Exhibit
10.23


 


LICENSE
AND CLINICAL TRIALS AGREEMENT


 


Agreement (“AGREEMENT”), effective as of
February 27, 1995 (“Effective Date”) between VIRUS RESEARCH INSTITUTE,
INC., a Delaware corporation, with its principal place of business at 61
Moulton Street, Cambridge, Massachusetts 02138 (hereinafter referred to as
“VRI”) and the JAMES N. GAMBLE INSTITUTE OF MEDICAL RESEARCH, an Ohio
non-profit corporation, with its principal place of business at 2141 Auburn
Avenue, Cincinnati, Ohio 45219 (hereinafter referred to as “GAMBLE”).


 


WITNESSETH:


 


WHEREAS, GAMBLE is the owner of certain rights in
technology as defined herein; and


 


WHEREAS, GAMBLE desires to have such rights utilized
to promote the public interest by granting a license thereunder;


 


WHEREAS, VRI is engaged in the development,
production, marketing and sale of products similar to the technology which is
the subject of this AGREEMENT and has the strategic commitment to facilitate
the transfer of such technology for the public interest; and


 


WHEREAS, VRI desires to obtain a license to said
rights upon the terms and conditions hereinafter set forth;


 


WHEREAS, VRI desires to utilize GAMBLE’s services with
respect to the conduct of certain of the clinical trials and laboratory
services needed to obtain FDA approval for GAMBLE’S rotavirus vaccines.


 


NOW THEREFORE, in consideration of the mutual
covenants herein contained and intending to be legally bound hereby, the
parties hereto agree as follows:


 


1.                                       DEFINITIONS


 


1.1                                 “Invention(s)”
shall mean rotavirus vaccines, developed from rotavirus strain 89-12, including
that which was safety tested by Lou Potash, Ph.D. of PRI/DynCorp for GAMBLE and
received by GAMBLE on 12/2/93 or modification of rotavirus strain 89-12
generated by natural or site-directed mutagenesis, that stimulate neutralizing
antibody to multiple serotypes of human rotavirus, and methods for vaccinating
humans against rotavirus illness caused by rotaviruses of different serotypes
using rotavirus strain 89-12 and for expanding the titers and memory of the
cells that express the pre-existing neutralizing antibodies induced following
primary vaccination against rotavirus disease using solely rotavirus strain
89-12. The Invention(s) include inactivated vaccines using rotavirus strain
89-12.


 

















 


1.2                                 “Technical
Information” shall mean vaccine production information and the results of the
safety and identity testing conducted by Lou Potash, Ph.D., of PRI/DynCorp and
received by GAMBLE on 12/2/93 and information regarding the history, culture,
adaptation and attenuation of rotavirus strain 89-12; and scientific, technical
and medical information related to 89-12, generated by or on behalf of GAMBLE
or obtained from Dr. Potash as part of the quality assurance process during the
term of this AGREEMENT.


 


1.3                                 “Patent
Rights” shall mean any current or future United States or foreign patent
applications which are set forth in Appendix A attached hereto and arising from
Inventions owned by or assigned to GAMBLE, together with any divisions and
continuations (related to rotavirus strain 89-12) continuations-in-part
(related solely to rotavirus strain 89-12 and improvements thereto), patents
issuing thereon and reissues thereof and extensions thereof; provided that in
the case of future patent applications and patents, inclusion in Patent Rights
shall be subject to reimbursement by VRI to GAMBLE of the cost of Research and
Development with respect thereto. Nothing in this Agreement gives VRI rights to
Improvements in a vaccine which does not employ rotavirus strain 89-12.


 


1.4                                 “Licensed
Products” shall mean any product which is covered in whole or in part by a
Valid Claim in the Patent Rights and/or which incorporates or utilizes to a
significant degree Technical Information.


 


1.5                                 “Licensed
Process” shall mean any process which is covered in whole or in part by a Valid
Claim in the Patent Rights and/or which incorporates or utilizes to a
significant degree Technical Information.


 


1.6                                 “Territory”
shall mean the entire world.


 


1.7                                 “Net
Sales” shall mean the gross revenue received by VRI, its Affiliates from the
sales of Licensed Products or Licensed Processes to independent third parties
less:


 


(a)                                  Transportation
charges or allowances separately stated and invoiced;


 


(b)                                 Trade,
quantity, cash, rebates or other allowances and discounts and brokers’,
distributors’, or agents’ commissions actually allowed and taken;


 


(c)                                  Credits
or allowances made or given on account of rejects or returns;


 


(d)                                 Medicare
and Medicaid disallowed reimbursements;


 


(e)                                  Taxes
levied on and/or other governmental charges made as to production, sale,
transportation, delivery or use and paid by or on behalf of Licensee.


 


Licensed Products shall
be considered “sold” when invoiced.


 


1.8                                 “Sublicensee”
shall mean any corporation, partnership or business organization which is not
an Affiliate to which VRI grants a license to enable said party to sell
Licensed Products or utilize Licensed Processes.


 


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1.9                                 “Affiliate”
shall mean any corporation or other business entity controlled by, controlling,
or under common control with VRI. For this purpose “control” means direct or
indirect beneficial ownership of at least fifty percent (50%) interest in the
income or stock of such corporation or other business.


 


1.10                           “Valid Claim”
shall mean a claim of an issued patent or pending patent application which has
not been pending for more than five (5) years from the relevant U.S. priority
date, January 3, 1992, which has not lapsed or become abandoned or been
declared invalid or unenforceable by a court of competent jurisdiction or an
administrative agency from which no appeal can be or is taken.


 


2.                                       GRANT


 


2.1                                 GAMBLE
hereby grants to VRI the exclusive right and license under Patent Rights and
Technical Information to make, have made, use, lease, have leased, sell, and
have sold the Licensed Products and to practice the Licensed Processes in the
Territory for the term of this AGREEMENT unless this AGREEMENT is sooner
terminated according to the terms hereof. VRI shall have the right to extend
the grant set forth in this Section 2.1 to its Affiliates.


 


2.2                                 Notwithstanding
the provision of Section 2.1, GAMBLE shall retain the right to make, use
and practice the Invention(s) and the Technical Information for its own
non-commercial, research purposes. GAMBLE shall have the right to convey to
other non-profit organizations at no charge other than shipping fees, the
Invention(s) and Technical Information for use in non-commercial, basic
research, provided that such organizations have entered into agreements in
substantially the form attached as Appendix B.


 


2.3                                 VRI
agrees that any Licensed Products subject to obligations under Public Laws
96-517 or 98-620 and which are intended for sale in the United States shall be
manufactured substantially in the United States. In the event that VRI
determines that compliance with the foregoing obligation is commercially
impracticable, GAMBLE agrees that it will cooperate with VRI in attempting to
obtain from the U.S. Government a waiver of such obligation.


 


2.4                                 (a)                                  VRI
will have the right, subject to the terms of this AGREEMENT, to enter into
sublicensing agreements with any other entity (other than an Affiliate to whom
the license may be extended in accordance with Section 2.1) for the
rights, privileges and licenses granted hereunder.


 


(b)                                 VRI
agrees that any sublicenses granted by it shall provide that the obligations to
GAMBLE contained in the following provisions of this AGREEMENT shall be binding
upon the Sublicensee: Sections 2.4 (c), 8 and 10. VRI further agrees to
attach a copies of such provisions to each sublicense agreement.


