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EXHIBIT 10.54   ***Text Omitted and Filed SeparatelyConfidential Treatment
RequestedUnder 17 C.F.R. §§ 200.80(b)(4)
and240.24b-2(b)(1)
 LICENSE AGREEMENT
 California (TherAtid). TherAtid shall
 RECITALS
   NOW, THEREFORE, Ciba and TherAtid agree as follows:
 DEFINITIONS
 1.1
    
    Affiliate means, with respect to each party, any legal entity
that directly or indirectly controls, is controlled by, or is under common control
with, such party, but only for so long as such control shall continue. One entity
shall be deemed to control another entity if such entity has the
power to direct or cause the direction of the management or policies of the other entity.1.2
    
    Confidential Information shall mean (i) any
proprietary or confidential information or material in tangible form disclosed
hereunder that is marked as confidential at the time it is delivered to the
receiving party, or (ii) proprietary or confidential information disclosed orally
hereunder which is identified as confidential or proprietary when disclosed and such
disclosure of confidential information is confirmed in writing within thirty (30)
days by the disclosing party.1.3
    
    Dominating Patent shall mean an unexpired patent owned
or controlled by a third party that has not been invalidated in a final unappealed or
unappealable judgment by a court or competent jurisdiction, which patent covers the
manufacture, use or sale of Licensed Products under circumstances such that
TherAtid or its sublicensees have no commercially reasonable alternative to obtaining
a royalty-bearing license under such patent in order to commercialize Licensed
Products under this Agreement.1.4
    
    Field shall mean all human and veterinary therapeutic
and prophylactic uses, excluding use as a vaccine adjuvant and, with respect to GCP
40774, excluding use for the treatment of asthma and other allergic diseases which
materially affect lung function. As used herein, vaccine adjuvant shall mean a
substance administered with an antigen to enhance the immune response to that
antigen.
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1.5
    
    Gross Profit shall mean Net Sales amounts received by TherAtid
for the commercial sale of Licensed Products, less (i) any taxes or other government
levies due with regard to such amounts, (ii) any expenses incurred or accrued in
connection with the manufacture, use, marketing, sale or other disposition of the
Licensed Products, and (iii) general and administrative expenses, reasonably
allocated according to GAAP.1.6
    
    Know-How shall mean all ideas, inventions, data, trade secrets,
instructions, processes, formulas, chemical, pharmacological, toxicological,
pharmaceutical, physical and analytical, manufacturing (including but not limited to
processes, yields, reagents and conditions relating to compound manufacture) data and
information, owned or controlled by Ciba existing as of the Effective Date, which are
not generally known during the term of this Agreement, and which are sufficient to
allow a chemist skilled in the art to synthesize and manufacture Licensed Products,
in liposome form or otherwise.1.7
    
    Licensed Product will mean any product which (i) but for the
license granted herein would infringe a Valid Claim in the country such product is
made or sold, or (ii) incorporates in material part or is made using Know How.1.8
    
    Net Sales means the gross revenues actually received from sales
of Licensed Products by TherAtid and its sublicensees, less (i) normal and customary
rebates, and cash and trade discounts, actually taken, (ii) sales, use and/or other
excise taxes or duties actually paid, (iii) the cost of any packages and packing, if
billed separately, (iv) insurance costs and outbound transportation charges prepaid
or allowed, (v) import and/or export duties actually paid, and (vi) amounts allowed
or credited due to returns.1.9
    
    Patent Rights means the patents listed on Exhibit A hereto, and
all divisions, continuations, continuations-in-part, and substitutions thereof.
Patent Rights shall also include any U.S. and foreign patent applications or patents
owned by or licensed to Ciba which claim inventions relating to the patent rights
listed on Exhibit A, conceived or reduced to practice in connection with research
sponsored by Ciba including, without limitation, in the laboratory of Dr. Isaiah J.
Fidler at the M.D. Anderson Cancer Center at the University of Texas.1.10
    
    Territory means all countries of the world.1.11
    
    Valid Claim means (i) a claim of an issued and unexpired patent
included within the Patent Rights which has not been held unenforceable or invalid by
a court or other governmental agency of competent jurisdiction, and which has not
been disclaimed or admitted to be invalid or unenforceable through reissue or
otherwise, or (ii) a claim of a pending application within the Patent Rights.
 2




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2.
    
    GRANT
  3.
    
