any), (a) by employees or
       others acting solely on behalf of VRI or its Affiliates, shall be owned
       solely by VRI, (b) by employees or others acting solely on behalf of
       LICENSEE or its Affiliates, shall be owned solely by LICENSEE, and (c) by
       both employees or others acting on behalf of LICENSEE or its Affiliates
       and on behalf of VRI or its Affiliates shall be jointly owned by LICENSEE
       and VRI (the "JOINT INVENTIONS"). Each Party promptly shall disclose to
       the other Party the making, conception or reduction to practice of
       COMPOUND Improvements by employees or others acting on behalf of such
       Party. VRI and LICENSEE each hereby represents that all employees and
       other Persons acting on its behalf in performing its obligations under
       this Agreement shall be obligated under a binding written agreement to
       assign to it, or as it shall direct, all COMPOUND Improvements conceived
       or reduced to practice by such employees or other Persons. The provisions
       of this Section 9.1 are subject to Section 2.2 hereof.


9.2.   PATENT PROSECUTION AND MAINTENANCE.

       VRI shall be responsible for and shall control the preparation, filing,
       prosecution, grant and maintenance of all LICENSED PATENTS. VRI shall
       prepare, file, prosecute and maintain such LICENSED PATENTS in good faith
       consistent with its customary patent policy and its reasonable business
       judgement, and shall consider in good faith the interests of LICENSEE in
       so doing. LICENSEE shall re-imburse VRI a share of reasonable costs of
       prosecution and maintenance of all LICENSED PATENTS as far as such costs
       are borne by VRI in the normal course of business after the Effective
       Date and for so long as the LICENSE to the relevant LICENSED PATENTS
       continues in effect. Such share shall be an amount equal to the total of
       the costs mentioned hereinabove multiplied by a fraction having as a
       numerator one (1), and as a denominator the total number of licences
       granted by VRI to Third-Parties with respect to LICENSED PATENTS. VRI
       shall furnish to HPC an estimated yearly budget for such costs.


9.3.   ENFORCEMENT OF LICENSED PATENTS.

       In the event that LICENSED PATENTS are infringed by any Third-Party in
       the Field of Use, LICENSEE shall have the right, but not the obligation,
       to institute and prosecute any action or proceeding under LICENSED
       PATENTS with respect to such infringement, by counsel of its choice,
       including any declaratory judgement action arising from such
       infringement. Any amounts recovered from Third-Parties




                                       18

<PAGE>   19

       with respect to the LICENSED PATENTS in such action shall be retained by
       LICENSEE. LICENSEE shall not have the right to settle, compromise or take
       any action in such litigation which diminishes, limits or inhibits the
       scope, validity or enforceability of LICENSED PATENTS without the express
       permission of VRI. LICENSEE shall keep VRI advised of the progress of
       such proceedings.

       In the event that a Third-Party is infringing any LICENSED PATENTS in the
       Field of Use and LICENSEE does not elect to institute an action, VRI
       shall have the right, but not the obligation, to commence an infringement
       suit under the LICENSED PATENTS against such infringer and shall retain
       any recovery ; provided that it so notifies LICENSEE.


ARTICLE 10 - TERM AND TERMINATION.


10.1.  EXPIRATION.

       Unless terminated earlier pursuant to this Article 10 or Article 12, the
       Agreement shall expire on the expiration of LICENSEE's obligations to pay
       royalties under the Agreement in accordance with the Royalty Term.
       Thereafter, LICENSEE and Sublicensees shall have a perpetual, fully
       paid-up, royalty-free, non-cancellable, worldwide license or sub-license
       (whichever is applicable) to the VRI Technology.


10.2.  After First Commercial Sale of a PRODUCT or PRODUCTS in a country,
       royalties for any other PRODUCT or PRODUCTS introduced into such country
       will only be payable if a Valid Patent Claim is in effect in the United
       States or Europe at the time such PRODUCT or PRODUCTS are first offered
       for sale in such country, provided that if LICENSEE has ceased to sell a
       PRODUCT in a country prior to the payment of royalties in such country
       for ten (10) years, any additional PRODUCT or PRODUCTS sold in such
       country thereafter will be subject to royalties without regard to the
       existence of a Valid Patent Claim until VRI has received at least ten
       (10) years of Royalty payments in such country.


10.3.  TERMINATION BY LICENSEE.

       LICENSEE shall have the right at any time as from January 1, 1998, in its
       sole discretion, to terminate this Agreement, by giving not less than
       three (3) months' prior written notice to VRI of such termination.


10.4.  TERMINATION FOR CAUSE.

       (i)    Either Party may terminate this Agreement, at its option, upon or
              after the breach of any material provision of the Agreement, if
              the breaching Party has not cured such breach within ninety (90)
              days after written notice thereof from the other Party.



                                       19
<PAGE>   20

       (ii)   LICENSEE or VRI 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 ninety (90)
              days after the filing thereof.

              Each of the parties hereto acknowledges and agrees 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, including, without limitation, those
              set forth in Section 365(n) of the Code. The parties further agree
              that, in the event that LICENSEE elects to retain its rights as a
              licensee under the Code, LICENSEE shall be entitled to complete
              access to any technology licensed to it hereunder and all
              embodiments of such technology. Such embodiments of the technology
              shall be delivered to LICENSEE not later than (a) the commencement
              of bankruptcy proceedings against VRI, unless VRI 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 VRI.

10.5.   EFFECT OF EXPIRATION AND TERMINATION.

        Expiration or termination of the Agreement shall not relieve the Parties
        of any obligation accruing prior to such expiration or termination. The
        provisions of Sections 2.1.3.(v) and 9.1. and Articles 8 and 11 shall
        survive the expiration or termination of the Agreement.


ARTICLE 11 - INDEMNITY.


11.1.   DIRECT INDEMNITY.


11.1.1. Each Party shall indemnify and hold harmless the other Party, its
        Affiliates, and their respective directors, officers, shareholders,
        agents, consultants and employees from and against all Third-Party
        claims, demands, liabilities, damages and expenses, including attorneys'
        fees and costs (collectively, the "LIABILITIES") arising out of the
        breach of any material provision of this Agreement by, or an act or an
        omission of, the indemnifying Party, except to the extent such
        Liabilities resulted from the gross negligence, recklessness or
        intentional acts or omissions of the other Party.