 


(c)                                  VRI
agrees to forward to GAMBLE a copy of any and all fully executed sublicense
agreements within thirty (30) days of execution thereof, and further agrees to
forward to GAMBLE annually a copy of such reports received by VRI from its
Sublicensee during the preceding twelve (12) month period under the sublicenses
as shall be pertinent to a royalty accounting under said sublicense agreements.
VRI may delete from copies of sublicense


 


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agreements provided to GAMBLE hereunder commercial, research and
development, manufacturing, financial and other provisions unrelated to VRI’s
or the Sublicensee’s obligations to GAMBLE.


 


(d)                                 In
the event that this AGREEMENT is terminated prior to its normal expiration, any
sublicense granted by VRI shall remain in full force and effect from and after
that date as a direct license between GAMBLE and the Sublicensee, to the extent
that the royalty obligations of VRI in individual countries have not ceased
pursuant to the terms of this AGREEMENT and the Sublicensee’s agreement to be
bound by the terms and conditions set forth in this AGREEMENT.


 


2.5                                 (a)                                  In
addition to the license granted herein, GAMBLE grants to VRI an exclusive
option to obtain a world-wide, exclusive royalty-bearing license to any
improvement(s) on the Invention(s) that (i) are not subject to prior
commitments to other parties; (ii) relate to the diagnosis, treatment and/or
prevention of human rotavirus illnesses employing strain 89-12;
(iii) which are not specifically included in the Invention(s) or Patent
Rights; and (iv) provide a significant commercial advantage, herein
collectively (“Improvements”).


 


(b)                                 Such
option shall extend for a period of sixty (60) days from the date VRI receives
written notice from GAMBLE disclosing such Improvement. During such sixty (60)
day period, GAMBLE shall reasonably make available to VRI any other information
in its possession or control which would be useful to VRI in evaluating the
improvement. In the event VRI decides to exercise its option, VRI shall do so
by notifying GAMBLE in writing during such sixty (60) day period. Upon exercise
of VRI’s option, GAMBLE and VRI shall enter into a license agreement containing
substantially the same provisions as the applicable provisions of this
AGREEMENT except for the initial license fee which shall be at least an amount
sufficient to reimburse GAMBLE for its costs relating to the development of the
Improvement, plus GAMBLE’s actual patent costs relating thereto.


 


(c)                                  The
written notice to GAMBLE of VRI’s exercise of its option hereunder shall
include instructions to GAMBLE as to whether VRI wishes GAMBLE to have a patent
application prepared and filed with respect to any such improvement. VRI shall
pay for all patent costs relating to any Improvement to which VRI exercises its
option.


 


(d)                                 In
the event that VRI does not exercise its option hereunder or if the parties
have not entered into a license agreement as described in Section 2.5
(b)(1) above at the close of sixty (60) days from VRI’s notice of exercise,
GAMBLE shall be free to offer a license for the Improvement on terms of its own
choosing to a third party, provided the terms are not more favorable than those
terms offered to VRI. VRI will grant a sublicense under Patent Rights to such
third party, if required, royalty-free, to permit such party to develop and
sell such Improvement.


 


2.6                                 As
soon as reasonably possible following the Effective Date of this AGREEMENT, but
in no event later than thirty (30) days after the Effective Date, GAMBLE shall
provide to VRI copies of all Technical Information directly relating to the
Invention(s) in its possession and control on the Effective Date. In addition,
GAMBLE shall transfer to VRI all supplies of rotavirus strain 89-12 and the
master and working cellbanks except as may be


 


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necessary for GAMBLE to conduct such basic research as may be agreed
upon by the parties. Upon termination of this AGREEMENT, as a result of a
breach by VRI or by VRI pursuant to Section 7.4, VRI shall return all
Technical Information to GAMBLE.


 


3.                                       CLINICAL
TRIALS AND DUE DILIGENCE


 


3.1                                 (a)                                  GAMBLE
and VRI will cooperate with one another to complete all pre-clinical studies
necessary for the continued support of the Investigational New Drug application
(“IND”) filed with the U.S. Food and Drug Administration (FDA) and for foreign
equivalents filed with respect to a Licensed Product. VRI shall consult with
GAMBLE, shall provide GAMBLE with drafts of the regulatory submission prior to
its filing, and shall not unreasonably refuse to comply with any request by
GAMBLE for any changes thereto, but all regulatory filings shall be submitted in
the name of VRI and VRI shall have the final authority with respect to their
content. GAMBLE shall cooperate with VRI in responding to any comments of the
FDA with respect to its regulatory filing.


 


(b)                                 Following
approval under FDA regulations that clinical trials may commence under the IND
for which approval has been granted, GAMBLE, recognizing the need for
expeditious handling of all matters for which GAMBLE is responsible herein,
agrees that GAMBLE will use reasonable efforts to promptly conduct the clinical
trials and necessary laboratory work provided for in the IND, subject to the
following:


 


(1)                                  In
consultation with and subject to the approval of VRI, GAMBLE will use
reasonable efforts to design and draft the protocols with respect to
Phase I clinical trials;


 


(2)                                  In
consultation with, and subject to the approval of VRI, GAMBLE will use
reasonable efforts to design and draft the protocols with respect to
Phase II clinical trials;


 


(3)                                  GAMBLE
will use reasonable efforts to conduct the initial Phase II clinical
trials and, subject to consultation with and the approval of VRI, conduct
and/or participate in confirmatory or other Phase II clinical trials,
together with all laboratory work, as required;


 


(4)                                  if
other sites are required in connection with Phase II clinical trials, VRI
will consult with GAMBLE regarding the use and selection of other sites and
GAMBLE will use reasonable efforts to assist VRI in selecting such additional
sites;


 


(5)                                  GAMBLE
and VRI will use reasonable efforts to jointly design and draft protocols for
Phase III clinical trials and GAMBLE may, at GAMBLE’s option, participate as
one of multiple centers for the clinical trials; Dependent upon FDA
requirements, GAMBLE will use reasonable efforts to conduct all laboratory work
required therefore; provided, however, that if GAMBLE’s laboratory capabilities
are not sufficient for the central lab work required for Phase III
clinical trials, GAMBLE will use reasonable efforts to assist VRI in selecting
and approving an appropriate central


 


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laboratory and will use reasonable efforts to
supervise that laboratory in its performance of such work;


 


(6)                                  promptly
after completion of the above-described clinical trials, GAMBLE will cooperate
with VRI in preparation and submission to the FDA of an appropriate application
for approval with respect to the Licensed Product (PLA/NDA) and in the
submission of regulatory filings in foreign countries;


 


(7)                                  if
the PLA/NDA is not approved, GAMBLE will cooperate with VRI at V RI’s expense
in taking any further action required to obtain its approval;


 


(8)                                  GAMBLE
will use reasonable efforts to conduct all trials with the prior approval and
ongoing review of all appropriate and necessary review authorities and in accordance
with applicable federal, state and local laws and regulations and will provide
VRI with written evidence of review and approval of each trial by the
appropriate Institutional Review Board prior to the initiation of each trial
and of that Board’s continuing review and approval of each trial whenever it is
reviewed, but at least once per year;


 


(9)                                  GAMBLE
will furnish VRI with the data resulting from the clinical trials within a
reasonable time after completion of each trial, provided that GAMBLE will
permit representatives of VRI to examine GAMBLE’s facilities, validate case
reports against original data in its files and monitor work performed, at
reasonable times and in a reasonable manner at mutually agreed upon times
during the term of this AGREEMENT, to determine the adequacy of the facilities
and whether the clinical trials are being conducted in compliance with the
protocol and relevant FDA regulations;


 


(10)                            GAMBLE
will retain original records of the clinical trials conducted by GAMBLE including
the original of all volunteer consent forms in strict accordance with all
federal regulations.


