**Exhibit 10.34**

**PUBLIC HEALTH SERVICE**

**PATENT LICENSE AGREEMENT-*EXCLUSIVE***

COVER PAGE

For PHS internal use only:

*Patent License Number:*

U.S. Application Serial No. 07/492,468 filed 3/13/90; “06-Substituted GuanineCompounds And Methods For Depleting 06-Alkylguanine-DNA Alkyltransferase Levels” Issued 2/25/92 U.S. Pat.5,091,430

U.S. Application Serial No. 07/616,913 filed 11/21/90; “06-Benzylated Guanine,Guanosine and 2’-Deoxyguanosine Compounds Possessing 06-Alkylguanine-DNA Alkyltransferase Depleting Activity” CIP of‘468 issued 10/4/94 U.S. Pat. 5,352,669

U.S. Application Serial No. 07/805,634 filed 12/21/91; “06-Substituted GuanineCompounds And Methods For Depleting 06-Alkylguanine-DNA Alkyltransferase Levels” DIV of ‘468, issued 10/25/94 U.S. Pat.5,358,952

U.S. Application Serial No. 07/875,438 filed 4/29/92; “06-Substituted GuanineCompounds and Methods for Depleting Derivatives 06 Alkylguanine-DNA Alkyltransferase Levels” CIP of ‘634 Abandoned8/19/94

U.S. Application Serial No. 08/255,190 filed 6/7/94; “06-Substituted GuanineCompounds And Methods For Depleting 06-Alkylguanine-DNA Alkyltransferase” CIP of ‘438, and ‘913 issued 11/25/97U.S. Pat. 5691,307.

U.S. Application Serial No. 08/283,953 filed 8/1/94; “Substituted 06-BenzylguaninesAnd 6(4)-Benzyloxpyrimidines” issued 6/11/96 U.S. Pat. 5,525,606, and PCT/US95/09702 filed 7/31/95 (based on parentapplication 08/283.953.  National Stage filed in Europe (EPO Application No. 9592837.7.  Validated in all countries,except Finland, under the European Patent Convention), Canada (Canadian Application No. 2,195,856), Japan (Japanese Application No.506694/1996), Australia (Australian Serial No. 32079/95, Issued Patent No. 702711) and U.S. Application No. 08/849,223, Issued9/28/99 as U.S. Patent No. 5,958,932).   Divisional of EP ‘837.7, Application No. 01108585.9 filed 4/5/01.

U.S. Application Serial No. 08/661,923 filed 6/11/96, issued 5/19/98 as 5,753,668;“Substituted Benzyloxpyrimidines and Their Inactivation of 06-Alkylguanine-DNA Alkyltransferase” DIV of parentapplication 08/283.953.

U.S. Application Serial No. 08/927, 846 filed 9/11/97.  Issued 6/29/99 as 5,916,894;“Substituted 06-Benzylguanines And 6(4) - Benzyloxpyrimidines” DIV of parent application 08/283,953.

U.S. Application Serial No. 08/318,238 filed 5/25/99.  Issued 1/9/01 as 6,172,070;“Substituted 06-Benzylguanines And 6(4) - Benzyloxpyrimidines” DIV of parent application 08/283.953.

U.S. Application Serial No. 08/849,223 filed 7/31/95.  Issued 9/28/99 as 5,958,932;“Substituted 06-Benzylguanines And 6(4) - Benzyloxpyrimidines” CIP of parent application 08/283,953.

U.S. Application No. 09/590,187, filed 6/9/00, U.S. Patent 6,303,604, issued 10/16/0l U.S.Application Serial No. 09/333,047 filed 6/15/99 (Allowed) “Pharmaceutical Composition Comprising2,4-Diamino-6-Benzyloxy-Triazine And Inactivation of 06-Alkylguanine-DNA-Alkyltransferase.”

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U.S. Application No. 09/333,047, filed 6/15/99, U.S. Patent 6,333,331, issued 12/25/01“Substituted 06-Benzylguanines.”

U.S. Application No. 09/928,410; filed 8/14/01 “Substituted 06Benzyl-B-Aza-Guanines” Pending.

Licensee:  Procept, Inc.(formerly named PacificPharmaceuticals, Inc.)

Cooperative Research and Development Agreement (CRADA) Number (if applicable): #0303

*AdditionalRemarks*:

**PHS**, by executing interinstitutional agreements between theMilton S. Hershey Medical Center of Pennsylvania State University (L-067-02/0), and the University of Chicago (L-086-02/0), hasobtained the exclusive license to, including the right to **Sublicense**, the **Licensed Patent Rights** listed inAppendix A.  Once executed, the terms and conditions of this Agreement shall supersede, and thereby terminate, the termsand conditions of the previous license agreement between the **Licensee** and the Pennsylvania State University, made effectiveon February 6, 1998

*Public Benefit(s*):

Procept agrees that subsequent to market approval by the Food and Drug Administration(**FDA**), to make reasonable quantities of **Licensed Product(s)** or materials produced through the use of **LicensedProcess(es)** available on a compassionate use basis, to patients, either through the patient’s physicians) and/or themedical center treating the patient; and Procept further agrees, after their **First Commercial Sale**, and to develop writteneducational materials (e.g., brochures, advertisements, etc.) directed to patients and physicians detailing the **LicensedProduct(s)** and/or medical aspects of using 06-Benzylguanine and/or its derivatives as a therapeutic modality for the treatmentof human cancers.

