EXHIBIT
10.27


 


PUBLIC
HEALTH SERVICE


 


PATENT
LICENSE AGREEMENT –NONEXCLUSIVE


 


COVER
PAGE


 




	
  For Office of
  Technology Transfer/NIH internal use only:

  	
   

  	
   

  
	
  Patent License Number:

  	
   

  	
   

  
	
  Serial Numbers of
  Licensed Patents:

  	
   

  	
  U.S. Patent Number
  5,591,631, USSN

  08/082,849 and SN 60/025,270

  
	
  Licensee:

  	
   

  	
  Virus Research
  Institute

  
	
  CRADA Number (if
  applicable):

  	
   

  	
  none

  
	
  Additional Remarks:

  	
   

  	
  none

  






 


This Patent License Agreement, hereinafter referred to
as the “Agreement,” consists of this Cover Page, an attached agreement, a Signature
Page, Appendix A (Patent or Patent Application), Appendix B (Fields of Use and
Territory), Appendix C (Royalties), Appendix D (Modifications) and Appendix E
(Benchmarks).  This Cover Page serves to
identify the Parties to this Agreement as follows:


 


1.                                       The
National Institutes of Health (“NIH”) or the Centers for Disease Control
(“CDC”), hereinafter singly or collectively referred to as “PHS,” agencies of
the United States Public Health Service within the Department of Health and
Human Services (“DHHS”); and


 


2.                                       The
person, corporation, or institution identified above and/or on the Signature
Page, having offices at the address indicated on the Signature Page,
hereinafter referred to as “Licensee.”


 

















 


PHS
PATENT LICENSE AGREEMENT–NONEXCLUSIVE


 


PHS and Licensee agree as follows:


 


1.                                      BACKGROUND


 


1.01                           In the
course of conducting biomedical and behavioral research, PHS investigators made
inventions that may have commercial applicability.


 


1.02                           By
assignment of rights from PHS employees and other inventors, DHHS, on behalf of
the United States Government, owns intellectual property rights claimed in any
United States and foreign patent applications or patents corresponding to the
assigned inventions.  DHHS also owns any
tangible embodiments of these inventions actually reduced to practice by PHS.


 


1.03                           The
Assistant Secretary for Health of DHHS has delegated to PHS the authority to
enter into this Agreement for the licensing of the rights to these inventions
under 35 U.S.C. §§ 200-212, the Federal Technology Transfer Act of 1986, 15
U.S.C. § 3710a, and/or the regulations governing the licensing of
Government-owned inventions, 37 CFR Part 404.


 


1.04                           PHS
desires to transfer these inventions to the private sector through
commercialization licenses to facilitate the commercial development of products
and processes for public use and benefit.


 


1.05                           Licensee
desires to acquire commercialization rights to certain of these inventions in
order to develop processes, methods, or marketable products for public use and
benefit.


 


2.                                      DEFINITIONS


 


2.01                           “Licensed
Patent Rights” shall mean:


 


a)                                      U.S.
patent applications and patents listed in Appendix A, all divisions and
continuations of these applications, all patents issuing from such
applications, divisions, and continuations, and any reissues, reexaminations,
and extensions of all such patents;


 


b)                                     to
the extent that the following contain one or more claims directed to the
invention or inventions disclosed or claimed in a) above: i)
continuations-in-part of a) above; ii) all divisions and continuations of these
continuations-in-part; iii) all patents issuing from such
continuations-in-part, divisions, and continuations; and iv) any reissues,
reexaminations, and extensions of all such patents;


 


c)                                      to
the extent that the following contain one or more claims directed to the
invention or inventions disclosed or claimed in a) above: all counterpart


 

















 


foreign applications and
patents to a) and b) above, including those listed in Appendix A.


 


Licensed Patent Rights
shall not include b) or c) above
to the extent that they contain one or more claims directed to new matter which
is not the subject matter of a claim in a) above.


 


2.02                           “Licensed
Product(s)” means tangible materials which, in the course of manufacture, use,
or sale would, in the absence of this Agreement, infringe one or more granted
claims of the Licensed Patent Rights that have not been held invalid or
unenforceable by an unappealed or unappealable judgment or decision of a court
of competent jurisdiction or an administrative agency.


 


2.03                           “Licensed
Process(es)” means processes which, in the course of being practiced would, in
the absence of this Agreement, infringe one or more granted claims of the
Licensed Patent Rights that have not been held invalid or unenforceable by an
unappealed or unappealable judgment or decision of a court of competent
jurisdiction or of an administrative agency.