 


(11)                            GAMBLE
shall compile clinical trial data and provide copies of the complete data set
to VRI in a timely manner. GAMBLE will cooperate with VRI in the analysis of
the clinical data.


 


(12)                            GAMBLE
is conducting the adult and child phases of the Phase I clinical trials
described in the protocols entitled “Reactivity and Immunogenicity of Live,
Attenuated Rotavirus Vaccine Candidate Strain 89-12.” and attached as
Appendix C, and will make reasonable efforts to conduct the infant phase
of the Phase I clinical trial, and Phase II and Phase III
clinical trials.


 


(13)                            Gilbert
M. Schiff, M.D. shall be responsible for supervising the adult clinical trials
at GAMBLE and shall be designated as “Principal Adult Investigator.” David I.
Bernstein, M.D. shall be responsible for supervising the pediatric clinical
trials at GAMBLE and shall be designated as “Principal Pediatric Investigator.”
In the event that either such investigator is disabled or no longer employed at
GAMBLE,


 


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then GAMBLE shall have the right to appoint another
such investigator, subject to approval by VRI which shall not be unreasonably
withheld.


 


(14)                            GAMBLE
and VRI agree to conduct the clinical trials according to the protocols.
However, if at any future date, changes in the protocol appear desirable, such
changes may be made through prior written mutual agreement between GAMBLE and
VRI. The clinical trials may be suspended or terminated , as appropriate, at
any time by GAMBLE if in the reasonable medical judgment of either: the
Principal Adult or Pediatric Investigator, or responsible institutional review
board(s) or in the medical and/or regulatory judgment of VRI the health or
safety of patients will be adversely affected and it is appropriate to do so.
Any action taken by GAMBLE or its investigators or employees based on any such
medical judgment shall not be deemed a breach of this AGREEMENT.


 


(15)                            GAMBLE
agrees that the rights and welfare of the human subjects shall be protected in
accordance with the protocols and all applicable federal and state laws. GAMBLE
shall be responsible for obtaining appropriate institutional review board
approval for the protocols and any subsequent changes to the protocols, and for
obtaining informed consent of each human subject participating in the
protocols. GAMBLE shall retain records of the clinical trials including the
original of all volunteer consent forms in accordance with all federal
regulations.


 


(16)                            In
order to maintain subject confidentiality, no information relative to subject
name or address shall be provided to VRI. All patient information will be
identified in code. Any audits conducted by VRI shall be undertaken in
conjunction with GAMBLE in order to ensure confidentiality.


 


(17)                            VRI
shall promptly advise GAMBLE of adverse reactions or side effects relating to
clinical trials which may become known to VRI and, similarly GAMBLE shall
promptly advise VRI of adverse reactions or side effects relating to clinical
trials which may become known to GAMBLE.


 


(c)                                  If
GAMBLE fails to perform any of its obligations under this Section 3.1 and
any such failure is not cured following sixty (60) days written notice to GAMBLE,
VRI may terminate GAMBLE’s services relating to the obligations in the relevant
Section (Sections 3.1(b) (1-17)) of this Section and VRI shall
thereafter have the right to hire a third party contractor at VRI’s expense to
perform and control the performance of such services. Termination of services
provided herein in Sections 3.1(b) (1-17) shall not affect the rights and
obligations of GAMBLE under any other Section. Upon termination of GAMBLE’s
services for the foregoing reasons VRI will be obligated to pay GAMBLE for all
pre-approved costs of the studies incurred by GAMBLE and not capable of
cancellation. Such payment will be made within 30 days of submission of billing
by GAMBLE to VRI. At VRI’s request, GAMBLE will assist VRI in selecting and approving
such third party contractors to perform functions described in this
Section 3.1.


 


(d)                                 Notwithstanding
the foregoing, VRI, as sponsor of the development program may terminate GAMBLE
services in conducting clinical trials for commercial reasons


 


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at any time with 30 days’ notice subject to VRI’s payment of all
non-cancelable, pre-approved costs within 30 days of GAMBLE’s billing to VRI.


 


3.2                                 VRI
agrees to pay GAMBLE for all fees and expenses that GAMBLE expects to
reasonably incur in conducting the trials described in Section 3.1 above,
provided that the amounts of such fees and costs have been approved by VRI in
writing in advance. VRI agrees to pay 40% of the approved budget for each study
in phase I, II and III upon initiation of each study and the remaining 60%
at agreed upon milestones during the course of each study, so that full payment
for each study is made by the conclusion of that study. Irrespective of the
amount advanced, VRI shall pay all costs incurred by GAMBLE in conducting the
trials described in Section 3.1, provided such expenses have been approved
in advance by VRI. If the monies advanced by VRI exceed expenses for a study,
GAMBLE shall refund the difference. VRI shall have the trials monitored by its
own staff or outside contractors at its election and shall have the data
resulting from the studies compiled and analyzed. VRI shall have any such VRI
staff or outside contractors execute a confidentiality agreement, prior to such
staff or outside contractors involvement in the clinical trials.


 


3.3                                 GAMBLE
and/or its investigators will have the right to publish the results of the
clinical trials described in Section 3.1 above and performed by GAMBLE,
provided that VRI is provided with a preprint and/or abstract of any proposed
publication at least forty-five (45) days in advance of submission of the
proposed publication. In the event that, as a result of reviewing such abstract
or preprint, VRI determines that such publication would result in disclosure of
an Invention as to which VRI has rights under Sections 2.1, 2.4 and/or 2.5
hereof or includes any VRI Confidential Information (as hereinafter defined),
GAMBLE agrees to delay publication for a sufficient period to enable a patent
application to be filed with respect thereto at VRI’s expense and delete VRI
confidential information, VRI acknowledges and agrees that GAMBLE and/or its
investigators will be entitled to appropriate credit, and to be included as
co-authors for those directly involved in the study, in accordance with
prevailing scientific standards.


 


3.4                                 In
lieu of VRI paying minimum royalties and subject to obtaining FDA or foreign
regulatory approval for the 89-12 rotavirus vaccine VRI agrees to use
reasonable efforts to bring one or more Licensed Products to the marketplace
through a program of development, production, distribution, and marketing
consistent with sound and reasonable business practices and judgments. VRI
agrees to provide GAMBLE annually with a business development plan (which will
include strategy, major milestones for clinical development, FDA registration,
commercialization, and financial performance data) for the upcoming fiscal
year, the first plan due no later than one hundred eighty (180) days from the
Effective Date hereof and each subsequent plan due no later than
December 31 in subsequent years. In the event GAMBLE believes VRI is not
exerting reasonable efforts GAMBLE shall advise VRI and state the efforts which
it believes would meet this requirement. If VRI disagrees the parties will
attempt to resolve the matter by good faith discussions. If they still cannot
agree the matter shall be submitted to arbitration pursuant to Section 12
to determine the efforts to be exerted by VRI. After the arbitration decision,
in the event VRI fails to exert the efforts required by the arbitration, GAMBLE
shall have the right to terminate this AGREEMENT upon giving VRI thirty (30)
days prior written notice and the opportunity to cure within said thirty (30)
days or alternatively VRI may resume minimum royalty payments in lieu of
preparation of a business


 


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plan and using reasonable efforts; however, in such event, resumption
of payment of minimum royalties under this Section 3.4 does not entitle
VRI to an exclusive license agreement.