11.1.2. LICENSEE shall defend, indemnify and hold harmless VRI, its Affiliates,
        licensors, their respective directors, officers, shareholders, agents,
        consultants and employees, from and against all Liabilities suffered or
        incurred arising out of any Third-Party claims in connection with the
        manufacture, design, testing, possession, distribution, use, sale or
        other disposition by or through LICENSEE, its Affiliates or Sublicensees
        of any PRODUCTS or COMPOUND, except in each case to the





                                       20
<PAGE>   21

        extent such Liabilities resulted from the gross negligence, recklessness
        or intentional acts or omissions of VRI, and except where VRI's
        liability is established in accordance with EXHIBIT 1 to APPENDIX B
        attached hereto as far as supply of COMPOUND is concerned.

11.2.   PROCEDURE.

        A Party (the "INDEMNITEE") that intends to claim indemnification under
        this Article 11 shall promptly notify the other Party (the "INDEMNITOR")
        of any Liability or action in respect of which the Indemnitee intends to
        claim such indemnification, and the Indemnitor shall have the right to
        participate in, and, to the extent the Indemnitor so desires, jointly
        with any other Indemnitor similarly noticed, to assume the defense
        thereof with counsel selected by the Indemnitor; PROVIDED, HOWEVER, that
        the Indemnitee shall have the right to retain its own counsel, with the
        fees and expenses to be paid by the Indemnitor, if representation of
        such Indemnitee by the counsel retained by the Indemnitor would be
        inappropriate due to actual or potential differing interests between
        such Indemnitee and any other Party represented by such counsel in such
        proceedings.

        The indemnity obligations under this Article 11 shall not apply to
        amounts paid in settlement of any loss, claim, damage, liability or
        action if such settlement is effected without the consent of the
        Indemnitor, which consent shall not be withheld unreasonably. The
        failure to deliver notice to the Indemnitor within a reasonable time
        after the commencement of any such action, if prejudicial to its ability
        to defend such action, shall relieve such Indemnitor of any liability to
        the Indemnitee under this Article 11. The Indemnitee, its Affiliates,
        employees and agents, shall cooperate fully with the Indemnitor and its
        legal representatives in the investigation of any action, claim or
        liability covered by this indemnification.



ARTICLE 12 - FORCE MAJEURE.

No Party (or any of its Affiliates) shall be held liable or responsible to the
other Party (or any of its Affiliates) nor be deemed to have defaulted under or
breached the Agreement for failure or delay in fulfilling or performing any term
of the Agreement when such failure or delay is caused by or results from causes
beyond the reasonable control of the affected Party (or any of its Affiliates)
including but not limited to fire, floods, embargoes, war, acts of war (whether
war be declared or not), insurrections, riots, civil commotions, strikes,
lockouts or other labor disturbances, acts of God or acts, omissions or delays
in acting by any governmental authority or the other Party (collectively,
"EVENTS OF FORCE MAJEURE"); PROVIDED, HOWEVER, that the affected Party (i)
shall immediately notify the other Party of the occurrence of any such Event of
Force Majeure and (ii) shall exert all reasonable efforts to eliminate, cure or
overcome any such Event of Force Majeure and to resume performance of its
covenants with all possible speed; and PROVIDED, FURTHER, that nothing
contained herein shall require any Party to settle on terms unsatisfactory to
such Party any strike, lockout or other labor difficulty, any investigation or
proceeding by any governmental authority or any litigation by any Third-Party.
Notwithstanding the foregoing, to the extent that an Event of Force Majeure
continues for a period in excess of six (6) months, the affected Party shall
promptly notify in writing the other Party of such Event of Force Majeure and
within four (4) months of the other Party's receipt of such notice, the Parties
agree to negotiate in good faith either (i) to resolve the Event of Force
Majeure, if possible, (ii) to extend by mutual agreement the time period to
resolve, eliminate, cure or overcome such Event of Force Majeure, (iii) to amend
this Agreement to the extent reasonably possible, or (iv) to terminate this
Agreement.




                                       21




<PAGE>   22
ARTICLE 13 - ASSIGNMENT.

This Agreement may not be assigned or otherwise transferred, nor, except as
expressly provided hereunder, may any right or obligations hereunder be assigned
or transferred to any Third-Party by either Party without the consent of the
other Party; PROVIDED, HOWEVER, that either Party may, without such consent,
assign this Agreement and its rights and obligations hereunder to any of its
Affiliates or in connection with the transfer or sale of all or substantially
all of its business, or in the event of its merger or consolidation or change in
control or similar transaction. Any permitted assignee shall assume all
obligations of its assignor under this Agreement.

Without limiting the generality of the foregoing, without the prior written
consent of LICENSEE, VRI shall not under any circumstances assign or transfer
any VRI Technology in the Field of Use unless the assignee expressly agrees in
writing that the LICENSE shall remain in full force and effect pursuant to its
terms and such assignment shall not relieve the assignor of any of its
obligations under this Agreement. Each Party acknowledges that the other Party
would suffer irreparable injury in the event of any breach of this Article 13
and that therefore the remedy at law for any breach or threatened breach hereof
by any Party shall be inadequate. Accordingly, upon a breach or threatened
breach hereof by any Party, the other Party shall, in addition and without
prejudice to any other rights and remedies it may have, be entitled as a matter
of right, without proof of actual damages, to seek specific performance hereof
and to such other injunctive or equitable relief to enforce or prevent any
violations (whether anticipatory, continuing or future) hereof.



ARTICLE 14 - NOTIFICATION OF PATENT TERM RESTORATION - PATENT EXTENSIONS.

VRI shall notify LICENSEE of (a) the issuance of each U.S. patent included
within the LICENSED PATENTS, giving the date of issue and patent number for each
such patent, and (b) each notice pertaining to any patent included within the
LICENSED PATENTS which it receives as patent owner pursuant to the United Sates
Drug Price Competition and Patent Term Restoration Act of 1984 (hereinafter
called the "Act"), including notices pursuant to secs. 101 and 103 of the
Act from Persons who have filed an abbreviated new drug application ("ANDA").
Such notices shall be given promptly, but in any event within five (5) calendar
days of each such patent's date of issue or receipt of each such notice pursuant
to the Act, whichever is applicable. VRI shall notify LICENSEE of each filing
for patent term restoration under the Act, any allegations of failure to show
due diligence and all awards of patent term restoration (extensions) with
respect to the LICENSED PATENTS.

Likewise, VRI or LICENSEE, as the case may be, shall inform the other Party of
patent extensions and periods of data exclusivity in the rest of the world
regarding any PRODUCTS and more generally the Parties shall diligently cooperate
with respect to any procedures for patent and period of data exclusivity
extensions, such as but not limited to Supplementary Protection Certificates,
the above-mentioned Patent Term Restoration and corresponding GATT regulations.