 


2.04                           “Licensed
Territory” means the geographical area identified in Appendix B.


 


2.05                           “Net
Sales” means the total gross receipts for sales of Licensed Products or
practice of Licensed Processes by or on behalf of Licensee and from leasing,
renting, or otherwise making Licensed Products available to others without sale
or other dispositions, whether invoiced or not, less returns and allowances
actually granted, packing costs, insurance costs, freight out, taxes or excise
duties imposed on the transaction (if separately invoiced), rebates, disallowed
reimbursements, and wholesaler and cash discounts in amounts customary in the
trade.  No deductions shall be made for
commissions paid to individuals, whether they be with independent sales
agencies or regularly employed by Licensee and on its payroll, or for the cost
of collections.


 


2.06                           “First
Commercial Sale” means the initial transfer by or on behalf of Licensee of
Licensed Products or the initial practice of a Licensed Process in exchange for
cash or some equivalent to which value can be assigned for the purpose of
determining Net Sales.


 


2.07                           “Government”
means the government of the United States of America.


 


2.08                           “Licensed
Fields of Use” means the fields of use identified in Appendix B.


 


3.                                      GRANT OF RIGHTS


 


3.01                           PHS
hereby grants and Licensee accepts, subject to the terms and conditions of this
Agreement, a nonexclusive license to Licensee under the Licensed Patent Rights
in the Licensed Territory to make and have made, to use and have used, to sell
and have sold, to import and have imported, and to offer for sale any Licensed
Products in the Licensed Fields of Use and to practice and have practiced any
Licensed Processes in the Licensed Fields of Use.


 


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3.02                           This
Agreement confers no license or rights by implication, estoppel, or otherwise
under any patent applications or patents of PHS other than the Licensed Patent
Rights regardless of whether such patents are dominant or subordinate to
Licensed Patent Rights.


 


3.03                           Upon
written approval by PHS, which approval will not be unreasonably withheld, nor
will a decision on approval be unduly delayed beyond ninety (90) days from
receipt of a written request from Licensee, Licensee may enter into
sublicensing agreements under the Licensed Patent Rights in which the Licensed
Patent Rights are licensed to a third party who also receives a license under
technology and/or in patent rights in addition to the Licensed Patent Rights as
to which Licensee has proprietary rights.


 


3.04                           Licensee
agrees that any sublicenses granted by it shall provide that the obligations to
PHS of Paragraphs 4.01, 6.01, 8.01, 8.02, 10.05, and 11.07-11.10 of this
Agreement shall be binding upon the sublicensee as if it were a party to this
Agreement.  Licensee further agrees to
attach copies of these Paragraphs to all sublicense agreements.


 


3.05                           Any
sublicenses granted by Licensee shall provide for the termination of the
sublicense, or the conversion to a license directly between such sublicensees
and PHS, at the option of the sublicensee, upon termination of this Agreement
under Article 11.  Such conversion
is contingent upon acceptance by the sublicensee of the remaining provisions of
this Agreement.


 


3.06                           Licensee
agrees to forward to PHS a copy of each fully executed sublicense agreement
postmarked within sixty (60) days of the execution of such agreement.


 


4.                                      STATUTORY AND PHS
REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS


 


4.01                           Licensee
agrees that products used or sold in the United States embodying Licensed
Products or produced through use of Licensed Processes shall be manufactured
substantially in the United States, unless a written waiver is obtained in
advance from PHS.


 


5.                                      ROYALTIES AND
REIMBURSEMENT


 


5.01                           Licensee
agrees to pay to PHS a noncreditable, nonrefundable license issue royalty as
set forth in Appendix C within thirty (30) days from the date that this
Agreement becomes effective.


 


5.02                           Licensee
agrees to pay to PHS a nonrefundable minimum annual royalty as set forth in
Appendix C.  The minimum annual royalty
is due and payable on January 1 of each calendar year and may be credited
against any earned royalties due for sales made in that year.  The minimum annual royalty for the first
calendar year of this Agreement is due and payable within thirty (30) days from
the effective date of this Agreement and may be prorated according to the
fraction of the calendar year remaining between the effective date of this
Agreement and the next subsequent January 1.


 


5.03                           Licensee
agrees to pay PHS benchmark royalties as set forth in Appendix C.


 


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5.04                           Licensee
agrees to pay PHS earned royalties as set forth in Appendix C.