 


4.                                       PAYMENTS


 


4.1                                 (a)                                  VRI
agrees to pay GAMBLE in partial consideration for the license granted hereunder
a licensing fee in the total amount of $50,000 payable in two equal
installments, as follows:


 


	
  (1)                                  upon signing of this AGREEMENT

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  (2)                                  upon filing of the PLA/NDA for a Licensed
  Product with the FDA

  	
   

  	
  $

  	
  25,000

  	
   

  



 


4.2                                 (a)                                  VRI
shall pay the following running royalties to GAMBLE during the term of this
AGREEMENT as set forth below:


 


(1)                                  Five
percent (5%) on the Net Sales by VRI or its Affiliates of Licensed Products or
any use of Licensed Processes in the United States (other than sales to
Sublicensees for resale) where the manufacture, use or sale of such Licensed
Products or any use of such Licensed Processes is covered by a Valid Claim of
Patent Rights; or four percent (4%) on such Net Sales in countries other than
the United States (other than sales to Sublicensees for resale) where the
manufacture, use or sale of Licensed Products or any use of Licensed Processes
is covered by a Valid Claim of Patent Rights in the country of sale; or one
percent (1%) of Net Sales for five (5) years from first commercial sale in a
country, on a country by country basis, on any other sales by VRI or its Affiliates
of Licensed Products (other than sales to Sublicensees for resale) where no
Patent Rights have been nor are intended to be filed with respect to such
products; or two percent (2%) of Net Sales of Licensed Products sold to the
United States Government or sold to State or other agencies at equivalent
prices to those established for sale to the United States Government.


 


(2)                                  From
any royalties received from its Sublicensees, VRI shall pay GAMBLE thirty (30%)
of royalties received by VRI from a Sublicensee for sale of Licensed Products.
Reporting and payment of such royalties shall be made in accordance with the
provisions of Section 5.


 


(3)                                  If
royalties for Licensed Products or Licensed Processes covered by a Valid Claim
of Patent Rights cease to be paid because a patent application has been pending
for more than five (5) years from the relevant U.S. priority date, then a
royalty of 1% of Net Sales will be payable until the end of the fifth year on
the market in that country. No royalty will be payable following the fifth
anniversary of first marketing in that country unless a valid and enforceable
patent subsequently issues. If a valid and enforceable patent issues royalties
will be payable from the date of issue until the expiry of said valid and enforceable
patent at the full applicable royalty rate for that country as set forth in
Section 4.2(1).


 


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4.3                                 (a)                                  Subject
to Section 3.4. During the exclusive period of the AGREEMENT, VRI shall
pay a minimum annual royalty commencing on the expiration of calendar year 1999
and continuing through calendar year 2003, as follows:


 


	
  1999

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  2000

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  2001

  	
   

  	
  $

  	
  300,000

  	
   

  
	
  2002

  	
   

  	
  $

  	
  400,000

  	
   

  
	
  2003

  	
   

  	
  $

  	
  500,000

  	
   

  



 


(b)                                 If
the royalties earned and paid to GAMBLE pursuant to Section 4.2(a) for any
of the above calendar years are not at least equal to the applicable minimum
royalties, VRI shall have the right to pay any difference between such minimum
royalty amounts and the royalties paid to GAMBLE in full satisfaction of such
obligation under this Section 4.3, which payment, if any, shall be made
with the quarterly royalty payment due for the last quarter of the applicable
calendar year. Waiver of any minimum royalty payment by GAMBLE shall not be construed
as a waiver of any such subsequent payment. If VRI fails to make any such
minimum royalty payment, GAMBLE shall have the right, at its option, to convert
the License for the Licensed Products and Licensed Processes under
Section 2.1 to a non-exclusive license. Royalty rates for non-exclusive
licenses shall be fifty percent (50%) of the exclusive rates set forth in
Section 4.2(a).


 


4.4                                 (a)                                  In
the event that a Licensed Product under this AGREEMENT is sold in any country
in a combination package or kit containing other active products not licensed
hereunder, the Net Sales in each such country for purposes of determining
royalty payments on the combination package, shall be calculated using one of
the following methods:


 


(1)                                  By
multiplying the net selling price of that combination package by the fraction
A/A+B, where A is the net selling price in such country during the
royalty-paying period in question, of the Licensed Product sold separately or
Licensed Process used separately, and B is the net selling price in such
country during the royalty period in question, of the other active products
sold separately or used separately.


 


(2)                                  In
the event that no such separate sales are made of the Licensed Product or any
of the active products in such combination package in such country during the
royalty-paying period in question, Net Sales for the purposes of determining
royalty payments, shall be calculated by dividing the net selling price in such
country of the combination package by the number of functions performed by the
combination package sold where such package contains active agents or other
proprietary technology other than those licensed under this AGREEMENT.


 


4.5                                 Payment
of royalties specified in Section 4.2(a) shall be made by VRI to GAMBLE
within sixty (60) days after March 31, June 30, September 30 and
December 31 each year during the term of this AGREEMENT covering the
quantity of Licensed Products sold or Licensed Processes used by VRI during the
preceding calendar quarter. The last such payment shall be made within sixty
(60) days after termination or expiration of this AGREEMENT.


 


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4.6                                 All
payments to be made under this Section shall be paid in United States
dollars at such a place and in such a way, as GAMBLE may reasonably designate,
without deduction of exchange, collection or other charges. Conversion of
foreign currency to U.S. dollars shall be made at the conversion rate published
by the Bank of Boston on the last day of the calendar quarter with respect to
which payments are due.


 


4.7                                 Only
a single royalty shall be paid with respect to any Licensed Product or Licensed
Process, under Section 4.2(a) irrespective of the number of Valid Claims
of Patent Rights utilized.


 


4.8                                 In
the event that VRI is required to pay royalties to one or more third parties
under patents other than Patent Rights in order to make, use, sell or have sold
Licensed Products or Licensed Processes, VRI shall be entitled to a credit
against royalties due GAMBLE under Section 4.2(a) in an amount equal to
fifty percent (50%) of the royalties paid to such third parties. However, in no
event shall royalties payable to GAMBLE under Section 4.2(a) hereunder be
reduced by more than forty percent (40%).


 


4.9                                 If
the transfer of or the conversion into the United States dollar equivalent of
any remittance due hereunder is not lawful or permissible in any country, such
remittance shall be made thereof in the currency of the country to the credit
and account of GAMBLE or its nominee in any commercial bank located in that
country. Prompt notice shall be given to GAMBLE and GAMBLE may provide a
nominee if so desired.


 


4.10                           If VRI
exercises its option for the rights to improvements, VRI shall reimburse GAMBLE
for the cost of the development program to make such Improvements.


 


5.                                       REPORTS
AND RECORDS


 


5.1                                 VRI
shall maintain true books of account containing an accurate record of all data
necessary for the determination of the amounts payable under Section 4
hereof. Said records shall be kept at VRI’s principal place of business or the
principal place of business of the appropriate division of VRI to which this
AGREEMENT relates. Said records shall be available for inspection by a
certified public accountant selected and paid by GAMBLE once each year during
regular business hours and for six (6) years thereafter following the end of
the calendar year to which they pertain in order for GAMBLE to ascertain the
correctness of any report and/or payment made under this AGREEMENT. The
provision of this Section 5.1 shall survive termination of this AGREEMENT.


 


5.2                                 (a)                                  Commencing
with the calendar quarter in which Net Sales first occurs, sixty (60) days
after March 31, June 30, September 30 and December 31, of
each year in which this AGREEMENT is in effect, VRI shall deliver to GAMBLE
full, true and accurate reports of its activities and those of its
Sublicensee(s), if any, relating to this AGREEMENT during the preceding three
month period. These reports shall include at least the following:


 


(1)                                  Gross
Sales for Licensed Products or Licensed Processes;


 


(2)                                  Net
Sales for Licensed Products or Licensed Processes;


 


11

















 


(3)                                  Expenses,
defined in Section 1.7, used to calculate Net Sales;


 


(4)                                  Calculation
of royalties due based on Net Sales;


 


(5)                                  Any
adjustments to amounts due pursuant to this AGREEMENT; and


 


(6)                                  Amounts
due to GAMBLE for the applicable quarters.