                                       22
<PAGE>   23


ARTICLE 15 - ADVERSE EXPERIENCE REPORTING.

During the term of the Agreement, each Party shall notify the other immediately
of any information (howsoever obtained and from whatever source) concerning any
unexpected side effect, injury, toxicity or sensitivity reaction, or any
unexpected incidence, and the severity thereof, associated with the clinical
uses, studies, investigations, tests and marketing of PRODUCTS and, to the
extent feasible, any other product containing COMPOUND (hereinafter, a
"PRODUCT"), or COMPOUND. For purposes of this Article 15, "UNEXPECTED" shall
mean (x) for a non-marketed Product, an experience that is not identified in
nature, severity or frequency in the current clinical investigator's
confidential information brochure, and (y) for a marketed Product, an experience
which is not listed in the current labeling for such Product, and includes an
event that may be symptomatically and pathophysiologically related to an event
listed in the labelling but differs from the event because of increased
frequency or greater severity or specificity.

Each Party further shall immediately notify the other of any information
received regarding any threatened or pending action by an agency which may
affect the safety and efficacy claims of a Product. Upon receipt of any such
information, the Parties shall consult with each other in an effort to arrive at
a mutually acceptable procedure for taking appropriate action ; provided,
however, that nothing contained herein shall be construed as restricting either
Party's right to make a timely report of such matter to any government agency or
take other action that it deems to be appropriate or required by applicable law
or regulation.


ARTICLE 16 - 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 provisions. In case such 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.


ARTICLE 17 - MISCELLANEOUS.


17.1.   NOTICES.

        Any consent, notice or report required or permitted to be given or made
        under this Agreement by one of the Parties hereto to the other shall be
        in writing, delivered personally or by facsimile and promptly confirmed
        by personal delivery, first class air mail or courier, postage prepaid
        (where applicable), addressed to such other Party at its address
        indicated below, or to such other address as the addressee



                                       23
<PAGE>   24

        shall have last furnished in writing to the addressor and (except as
        otherwise provided in this Agreement) shall be effective upon receipt by
        the addressee.

        -  IF TO VRI:

           VIRUS RESEARCH INSTITUTE, INC.
           61 Moulton Street
           Cambridge MA 02138 USA
           Attention: President
           Telefax: (617) 864-6334
           Telephone: (617) 864-6232

        -  IF TO LICENSEE:

           MERIEUX ORAVAX S.N.C. c/o
           PASTEUR MERIEUX Serums & Vaccins S.A.
           58, avenue Leclerc
           69007 Lyon, France
           Attention: Corporate Vice-President, Secretary and General Counsel,
                      Legal Department
           Telefax: 33.4.72.73.70.61
           Telephone: 33.4.72.73.77.84


           ORAVAX MERIEUX CO. c/o
           ORAVAX, INC.
           38 Sidney Street
           Cambridge, MA 02139, USA;
           Attention: President & Chief Executive Officer
           Telefax: (617) 494-1741
           Telephone: (617) 494-1339


17.2.   APPLICABLE LAW.

        The Agreement shall be governed by and construed in accordance with the
        laws of the State of Massachusetts, without regard to the conflict of
        law principles thereof.


17.3.   REPRESENTATIONS, WARRANTIES AND COVENANTS.


17.3.1. REPRESENTATIONS AND WARRANTIES OF MERIEUX ORAVAX S.N.C.

        (a) Merieux OraVax S.N.C. is a Societe en Nom Collectif duly
            organized and existing under the laws of France, with the
            corporate power to own, lease and operate its properties and to
            carry on its business as now conducted.

        (b) Merieux OraVax S.N.C. 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
            Merieux OraVax S.N.C. does not conflict with or contravene the
            statuts of Merieux OraVax




                                       24


<PAGE>   25

                S.N.C., 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 Merieux OraVax S.N.C. is a party, or by which any of
                its assets or properties are bound.

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


17.3.2. REPRESENTATIONS AND WARRANTIES OF ORAVAX MERIEUX CO.

           (a)  OraVax Merieux Co. is a General Partnership duly organized and
                existing under the laws of the State of Massachusetts, with the
                corporate power to own, lease and operate its properties and to
                carry on its business as now conducted.

           (b)  OraVax Merieux Co. 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
                OraVax Merieux Co. does not conflict with or contravene the
                by-laws of OraVax Merieux Co., 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 OraVax Merieux Co. is
                a party, or by which any of its assets or properties are bound.

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


17.3.3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF VRI.

           (a)  VRI is a corporation duly incorporated and validly existing as a
                corporation 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)  VRI 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 VRI
                does not conflict with or contravene its 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 VRI is a party, or by
                which any of its assets or properties are bound.

           (d)  This Agreement has been duly authorized, executed and delivered
                by VRI and constitutes a legal, valid and binding agreement of
                VRI, enforceable against



                                       25
<PAGE>   26

                VRI 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)  All LICENSED PATENTS listed on SCHEDULE A have been registered
                in, filed in or issued by the appropriate patent offices of each
                jurisdiction as indicated on such SCHEDULE A, and in each case
                is currently in effect and all maintenance fees and renewals
                thereof have been duly made with respect thereto. VRI owns or
                has full and exclusive rights to use and exploit under licenses
                (and to license or sublicense) all its rights under such
                LICENSED PATENTS and the LICENSED KNOW-HOW. There have been no
                material claims made against VRI asserting the invalidity or
                unenforceability of, or with respect to such LICENSED PATENTS,
                the misuse of such LICENSED PATENTS or the LICENSED KNOW-HOW,
                nor is VRI aware that any such claims exist. VRI has not
                received a notice of conflict of such LICENSED PATENTS or the
                LICENSED KNOW-HOW with the asserted rights of others, or
                otherwise challenging its rights to use any of such LICENSED
                PATENTS, or the LICENSED KNOW-HOW. EXCEPT AS OTHERWISE EXPRESSLY
                SET FORTH IN THIS SECTION, NEITHER PARTY MAKES ANY
                REPRESENTATION OR EXTENDS ANY WARRANTIES OF ANY KIND EITHER
                EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
                MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
                NON-INFRINGEMENT, OR VALIDITY OF ANY PATENT RIGHTS ISSUED OR
                PENDING.


17.4.   DISPUTE RESOLUTION.

        The Parties agree that if any dispute or disagreement arises between
        LICENSEE on the one hand and VRI on the other in respect of this
        Agreement, they shall follow the following procedure in an attempt to
        resolve the dispute or disagreement.