This Patent License **Agreement**, hereinafter referred to as the“**Agreement**”, consists of this Cover Page, an attached **Agreement**, a Signature Page, Appendix A (Listof Patent(s) and/or Patent Application(s)), Appendix B (Fields of Use and Territory), Appendix C (Royalties),Appendix D (Modifications), Appendix E (**Benchmarks**), Appendix F (**Commercial Development Plan**),Appendix G (**Sublicense Agreement** ), Appendix H (Amendment to said **Sublicense Agreement**) and Appendix I(**Release Agreement** and its Relevant Exhibits).  The **Parties** to this Agreement are:

| 1) | The NationalInstitutes of Health (“NIH”), the Centers for Disease Control and Prevention (“CDC”), or the Food and DrugAdministration (“**FDA**”), hereinafter singly or collectively referred to as “**PHS**”, agencies ofthe United States Public Health Service within the Department of Health and Human Services (“**DHHS**”);and |
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| 2) | **Procept,Inc.**, having offices at the address indicated on the Signature Page, hereinafter referred to as“**Licensee**”.                                                                                                                                                                                                                                                            |

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**PHS PATENT LICENSE AGREEMENT-*EXCLUSIVE***

**PHS**and **Licensee** agree as follows:

| l.     | BACKGROUND        |
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|   | 1.01              | In the course of fundamental researchprograms at the **PHS**, Robert C. Moschel (**PHS**), Anthony Pegg (Milton S. Hershey Medical Center of Pennsylvania StateUniversity, (**PSU**)), and Eileen Dolan (Milton S. Hershey Medical of Pennsylvania State University Center and the Universityof Chicago (**UC**), whereas **UC**, under an agreement with its affiliated corporation, ARCH Development Corporation has theright to license Licensed Patents and other intellectual property owned by ARCH ), made or reduced to practice certain inventionswhich are included within the **Licensed Patent Rights**, as defined in Paragraph 2.06 below. |
|   | 1.02              | **PHS**, by executinginterinstitutional agreements with **PSU** (L-067-02/0), and **UC** (L-086-02/0), has obtained the exclusive license,including the right to sublicense, the **Licensed Patent Rights** listed in Appendix A.  Once executed, the terms andconditions of this **Agreement** shall supersede, and thereby terminate the terms and conditions of the previous licenseagreement between Pacific Pharmaceuticals, Inc. (now **Procept, Inc.**) and **PSU**, made effective on February 6, 1998,*provided that,* the sublicense agreement, including its associated amendment, by and between **AOI Pharmaceuticals, Inc.**(“**Sublicensee**”) and **Licensee** made effective on October 13, 2000, and attached as Appendices G and H (suchsublicense agreement and its associated amendment, the “**Sublicensee Agreement**”), shall continue to remain infull force and effect. |
|   | 1.03              | By assignment of rights from**PHS** employees and other inventors, **DHHS**, on behalf of the United States **Government**, owns intellectual propertyrights claimed in any United States and/or 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**. |
|   | 1.04              |  The Secretary of **DHHS** hasdelegated to **PHS** the authority to enter into this **Agreement** for the licensing of rights to theseinventions. |
|   | 1.05              |  **PHS** desires to transfer theseinventions to the private sector through commercialization licenses to facilitate the commercial development of products andprocesses for public use and benefit. |
|   | 1.06              |  **Licensee** desires to acquirecommercialization rights to certain of these inventions in order to develop processes, methods, and/or marketable products forpublic use and benefit. |
| 2.     |  DEFINITIONS |
|   | 2.01              | “**Affiliate**” means,with respect to any organization that can exercise independent legal standing, including a corporation, association, joint venture,partnership, trust, university, business, individual, government or political subdivision thereof (any such organization, an“**Entity**”), any **Entity** that directly or indirectly controls, is controlled by, or is under common controlwith such **Entity**.  “Control” for this purpose shall mean control of more than fifty percent (50%) of thevoting securities of an **Entity**. |
|   | 2.02              | “**Benchmarks**” meanthe performance milestones that are set forth in Appendix E. |

 

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|   | 2.03       | “**Commercial DevelopmentPlan**” means the written commercialization plan attached as Appendix F.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
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|   | 2.04       | “**First CommercialSale**” means the initial transfer by or on behalf of **Licensee** or its sublicensees of **Licensed Products** orthe initial practice of a **Licensed Process** by or on behalf of **Licensee** or its sublicensees in exchange for cash orsome equivalent to which value can be assigned for the purpose of determining **Net Sales**.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 2.05       | “**Government**” meansthe **Government** of the United States of America.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | 2.06       | “**Licensed Fields ofUse**” means the fields of use identified in Appendix B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | 2.07       | “**Licensed PatentRights**” shall mean:-  Patentapplications (including provisional patent applications and PCT patentapplications) and/or patents listed in Appendix A, all divisions andcontinuations of these applications, all patents issuing from such applications,divisions, and continuations, and any reissues, reexaminations, and extensionsof all such patents; 
-  to the extent thatthe following contain one or more claims directed to the invention or inventions disclosed in a) above:  i)continuations-in-part of a) above; ii) all divisions and continuations of these continuations-in-part; iii) all patents issuingfrom such continuations-in-part, divisions, and continuations; iv) priority patent applications) of a) above; and v) any reissues,reexaminations, and extensions of alt such patents; 
-  to the extentthat the following contain one or more claims directed to the invention orinventions disclosed in a) above:  all counterpart foreign and U.S. patentapplications and patents to a) and b) above, including those listed inAppendix A. 

**LicensedPatent Rights**shall not include b) or c) above to the extent that they contain one or more claims directedto new matter which is not the subject matter disclosed in a) above. |
|   |  2.08 | “**LicensedProcess(es)**” means processes which, in the course of being practiced would be within the scope of one or more claims ofthe **Licensed Patent Rights** that have not been held unpatentable, invalid or unenforceable by an unappealed or unappealablejudgment of a court of competent jurisdiction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |  2.09 | “**LicensedProduct(s)**” means tangible materials which, in the course of manufacture, use, sale, or importation would be within thescope of one or more claims of the **Licensed Patent Rights** that have not been held unpatentable, invalid or unenforceable byan unappealed or unappealable judgment of a court of competent jurisdiction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |  2.10 | “**LicensedTerritory**” means the geographical area identified in Appendix B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |  2.11 | “**Net Sales**” meansthe total gross receipts actually received for sales of **Licensed Products** or practice of **Licensed Processes** by**Licensee**, any of its **Affiliates**, its Sublicensee or any other sublicensee(s), and from leasing, renting, or otherwisemaking **Licensed Products** available to others without sale or other dispositions, whether invoiced or not, less returns andallowances, packing costs, insurance costs, freight out, taxes or excise duties imposed on the transaction (if separatelyinvoiced), and wholesaler and cash discounts in amounts customary in the trade to the extent actually granted.  No deductionsshall be made for commissions paid to individuals, whether they be with independent sales agencies or regularly employed by**Licensee**, **Sublicensee** or sublicensee(s), and on its payroll, or for the cost of collections.                                                                                                                                                                                                                                                                                                                                                                                                          |