    TECHNICAL ASSISTANCE
 3.1
    
    Delivery of Know-How. Within ninety (90) days after the Effective
Date, Ciba shall deliver to TherAtid the Know-How in electronic or hard copy formats.3.2
    
    Technical Assistance. Until six (6) months following delivery of
the Know-How pursuant to Section 3.1, at TherAtids request, Ciba shall promptly
provide TherAtid or its designee, instruction, advice and assistance regarding the
practice of the Patent Rights and use of the Know-How, including without limitation,
relating to the manufacture of compounds within the scope of the Patent Rights. Such
assistance shall be provided at a site agreed by the parties, at agreed times.
TherAtid shall reimburse Ciba for any out-of-pocket expenses incurred in connection
with such assistance.3.3
    
    Regulatory Data and Filings. On the Effective Date, without
additional cost, Ciba shall promptly provide TherAtid with access to and the right to
use all regulatory filings made by Ciba or its Affiliates with respect to compounds
within the scope of the Patent Rights, together with the underlying pre-clinical and
clinical data. TherAtid and its sublicensees may use and incorporate such filings and
data in support of efforts to obtain regulatory approval of Licensed Products
worldwide.3.4
    
    Clinical Trial Data. So far as it has the right to do so, Ciba
shall provide TherAtid with all data from any clinical trials performed by Ciba or
its Affiliates with respect to any compound within the scope of the Patent Rights
including but not limited to copies of any clinical trial agreement(s), protocols,
case report forms and supporting documentation relating to Phase II trials of such compounds. For those data yet to become available from the ongoing
Phase III clinical trial with respect to the evaluation of MTP-PE (CGP 19835) for the
treatment of osteogenic sarcoma in progress at the National Cancer Institute of the
U.S. National Institutes of Health (NCI) on the Effective Date, Ciba will use all
reasonable endeavors to help TherAtid obtain access to such data directly from
the NCI, including making a written request to the NCI to give TherAtid access
to the data.TherAtid and its sublicensees may use and incorporate such data in support of
filings for regulatory approval of Licensed Products worldwide.
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3.5
    
    Other Intellectual Property. In the event that Ciba has any option
or other rights with respect to intellectual property relating to the Field developed
in connection with research sponsored by Ciba including, without limitation, in the
laboratory of Dr. Isaiah J. Fidler at the M.D. Anderson Cancer Center at the
University of Texas, and the owner of such intellectual property refuses to
acknowledge or contests such rights, Ciba shall use reasonable endeavors to perfect
and enforce its interest in such intellectual property.
 4.
    
    CONSIDERATION
 4.1
    
    License Fee. Within thirty (30) days of the Effective Date, TherAtid
shall pay to Ciba a license fee of [. . . *** . . .].4.2
    
    Annual Maintenance Fee. TherAtid shall pay to Ciba an annual
maintenance fee of [ . . *** . . .] during the period commencing on the first
anniversary of the Effective Date and continuing until the initiation of any Phase
III clinical trial sponsored by TherAtid or a TherAtid sublicensee for any Licensed
Product; provided, however, that in the event that any additional patients are added
to the Phase III clinical trial of MTP-PE (CGP 19835) in progress on the Effective
Date at the National Cancer Institute of the U.S. National Institutes of Health,
TherAtids obligations to pay the annual maintenance fee shall terminate on the date
that the first such patient is enrolled in such clinical trial.4.3
    
    Milestone Payments. Unless the Agreement is terminated earlier,
following the first achievement by TherAtid of the following milestones with respect
to such first Licensed Product for humans incorporating CGP19835, and the first
Licensed Product for humans incorporating CGP40774, TherAtid shall pay Ciba one-time
milestone payments, as follows:
 Event
    
    Payment[. . . *** . . .]
    
    
    
    [. . . *** . . .]
   *Confidential TreatmentRequested under 17 C.F.R.§§200.80(b)(4)and240.24b-2(b)(1)
 4




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4.4
    
    Royalties. In consideration of the license granted herein,
TherAtid shall pay to Ciba royalties on Net Sales of Licensed Products
sold by TherAtid on a Licensed Product-by-Licensed Product basis as set
forth below:
 4.4.1
    
    Licensed Products Sold by TherAtid.
TherAtid shall pay to Ciba the following royalties with respect to
Net Sales of Licensed Products sold by TherAtid, as follows:(a)
    
    Until the tenth anniversary of the first commercial sale
of a particular Licensed Product:
 Licensed Products
    
    [. . . *** . . .]containing GP19835Licensed Productscontaining a compoundwithin the Patent Rights
    
    [. . . *** . . .]other than CGP 19835
 (b)
    
    In the period following the tenth anniversary of the
first commercial sale of a particular Licensed Product until the
fifteenth anniversary of such commercial sale:
 Licensed Products
    
    [. . . *** . . .]containing CGP19835Licensed Productscontaining a compoundwithin the Patent Rightsother than CGP 19835
    
    [. . . *** . . .]
 4.4.2
    
    Licensed Products Sold by Sublicensees. TherAtid shall
pay to Ciba the following royalties with respect to Net Sales of
Licensed Products sold by sublicensees of TherAtid, as follows :
 *Confidential TreatmentRequested under 17 C.F.R.§§200.80(b)(4)and240.24b-2(b)(1)
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(a)
    