           (a)  The Party claiming that such a dispute exists shall give notice
                in writing ("NOTICE OF DISPUTE") to the other Party of the
                nature of the dispute ;

           (b)  Within twenty eight (28) business days of receipt of a Notice of
                Dispute, a nominee or nominees of LICENSEE and a nominee or
                nominees of VRI shall meet in person and exchange written
                summaries reflecting, in reasonable detail, the nature and
                extent of the dispute, and at this meeting they shall use their
                reasonable endeavours to resolve the dispute ;

           (c)  If, within a further period of twenty eight (28) business days,
                the dispute has not been - resolved or if, for any reason, the
                required meeting has not been held, then the Parties agree that
                any dispute shall be referred to an arbitrator appointed by
                agreement of VRI and LICENSEE or, if no such agreement is
                reached within sixty (60) business days after a Party commences
                the arbitration, then by a panel of three arbitrators, with each
                of LICENSEE and VRI to select one arbitrator and those two
                arbitrators to select the third. If all three arbitrators have
                not been selected within sixty (60) business days after a Party
                commences the arbitration, then the Parties agree to abide by
                the selection of the remaining arbitrator to be named by a
                representative of the International Chamber of Commerce.

                The Parties agree that the Rules of the International Chamber of
                Commerce shall govern such arbitration and that any decision of
                the arbitrators shall be final and binding and shall be
                enforceable in any court of competent jurisdiction worldwide
                (regardless of whether one of the Parties fails or


                                       26
<PAGE>   27

                refuses to participate in the arbitration) and shall be enforced
                pursuant to the New-York Convention on the Recognition and
                Enforcement of Arbitral Awards. The Parties agree that all
                arbitrations shall be conducted in the English language and that
                the exclusive venue of all arbitrations shall be in London,
                England. The Party determined by the arbitrators to be the Party
                substantially prevailing in the arbitration shall be entitled to
                recover its legal and consultants' fees and other costs
                reasonably incurred in connection with the arbitration (as
                determined by the arbitrators) ; and

        (d)     in the event of a dispute regarding any payments owing under
                this Agreement, all undisputed amounts shall be paid promptly
                when due and the balance, if any, promptly after resolution of
                the dispute.

17.5.   ENTIRE AGREEMENT.

        This Agreement contains the entire understanding of the Parties with
        respect to the subject matter hereof. All express or implied agreements
        and understandings, either oral or written, heretofore made [-] are
        expressly superseded by this Agreement. This Agreement may be amended,
        or any term hereof modified, only by a written instrument duly executed
        by both Parties hereto.

17.6.   INDEPENDENT CONTRACTORS.

        VRI and LICENSEE each acknowledge that they shall be independent
        contractors and that the relationship between the two Parties shall not
        constitute a partnership, joint venture or agency. Neither VRI nor
        LICENSEE shall have the authority to make any statements,
        representations or commitments of any kind, or to take any action, which
        shall be binding on the other Party, without the prior consent of the
        other Party to do so.

17.7.   AFFILIATES.

        Each Party shall cause its respective Affiliates to comply fully with
        the provisions of this Agreement to the extent such provisions
        specifically relate to, or are intended to specifically relate to, such
        Affiliates, as though such Affiliates were expressly named as joint
        obligors hereunder.

17.8.   WAIVER.

        The waiver by either Party hereto of any right hereunder or the failure
        to perform or of a breach by the other Party shall not be deemed a
        waiver of any other right hereunder or of any other breach or failure by
        said other Party whether of a similar nature or otherwise.

17.9.   NO IMPLIED LICENCE.

        Nothing in this Agreement shall be deemed to constitute, by implication
        or otherwise, the grant by LICENSEE to VRI, or by VRI to LICENSEE, of
        any license to, or interest in, or other rights under any patent, patent
        application, proprietary know-how, trade secrets or other intellectual
        property rights owned or possessed by LICENSEE or VRI, whichever is
        applicable, except as expressly provided for herein.




                                       27
<PAGE>   28



17.10.  COUNTERPARTS.

        This Agreement may be executed in two or more counterparts, each of
        which shall be deemed an original, but all of which together shall
        constitute one and the same instrument.



IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first set forth above.



For VIRUS RESEARCH INSTITUTE, INC.




By:  /s/ J. Barrie Ward
   ------------------------------------------------------------
   Name: J. Barrie WARD
   Title: Chairman & Chief Executive Officer.



For MERIEUX ORAVAX S.N.C.




By:  /s/ Jean-Jacques Bertrand
   ------------------------------------------------------------
   Name: PASTEUR MERIEUX Serums & Vaccins S.A.
         Associe Gerant, represented by Jean-Jacques BERTRAND,
         Chairman, President & Chief Executive Officer




By:  /s/ Lance K. Gordon
   ------------------------------------------------------------
   Name: ORAVAX JVM, Inc., Associe,
         represented by Lance K. GORDON,
         President and Chief Executive Officer



For ORAVAX MERIEUX, CO.




By:  /s/ Herve Tainturier
   ------------------------------------------------------------
   Name: MERIEUX AMERICA HOLDINGS, Inc.
         General Partner, represented by Herve TAINTURIER,
         President





                                       28

<PAGE>   29



By:  /s/ Lance K. Gordon
   ------------------------------------------------------------
   Name: ORAVAX JVM, Inc., general partner,
         represented by Lance K. GORDON,
         President


OraVax and PMC each hereby guarantee that their respective Affiliates, including
but not limited to Merieux OraVax S.N.C. and OraVax Merieux Co., shall perform
all obligations which are expressly imposed upon them pursuant to and in
accordance with this Agreement, and that OraVax and PMC shall each be bound by
the terms and conditions of this Agreement imposed on LICENSEE as if OraVax and
PMC were parties to this Agreement.



For ORAVAX INCORPORATED




By:  /s/ Lance K. Gordon
   ------------------------------------------------------------
   Name: Lance K. GORDON
   Title: President & Chief Executive Officer



For PASTEUR MERIEUX SERUMS & VACCINS S.A.




By:  /s/ Jean-Jacques Bertrand
   ------------------------------------------------------------
   Name: Jean-Jacques BERTRAND
   Title: Chairman, President & Chief Executive Officer.







                                       29
<PAGE>   30
                                                         CONFIDENTIAL TREATMENT


                       ----------------------------------
                                   SCHEDULE A

                                   ----------

                                LICENSED PATENTS
                       ----------------------------------






            [*]












/*/ Confidential material omitted and filed separately with the Securities and
    Exchange Commission.