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| GRANT OFRIGHTS |
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| 5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | STATUTORY AND PHS REQUIREMENTS AND    RESERVED GOVERNMENT RIGHTS |
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| **PHS** reserves on behalf of the **Government** anirrevocable, nonexclusive, nontransferable, royalty-free license for the practice of all inventions licensed under the **LicensedPatent Rights** throughout the world by or on behalf of the **Government** and on behalf of any foreign government orinternational organization pursuant to any existing or future treaty or agreement to which the **Government** is asignatory.  Prior to the **First Commercial Sale**, **Licensee** agrees to provide **PHS** reasonable quantities of**Licensed Products** or materials made through the **Licensed Processes** for **PHS** research use.                                                                                                                                                                                                                                                                                                          |
| In the event that**Licensed Patent Rights** are Subject Inventions made under a Cooperative Research and Development Agreement (CRADA),**Licensee** grants to the **Government**, pursuant to 15 U.S.C. 3710a(b)(1)(A), a nonexclusive, nontransferable,irrevocable, paid-up license to practice **Licensed Patent Rights** or have **Licensed Patent Rights** practiced throughoutthe world by or on behalf of the **Government**.  In the exercise of such license, the **Government** shall not publiclydisclose trade secrets or commercial or financial information that is privileged or confidential within the meaning of 5 U.S.C.552(b)(4) or which would be considered as such if it had been obtained from a non-Federal party.  Prior to the **FirstCommercial Sale**, **Licensee** agrees to provide **PHS** reasonable quantities of **Licensed Products** or materialsmade through the **Licensed Processes** for **PHS** research use. |
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 5.03                                                             | **Licensee** acknowledges that**PHS** may enter into future Cooperative Research and Development **Agreements** (CRADAs) under the Federal TechnologyTransfer Act of 1986 that relate to the subject matter of this **Agreement**.  **Licensee** agrees not to unreasonablydeny requests for a **Research License** from such future collaborators with **PHS** when acquiring such rights is necessaryin order to make a Cooperative Research and Development **Agreement** (CRADA) project feasible.  **Licensee** mayrequest an opportunity to join as a party to the proposed Cooperative Research and Development **Agreement** (CRADA). |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 5.04                                                             | (a) |  In addition to the reserved license of Paragraph 5.01 above,**PHS** reserves the right to grant nonexclusive **Research Licenses** directly or to require **Licensee** to grantnonexclusive **Research Licenses** on reasonable terms.  The purpose of this **Research License** is to encourage basicresearch, whether conducted at an academic or corporate facility.  In order to safeguard the **Licensed Patent Rights**,however, **PHS** shall consult with **Licensee** before granting to commercial entities a **Research License** orproviding to them research samples of materials made through the **Licensed Processes**. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                             | (b) | In exceptionalcircumstances, and in the event that **Licensed Patent Rights** are Subject Inventions made under a Cooperative Research andDevelopment **Agreement** (CRADA), the **Government**, pursuant to 15 U.S.C. 3710a(b)(1)(B), retains the right to require the**Licensee** to grant to a responsible applicant a nonexclusive, partially exclusive, or exclusive sublicense to use **LicensedPatent Rights** in **Licensee**’s field of use on terms that are reasonable under the circumstances; or if**Licensee** fails to grant such a license, the **Government** retains the right to grant the license itself.  Theexercise of such rights by the **Government** shall only be in exceptional circumstances and only if the **Government**determines (i) the action is necessary to meet health or safety needs that are not reasonably satisfied by **Licensee**; (ii)the action is necessary to meet requirements for public use specified by Federal regulations, and such requirements are notreasonably satisfied by the **Licensee**; or (iii) the **Licensee** has failed to comply with an agreement containingprovisions described in 15 U.S.C. 3710a(c)(4)(B).  The determination made by the **Government** under this Article issubject to administrative appeal and judicial review under 35 U.S.C. 203(2). |

 

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|   | 6.02 | **Licensee** agrees to pay to**PHS** a nonrefundable minimum annual royalty as set forth in Appendix C.  The minimum annual royalty is due andpayable 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 due for the first calendar year of this **Agreement** may be prorated according to the fraction ofthe calendar year remaining between the effective date of this **Agreement** and the next subsequent January 1. |
|   | 6.03. | **Licensee** agrees to pay**PHS** earned royalties as set forth in Appendix C. |
|   | 6.04 | **Licensee** agrees to pay**PHS** benchmark royalties as set forth in Appendix C. |
|   | 6.05 | **Licensee** agrees to pay**PHS** sublicensing royalties as set forth in Appendix C. |
|   | 6.06 | A patent or patent applicationlicensed under this **Agreement** shall cease to fall within the **Licensed Patent Rights** for the purpose of computingearned royalty payments in any given country on the earliest of the dates that a) the application has been abandoned and notcontinued, b) the patent expires or irrevocably lapses, or c) the claim has been held to be invalid or unenforceable by anunappealed or unappealable decision of a court of competent jurisdiction or administrative agency. |
|   | 6.07 | No multiple royalties shall bepayable because any **Licensed Products** or **Licensed Processes** are covered by more than one of the **Licensed PatentRights**. |
|   | 6.08 | On sales of **Licensed Products**by **Licensee** or on sales made in other than an arm’s-length transaction, the value of the **Net Sales** attributedunder this Article 6 to such a transaction shall be that which would have been received in an arm’s-length transaction, basedon sales of like quantity and quality products on or about the time of such transaction. |
|   | 6.09 | With regard to expenses associatedwith the preparation, filing, prosecution, and maintenance of all patent applications and patents included within the **LicensedPatent Rights** incurred by **PHS** prior to the effective date of this **Agreement**, **Licensee** shall pay to**PHS**, as an additional royalty, within sixty (60) days of **PHS**’s submission of a statement and request forpayment to **Licensee**, an amount equivalent to such patent expenses previously incurred by **PHS** unless such expenses aredisputed in good faith by **Licensee**, in which case the parties will attempt to resolve amicably the dispute pursuant toparagraph 14.12. |
|   | 6.10 | With regard to expenses associatedwith the preparation, filing, prosecution, and maintenance of all patent applications and patents included within the **LicensedPatent Rights** incurred by **PHS** on or after the effective date of this **Agreement**, **PHS**, at its sole option,may require **Licensee**: |
|   |  |  |