 


5.05                           A claim
of a patent licensed under this Agreement shall cease to fall within the
Licensed Patent Rights for the purpose of computing the minimum annual royalty
and earned royalty payments in any given country on the earliest of the dates
that a) the claim has been abandoned but not continued, b) the patent expires,
c) the patent is no longer maintained by the Government, or d) all claims of
the Licensed Patent Rights have been held to be invalid or unenforceable by an
unappealed or unappealable decision of a court of competent jurisdiction or
administrative agency.


 


5.06                           No
multiple royalties shall be payable because any Licensed Products or Licensed
Processes are covered by more than one of the Licensed Patent Rights.


 


5.07                           On
sales of Licensed Products by Licensee in other than an arm’s-length
transaction, the value of the Net Sales attributed under this Article 5 to
such a transaction shall be that which would have been received in an
arm’s-length transaction, based on sales of like quantity and quality products
on or about the time of such transaction.


 


5.08                           As an
additional royalty, Licensee agrees to pay PHS, an amount equivalent to all
patent expenses previously incurred by PHS in the preparation, filing,
prosecution, and maintenance of Licensed Patent Rights, the amount of
Seventy-five Thousand Dollars ($75,000.00). 
PHS will bill Licensee for past patent prosecution costs of Seventy-five
Thousand Dollars ($75,000.00) in five equal installments of Fifteen Thousand
Dollars ($15,000.00) on the first, second, third, fourth, and fifth anniversary
of this Agreement unless PHS has executed additional nonexclusive licenses to
the Licensed Patent Rights before these dates under which circumstances these
payments will be divided equally among all nonexclusive commercialization
licensees of record as of the date the statement and request for payment is
sent by PHS to Licensee.  Licensee
further agrees to pay PHS annually, within sixty (60) days of PHS’s submission
of a statement and request for payment, a royalty amount equivalent to all such
future patent expenses incurred during the previous calendar year divided
equally among all nonexclusive commercialization licensees of record as of the
date the statement and request for payment are sent by PHS to Licensee.  Fifty percent (50%) of the cumulative amount
of the payments due under this Paragraph 5.08 may be credited against royalties
due under Paragraph 5.03; however, the net royalty payment in any calendar year
may not be lower than the minimum annual royalty specified in Appendix C.  Licensee may elect to surrender its rights
in any country of the Licensed Territory under any Licensed Patent Rights upon
sixty (60) days’ written notice to PHS and owe no payment obligation under this
Paragraph for subsequent patent-related expenses incurred in that country.  PHS intends that all non-exclusive licensees
of the Licensed Patent Rights shall contribute equally for the expenses of
patent prosecution of the Licensed Patent Rights.  In order that Licensee, as the first licensee of these Licensed
Patent Rights, pays an equal share of the costs of patent prosecution to that
paid by subsequent licensee(s) of these Licensed Patent Rights, PHS will adjust
payments for patent prosecution of the Licensed Patent Rights among the
licensees at the time such payments become due.


 


5.09                           PHS
intends that the royalty terms of all other licenses under Licensed Patent
Rights in the identical Licensed Fields of Use will be essentially similar to
the terms of this Agreement.  During the
term of this Agreement, PHS will advise Licensee as to those royalty


 


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terms in other agreements under Licensed Patent Rights in the Licensed
Fields of Use in the Licensed Territory signed after the effective date of this
Agreement that are different from this Agreement as to Minimum Annual Royalty
or Earned Royalty or the basis on which these royalties are computed.  During the term of this Agreement, Licensee
may determine whether such package of royalty terms are more favorable than
those granted under this Agreement, and shall be entitled upon written notice
to PHS, within sixty (60) days after receipt from PHS of the different royalty
terms, to have this Agreement amended to substitute this package of royalty
terms as of the date upon which more favorable royalty terms become effective.


 


6.                                      RECORD KEEPING


 


6.01                           Licensee
agrees to keep accurate and correct records of Licensed Products made, used, or
sold and Licensed Processes practiced under this Agreement appropriate to
determine the amount of royalties due PHS. 
Such records shall be retained for at least five (5) years following a
given reporting period.  They shall be
available during normal business hours for inspection at the expense of PHS by
an accountant or other designated auditor selected by PHS for the sole purpose
of verifying reports and payments hereunder. 
The accountant or auditor shall only disclose to PHS information
relating to the accuracy of reports and payments made under this
Agreement.  If an inspection shows an
underreporting or underpayment in excess of five percent (5%) for any twelve
(12) month period, then Licensee shall reimburse PHS for the cost of the
inspection at the time Licensee pays the unreported royalties, including any
late charges as required by Paragraph 7.06 of this Agreement.  All payments required under this Paragraph
shall be due within thirty (30) days of the date PHS provides Licensee notice
of the payment due.