 


5.3                                 With
each such report, VRI shall pay to GAMBLE the royalties due and payable as
provided for in Section 4.5. If no royalties are due under
Section 4.2(a), VRI shall so report.


 


6.                                       PATENT PROSECUTION AND INFRINGEMENT


 


6.1                                 GAMBLE
shall apply for and maintain during the term of this AGREEMENT any Patent
Rights in the United States and in the European Union, Australia, Brazil,
Canada, Japan and South Korea, and Mexico. The prosecution, filing and
maintenance of all patents, with the exception of fee payments, shall be the
primary responsibility of GAMBLE, using patent counsel selected by GAMBLE and
reasonably acceptable to VRI, provided, however, that VRI shall be given a
reasonable opportunity to advise GAMBLE on such matters, particularly as they
pertain to patent prosecution in foreign countries, and GAMBLE shall furnish to
VRI copies of any documents relevant to such prosecution, filing and
maintenance in sufficient time in advance for VRI or its patent counsel to
comment thereon. VRI shall pay all reasonable patent fees and costs, including
reasonable counsel fees, incurred by GAMBLE pursuant to this Section.


 


6.2                                 VRI
has reimbursed GAMBLE the sum of $24,277, representing 50% of foreign phase
filing costs for the countries and listed in Section 6.1. VRI shall
reimburse GAMBLE the sum of $78,558 upon VRI signing this AGREEMENT for the
remaining 50% of the foreign phase filing costs and for its U.S. patent fees
and costs arising from the Patent Rights invoiced by patent counsel to GAMBLE
prior to October 10, 1994. All fees and costs incurred by GAMBLE after the
Effective Date relating to the filing, prosecution and maintenance of all
Patent Rights shall be paid by VRI within 30 days of receipt of invoice from
GAMBLE. The foregoing notwithstanding, VRI shall will have the right to
discontinue payment of any such fees or costs with respect to the Patent Rights
in any particular country or countries, if after a good faith assessment of the
cost of patent filing, the enforceability of intellectual property rights and
the commercial value of the market, in a specific country, VRI believes that
making such payments would not be commercially practical. VRI shall provide
timely notice of VRI’s intention not to pay a fees so, if GAMBLE desires,
GAMBLE may pay such fee.


 


6.3                                 If
at any time during the term of this AGREEMENT, VRI furnishes to GAMBLE
reasonably convincing written evidence of an infringement of a patent included
in the Patent Rights which adversely and substantially affects the commercial
operations of VRI under the license granted hereunder, GAMBLE shall have the
right, but not the obligation, to prosecute, at its own expense any such
infringement and shall have the right for such purpose to join VRI as a party
plaintiff at GAMBLE’s expense. VRI independently shall have the right to join
any such suit or action brought by GAMBLE and, in such event, shall pay
one-half of the cost of such suit or action from the date of joining. Provided
that VRI has joined in the action and shared the costs


 


12

















 


thereof as stated in the preceding sentence, no settlement, consent
judgment or other voluntary final disposition of the suit may be entered into
without the consent of VRI, which consent will not unreasonably be withheld.
Any recovery or damages derived from such action shall first be used to
reimburse GAMBLE for all legal expenses relating to such action. If VRI has not
joined the action, GAMBLE is entitled to all recovery or damages still
remaining; however, if VRI has joined the action, any recovery or damages still
remaining shall be applied toward (i) reimbursement of GAMBLE for the
amount of royalties not received by GAMBLE from the infringing party as a
result of such infringement, and (ii) compensation of VRI for its lost
profits or a reasonable royalty on the sales of the infringer, whichever is
applicable; provided, however that if such remaining amount of recovery or
damages is insufficient to compensate GAMBLE fully for such royalties and to
compensate VRI fully for such lost profits or reasonable royalty, then such
amount of recovery or damages still remaining shall be apportioned pro rata
between GAMBLE and VRI in proportion to (a) the amount of royalties not
received by GAMBLE from the infringing party as a result of such infringement,
as compared with (b) VRI’s lost profits or reasonable royalty on the sales
of the infringer. Any recovery or damages still remaining after the
above-mentioned applications shall be distributed two-thirds (2/3) to GAMBLE
and one-third (1/3) to VRI.


 


6.4                                 If
after said three (3) months, GAMBLE fails to cause such infringement to
terminate or to bring a suit or action to compel termination, VRI shall have
the right, but not the obligation, to prosecute, at its own expense any such
infringement and shall have the right for such purpose to join GAMBLE as a
party plaintiff at VRI’s expense. GAMBLE independently shall have the right to
join any such suit or action brought by VRI and, in such event, shall pay
one-half of the cost of such suit or action from the date of joining. Provided
that GAMBLE has joined in the action and shared the costs thereof as stated in
the preceding sentence, no settlement, consent judgment or other voluntary
final disposition of the suit may be entered into without the consent of
GAMBLE, which consent will not unreasonably be withheld. Any recovery or
damages derived from such action shall first be used to reimburse VRI (and
GAMBLE if it joined in the action) for all legal expenses relating to such
action. If GAMBLE has not joined the action, VRI is entitled to all recovery or
damages still remaining; however, if GAMBLE has joined the action, any recovery
or damages still remaining shall be applied toward (i) reimbursement of
GAMBLE for the amount of royalties not received by GAMBLE from the infringing
party as a result of such infringement, and (ii) compensation of VRI for
its lost profits or a reasonable royalty on the sales of the infringer,
whichever is applicable; provided, however that if such remaining amount of
recovery or damages is insufficient to compensate GAMBLE fully for such
royalties and to compensate VRI fully for such lost profits or reasonable
royalty, then such amount of recovery or damages still remaining shall be
apportioned pro rata between GAMBLE and VRI in proportion to (a) the
amount of royalties not received by GAMBLE from the infringing party as a result
of such infringement, as compared with (b) VRI’s lost profits or
reasonable royalty on the sales of the infringer. Any recovery or damages still
remaining after the above-mentioned applications shall be distributed
two-thirds (2/3) to GAMBLE and one-third (1/3) to VRI.


 


6.5                                 In
any infringement suit that either party may institute to enforce the Patent
Rights pursuant to this AGREEMENT, the other party hereto shall, cooperate in
all respects and, to the extent possible, have its employees testify when requested
and make available relevant records, papers, information, samples and the like.


 


13

















 


6.6                                 In
the event that a declaratory judgment action alleging invalidity or
non-infringement of any of the Patent Rights shall be brought against VRI,
GAMBLE, at its sole option shall have the right, within sixty (60) days after
GAMBLE receives notice from VRI of such action, to intervene and participate in
action at its own expense.


 


7.                                       TERM AND TERMINATION


 


7.1                                 Unless
earlier terminated as provided herein, this AGREEMENT shall remain in full
force and effect for the life of the last to expire patent issued under the
Patent Rights. Upon expiration, VRI shall have a fully paid-up, non-cancelable
license.