                                       30
<PAGE>   31
                                                         CONFIDENTIAL TREATMENT



                       ----------------------------------
                                   SCHEDULE B

                                   ----------

                              LIST OF HPC ANTIGENS
                       ----------------------------------






                               [*]














/*/ Confidential material omitted and filed separately with the Securities and
    Exchange Commission.






                                       31
<PAGE>   32

                         -------------------------------
                                   APPENDIX A

                                   ----------

                         TERMS AND CONDITIONS APPLICABLE
                              TO RESEARCH CONTRACT

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

1.      OBJECT.

        Pursuant to a mutually agreed upon research program which shall be
        definitely established by the Research Committee referred to in Section
        2. hereinafter on terms substantially in accordance with the draft
        research program attached hereto as EXHIBIT 1 (the "RESEARCH PROGRAM"),
        VRI agrees to conduct research works described therein and LICENSEE
        agrees to support and fund such Research Program in accordance with the
        terms and conditions set forth here below.

2.      OVERSIGHT OF THE RESEARCH PROGRAM.

2.1.    OVERSIGHT. The Research Program shall be overseen and monitored by the
        Research Committee as described herein (the "COMMITTEE").

2.2.    MEMBERSHIP. VRI and LICENSEE shall each appoint two (2) persons (or such
        other number of persons as the Parties may determine) to serve on the
        Committee. Such representatives shall be qualified, by reason of
        background and experience, to assess the scientific progress of the
        Research Program. Each Party shall have the right to change its
        representation on the Committee upon written notice sent to the other.

2.3.    CHAIR. The Committee shall be chaired by one representative of LICENSEE.

2.4.    RESPONSIBILITIES. The Committee shall have authority to:

        (i)     review and approve the draft Research Program and establish the
                definitive Research Program;

        (ii)    make recommendations regarding the performance of the Research
                Program and the conduct of research works pursuant thereto, and
                monitor performance thereunder;

        (iii)   modify the Research Program as it determines, for each twelve
                (12) month period during the term thereof;

        (iv)    review any and all proposed publication or communication
                relating to the Research Program and the results therefrom;




                                       32
<PAGE>   33

        (v)     review any and all proposed filings of patent applications in
                connection with the Research Program.

2.5.    MEETINGS. The Committee shall meet not less than two (2) times a year
        during the term of the Research Program, at such dates and times as
        agreed to by the Parties. Meetings in person shall normally take place
        at VRI's premises or such other place as may be mutually agreed upon.
        Meetings may be held by telecommunication means. At such meetings, the
        Committee shall discuss the Research Program and the status of
        performance by VRI under the Program, evaluate the results thereof and
        set priorities therefor. The Committee shall prepare written minutes of
        each meeting and a written record of all decisions whether made at a
        formal meeting or not. Such minutes shall incorporate semi-annual
        research reports prepared by VRI.


3.      THE PRINCIPAL INVESTIGATOR.

3.1.    PRINCIPAL INVESTIGATOR. The Principal Investigator of the Research
        Program shall be Dr. Kevin KILLEEN, an employee of VRI ("Principal
        Investigator"). VRI shall consult with LICENSEE regarding any
        replacement of the Principal Investigator, PROVIDED, however, that VRI
        shall have the right to make, and shall make, the final determination
        regarding any such replacement. The Principal Investigator shall be
        appointed as a member of the Committee and may be designated by VRI to
        act on behalf of VRI as co-chair on such Committee.

3.2.    DUTIES. The Principal Investigator shall direct the Research Program and
        coordinate the efforts of other researchers involved in the performance
        of such Program. The Principal Investigator shall sit with the Committee
        as provided in Section 2. hereof, shall contribute to the performance of
        the duties set forth hereunder and shall be afforded the opportunity to
        actively participate in all Committee deliberations. The Principal
        Investigator shall provide reasonably detailed status reports of the
        Research Program to the Committee at six-month intervals, as well as at
        the earliest practicable time whenever, in the Principal Investigator's
        judgment, an invention is created or reduced to practice. The Principal
        Investigator shall devote such time and efforts as may be required to
        fulfill his duties hereunder and to ensure the successful administration
        and coordination of the Research Program.

3.3.    REPLACEMENT. The Principal Investigator may be replaced at any time upon
        the written request of either Party. In such event, or if the then
        existing Principal Investigator is no longer able or is unwilling so to
        serve, the Parties shall endeavour to find a mutually acceptable
        substitute. If no mutually acceptable substitute can be agreed upon
        within a reasonable time, then HPC shall have the right to terminate
        forthwith the Research Program, and effect of such termination shall be
        as provided for in Section 6.2 hereof, it being understood that
        termination of the Research Program shall not entail termination of, and
        shall be without any prejudice whatsoever to, the License Agreement.





                                       33
<PAGE>   34




4.      CONDUCT OF RESEARCH PROGRAM.

4.1.    GOOD LABORATORY PRACTICES. The Research Program shall be conducted by
        VRI at VRI's laboratories. VRI shall use all reasonable efforts to
        complete research works in accordance with the said Program. Any
        research work performed by VRI pursuant hereto shall be in compliance
        with current Good Laboratory Practices (cGLP) as applicable in the
        United States of America.

4.2.    LABORATORY NOTEBOOKS. VRI shall cause its employees to maintain
        laboratory notebooks. Such laboratory notebooks shall set forth such
        work in detail, including a clear description of the purposes for which
        the work has been undertaken and the results expected; sufficient
        details, diagrams, plans, sketches and identification of materials used,
        formulations and operating conditions under which the work was conducted
        as may be necessary to understand and reproduce the work conducted;
        identification of any intermediate or final results achieved; and if
        such laboratory notebooks contain any interpretations of data, they
        shall also describe the rough data upon which such interpretations have
        been based. VRI shall further cause its employees, agents and permitted
        subcontractors maintaining such laboratory notebooks to have their work
        corroborated periodically, which corroboration shall include at least
        personal witnessing of the notebooks indicating that the witness has
        read and understood the material on the page witnessed on the date that
        he or she signed it.

5.      FINANCIAL CONDITIONS.

5.1.    SUPPORT COMMITMENT. In consideration of the work performed by VRI
        pursuant to and accordance with the Research Program, LICENSEE shall
        make available to VRI during the Research Program a maximum of ________
        United States dollars (the "Commitment"). The Commitment shall be
        inclusive of all costs incurred by VRI implementing the Research
        Program.