 


7.                                      REPORTS ON
PROGRESS, SALES, AND PAYMENTS


 


7.01                           Prior
to signing this Agreement, Licensee has provided to PHS a written
commercialization plan (“Commercial Development Plan”) under which Licensee
intends to bring the subject matter of the Licensed Patent Rights into
commercial use.  The Commercial
Development Plan is hereby incorporated by reference into this Agreement.


 


7.02                           Licensee
shall provide written annual reports on its product development progress or
efforts to commercialize under the Commercial Development Plan for each of the
Licensed Fields of Use within sixty (60) days after December 31 of each
calendar year.  These progress reports
shall include, but not be limited to: 
progress on research and development, status of applications for
regulatory approvals, manufacturing, marketing, and sales during the preceding
calendar year, as well as plans for the present calendar year.  Licensee agrees to provide any additional
data reasonably required by PHS to evaluate Licensee’s performance.


 


7.03                           Licensee
shall report to PHS the date of the First Commercial Sale in each country in
the Licensed Territory within thirty (30) days of such occurrence.


 


7.04                           Licensee
shall submit to PHS within sixty (60) days after each calendar half-year ending
June 30 and December 31 a royalty report setting forth for the
preceding half-year period the amount of the Licensed Products sold or Licensed
Processes practiced by or on behalf of Licensee in each country within the
Licensed Territory, the Net Sales, and the amount of royalty 


 


5

















 


accordingly due.  With each such
royalty report, Licensee shall submit payment of the earned royalties due.  If no earned royalties are due to PHS for
any reporting period, the written report shall so state.  The royalty report shall be certified as
correct by an authorized officer of Licensee and shall include a detailed
listing of all deductions made under Paragraph 2.05 to determine Net Sales made
under Article 5 to determine royalties due.


 


7.05                           Royalties
due under Article 5 shall be paid in U.S. dollars.  For conversion of foreign currency to U.S.
dollars, the conversion rate shall be the rate quoted in The Wall Street Journal on the day that
the payment is due.  All checks and bank
drafts shall be drawn on United States banks and shall be payable to NIH/Patent
Licensing at the address shown on the Signature Page below.  Any loss of exchange, value, taxes, or other
expenses incurred in the transfer or conversion to U.S. dollars shall be paid entirely
by Licensee.  All royalty payments due
under this Agreement shall be mailed to the following address: NIH, P.O. Box
360120, Pittsburgh, Pennsylvania 15251-6120. 
The royalty report required by paragraph 7.04 of this Agreement shall
accompany each such payment and a copy of such report shall also be mailed to
PHS at its address for notices indicated on the Signature Page of this
Agreement.


 


7.06                           Late
charges will be applied to any overdue payments as required by the U.S.
Department of Treasury in the Treasury Fiscal Requirements Manual,
Section 8025.40.  The payment of
such late charges shall not prevent PHS from exercising any other rights it may
have as a consequence of the lateness of any payment.


 


7.07                           All
plans and reports required by this Article 7 and marked “confidential” by
Licensee shall be treated by PHS as commercial and financial information
obtained from a person, and as privileged and confidential and, to the extent
permitted by law, shall not be subject to disclosure under the Freedom of
Information Act, 5 U.S.C. § 552.


 


8.                                      PERFORMANCE


 


8.01                           Consistent
with sound and reasonable business practices and judgment, Licensee shall use
its reasonable best efforts to introduce the Licensed Products into the
commercial market or apply the Licensed Processes to commercial use as soon as
practicable.  “Reasonable best efforts”
for the purpose of this provision shall include, but not be limited to,
adherence to the Commercial Development Plan and Benchmarks in Appendix E.  However, the failure of Licensee to meet a
Benchmark does not solely establish that Licensee has not met the requirements
under this section.


 


8.02                           Upon
the First Commercial Sale, until the expiration of this Agreement, Licensee
shall use its reasonable best efforts to keep Licensed Products and Licensed
Processes reasonably accessible to the public.


 


9.                                      INFRINGEMENT AND
PATENT ENFORCEMENT


 


9.01                           PHS and
Licensee agree to notify each other promptly of each infringement or possible
infringement, as well as any facts which may affect the validity, scope, or
enforceability of the Licensed Patent Rights of which either Party becomes
aware.