 

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|     |                                       |  (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | to pay **PHS** on anannual basis, within sixty (60) days of **PHS**’s submission of a statement and request for payment, a royalty amountequivalent to all such patent expenses incurred during the previous calendar year(s); or |
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|     |                                       |  (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | to pay such expensesdirectly to the law firm employed by **PHS** to handle such functions.  However, in such event, **PHS** and not**Licensee** shall be the client of such law firm.                                              |
|     |                                       | In limited circumstances, **Licensee** may be given the right to assume responsibility for the preparation, filing, prosecution,or maintenance of any patent application or patent included with the **Licensed Patent Rights**.  In that event,**Licensee** shall directly pay the attorneys or agents engaged to prepare, file, prosecute, or maintain such patentapplications or patents and shall provide to **PHS** copies of each invoice associated with such services as well asdocumentation that such invoices have been paid.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|     | 6.11                                       | **Licensee** may elect tosurrender its rights in any country of the **Licensed Territory** under any **Licensed Patent Rights** upon ninety (90) dayswritten notice to **PHS** and owe no payment obligation under Article 6.10 for patent-related expenses incurred in that countryafter ninety (90) days of the effective date of such written notice.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|  7. | PATENTFILING, PROSECUTION, AND MAINTENANCE |
|     | 7.01                                       | Except as otherwise provided in thisArticle 7, **PHS** agrees to take responsibility for, but to consult with, the **Licensee** in the preparation, filing,prosecution, and maintenance of any and all patent applications or patents included in the **Licensed Patent Rights** and shallfurnish copies of relevant patent-related documents to **Licensee**.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|     | 7.02                                       | Upon **PHS**’s writtenrequest, **Licensee** shall assume the responsibility for the preparation, filing, prosecution, and maintenance of any and allpatent applications or patents included in the **Licensed Patent Rights** and shall on an ongoing basis promptly furnish copiesof all patent-related documents to **PHS**.  In such event, **Licensee** shall, subject to the prior approval of**PHS**, select registered patent attorneys or patent agents to provide such services on behalf of **Licensee** and**PHS**.  **PHS** shall provide appropriate powers of attorney and other documents necessary to undertake such actionsto the patent attorneys or patent agents providing such services.  **Licensee** and its attorneys or agents shall consultwith **PHS** in all aspects of the preparation, filing, prosecution and maintenance of patent applications and patents includedwithin the **Licensed Patent Rights** and shall provide **PHS** sufficient opportunity to comment on any document that**Licensee** intends to file or to cause to be filed with the relevant intellectual property or patent office. |
|     | 7.03                                       | At any time, **PHS** may provide**Licensee** with written notice that **PHS** wishes to assume control of the preparation, filing, prosecution, andmaintenance of any and all patent applications or patents included in the **Licensed Patent Rights**.  If **PHS** electsto assume such responsibilities, **Licensee** agrees to cooperate fully with **PHS**, its attorneys, and agents in thepreparation, filing, prosecution, and maintenance of any and all patent applications or patents included in the **Licensed PatentRights** and to provide **PHS** with complete copies of any and all documents or other materials that **PHS** deemsnecessary to undertake such responsibilities.  **Licensee** shall be responsible for all costs associated with transferringpatent prosecution responsibilities to an attorney or agent of **PHS**’s choice.                                                                                                                                                                                                                                                                              |
|     | 7.04                                       | Each party shall promptly inform theother as to all matters that come to its attention that may affect the preparation, filing, prosecution, or maintenance of the**Licensed Patent Rights** and permit each other to provide comments and suggestions with respect to the preparation, filing,prosecution, and maintenance of **Licensed Patent Rights**, which comments and suggestions shall be considered by the otherparty.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

 