 


7.2                                 Subject
to Section 16, if VRI shall cease to carry on its business, this AGREEMENT
shall terminate ninety (90) days after VRI ceases to do business, unless,
within ninety (90) days VRI has identified a qualified successor licensee
reasonably acceptable to GAMBLE willing to assume the obligation of VRI
hereunder, in which case the assignment of this AGREEMENT to such successor
licensee shall be subject to the written assumption by such successor of VRI’s
obligations hereunder and to the written approval of GAMBLE, which shall not be
unreasonably withheld.


 


7.3                                 Should
VRI fail to pay GAMBLE such royalties other than minimum royalties as are due
and payable hereunder, GAMBLE shall have the right to terminate this AGREEMENT
on thirty (30) days written notice, or to convert this AGREEMENT from an
exclusive to a non-exclusive license upon expiration of the thirty (30) day
period.


 


7.4                                 VRI
shall have the right to terminate this AGREEMENT at any time upon six (6)
months written notice to GAMBLE, and upon payment of all amounts due GAMBLE
through the effective date of termination. If this AGREEMENT is terminated, VRI
will provide GAMBLE with information and data necessary for GAMBLE to pursue
the development of Licensed Products or Licensed Processes and a right to
reference VRI’s regulatory filings with the FDA.


 


7.5                                 Upon
any material breach or default of this AGREEMENT by VRI or GAMBLE, the
non-breaching party shall have the right to terminate this AGREEMENT and the
rights, privileges and license hereunder granted upon ninety (90) days written
notice to the other party. Such termination shall become effective immediately
at the conclusion of such notice period unless the breaching party shall have
cured any such breach or default prior to the expiration of the ninety (90) day
period.


 


7.6                                 Upon
termination of this AGREEMENT for any reason, nothing herein shall be construed
to release either party from any obligation that matured prior to the effective
date of such termination. VRI and any Sublicensee thereof may, after the
effective date of such termination, sell all Licensed Products which are in
inventory at the time of termination, and complete and sell Licensed Products
which VRI can clearly demonstrate were in the process of manufacture at the
time of such termination, provided that VRI shall pay to GAMBLE the royalties
thereon as required by Section 4 of this AGREEMENT and shall submit the
reports required by Section 5 hereof on the sales of Licensed Products.


 


14

















 


8.                                       INDEMNIFICATION AND INSURANCE


 


8.1                                 VRI
shall defend, indemnify and hold harmless GAMBLE and its trustees, officers,
medical and professional staff, employees, and agents and their respective
successors, heirs and assigns, against all losses, damages, expenses, including
attorney’s fees and against any claims, suits, actions, demands or judgments
brought against any one or more of them, arising out of any theory of product
liability (including, but not limited to, actions in the form of tort,
warranty, or strict liability) or negligence concerning any product, process or
service made, used or sold pursuant to any right or license granted under this
AGREEMENT. VRI shall have the right to control the defense settlement and/or
compromise of any such claims or actions.


 


8.2                                 VRI’s
obligations under Section 8.1 above shall not apply to any liability,
damage, loss or expense to the extent that it is directly attributable to the
negligence or intentional misconduct of GAMBLE or of any of its trustees,
officers, medical and professional staff, employees, agents or their respective
successors, heirs or assigns.


 


8.3                                 VRI
shall add, at VRI’s expense, GAMBLE as an additional insured on VRI’s clinical
trial insurance policy, which provides limits of liability of $2,000,000 per
incident and aggregate, effective upon the Effective Date of this AGREEMENT, to
provide insurance coverage for GAMBLE for the clinical trials.


 


8.4                                 VRI,
at VRI’s expense, shall maintain policies of comprehensive general liability
insurance and will obtain product liability insurance in amounts not less than
$1,000,000 per incident and $2,000,000 annual aggregate and shall add GAMBLE as
an additional insured on VRI’s policy, which provides such limits of liability.
Such insurance shall provide (i) product liability coverage,
(ii) negligence, and (iii) broad form contractual liability coverage,
for VRI’s indemnification under Section 8.1 of this AGREEMENT. The minimum
amounts of insurance coverage required under these provisions shall not be
construed to create a limit of VRI’s liability with respect to VRI’s
indemnification obligation under Section 8.1 of this AGREEMENT. VRI shall
maintain such comprehensive general liability insurance and product liability
insurance beyond the expiration or termination of this AGREEMENT and for a
reasonable period after the termination of the clinical trials, which in no
event shall be less than fifteen (15) years after the clinical trials.


 


8.5                                 This
Section 8 shall survive expiration or termination of this AGREEMENT.


 


9.                                       REPRESENTATIONS


 


9.1                                 Subject
to any prior rights of the U.S. government, GAMBLE represents that patent
applications or patents included in the Patent Rights have been assigned to it
and that GAMBLE has the authority and power to issue licenses under said Patent
Rights and that GAMBLE has the right to disclose Technical Information to VRI
and to enter into and perform this AGREEMENT.


 


9.2                                 GAMBLE
does not warrant the validity of the Patent Rights licensed hereunder and makes
no representation whatsoever with regard to the scope of the Patent Rights or
that such Patent Rights may be exploited by VRI, its Affiliates, or
Sublicensees without infringing


 


15

















 


other patents, except that GAMBLE represents that as of the Effective Date
it is not aware of any patent or patent application not a part of the Patent
Rights licensed hereunder that would be infringed by the exercise by VRI, its
Affiliates or Sublicensees, of the rights granted to them hereunder.


 


10.                                 CONFIDENTIALITY


 


10.1                           Confidential
Information.  As used in this
AGREEMENT, “Confidential Information” means all information transmitted by a
party hereto or obtained by a party hereto in connection with the performance
of the clinical trials and other services described in Section 3 hereof or
of any such other services to be provided by the parties as described herein,
subject to the exceptions specified below. “Confidential Information” means
information of any type, not generally known, about the business, processes, services,
products, suppliers, customers, clients or plans of GAMBLE or VRI (“the parties
hereto”) of any client of the parties hereto (regardless of whether the parties
hereto have executed a confidentiality agreement with such customer), which is
used or useful in the conduct of business of the parties hereto, or which
confers or tends to confer a competitive advantage over one who does not
possess such information. Such information includes, but is not limited to,
information relating to trade secrets, Technical Information, patent
applications, know-how, research, development, design, engineering, quality
control or service techniques, information about existing, new or envisioned
products, processes or services and their development, performance, scientific,
engineering or technical information, laboratory notebooks, notes, computer
programs, source codes, object codes, software manuals, sketches, drawings,
reports, formulae, gels, slides, sequences, biological materials living or
otherwise, photographs, negatives, prototypes, models, correspondence, and
other documents and things, and information relating to purchasing, sales,
marketing, licensing, contracts with third parties, and pricing, whether or not
in writing and whether or not labeled or identified as confidential or
proprietary. Confidential Information may be disclosed in writing or orally or
may be obtained by observation or inspection. All data, materials, information,
and records developed by a party hereto in the course of performing this
AGREEMENT shall be considered Confidential Information. However, Confidential
Information shall not include information that a party hereto can demonstrate:
(i) is in or enters the public domain through no fault of such party;
(ii) is disclosed to a party hereto by a third party entitled to disclose
it; (iii) was known to a party hereto before the date of this AGREEMENT;
or (iv) is required by law to be disclosed, provided reasonable advance
notice of such requirement is given to a party hereto before such disclosure.


 


10.2                           Confidentiality.  Without prior written consent, the parties
hereto will not disclose the other party’s Confidential Information to any
third party other than employees, agents or others of the parties hereto who
must necessarily be informed thereof, but only if and to the extent that any
such person has a need for such information. A party hereto will only use
Confidential Information for the purpose of fulfilling its obligations under
this AGREEMENT. The parties hereto agree that they will take such reasonable
steps as may be necessary to prevent the disclosure or use of any such
materials by their officers, employees or agents except as provided herein,
including but not limited to obtaining and enforcing appropriate
confidentiality agreements with such persons. All obligations of
confidentiality and nondisclosure set forth in this AGREEMENT shall survive the
termination or expiration of this AGREEMENT.