 


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9.02                           If PHS
has been unable to eliminate a substantial infringement within one (1) year of
written notification to the Office of Technology Transfer from Licensee of the
existence of a substantial infringement and has not instituted infringement
litigation, Licensee shall be excused from the payment of the minimum annual
royalty and earned royalties in any country in which the substantial
infringement continues to occur. 
Thereafter, when the substantial infringement has ceased or an
infringement suit has been initiated, PHS shall so notify the Licensee in
writing, at which time Licensee’s obligation to pay such royalties shall resume
as of the date of such notification.


 


9.03                           In the
event that a declaratory judgment action alleging invalidity of any of the
Licensed Patent Rights shall be brought against PHS, PHS agrees to notify
Licensee that an action alleging invalidity has been brought.  PHS does not represent that it will commence
legal action to defend against a declaratory action alleging invalidity.  Licensee shall take no action to compel the
Government either to initiate or to join in any such declaratory judgment
action.  Should the Government be made a
party to any such suit by motion or any other action of Licensee, Licensee
shall reimburse the Government for any costs, expenses, or fees which the Government
incurs as a result of its defending against such motion or other action taken
in response to the motion.  Upon
Licensee’s payment of all costs incurred by the Government as a result of
Licensee’s joinder motion or other action, these actions by Licensee will not
be considered a default in the performance of any material obligation under
this Agreement.


 


10.                               NEGATION OF WARRANTIES
AND INDEMNIFICATION


 


10.01                     PHS offers no
warranties other than those specified in Article 1.


 


10.02                     PHS does not
warrant the validity of the Licensed Patent Rights and makes no representations
whatsoever with regard to the scope of the Licensed Patent Rights, or that the
Licensed Patent Rights may be exploited without infringing other patents or
other intellectual property rights of third parties.


 


10.03                     PHS MAKES NO WARRANTIES, EXPRESSED OR IMPLIED, OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY SUBJECT MATTER
DEFINED BY THE CLAIMS OF THE LICENSED PATENT RIGHTS.


 


10.04                     PHS does not
represent that it will commence legal actions against third parties infringing
the Licensed Patent Rights.


 


10.05                     Licensee
shall indemnify and hold PHS, its employees, students, fellows, agents, and
consultants harmless from and against all liability, demands, damages,
expenses, and losses, including but not limited to death, personal injury,
illness, or property damage in connection with or arising out of a) the use by
or on behalf of Licensee or its directors, employees, or third parties of any
Licensed Patent Rights, or b) the design, manufacture, distribution, or use of any
Licensed Products, Licensed Processes, or other products or processes developed
in connection with or arising out of the Licensed Patent Rights.  Licensee agrees to maintain a liability
insurance program consistent with sound business practice.


 


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11.                               TERMINATION AND
MODIFICATION OF RIGHTS


 


11.01                     This
Agreement is effective when signed by all parties and shall extend to the
expiration of the last to expire of the Licensed Patent Rights unless sooner
terminated as provided in this Article 11.


 


11.02                     In the event
that Licensee is in default in the performance of any material obligations
under this Agreement, and if the default has not been remedied within ninety
(90) days after the date of notice in writing of such default, PHS may
terminate this Agreement by written notice.


 


11.03                     At least
thirty (30) days prior to filing a petition in bankruptcy, Licensee must inform
PHS in writing of its intention to file the petition in bankruptcy or of a
third party’s intention to file an involuntary petition in bankruptcy.


 


11.04                     In the event
that Licensee becomes insolvent, files a petition in bankruptcy, has such a
petition filed against it, determines to file a petition in bankruptcy, or
receives notice of a third party’s intention to file an involuntary petition in
bankruptcy, Licensee shall immediately notify PHS in writing.  Furthermore, PHS shall have the right to
terminate this Agreement by giving Licensee written notice.  Termination of this Agreement is effective
upon Licensee’s receipt of the written notice.


 


11.05                     Licensee
shall have a unilateral right to terminate this Agreement and/or its rights in
any country by giving PHS sixty (60) days’ written notice to that effect.


 


11.06                     PHS shall
specifically have the right to terminate or modify, at its option, this
Agreement, if PHS determines that the Licensee: 1) is not executing the
Commercial Development Plan submitted with its request for a license and the
Licensee cannot otherwise demonstrate to PHS’s satisfaction that the Licensee
has taken, or can be expected to take within a reasonable time, effective steps
to achieve practical application of the Licensed Products or Licensed
Processes; 2) has willfully made a false statement of, or willfully omitted, a
material fact in the license application or in any report required by the
license agreement; 3) has committed a substantial breach of a covenant or
agreement contained in the license; 4) cannot reasonably satisfy unmet health
and safety needs; or 5) cannot reasonably justify a failure to comply with the
domestic production requirement of Paragraph 4.01 unless waived.  In making this determination, PHS will take
into account the normal course of such commercial development programs
conducted with sound and reasonable business practices and judgment and the
annual reports submitted by Licensee under Paragraph 7.02.  Prior to invoking this right, PHS shall give
written notice to Licensee providing Licensee specific notice of, and a ninety
(90) day opportunity to respond to, PHS’s concerns as to the previous items 1)
to 5).  If Licensee fails to remedy the
deficiencies specified in the notice provided by PHS with respect to the
previous items 1) to 5) or fails to initiate corrective action to PHS’s
satisfaction, PHS may terminate this Agreement.