5.2.    PAYMENTS SCHEDULE. Support payments shall be made by LICENSEE to VRI in
        ............ quarterly payments of ....................... in advance
        with the first payment to be made within fifteen (15) days of the
        Effective Date of this Agreement, and the other payments payable on the
        first day of each of the .......... subsequent Calendar Quarters.

5.3.    REPORTING. VRI shall report and reconcile budgeted versus actual
        expenditures on a semi-annual basis. Two copies of the semi-annual
        report shall be sent to HPC. Upon reasonable advance request and at
        reasonable times (but not on more than two occasions), HPC shall have
        the right on demand to receive full and true financial information
        regarding any and all matters affecting compliance with Research Program
        and any amounts funded hereunder and to inspect the relevant books and
        records of VRI relating thereto, at HPC expenses, using representatives







                                       34
<PAGE>   35


        of its choice. VRI's books of account and all necessary supporting data
        shall be kept for at least three (3) years following the end of the
        fiscal year to which each will pertain. In the event that amounts funded
        pursuant hereto exceeds actual expenditures incurred by VRI, VRI shall
        promptly reimburse such excess to HPC, unless the Parties mutually agree
        on an extension of the Research Program which would require consummation
        of such excess.

5.4.    NO CONFLICT WITH RESEARCH PROGRAM. VRI agrees that the Commitment
        provided by LICENSEE shall be applied to the Research Program and may
        not, without LICENSEE prior written approval, be used in support of any
        other research at VRI.

5.5.    TITLE TO EQUIPMENT. VRI shall retain title to any equipment purchased
        with funds provided by LICENSEE under this Agreement, if such purchase
        is mutually agreed upon as part of the Research Program budget.

6.      TERM OF THE RESEARCH PROGRAM.

6.1.    The term of the Research Program shall be twelve (12) months as from
        [January 1], 1997, unless terminated earlier upon termination of this
        Agreement in accordance with Article 10 of the License Agreement.

6.2.    HPC shall be entitled to forthwith terminate the Research Program and
        cease funding thereof (i) in the event of disagreement between the
        Parties as to the replacement of the Principal Investigator under
        Section 3.3 hereinabove, and (ii) in the event of a material breach by
        VRI of any VRI's obligations and covenants hereunder. In the event of
        any such termination, VRI shall reimburse HPC of any amounts paid by HPC
        and found in excess of VRI's actual expenditures (reasonable termination
        costs excluded) further to an accounting audit conducted in accordance
        with Section 5.3 above. VRI's right to receive any unpaid balance
        otherwise committed by HPC as support commitment to the Research Program
        pursuant to Section 5.1 hereof shall become forfeited and no further
        payments with respect to Research Program shall be due to VRI by HPC.
        Termination of the Research Program pursuant to this Section 6.2. shall
        not entail termination of, and shall be without any prejudice whatsoever
        to the License Agreement.

7.      CONFIDENTIALITY.

        In order to facilitate the Research Program, either Party may disclose
        confidential or proprietary information owned or controlled by it to the
        other. It is hereby understood and agreed that such information shall be
        deemed "CONFIDENTIAL INFORMATION" as defined in Article 8 of the License
        Agreement and treated as such.




                                       35
<PAGE>   36


8.      PUBLICATIONS.

        Each Party shall have the right to publish or present the Results of the
        Research Program and announce scientific progress of the Research
        Program, provided such publication, presentation or announcement (and
        any revisions thereof, a "Publication") is submitted to the other Party
        through the Committee at least sixty (60) days prior to submitting it to
        any Third-Party (including any editing person). The other Party shall
        have sixty (60) days after receipt of the draft Publication to review
        and comment on such draft. Upon notice within such sixty (60) day period
        by the other Party that such Party reasonably believes the Publication
        would amount to the public disclosure of a patentable invention upon
        which a patent application should be filed prior to any such disclosure,
        submission of the concerned Publication to Third-Parties shall be
        delayed for a ninety (90) day period from the date of said notice, or
        for such longer period which may appear necessary for appropriately
        drafting and filing a patent application covering such invention. If the
        other Party reasonably believes that the Publication would amount to the
        public disclosure of such other Party's Confidential Information, said
        other Party may request deletion of such information from the proposed
        Publication. In addition, each Party shall duly take into account
        comments made by the other Party on any Publication and shall accept to
        have employees or others acting on behalf of the other Party be
        mentioned as co-authors on any Publication describing results to which
        such persons will have contributed.

9.      INVENTIONS.

        Ownership of inventions, whether or not patentable, and of any patent
        applications and patents based thereon, which may result from the
        Research Program (the "RESEARCH INVENTIONS") shall be established in
        accordance with the following:

        (i)     Any Research Invention which is solely directed to the VRI
                Technology and/or COMPOUND, per se, shall be owned by VRI and
                automatically licensed by VRI to HPC subject to and in
                accordance with the LICENSE, except that if any such invention
                is patented, the term of the corresponding patent shall not be
                taken into account to determine the Royalty Term;

        (ii)    Any Research Invention solely directed to an HPC Antigen or an
                Other Hp Antigen, shall be owned by HPC;

        (iii)   Any Research Invention which is directed to the combination of
                the VRI Technology and an antigen or antigens or another piece
                of technology controlled by HPC rather than antigens in general,
                shall be jointly owned by VRI and HPC and be considered a Joint
                Invention. VRI's interest in such Joint Invention shall be
                deemed automatically licensed by VRI to HPC subject to and in
                accordance with the LICENSE, except that if any such invention
                is patented, the term of the corresponding patent shall not be
                taken into account to determine the Royalty Term. Except for the
                rights granted to HPC in the Field of Use under the LICENSE,
                neither Party shall exploit a Joint Invention without the prior
                agreement in writing of the other Party, provided VRI may
                request HPC to enter into good faith negotiations if VRI wishes
                to exploit any such Joint




                                       36
<PAGE>   37

                Invention outside the Field of Use or within the scope of the
                non-exclusive LICENSE.

        (iv)    Any Research Invention which is directed to the combination of
                VRI Technology and to antigens in general shall be owned by VRI
                and automatically licensed by VRI to HPC, subject to and in
                accordance with the LICENSE, except that if any such invention
                is patented, the term of the corresponding patent shall not be
                taken into account to determine the Royalty Term.