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|  8. | RECORDKEEPING                                       |
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|     | 8.01                                                | **Licensee** agrees to keepaccurate and correct records of **Licensed Products** made, used, sold, or imported and **Licensed Processes** practicedunder this **Agreement** appropriate to determine the amount of royalties due **PHS**.  Such records shall be retainedfor at least five (5) years following a given reporting period and shall be available during normal business hours, and uponreasonable written notice 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 inspectionshows an underreporting or underpayment in excess of five percent (5%)for any twelve (12) month period, then **Licensee** shallreimburse **PHS** for the cost of the inspection at the time **Licensee** pays the unreported royalties, including any latecharges as required by Paragraph 9.08 of this **Agreement**.  All payments required under this Paragraph shall be duewithin thirty (30) days of the date **PHS** provides **Licensee** notice of the payment due. |
|     |  8.02                                          | **Licensee** agrees to have anaudit of sales and royalties conducted by an independent auditor at least every two (2) years if annual sales of the **LicensedProduct** or **Licensed Processes** are over two (2) million dollars.  The audit shall address, at a minimum, the amountof gross sales by or on behalf of **Licensee** during the audit period, terms of the license as to percentage or fixed royaltyto be remitted to the **Government**, the amount of royalty funds owed to the **Government** under this **Agreement**, andwhether the royalty amount owed has been paid to the **Government** and is reflected in the records of the**Licensee**.  The audit shall also indicate the **PHS** license number, product, and the time period beingaudited.  A report certified by the auditor shall be submitted promptly by the auditor directly to **PHS** oncompletion.  **Licensee** shall pay for the entire cost of the audit. |
|  9. | REPORTS ONPROGRESS, BENCHMARKS, SALES, AND PAYMENTS |
|     | 9.01                                                | Prior to signing this**Agreement**, **Licensee** has provided to **PHS** the **Commercial Development Plan** at Appendix F, under which**Licensee** intends to bring the subject matter of the **Licensed Patent Rights** to the point of **PracticalApplication**.  This **Commercial Development Plan** is hereby incorporated by reference into this**Agreement**.  Based on this plan, performance **Benchmarks** are determined as specified inAppendix E. |
|     | 9.02                                                |  **Licensee** shall provide writtenannual reports on its product development progress or efforts to commercialize under the **Commercial Development Plan** foreach of the **Licensed Fields of Use** within sixty (60) days after December 31 of each calendar year.  These progressreports shall include, but not be limited to:  progress on research and development, status of applications for regulatoryapprovals, manufacturing, sublicensing, marketing, importing, and sales during the preceding calendar year, as well as plans forthe present calendar year.  **PHS** also encourages these reports to include information on any of **Licensee**’spublic service activities that relate to the **Licensed Patent Rights**.  If reported progress differs from that projectedin the **Commercial Development Plan** and **Benchmarks**, **Licensee** shall explain the reasons for suchdifferences.  In any such annual report, **Licensee** may propose amendments to the **Commercial Development Plan**,acceptance of which by **PHS** may not be denied unreasonably.  **Licensee** agrees to provide any additionalinformation reasonably required by **PHS** to evaluate **Licensee**’s performance under this **Agreement**. **Licensee** may amend the **Benchmarks** at any time upon written consent by **PHS**.  **PHS** shall notunreasonably withhold approval of any request of **Licensee** to extend the time periods of this schedule if such request issupported by a reasonable showing by **Licensee** of diligence in its performance under the **Commercial Development Plan**and toward bringing the **Licensed Products** to the point of **Practical Application** as defined in 37 CFR 404.3(d). **Licensee** shall amend the **Commercial Development Plan** and **Benchmarks** at the request of **PHS** to addressany **Licensed Fields of Use** not specifically addressed in the plan originally submitted. |

 

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|   | 9.03        | **Licensee** shall report to**PHS** the dates for achieving **Benchmarks** specified in Appendix E and the **First Commercial Sale** in eachcountry in the **Licensed Territory** within thirty (30) days of such occurrences.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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|   | 9.04        | **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 forthe preceding half-year period the amount of the **Licensed Products** sold or **Licensed Processes** practiced by or onbehalf of **Licensee** in each country within the **Licensed Territory**, the **Net Sales**, and the amount of royaltyaccordingly due.  With each such royalty report, **Licensee** shall submit payment of the earned royalties due.  If noearned royalties are due to **PHS** fox any reporting period, the written report shall so state.  The royalty report shallbe certified as correct by an authorized officer of **Licensee** and shall include a detailed listing of all deductions madeunder Paragraph 2.10 to determine **Net Sales** made under Article 6 to determine royalties due.                                                       |
|   | 9.05        | **Licensee** agrees to forwardsemi-annually to **PHS** a copy of such reports received by **Licensee** from its sublicensees during the preceding half-yearperiod as shall be pertinent to a royalty accounting to **PHS** by **Licensee** for activities under thesublicense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | 9.06        | Royalties due under Article 6 shallbe paid in U.S. dollars.  For conversion of foreign currency to U.S. dollars, the conversion rate shall be the New Yorkforeign exchange rate quoted in *The Wall Street Journal* on the day that the payment is due.  All checks and bank draftsshall be drawn on United States banks and shall be payable, as appropriate, to “NIH/Patent Licensing.” All suchpayments shall be sent to the following address:  NIH, P.O. Box 360120, Pittsburgh, Pennsylvania 15251-6120.  Any loss ofexchange, value, taxes, or other expenses incurred in the transfer or conversion to U.S. dollars shall be paid entirely by**Licensee**.  The royalty report required by Paragraph 9.04 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**. |
|   | 9.07        | **Licensee** shall be solely    responsible for determining if any tax on royalty income is owed outside the United States and shall pay any such tax and beresponsible for all filings with appropriate agencies of foreign governments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | 9.08        |  Interest and penalties may beassessed by **PHS** on any overdue payments in accordance with the Federal Debt Collection Act.  The payment of such latecharges shall not prevent **PHS** from exercising any other rights it may have as a consequence of the lateness of anypayment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | 9.09        | All plans and reports required by this Article 9 and marked “confidential”    by **Licensee** shall, to the extent permitted by law, be treated by**PHS** as commercial and financial information obtained from a person and as    privileged and confidential, and any proposed disclosure of such records by    the **PHS** under the Freedom of Information Act (FOIA), 5 U.S.C. §552    shall be subject to the predisclosure notification requirements of 45 CFR    §5.65(d).                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.    | PERFORMANCE |
|   | 10.01       | **Licensee** shall use its reasonable bestefforts to bring the **Licensed Products** and **Licensed Processes** to **Practical Application**. “Reasonable best efforts” for the purposes of this provision shall include commercially reasonable best efforts toadhere to the **Commercial Development Plan** at Appendix F and perform the **Benchmarks** at Appendix E.  Theefforts of a sublicensee shall be considered the efforts of **Licensee**.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