 


16

















 


10.3                           The
parties agree that clinical trial data generated by GAMBLE under the terms of
the AGREEMENT will not be published by VRI prior to its publication by GAMBLE’s
principal investigators. To the extent not published, the results of the
clinical trials will be held in confidence by GAMBLE. Subject to the foregoing,
VRI will have the unrestricted right to use or disclose such clinical trial
data.


 


11.                                 NOTICES


 


11.1                           Reports,
notices and other communications from VRI to GAMBLE as provided hereunder shall
be sent by certified mail to:


 


James N. Gamble Institute
of Medical Research

2141 Auburn Avenue

Cincinnati, OH 45219

Attention: President


 


or other individuals or
addresses as shall hereafter be furnished by written notice to VRI.


 


11.2                           Reports,
notices and other communications from GAMBLE to VRI as provided hereunder shall
be sent to by certified mail to:


 


Virus Research Institute,
Inc.

61 Moulton Street

Cambridge, MA 02138

Attention: President


 


or other individuals or
addresses as shall hereafter be furnished by written notice to GAMBLE.


 


12.                                 ARBITRATION


 


12.1                           (a)                                  Any
controversy, dispute or claim arising out of, or relating to, any provisions,
the interpretation or the performance of this AGREEMENT or any breach thereof
which cannot otherwise be resolved by good faith negotiations between the parties
shall be resolved by final and binding arbitration under the rules of the
American Arbitration Association, or the Patent Arbitration Rules, if
applicable, which are in effect as of the Effective Date of this AGREEMENT. In
the event that VRI initiates, requests and/or files for arbitration, the
arbitration shall be conducted in Cincinnati, Ohio. In the event that GAMBLE
initiates, requests and/or files for arbitration, the arbitration shall be
conducted in Boston, Massachusetts.


 


(b)                                 The
arbitration shall be subject to the following terms:


 


(1)                                  The
number of arbitrators shall be three (3).


 


(2)                                  The
arbitrators shall be independent, impartial third parties having no direct or
indirect personal or financial relationship to any of the parties to the
dispute, who has have agreed to accept the appointment as arbitrator on the
terms set out in this Section 12.1.


 


17

















 


(3)                                  The
arbitrators shall be active or retired attorneys, law professors, or judicial
officers with at least five (5) years experience in general commercial matters
and a familiarity with the laws governing proprietary rights in intellectual
property and in particular patent law.


 


(4)                                  The
arbitrators shall be selected as follows:


 


(i)                                     Each
party shall submit a description of the matter to be arbitrated to the American
Arbitration Association at the appropriate Regional Office in Cincinnati, Ohio
or Boston, Massachusetts, depending upon where the arbitration is to be held.
Said Association shall submit to the parties a list of the arbitrators
available to arbitrate any dispute between them. Thereafter, each party shall
select, in numerical order, those persons on said list acceptable as
arbitrators and return the same to the Association. The first three arbitrators
acceptable to both parties shall be deemed the selected arbitrators with
respect to the dispute then at issue under this AGREEMENT. In the event of a
failure to select three mutually agreeable arbitrators, the Association shall
be requested to submit as many subsequent lists of arbitrators as shall be
necessary to effect a mutual selection.


 


(ii)                                  If
the method of selection set out in Section 12.1(b)(4)(a) fails for any
reason, then either party may petition any state or federal court in Massachusetts
or Ohio having jurisdiction for appointment of the arbitrators in accordance
with applicable law, provided that the arbitrators must satisfy the
requirements of Sections 12.1(b)(2) and 12.1(b)(3) above and be acceptable to
each party hereto.


 


(5)                                  The
arbitrators shall announce the award in writing accompanied by written findings
explaining the facts determined in support of the award, and any relevant
conclusions of law.


 


(6)                                  Unless
otherwise provided in this Section 12.1 or extended by agreement of the
parties, each party shall submit an initial request for designation of
arbitrators within thirty (30) days after any request for arbitration, the
dispute shall be submitted to the arbitrators within sixty (60) days after the
arbitrators are selected, and a decision shall be rendered within thirty (30)
days after the dispute is submitted.


 


(7)                                  The
fees of the arbitrators and any other costs and fees associated with the
arbitration shall be paid in accordance with the decision of the arbitrators.


 


(8)                                  The
arbitrators shall have no power to add to, subtract from, or modify any of the
terms or conditions of this AGREEMENT. Any award rendered in such arbitration
may be enforced by either party in either the courts of the Commonwealth of
Massachusetts or Ohio or in a United States District Court for the District of
Massachusetts or Ohio, to whose jurisdiction for such purposes GAMBLE and VRI
each hereby irrevocably consents and submits.


 


18

















 


12.2                           Notwithstanding
the foregoing, nothing in this Section shall be construed to waive any
rights or timely performance of any obligations existing under this AGREEMENT.


 


13.                                 RESTRICTIONS ON USE OF NAMES


 


VRI shall not use the names of GAMBLE, its related
entities and its employees, or any adaptations thereof in any advertising,
promotional or sales literature, without the prior written consent of GAMBLE;
provided however, that VRI (a) may refer to publications by employees of
GAMBLE in the scientific literature or (b) may state that a license from
GAMBLE has been granted as herein provided.


 


14.                                 INDEPENDENT CONTRACTOR


 


For the purpose of this AGREEMENT and all services to
be provided hereunder, both parties shall be, and shall be deemed to be,
independent contractors and not agents or employees of the other. Neither party
shall have authority to make any statements, representations or commitments or
any kind, or to take any action, that will be binding on the other party.


 


15.                                 SEVERABILITY


 


If any one or more of the provisions of this AGREEMENT
shall be held to be invalid, illegal or unenforceable, the validity, legality
or enforceability of the remaining provisions of this AGREEMENT shall not in
any way be affected or impaired thereby.


 


16.                                 NON-ASSIGNABILITY


 


Neither this AGREEMENT nor any part hereof shall be
assignable by either party without the express written consent of the other
provided that either VRI or GAMBLE may assign this AGREEMENT in connection with
the merger, consolidation or sale of substantially all of its assets or the
sale of that portion of its business to which the Inventions relate or as set
forth in Section 7.2 and further provided that neither party shall
unreasonably withhold its consent to any other assignment by the other party to
an assignee which can reasonably demonstrate its qualifications to carry out
the obligations of VRI or GAMBLE hereunder. Any other attempted assignment
without such consent shall be void.


 


17.                                 ENTIRE AGREEMENT


 


This instrument contains the entire AGREEMENT between
the parties hereto. No verbal agreement, conversation or representation between
any officers, agents, or employees of the parties hereto either before or after
the execution of this AGREEMENT shall affect or modify any of the terms or
obligations herein contained.


 


18.                                 MODIFICATIONS IN WRITING


 


No change, modification, extension, termination or
waiver of this AGREEMENT, or any of the provisions herein contained, shall be
valid unless made in writing and signed by a duly authorized representative of
each party.


 


19

















 


19.                                 GOVERNING LAW


 


The validity and interpretation of this AGREEMENT and
the legal relations of the parties to it shall be governed by the laws of the
State of Ohio.


 


20.                                 CAPTIONS


 


The captions are provided for convenience and are not
to be used in construing this AGREEMENT.