 


11.07                     PHS reserves
the right according to 35 U.S.C. § 209(f)(4) to terminate or modify this
Agreement if it is determined that such action is necessary to meet
requirements for public


 


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use specified by Federal regulations issued after the date of the
license and such requirements are not reasonably satisfied by Licensee.


 


11.08                     Within thirty
(30) days of receipt of written notice of PHS’s unilateral decision to
terminate this Agreement, Licensee may, consistent with the provisions of 37
CFR § 404.11, appeal the decision by written submission to the Director of NIH
or designee.  The decision of the NIH
Director or designee shall be the final agency decision.  Licensee may thereafter exercise any and all
administrative or judicial remedies that may be available.


 


11.09                     Within ninety
(90) days of termination of this Agreement under this Article 11 or
expiration under Paragraph 11.01, a final report shall be submitted by
Licensee.  Any royalty payments and
unreimbursed patent expenses due to PHS become immediately due and payable upon
termination or expiration of this Agreement, and Licensee shall return all
Licensed Products or other materials included within the Licensed Patent Rights
to PHS or provide PHS with certification of their destruction.


 


11.10                     Paragraphs
6.01, 7.05-7.07,10.01, 10.03, 10.05, and 11.08 of this Agreement shall survive
termination of this Agreement.


 


12.                               GENERAL PROVISIONS


 


12.01                     Neither Party
may waive or release any of its rights or interests in this Agreement except in
writing.  The failure of the Government
to assert a right hereunder or to insist upon compliance with any term or
condition of this Agreement shall not constitute a waiver of that right by the Government
or excuse a similar subsequent failure to perform any such term or condition by
Licensee.


 


12.02                     This
Agreement constitutes the entire agreement between the Parties relating to the
subject matter of the Licensed Patent Rights, and all prior negotiations,
representations, agreements, and understandings are merged into, extinguished
by, and completely expressed by this Agreement.


 


12.03                     The
provisions of this Agreement are severable, and in the event that any provision
of this Agreement shall be determined to be invalid or unenforceable under any
controlling body of law, such determination shall not in any way affect the
validity or enforceability of the remaining provisions of this Agreement.


 


12.04                     If either
Party desires a modification to this Agreement, the Parties shall, upon
reasonable notice of the proposed modification by the Party desiring the
change, confer in good faith to determine the desirability of such
modification.  No modification will be
effective until a written amendment is signed by the signatories to this
Agreement or their designees.


 


12.05                     The
construction, validity, performance, and effect of this Agreement shall be
governed by Federal law as applied by the Federal courts in the District of
Columbia.


 


12.06                     All notices
required or permitted by this Agreement shall be given by prepaid, first class,
registered or certified mail properly addressed to the other Party at the
address


 


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designated on the following Signature Page, or to such other address as
may be designated in writing by such other Party, and shall be effective as of
the date of the postmark of such notice.


 


12.07                     This
Agreement shall not be assigned by Licensee except a) with the prior written
consent of PHS; orb) as part of a sale or transfer of substantially the entire
business of Licensee relating to operations which concern this Agreement
including but not limited to asset sales, stock sales, mergers and
consolidations.  Licensee shall notify
PHS within ten (10) days of any assignment of this Agreement by Licensee.


 


12.08                     Licensee
agrees in its use of any PHS-supplied materials to comply with all applicable
statutes, regulations, and guidelines, including Public Health Service and
National Institutes of Health regulations and guidelines.  Licensee agrees not to use the materials for
research involving human subjects or clinical trials in the United States
without complying with 21 CFR Part 50 and 45 CFR Part 46.  Licensee agrees not to use the materials for
research involving human subjects or clinical trials outside of the United
States without notifying PHS, in writing, of such research or trials and
complying with the applicable regulations of the appropriate national control
authorities.  Written notification to
PHS of research involving human subjects or clinical trials outside of the
United States shall be given no later than sixty (60) days prior to
commencement of such research or trials.