                                       37
<PAGE>   38

                                                          CONFIDENTIAL TREATMENT
                         -------------------------------
                                   APPENDIX B

                                   ----------

                         TERMS AND CONDITIONS APPLICABLE
                                       TO
                                 COMPOUND SUPPLY

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


1.      THE SUPPLY AGREEMENT. VRI has stated to LICENSEE its current intention
        to establish itself as a manufacturer of the COMPOUND. Provided VRI can
        reasonably demonstrate that it shall be able to timely manufacture
        COMPOUND under current Good Manufacturing Practice at competitive cost
        in sufficient quantities, LICENSEE shall purchase from VRI LICENSEE's
        requirements for COMPOUND for use in the manufacture of PRODUCTS under
        the terms and conditions of a supply agreement (the "SUPPLY AGREEMENT"),
        which agreement shall be negotiated in good faith in a timely fashion by
        the Parties hereto so as to become effective at least six months before
        LICENSEE's expected First Commercial Sale of PRODUCTS. The Parties agree
        to negotiate in good faith in a timely fashion the detailed terms and
        conditions of the Supply Agreement which shall include at a minimum the
        following terms and conditions set forth in this Article 1, as well as
        such other terms and conditions as may be agreed upon by the Parties.

2.      COMPOUND REQUIREMENTS. The Supply Agreement shall provide that VRI shall
        manufacture or have manufactured and LICENSEE shall purchase from VRI,
        LICENSEE's entire requirements of COMPOUND (clinical lots as well as
        commercial lots) for PRODUCTS and that LICENSEE shall purchase such
        COMPOUND for its own use in manufacturing PRODUCTS only and shall not be
        permitted to sell or re-sell COMPOUND to any Third-Party.

3.      SPECIFICATIONS. The Supply Agreement shall provide for (i)
        specifications that VRI shall be obligated to comply with; (ii) quality
        control criteria and procedures; and (iii) LICENSEE's reasonable
        acceptance criteria for the COMPOUND.

4.      FORECASTS AND ORDERS. The Supply Agreement shall provide for the
        establishment of reasonable rolling forecasts and placement of orders
        which shall take into account VRI's need to rationally plan its
        manufacturing of COMPOUND consistent with its other manufacturing
        obligations.

5.      PRICE. The price of COMPOUND shall be negotiated in good faith by the
        Parties and set forth in the Supply Agreement, but in no event shall
        such price be [*].






/*/ Confidential material omitted and filed separately with the Securities and
    Exchange Commission.




                                       38
<PAGE>   39


6.      BACK-UP INVENTORIES. Pursuant to the Supply Agreement, VRI shall agree
        to supply, and LICENSEE shall agree to maintain inventory of COMPOUND in
        its own facility sufficient to meet its forecasted needs.

7.      WARRANTIES. Pursuant to the Supply Agreement, VRI shall warrant that (i)
        COMPOUND at the time of delivery shall meet the specifications referred
        to in Section 3. hereinabove; (ii) COMPOUND shall be manufactured in
        accordance with current Good Manufacturing Practices in effect in the
        country where it is manufactured or in compliance in all material
        respects with the principles of the current Good Manufacturing Practices
        in effect in any other country where PRODUCTS are manufactured and/or
        sold (if more stringent than cGMP first referred above) and any relevant
        establishment and product licenses issued by any public health authority
        having jurisdiction. LICENSEE shall inform VRI of the countries in which
        PRODUCT is to be licensed to be sold and of any and all Agency(ies)
        responsible in such countries. Upon request, LICENSEE shall provide VRI
        with information regarding the regulatory requirements in each such
        country. VRI SHALL DISCLAIM ANY OTHER WARRANTIES, EXPRESS OR IMPLIED,
        INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS.

8.      QUALITY AUDIT. Pursuant to the Supply Agreement, VRI shall permit
        LICENSEE, upon reasonable notice and at reasonable times, at LICENSEE's
        expense, to audit in cooperation with VRI's personnel production,
        packaging, quality control and forwarding facilities of VRI and any of
        its significant suppliers as they relate to VRI's manufacturing
        responsibilities under the Supply Agreement.

9.      ADVERSE EVENTS REPORTING. Under the Supply Agreement, the Parties shall
        establish a procedure for monitoring and reporting adverse drug
        experiences, consistent with Article 15 of the License Agreement.

10.     ASSURANCE OF SUPPLY. Under the terms of the Supply Agreement, LICENSEE
        and VRI shall cooperate to anticipate LICENSEE's reasonable long-term
        requirements for COMPOUND, and VRI shall take reasonable measures to
        assure that LICENSEE's reasonable requirements can be met, which
        measures may include the qualification of more than one manufacturing
        facility (including one such facility that may be operated by LICENSEE
        or an Affiliate of LICENSEE, in which case VRI shall transfer
        manufacturing Know-how in accordance with Section 11 hereinafter) and/or
        maintenance of safety stocks of COMPOUND as provided for in Section 6
        hereof.

11.     TRANSFER OF MANUFACTURING TECHNOLOGY.

        The Supply Agreement shall contain provisions for the compulsory
        transfer of Manufacturing Know-How from VRI to HPC under certain
        circumstances such as, but not necessarily limited to, durable failure
        to supply by VRI, VRI's Affiliates or contractors, VRI's material breach
        of the Supply Agreement or VRI's bankruptcy.




                                      39
<PAGE>   40



12.     NO ASSIGNMENT; NO SUB-CONTRACT. VRI shall neither assign nor
        sub-contract any part of its rights and obligations under this APPENDIX
        B, or any part of its manufacturing responsibility under the Supply
        Agreement, to any third Party without the prior written agreement of
        LICENSEE which shall not unreasonably withheld.

13.     LIABILITIES, INDEMNIFICATION AND INSURANCE. The Supply Agreement shall
        include provisions relating to liabilities, indemnification and
        insurance substantially similar to the provisions of the Indemnity
        Agreement herewith attached as EXHIBIT 1.


                          -----------------------------
                                    EXHIBIT 1

                                    ---------

                               INDEMNITY AGREEMENT
                          -----------------------------


WHEREAS, HPC (hereinafter called "Purchaser") and VRI (hereinafter called
"Supplier") have entered into a License Agreement (the "License") relating to
the use of a certain compound (the "Compound") known as polyphosphazene for use
as an adjuvant and/or a delivery system in vaccines against Helicobacter pylori
infections, dated March ....., 1997;

WHEREAS, pursuant to the License, Supplier has agreed to sell, and Purchaser has
agreed to purchase, certain quantities of Compound, under terms and conditions
set forth in short form in the relevant provisions contained in APPENDIX B of
the License and to be finally established in a Supply Agreement to be negotiated
in good faith in a timely manner by the parties hereto;

WHEREAS, Purchaser is planning to enter into human clinical trials using
Compound;

WHEREAS, Supplier has already obtained clinical trial supplies of Compound under
a development agreement with a third-party and is planning to set-up a
sub-contract for having Compound manufactured by a third-party manufacturer,
AeroJet General Corporation of Akron, Ohio, United States of America (the
"SUBCONTRACTOR");

WHEREAS, in order to allow these actions to be timely undertaken, the parties
have agreed to set-up terms and conditions applicable to liabilities and
indemnification in connection with the early supply of clinical lots of Compound
which have previously been supplied to Purchaser, in advance of entering into
the definitive Supply Agreement.