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|   | 10.02                                    | Upon the **First Commercial Sale**, until theexpiration of this **Agreement**, **Licensee** shall use its reasonable best efforts to make **Licensed Products** and**Licensed Processes** reasonably accessible to the United States public.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 11.    |  INFRINGEMENT AND PATENTENFORCEMENT |
|   | 11.01                                    | **PHS** and **Licensee** agree to notifyeach other promptly of each infringement or possible infringement of the **Licensed Patent Rights**, as well as any facts whichmay affect the validity, scope, or enforceability of the **Licensed Patent Rights** of which either **Party** becomesaware.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | 11.02                                    | Pursuant to this **Agreement** and theprovisions of Chapter 29 of title 35, United States Code, **Licensee** may:  a) bring suit in its own name, at its ownexpense, and on its own behalf for infringement of presumably valid claims in the **Licensed Patent Rights**; b) in any suchsuit, enjoin infringement and collect for its use, damages, profits, and awards of whatever nature recoverable for suchinfringement; and c) settle any claim or suit for infringement of the **Licensed Patent Rights***provided, however,* that**PHS** and appropriate **Government** authorities shall have the first right to take such actions.  If **Licensee**desires to initiate a suit for patent infringement, **Licensee** shall notify **PHS** in writing.  If **PHS** doesnot notify **Licensee** of its intent to pursue legal action within ninety (90) days, **Licensee** will be free to initiatesuit.  **PHS** shall have a continuing right to intervene in such suit at its own expense and may consult with**Licensee** in such litigation.  **Licensee** shall take no action to compel the **Government** either to initiateor to join in any such suit for patent infringement.  **Licensee** may request the **Government** to initiate or join inany such suit if necessary to avoid dismissal of the suit.  Should the **Government** be made a party to any such suit,**Licensee** shall reimburse the **Government** for any costs, expenses, or fees which the **Government** incurs as aresult of such motion or other action, including any and all costs incurred by the **Government** in opposing any such motion orother action.  In all cases, **Licensee** agrees to keep **PHS** reasonably apprised of the status and progress of anylitigation.  Before **Licensee** commences an infringement action, **Licensee** shall notify **PHS** and give carefulconsideration to the views of **PHS** and to any potential effects of the litigation on the public health in deciding whether tobring suit.                                                                                                                                                                                                                                                                                                                                                                   |
|   | 11.03                                    | In the event that a declaratory judgment actionalleging invalidity or non-infringement of any of the **Licensed Patent Rights** shall be brought against **Licensee** orraised by way of counterclaim or affirmative defense in an infringement suit brought by **Licensee** under Paragraph 11.02,pursuant to this **Agreement** and the provisions of Chapter 29 of Title 35, United States Code or other statutes,**Licensee** may:  a) defend the suit in its own name, at its own expense, and on its own behalf for presumably validclaims in the **Licensed Patent Rights**; b) in any such suit, ultimately enjoin infringement and collect for its use, damages,profits, and awards of whatever nature recoverable for such infringement; and c) settle any claim or suit for declaratory judgmentinvolving the **Licensed Patent Rights**-*provided, however,* that **PHS** and appropriate **Government** authoritiesshall have the first right to take such actions and shall have a continuing right to intervene in such suit.  If **PHS**does not notify **Licensee** of its intent to respond to the legal action within a reasonable time, **Licensee** will be freeto do so, and **PHS** and any appropriate government authorities may only intervene at their own expense and may consult with**Licensee** in such legal action.  **Licensee** shall take no action to compel the **Government** either to initiateor to join in any such declaratory judgment action.  **Licensee** may request the **Government** to initiate or to joinany such suit if necessary to avoid dismissal of the suit.  Should the **Government** be made a party to any such suit bymotion or any other action of **Licensee**, **Licensee** shall reimburse the **Government** for any costs, expenses, orfees which the **Government** incurs as a result of such motion or other action.  If **Licensee** elects not to defendagainst such declaratory judgment action, **PHS**, at its option, may do so at its own expense.  In all cases,**Licensee** agrees to keep **PHS** reasonably apprised of the status and progress of any litigation.  Before**Licensee** commences an infringement action, **Licensee** shall notify **PHS** and give careful consideration to theviews of **PHS** and to any potential effects of the litigation on the public health in deciding whether to bringsuit. |

 

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|   | 11.04                                              | In any action under Paragraphs 11.02 or 11.03,the expenses including costs, fees, attorney fees, and disbursements, shall be paid by **Licensee**.  The value of anyrecovery made by **Licensee** through court judgment or settlement shall be treated as **Net Sales** and subject to earnedroyalties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|----------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 11.05                                              | **PHS** shall cooperate fully with**Licensee** in connection with any action under Paragraphs 11.02 or 11.03.  **PHS** agrees promptly to provide accessto all necessary documents and to render reasonable assistance in response to a request by **Licensee**.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 12.    | NEGATION OF WARRANTIESAND INDEMNIFICATION          |
|   | 12.01                                              | **PHS** offers no warranties other than thosespecified in Articles 1 and 4.01.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | 12.02                                              | **PHS** does not warrant the validity of the**Licensed Patent Rights** and makes no representations whatsoever with regard to the scope of the **Licensed PatentRights**, or that the **Licensed Patent Rights** may be exploited without infringing other patents or other intellectualproperty rights of third parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | 12.03                                              | **PHS** MAKES NO WARRANTIES, EXPRESSED ORIMPLIED, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY SUBJECT MATTER DEFINED BY THE CLAIMS OF THE **LICENSEDPATENT RIGHTS** OR TANGIBLE MATERIALS RELATED THERETO.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | 12.04                                              | **PHS** does not represent that it willcommence legal actions against third parties infringing the **Licensed Patent Rights**.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | 12.05                                              | **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 orarising out of a) the use by or on behalf of **Licensee**, its sublicensees, directors, employees, or third parties of any**Licensed Patent Rights**; or b) the design, manufacture, distribution, or use of any **Licensed Products**, **LicensedProcesses** or materials by **Licensee**, 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 soundbusiness practice. |
| 13.    |  TERM, TERMINATION, ANDMODIFICATION OF RIGHTS |
|   | 13.01                                              | This **Agreement** is effective when signedby the **Parties**, except that the noncreditable, nonrefundable licensee issue royalty fee in the amount of Eighty-FiveThousand Eight Hundred and Fifty-Eight Dollars and Fifty-Four Cents ($85,858.54 U.S. Dollars) for outstanding patent prosecutioncosts owed to **PHS** under this **Agreement** will be held in escrow by **Licensee** until the execution of a releaseagreements) by **PSU** and **UC** that is substantially similar to the **Release Agreement** attached hereto asAppendix I, and shall extend to the expiration of the last to expire of the **Licensed Patent Rights** unless soonerterminated as provided in this Article 13.                                                                                                        |