 


12.09                     Licensee
acknowledges that it is subject to and agrees to abide by the United States
laws and regulations (including the Export Administration Act of 1979 and Arms
Export Control Act) controlling the export of technical data, computer
software, laboratory prototypes, biological material, and other commodities.  The transfer of such items may require a
license from the cognizant agency of the U.S. Government or written assurances
by Licensee that it shall not export such items to certain foreign countries
without prior approval of such agency. 
PHS neither represents that a license is or is not required or that, if
required, it shall be issued.


 


12.10                     Licensee
agrees to mark the Licensed Products or their packaging sold in the United
States with all applicable U.S. patent numbers and similarly to indicate
“Patent Pending” status.  All Licensed
Products manufactured in, shipped to, or sold in other countries shall be
marked in such a manner as to preserve PHS patent rights in such countries.


 


12.11                     By entering
into this Agreement, PHS does not directly or indirectly endorse any product or
service provided, or to be provided, by Licensee whether directly or indirectly
related to this Agreement.  Licensee
shall not state or imply that this Agreement is an endorsement by the
Government, PHS, any other Government organizational unit, or any Government
employee.  Additionally, Licensee shall
not use the names of PHS, NIH, or CDC or their employees in any advertising,
promotional, or sales literature without the prior written consent of PHS.


 


12.12                     The Parties
agree to attempt to settle amicably any controversy or claim arising under this
Agreement or a breach of this Agreement, except for appeals of modification or
termination decisions provided for in Article 11.  Licensee agrees first to appeal any such
unsettled claims or controversies to the Director of NIH, or designee, whose
decision shall be considered the final agency decision.  Thereafter, Licensee may exercise any
administrative or judicial remedies that may be available.


 


10

















 


12.13                     Nothing
relating to the grant of a license, nor the grant itself, shall be construed to
confer upon any person any immunity from or defenses under the antitrust laws
or from a charge of patent misuse, and the acquisition and use of rights
pursuant to 37 CFR Part 404 shall not be immunized from the operation of state
or Federal law by reason of the source of the grant.


 


SIGNATURES
BEGIN ON NEXT PAGE


 


11

















 


PHS
PATENT LICENSE AGREEMENT –NONEXCLUSIVE


 


SIGNATURE
PAGE


 


	
  FOR PHS:

  
	
   

  
	
  by:

  	
  /s/ Barbara
  McGarey

  	
   

  	
   3/25/98

  
	
  Barbara McGarey, J.D.

  	
   Date

  
	
  Deputy Director, Office
  of Technology Transfer

  National Institutes of Health

  	
   

  



 


Mailing Address for
Notices:


 


Office of Technology
Transfer


National Institutes of
Health


6011 Executive Boulevard,
Suite 325


Rockville, Maryland 20852


 


FOR Licensee (Upon
information and belief, the undersigned expressly certifies or affirms that the
contents of any statements of Licensee made or referred to in this document are
truthful and accurate.):


 


	
  Licensee

  
	
   

  
	
  by:

  	
  /s/ William A.
  Packer

  	
   

  	
   3/4/98

  
	
  Signature of Authorized
  Official

  	
   Date

  
	
   

  	
   

  
	
  William A. Packer

  	
   

  
	
  Printed Name

  	
   

  
	
   

  	
   

  
	
  President/CFO

  	
   

  
	
  Title

  	
   

  



 


 


Mailing Address for Notices:


 


	
  61 Moulton Street

  	
   

  
	
   

  
	
  Cambridge, MA 02138

  	
   

  
	
   

  
	
   

  	
   

  



 

















 


APPENDIX
A - Patent or Patent Application


 


PATENT
OR PATENT APPLICATION:


 


U.S. Patent Number
5,591,631 (USSN 08/021,601), entitled, “Anthrax Toxin Fusion Proteins And
Related Methods”, Leppla et al., filed February 12, 1993, issued,
January 7, 1997.


 


U.S. Patent Application
Serial Number 08/082,849 (CIP of 08/021,601), entitled, “Anthrax Toxin Fusion
Proteins And Related Methods”, Leppla et al., filed June 25, 1993.


 


Patent Application Serial
Number 60/025,270, entitled, “Targeting Antigens To The MHC Class I Processing
Pathway With An Anthrax Toxin Fusion Protein”, Klimpel et al., filed
September 17, 1996.


 

















 


APPENDIX
B - Licensed Fields of Use and Territory


 


LICENSED
TERRITORY:


 


Worldwide


 


LICENSED
FIELDS OF USE:


 


Vaccines and
immunotherapeutics for the prevention or treatment of human and animal
diseases.