NOW, THEREFORE, in consideration of the premises herein and for other good and
valuable consideration, the parties hereto agree as follows:

1.      PURPOSE.

        This Agreement shall set forth the terms and conditions under which
        Purchaser shall provide and maintain insurance coverage and indemnify
        Supplier in certain circumstances in connection with the use of Compound
        by Purchaser in human clinical trials.





                                       40
<PAGE>   41



2.      INSURANCE.

        Each party, at its own expense, will maintain, with insurers which are
        rated A or better by A.M. BEST, a General Product Liability,
        Environmental and, in the case of Purchaser, Clinical Trial insurance
        program(s) in an amount commensurate with the risks incurred. Purchaser
        will cause (a) Supplier and Sub-contractor to be named as an additional
        insured under Purchaser's General & Product Liability and Environmental
        Liability insurance policies (but under those policies only and with
        coverage limited to Claims as defined in Section 4 hereof), (b) such
        insurance to be designated as primary to any insurance which may be
        carried by Supplier, and (e) such insurance to provide that it can only
        be cancelled or materially altered upon not less than thirty (30) days
        notice to Supplier. Purchaser shall not assert against Supplier or
        Sub-contractor and hereby waives any and all claims against Supplier for
        losses, damages, liability, judgments, costs and expenses (including
        attorney's fees) imposed upon or incurred by Purchaser as a result of or
        arising out of any claim covered by such insurance to the extent of such
        coverage and to the extent Purchaser will have agreed to indemnify
        Supplier pursuant to Section 4 hereinafter.

3.      INSURANCE CERTIFICATES.

        Prior to issuing the first purchase order to Supplier and from time to
        time thereafter as reasonably required by Supplier, Purchaser shall
        furnish Supplier with (an) insurance certificate(s) evidencing
        compliance with Insurance Section above, and reciprocally.

4.      INDEMNITY.

        Notwithstanding the existence or lack of insurance, Purchaser shall, at
        its sole cost and expense, defend Supplier from any and all claims,
        demands, actions or causes of action, at law or in equity (including but
        not limited to claims by Purchaser's employees and customers and
        including an environmental liability) (a "Claim") and indemnify and hold
        Supplier harmless from all damages, liabilities, losses, costs,
        judgments, orders, assessments, interest, penalties, fines, settlement
        payments, costs and expenses (including, without limitation, reasonable
        attorneys fees and other investigation and defense costs and expenses)
        incurred by Supplier which arise out of or result in any way from bodily
        injury (including death) or property damage, however arising out of, or
        related in any way, to Purchaser's possession, use, sale, distribution,
        processing, shipment, storage or disposal of the Compound or any
        derivative thereof sold or otherwise transferred by Supplier to
        Purchaser for the purpose described in the preamble to this Agreement.
        Purchaser shall have the duty to defend, indemnify and hold Supplier
        harmless against any actual or alleged negligence by Supplier. In the
        event that Purchaser fails to promptly and diligently investigate and
        defend or settle any Claim then Supplier shall have the right, at
        Purchaser's cost, expense and risk, from that time forward to have sole
        control of the defense of the Claim and all negotiations for its
        settlement or compromise.

        Notwithstanding the foregoing, the INDEMNITY provided for hereinabove
        shall not apply to the extent that the Claim arises out of, is based
        upon or results from the gross negligence or willfull misconduct (which
        shall include misrepresentation or concealment of data relating to
        toxicity of Compound) of Supplier, or an event having occurred before
        the time that title to Compound (or to any shipment or unit thereof)
        passes to Purchaser, in which cases Supplier shall defend, indemnify and
        hold Purchaser harmless in the




                                       41
<PAGE>   42

        same manner and to the same extent than provided for hereinabove where
        Purchaser is the indemnifying party, and PROVIDED further that, in any
        event, the INDEMNITY provided for hereinabove shall not apply to the
        extent the Claim is a claim for environmental liability arising out of,
        based upon or resulting from an event occurring at a Supplier's
        facility, or at a Sub-contractor's facility, or a facility of another
        Supplier's sub-contractor, or at any other place (including during
        transportation) prior to the time title to Compound (or to any shipment
        or unit thereof) passes to Purchaser.

        The Indemnity provided for herein shall be limited to Claims relating to
        units of Compound sold or otherwise transferred by Supplier to Purchaser
        for the purpose described in the preamble to this Agreement, as
        identified in the invoices and/or control certificates and other
        commercial and pharmaceutical documentation issued by Supplier to
        Purchaser along with the delivery of such units of Compound.

5.      COSTS & EXPENSES.

        The indemnities in INDEMNITY Paragraph of this Agreement include all
        costs and expenses reasonably required to investigate and to defend any
        such claim or action, any amount paid or required to be paid to settle
        such claim or action, or any amount paid or required to be paid to
        settle such claim or action, or any amount finally awarded by a court as
        damages or otherwise in any such action, provided that neither party
        will have an obligation to pay or to reimburse the other party for the
        amount of any internal expenses (including, but not limited to,
        compensation paid to its employees) that it may incur in connection with
        its cooperation in the investigation and/or defense of such claim or
        action.

6.      LIMITATION OF LIABILITY.

        IN NO EVENT SHALL ANY PARTY HAVE ANY LIABILITY TO THE OTHER PARTY
        HEREUNDER OR OTHERWISE FOR ANY LOSS OF PROFITS, COST OR COVER OR ANY
        SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT OR PUNITIVE DAMAGES,
        HOWEVER CAUSED, WHETHER BY THE OTHER PARTY'S BREACH OF ANY EXPRESS OR
        IMPLIED WARRANTY, NEGLIGENCE, STRICT LIABILITY UNDER LAW OR OTHERWISE.

7.      SURVIVAL.

        The provisions of this Agreement shall survive the expiration and/or
        termination of this Agreement, unless this Agreement is superseded by
        the Supply Agreement, in which case the provisions relating to
        Liabilities and Indemnification contained in said Supply Agreement will
        supersede this Agreement.




                                       42