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|   | 13.02 | In the event that **Licensee** is in defaultin the performance of any material obligations under this **Agreement**, including but not limited to the obligations listed inArticle 13.05, and if the default has not been remedied within ninety (90) days after the date on which License receives notice inwriting of such default, **PHS** may terminate this **Agreement** by written notice and pursue outstanding amounts owedthrough procedures provided by the Federal Debt Collection Act.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 13.03 |  In the event tat **Licensee** becomesinsolvent, files a petition in bankruptcy, has such a petition filed against it, determines to file a petition in bankruptcy, orreceives notice of a third party’s intention to file an involuntary petition in bankruptcy, **Licensee** shall immediatelynotify **PHS** in writing.  Furthermore, **PHS** shall have the right to terminate this **Agreement** immediatelyupon **Licensee**’s receipt of written notice.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | 13.04 | **Licensee** shall have a unilateral right toterminate this **Agreement** and/or any licenses in any country or territory by giving **PHS** sixty (60) days written noticeto that effect.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 13.05 | **PHS** shall specifically have the right toterminate or modify, at its option, this **Agreement**, if **PHS** determines that the **Licensee**:  1) is not usingits commercially reasonable best efforts to execute the **Commercial Development Plan** submitted with its request for a licenseand the **Licensee** cannot otherwise demonstrate to **PHS**’ reasonable satisfaction that the **Licensee** hastaken, 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 not used its commercially reasonable best efforts to achieve the**Benchmarks** as may be modified under Paragraph 9.02; 3) has willfully made a false statement of, or willfully omitted, amaterial fact in the license application or in any report required by the license **Agreement**; 4) has committed a materialbreach of a covenant or agreement contained in the license; 5) is not keeping **Licensed Products** or **Licensed Processes**reasonably available to the public after commercial use commences; 6) cannot reasonably satisfy unmet health and safety needs; or7) cannot reasonably justify a failure to comply with the domestic production requirement of Paragraph 5.02 unless waived.  Inmaking this determination, **PHS** will take into account the normal course of such commercial development programs conductedwith sound and reasonable business practices and judgment and the annual reports submitted by **Licensee** under Paragraph9.02.  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**’ concerns as to the previous items 1) to7).  If **Licensee** fails to alleviate **PHS**’ concerns as to the previous items 1) to 7) or fails to initiatecorrective action to **PHS**’ reasonable satisfaction, **PHS** may terminate this **Agreement**. |
|   | 13.06 | When the public health and safety so require,and after written notice to **Licensee** providing **Licensee** a sixty (60) day opportunity to respond, **PHS** shallhave the right to require **Licensee** to grant sublicenses to responsible applicants, on reasonable terms, in any **LicensedFields of Use** under the **Licensed Patent Rights**, unless **Licensee** can reasonably demonstrate that the granting ofthe sublicense would not materially increase the availability to the public of the subject matter of the **Licensed PatentRights**.  **PHS** will not require the granting of a sublicense unless the responsible applicant has first negotiated ingood faith with **Licensee**.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | 13.07 | **PHS** reserves the right according to 35U.S.C. §209(f)(4) to terminate or modify this **Agreement** if it is determined that such action is necessary to meetrequirements for public use specified by federal regulations issued after the date of the license and such requirements are notreasonably satisfied by **Licensee**.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 13.08 | Within thirty (30) days of receipt of writtennotice of **PHS**’s unilateral decision to modify or terminate this **Agreement**, **Licensee** may, consistent withthe provisions of 37 CFR 404.11, appeal the decision by written submission to the designated **PHS** official.  Thedecision of the designated **PHS** official shall be the final agency decision.  **Licensee** may thereafter exerciseany and all administrative or judicial remedies that may be available.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

 

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|   | 13.09             | Within ninety (90) days of expiration ortermination of this **Agreement** under this Article 13, a final report shall be submitted by **Licensee**.  Any royaltypayments, including those incurred but not yet paid (such as the full minimum annual royalty), and those related to patent expense,due to **PHS** shall become immediately due and payable upon termination or expiration.  If terminated under this Article13, sublicensees may elect to convert their sublicenses to direct licenses with **PHS** pursuant to Paragraph 4.03.  Unlessotherwise specifically provided for under this **Agreement**, upon termination or expiration of this **Agreement**,**Licensee** shall return all **Licensed Products** or other materials included within the **Licensed Patent Rights** to**PHS** or provide **PHS** with certification of the destruction thereof.                                                                                                                                                                                                                       |
|--------|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 14.    | GENERALPROVISIONS |
|   | 14.01             | Neither **Party** may waive or release any ofits rights or interests in this **Agreement** except in writing.  The failure of the **Government** to assert a righthereunder or to insist upon compliance with any term or condition of this **Agreement** shall not constitute a waiver of thatright by the **Government** or excuse a similar subsequent failure to perform any such term or condition by**Licensee**.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | 14.02             | This Agreement constitutes the entire agreementbetween 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**.  It is the mutual desire of the **Licensee** and the **PHS** that the terms of this **Agreement**,shall become effective according to the conditions set forth in Section 13, and once executed, shall supersede, and therebyterminate the terms and conditions of the following listed agreements, but not the **Sublicense Agreement**,including:-  Theexclusive license agreement between the **Licensee** and **PSU**, executed February 6, 1998; 
-  The Interinstitutional agreement between **PHS** and **PSU** (L-094-91/0), executed on May 20, 1997, but not its replacementagreements between **PHS** and **PSU** executed January 29, 2002; and L-086-02/0 between **PHS** and **UC** executedJanuary 30, 2002; 
-  The agreement between**PSU** and the **UC**, executed on May I6, 1997. |
|   |              | **PHS**acknowledges the **Release Agreement** listed as Appendix I and its relevant Exhibits, ofthis **Agreement**, entered into by and among the **Licensee**, the **Sublicensee**, **PSU**, **UC** and**PHS**.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | 14.03             | The provisions of this **Agreement** areseverable, and in the event that any provision of this **Agreement** shall be determined to be invalid or unenforceable underany controlling body of law, such determination shall not in any way affect the validity or enforceability of the remainingprovisions of this **Agreement**.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 14.04             | If either **Party** desires a modification tothis **Agreement**, the **Parties** shall, upon reasonable notice of the proposed modification by the **Party** desiringthe change, confer in good faith to determine the desirability of such modification.  No modification will be effective untila written amendment is signed by the signatories to this **Agreement** or their designees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