 


21.                                 PATENT MARKING


 


VRI agrees to mark and have marked all Licensed
Products sold by it under the license granted herein, if practical, with the
word “Patent” or “Patents” and the number of the patent or patents applicable
thereto.


 


20

















 


IN WITNESS WHEREOF, the parties hereto have caused
this AGREEMENT to be executed in quadruplicate by their duly authorized
representatives as of the date first above written.


 


	
  JAMES N. GAMBLE
  INSTITUTE

  (GAMBLE)

  	
   

  	
  VIRUS RESEARCH
  INSTITUTE, INC.

  (VRI)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Gilbert M.
  Schiff  2/24/95

  	
   

  	
  By:

  	
  /s/ William A. Packer

  
	
   

  	
  Gilbert M. Schiff, M.D.

  	
   

  	
   

  	
  William A. Packer

  
	
   

  	
  Title:  President

  	
   

  	
   

  	
  Title:  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WITNESSED BY:

  	
   

  	
  WITNESSED BY:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ [signature
  illegible]

  	
   

  	
  /s/ [signature
  illegible]

  



 


21

















 


APPENDIX
A


 


LIST
OF PATENT APPLICATIONS INCLUDED IN THE PATENT RIGHTS


 


1.)                                   U.S.
Serial No. 07/614,310, filed November 16, 1990, entitled “Human
Rotaviruses, Vaccines and Methods,” and invented by Richard L. Ward.


 


2.)                                   U.S.
Serial No. 07/816,974, filed January 3, 1992, entitled “Human Rotaviruses,
Vaccines and Methods,” and invented by Richard L. Ward (Division of U.S. Serial
No. 07/614,310).


 


3.)                                   Serial
No. PCT/U.S. 91/08191, filed November 4, 1990, entitled “Human
Rotaviruses, Vaccines and Methods,” and invented by Richard L. Ward.


 


	
  U.S. Patent Application
  Serial Number

  	
   

  	
  08/143975

  
	
  U.S. Patent Application
  Serial Number

  	
   

  	
  08/114114

  
	
  Brazilian Patent
  Application Serial Number

  	
   

  	
  9106982

  
	
  European Patent
  Application Serial Number

  	
   

  	
  92900590.8

  
	
  Mexican Patent
  Application Serial Number

  	
   

  	
  9303196

  
	
  Australian Application
  Serial Number

  	
   

  	
  90603/91

  
	
  Canadian Application
  Serial Number

  	
   

  	
  2096315

  
	
  S. Korean Application
  Serial Number

  	
   

  	
  93701493

  
	
  Japanese Application
  Serial Number

  	
   

  	
  501860/92

  



 


22

















 


APPENDIX
B


 


MATERIALS
TRANSFER AGREEMENT


 


THIS AGREEMENT entered
the
             
day of
                         ,
19    , by and between the James N. Gamble Institute of
Medical Research (“Provider”), a non-profit corporation having a place of
business at 2141 Auburn Ave., Cincinnati, Ohio 45219 and (“Recipient”), a
corporation having a place of business at


 


1.                                       Subject
to availability Provider agrees to provide the following material to recipient:
***. Such material and any related biological material or associated know-how
and data that will be received by Recipient from Provider, and any substance
that is replicated or derived therefrom are covered by this Agreement. All such
materials shall hereinafter be referred to as the “Material(s).”


 


2.                                       The
Materials will be used by Recipient in connection with the research described
in Appendix A and only for non-commercial purposes. The Materials shall
not be used in research that is subject to consulting or licensing obligations
to another institution, corporation or business entity, unless written
permission is obtained in advance from Provider.


 


3.                                       Recipient
shall not distribute, release or disclose the Materials to any other person or
entity and shall ensure that no one will be allowed to take or send the
Materials to any other location, unless written permission is obtained in
advance from Provider. Recipient agrees to maintain the confidentiality of any
propriety information of Provider regarding the Materials.


 


4.                                       The
Materials are supplied solely for scientific research purposes, for use in
animals and/or in  vitro. THE
MATERIALS SHALL NOT BE USED IN HUMANS.


 


5.                                       No
right or license is granted under the Agreement either expressly or by
implication. It is understood that any and all proprietary rights, including
but not limited to patent rights, in and to the Materials shall be and remain
in Provider.


 


6.                                       Recipient
agrees to provide Provider with an advance copy at least thirty (30) days in
advance of any written submission (abstract or paper) or oral presentation that
makes reference to the Materials. If in the opinion of Provider any such publication
describes a patentable development, Provider shall have an opportunity to
request that Recipient delay the submission or public presentation until after
a U.S. patent application has been filed. In no event shall the delay be
unreasonable. If a publication does result from work using the Materials,
Recipient agrees to acknowledge Provider and/or give credit to Provider’s
scientists, as scientifically appropriate, based on any direct contribution
they may have made to the work.


 


7.                                       Recipient
agrees not to sequence or clone any Material provided by Provider without the
written permission of Provider.


 


23

















 


8.                                       In
the event that use of the Material results in an invention, improvement,
substance, or information whether or not patentable and patents, if any, which
result therefrom (“Developed Technology”), Recipient agrees to disclose
promptly to Provider all such inventions, improvements or substances.


 


9.                                       Recipient
shall assign all right, title and interest in and to Developed Technology to
Provider. Recipient agrees to cooperate and assist Provider in obtaining patent
protection for Developed Technology.


 


10.                                 Recipient
agrees to execute, acknowledge and deliver all such further papers as may be
necessary to perform its obligation under this Agreement


 


11.                                 Recipient
acknowledges that the Materials are provided WITHOUT WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY,
EXPRESS OR IMPLIED. PROVIDER MAKES NO REPRESENTATION THAT THE USE OF THE
MATERIALS WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK OR OTHER
PROPRIETARY RIGHT.


 


12.                                 In
no event shall Provider be liable for any use of the Materials by Recipient.
Recipient hereby agrees to defend, indemnify and hold harmless Provider, its
officers, directors, trustees, employees and agents from any loss, claim,
damage, expense or liability, of whatsoever kind or nature (including
attorney’s fees), which may arise from or in connection with this Agreement or
the use, handling or storage of the Materials.


 


13.                                 Recipient
shall report to Provider a summary of the results of Recipient’s work utilizing
the Materials.


 


14.                                 Upon
the request of Provider, Recipient shall promptly return to Provider the
Materials furnished to Recipient under this Agreement.


 


15.                                 Recipient
agrees to comply with all government and National Institutes of Health
regulations and guidelines which are applicable to the Recipient’s use of the
Materials.


 


16.                                 This
Agreement is not assignable, whether by operation of law or otherwise, without
the prior written consent of Provider.


 


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IN WITNESS WHEREOF, the
parties, intending to be legally bound, have caused this Agreement to be
executed by their respective duly authorized representatives.


 


	
  RECIPIENT’S
  INVESTIGATOR

  	
   

  	
  AUTHORIZED
  REPRESENTATIVE FOR

  RECIPIENT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Typed Name

  	
   

  	
  Typed Name

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PROVIDER’S INVESTIGATOR

  	
   

  	
  AUTHORIZED
  REPRESENTATIVE FOR

  PROVIDER

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Typed Name

  	
   

  	
  Typed Name

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  	
  Title

  	
   

  



 


25

















 


APPENDIX
C


 


PROTOCOL


 


REACTIVITY
AND IMMUNOGENICITY OF LIVE, ATTENUATED


 


ROTAVIRUS
VACCINE CANDIDATE 89-12


 


A copy of the protocol will
be attached to the execution copy of this AGREEMENT


 


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