 

















 


APPENDIX
C - Royalties


 


ROYALTIES:


 


Licensee agrees to pay to
PHS a noncreditable, nonrefundable license issue royalty in the amount of Ten
Thousand Dollars ($10,000.00) due within thirty (30) days of the date of
execution of this Agreement.


 


Licensee agrees to pay to
PHS a nonrefundable minimum annual royalty in the amount of One Thousand
Dollars ($1,000.00) for the first Five (5) years of this Agreement, and Five
Thousand Dollars ($5,000.00), thereafter.


 


Licensee agrees to pay
PHS earned royalties on Net Sales as follows:


 


1.                                       One
Percent (1%) on Net Sales of Licensed Products made, have made, used, or sold
by Licensee or its Affiliates and


 


2.                                       In
the case where Licensee grants a sublicense under the Licensed Patent Rights
with respect to a Licensed Product which includes a proprietary antigen of
Licensee, One Percent (1%) on Net Sales of Licensed Products made, have made,
used, or sold by sublicensees or Ten Percent (10%) of the earned royalties received
by Licensee from its sublicensees on Net Sales of Licensed Products, whichever
is greater and


 


3.                                       In
the case where Licensee grants a sublicense other than those of paragraph 2
above, Ten Percent (10%) of the earned royalties received by Licensee from its
sublicensees on Net Sales of Licensed Products.


 


Licensee agrees to pay
PHS a noncreditible, nonrefundable sublicensing royalty in the amount of Twenty
Thousand Dollars ($20,000) for each sublicense.


 


Licensee agrees to pay
PHS benchmark royalties as follows:


 


Fifteen Thousand Dollars
($15,000.00) at the initiation of the first Phase III study for Licensed
Product(s) for the first indication in cancer and for the first indication in
infectious disease.


 


Twenty-five Thousand
Dollars ($25,000) upon filing of the first PLA for Licensed Product(s) for the
first indication in cancer and for the first indication in infectious disease.


 


One Hundred Thousand
Dollars ($100,000.00) upon the First Commercial Sale of the first Licensed
Product(s) for the first indication in cancer and for the first indication in
infectious disease.


 

















 


APPENDIX
D - Modifications


 


PHS and Licensee agree to the following modifications
to the Articles and Paragraphs of this Agreement:


 


none


 

















 


APPENDIX
E - Benchmarks


 


	
  Cancer
  Vaccines

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Evaluation of
  Anthrax-Toxoid (AT) delivery system for efficiency in generating immune
  responses directed against tumor tissues in a mouse model system.

  	
   

  	
  12/1/98

  
	
   

  	
   

  	
   

  
	
  Application of the AT
  delivery system to two murine tumor models.

  	
   

  	
  12/1/99

  
	
   

  	
   

  	
   

  
	
  DNA
  Delivery Systems

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Evaluation of the AT
  system for efficiency of DNA expression.

  	
   

  	
  12/1/98

  
	
   

  	
   

  	
   

  
	
  Testing of AT system
  for generating immune responses for Listeria
  monocytogenes.

  	
   

  	
  12/1/98

  
	
   

  	
   

  	
   

  
	
  Testing of a human
  pathogen as a DNA vaccine target.

  	
   

  	
  12/1/99

  
	
   

  	
   

  	
   

  
	
  Persistent
  Viral Infections

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Application of the AT
  system to the (Latent Cytomegalovirus)
  LCMV model in mice.

  	
   

  	
  12/1/98

  
	
   

  	
   

  	
   

  
	
  Therapy of
  immunodeficiency virus (SHIV) infected Rhesus macaques and hepatitis B
  infected non-human primates using the AT system.

  	
   

  	
  12/1/99

  
	
   

  	
   

  	
   

  
	
  Clinical
  Development

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Phase I Clinical Trials

  	
   

  	
  12/1/2000

  
	
   

  	
   

  	
   

  
	
  Phase II Clinical
  Trials

  	
   

  	
  12/1/2001

  
	
   

  	
   

  	
   

  
	
  Manufacturing
  Activities

  	
   

  	
  12/1/2003

  
	
   

  	
   

  	
   

  
	
  Phase III Clinical
  Trials and preparation of Registration File.

  	
   

  	
  12/1/2005

  
	
   

  	
   

  	
   

  
	
  FDA Review

  	
   

  	
  12/1/2006

  
	
   

  	
   

  	
   

  
	
  Product Approval &
  Marketing

  	
   

  	
  12/1/2007