 

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|   | 14.05 | The construction, validity, performance, andeffect of this **Agreement** shall be governed by Federal law as applied by the Federal courts in the District ofColumbia.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 14.06 | All notices required or permitted by this**Agreement** shall be given by prepaid, first class, registered or certified mail or by an express/overnight delivery serviceprovided by a commercial carrier, properly addressed to the other **Party** at the address designated on the following SignaturePage, or to such other address as may be designated in writing by such other **Party**.  Notices shall be considered timelyif such notices are received on or before the established deadline date or sent on or before the deadline date as verifiable byU.S. Postal Service postmark or dated receipt from a commercial carrier.  **Parties** should request a legibly dated U.S.Postal Service postmark or obtain a dated receipt from a commercial carrier or the U.S. Postal Service.  Private meteredpostmarks shall not be acceptable as proof of timely mailing.                           |
|   | 14.07 | This Agreement shall not be assigned by**Licensee** except:  a) with the prior written consent of **PHS**, such consent not to be withheld unreasonably; or b)as part of a sale or transfer of substantially the entire business of **Licensee** relating to operations which concern this**Agreement**.  **Licensee** shall notify **PHS** within ten (10) days of any assignment of this **Agreement** by**Licensee**, and **Licensee** shall pay **PHS**, as an additional royalty, twenty thousand U.S. dollars ($20,000 U.S.)for an assignment of this **Agreement** within thirty (30) days of such assignment.                                                                                                                                                                                                                                                                                          |
|   | 14.08 | **Licensee** agrees in its use of any**PHS**-supplied materials to comply with all applicable statutes, regulations, and guidelines, including **PHS** and**DHHS** regulations and guidelines.  **Licensee** agrees not to use the materials for research involving human subjectsor clinical trials in the United States without complying with 21 CFR Part 50 and 45 CFR Part 46.  **Licensee** agrees notto 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 nationalcontrol authorities.  Written notification to **PHS** of research involving human subjects or clinical trials outside ofthe United States shall be given no later than sixty (60) days prior to commencement of such research or trials. |
|   | 14.09 | **Licensee** acknowledges that it is subjectto and agrees to abide by the United States laws and regulations (including the Export Administration Act of 1979 and Arms ExportControl Act) controlling the export of technical data, computer software, laboratory prototypes, biological material, and othercommodities.  The transfer of such items may require a license from the cognizant Agency of the U.S. **Government** orwritten assurances by **Licensee** that it shall not export such items to certain foreign countries without prior approval ofsuch agency.  **PHS** neither represents that a license is or is not required or that, if required, it shall beissued.                                                                                                                                                                                                                          |
|   | 14.10 | **Licensee** agrees to mark the **LicensedProducts** 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 countriesshall be marked in such a manner as to preserve **PHS** patent rights in such countries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | 14.11 | By entering into this **Agreement**,**PHS** does not directly or indirectly endorse any product or service provided, or to be provided, by **Licensee** whetherdirectly 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 NIH, CDC, **PHS**, or **DHHS** or the**Government** or their employees in any advertising, promotional, or sales literature without the prior written consent of**PHS**.                                                                                                                                                                                                                                                              |

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|   | 14.12 | The **Parties** agree to attempt to settleamicably any controversy or claim arising under this **Agreement** or a breach of this **Agreement**, except for appeals ofmodifications or termination decisions provided for in Article 13.  **Licensee** agrees first to appeal any such unsettledclaims or controversies to the designated **PHS** official, or designee, whose decision shall be considered the final agencydecision.  Thereafter, **Licensee** may exercise any administrative or judicial remedies that may be available.                                                                                                                                                                                              |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 14.13 | Nothing relating to the grant of a license, northe grant itself, shall be construed to confer upon any person any immunity from or defenses under the antitrust laws or from acharge of patent misuse, and the acquisition and use of rights pursuant to 37 CFR Part 404 shall not be immunized from theoperation of state or Federal law by reason of the source of the grant.                                                                                                                                                                                                                                                                                                                                                                   |
|   | 14.14 | Paragraphs 4.03, 8.01, 9.05-9.07, 12.01-12.05,13.08, 13.09, and 14.12 of this **Agreement** shall survive termination of this **Agreement**.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | 14.15 | Procept agrees that subsequent to marketapproval by the Food and Drug Administration (**FDA**), to make reasonable quantities of **Licensed Product(s)** or materialsproduced through the use of **Licensed Process(es)** available on a compassionate use basis, to patients, either through thepatient’s physicians) and/or the medical center treating the patient; and Procept further agrees, after their **FirstCommercial Sale**, and to develop written educational materials (e.g., brochures, advertisements, etc.) directed to patients andphysicians detailing the **Licensed Product(s)** and/or medical aspects of using 06-Benzylguanine and/or its derivatives as atherapeutic modality for the treatment of human cancers. |

 

**SIGNATURES BEGIN ON NEXT PAGE**

 

 

 

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**PHS PATENT LICENSE AGREEMENT-*EXCLUSIVE***

****

**SIGNATURE PAGE**

For **PHS**:

/s/ Jack Spiegel, Ph.D.                                                                 2/2/02Jack Spiegel, Ph.D.                                                                                DateDirector, Division of Technology Development and Transfer  Office of Technology Transfer  National Institutes of Health

Mailing Address for Notices:  Office of Technology Transfer  National Institutes of Health  6011 Executive Boulevard, Suite 325Rockville, Maryland 20852-3804 U.S.A.

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

by:          **Procept, Inc.**

/s/ Salvatore A. Bucci                                                                 2/2/02Salvatore A.  Bucci                                                                               DatePresident and Chief Executive Officer

Official and Mailing Address for Notices:369 Lexington Avenue, 10th Floor  New York, NY 10017Any false or misleading statements made, presented, or submitted to the **Government**,  including any relevant omissions, under this **Agreement** and during the course of negotiation of this **Agreement** are subject  to all applicable civil and criminal statutes including Federal statutes 31 U.S.C. §§3801-3812 (civil liability) and 18 U.S.C.  §1001 (criminal liability including fines) and/or imprisonment).