    Until the tenth anniversary of the first commercial
sale of a particular Licensed Product:
 Licensed Products
    
    [. . . *** . . .]containing CGP19835Licensed Productscontaining a compound
    
    [. . . *** . . .]within the Patent Rightsother than CGP 19835
 (b)
    
    In the period following the tenth anniversary of
the first commercial sale of a particular Licensed Product until
the fifteenth anniversary of such commercial sale:
 Licensed Products
    
    [. . . *** . . .]containing CGP19835Licensed Productscontaining a compound
    
    [. . . *** . . .]within the Patent Rightsother than CGP 19835
  4.4.3
    
    Royalty Reduction. The royalty rates set
forth in Sections 4.4.1 and 4.4.2 above shall be reduced by fifty
percent (50%) if the applicable Licensed Products are not within the
scope of an issued Valid Claim within the Patent Rights in the
country such Licensed Products are either made or sold.
 4.5
    
    Commercial Impracticability. Notwithstanding the above, in the
event that TherAtid believes that the foregoing royalty rates would make the
sale of Licensed Products commercially impracticable it may notify Ciba, and
in such event the parties shall negotiate in good faith a reduction in such
royalties; provided, the foregoing terms shall remain in effect until such
other terms are agreed in writing.
 *Confidential TreatmentRequested under 17 C.F.R.§§200.80(b)(4)and240.24b-2(b)(1)
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4.6
    
    One Royalty. No more than one royalty payment shall be due
with respect to a sale of a particular Licensed Product. No multiple
royalties shall be payable because any Licensed Product, or its manufacture,
sale or use is covered by more than one Valid Claim. No royalty shall be
payable under Section 4.4 above with respect to sales of Licensed Products
among TherAtid and its Sublicensees, but shall be payable on sales
of Licensed Products by TherAtid or its sublicensees to third
parties, nor shall a royalty be payable under this Article 4 with respect to
Licensed Products distributed for use in research and/or development, in
clinical trials or as promotional samples if such promotional samples are
provided without charge.
 5.
    
    PAYMENTS
 5.1
    
    Payment Method. All payments due hereunder shall be made
in U.S. dollars, and shall be made by bank wire transfer in immediately
available funds to an account designated by Ciba.. Any payments that are not
paid on the date such payments are due under this Agreement shall bear
interest to the extent permitted by applicable law at the prime rate as
reported by the Chase Manhattan Bank, New York, New York, on the date such
payment is due calculated on the number of days such payment is delinquent.
This Section 5.1 shall in no way limit any other remedies available to Ciba.5.2
    
    Currency Conversion. If any currency conversion shall be
required in connection with the calculation of royalties hereunder, such
conversion shall be made using the selling exchange rate for conversion of
the foreign currency into U.S. dollars, quoted for current sell
transactions reported in The Wall Street Journal for the last
business day of the calendar quarter to which such payment pertains.
 5.3
    
    Restrictions on Payment. To the extent and
as long as the laws and/or regulations in force in any country prohibit the
payment, conversion or remittance of the royalties as hereby contemplated,
TherAtids obligations under Article 5 may be discharged by the deposit
thereof to the account of TherAtid, or its designee, in any commercial bank
or trust company selected by Ciba located in such country; provided, that no
infraction of law or regulation occurs in making such deposit. If due to
restrictions or prohibitions imposed by national or international authority,
payments cannot be made as aforesaid, the parties shall consult with a view
to finding a prompt and acceptable solution, and TherAtid will, from time to
time, deposit such monies as Ciba may lawfully direct, at no additional
out-of-pocket expense to TherAtid.
 5.4
    
    Withholding Taxes. All royalty amounts required to be paid
to Ciba pursuant to this Agreement may be paid with deduction for
withholding for or on account of any taxes (other than taxes imposed on or
measured by net income) or similar governmental charge imposed by a
jurisdiction other
 7




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than the United States (Withholding Taxes) to the extent Ciba or its
successor has the lawful right to utilize the Withholding Taxes paid by
TherAtid as a credit against Cibas regular tax liability. TherAtid shall
provide Ciba a certificate evidencing payment of any Withholding Taxes
hereunder.
 6.
    
    REPORTS AND RECORDS
 6.1
    
    Royalty Reports. TherAtid shall deliver to Ciba within sixty (60) days
after the end of each calendar quarter in which Licensed Products are sold a written
report setting forth in reasonable detail, on a country-by-country and Licensed
Product-by-Licensed Product basis, the calculation of the royalties payable to Ciba
for such calendar quarter, including the Licensed Products sold in each country, the
Net Sales thereof, and all amounts received from sublicensees for sales of Licensed
Products. Such reports shall be Confidential Information of TherAtid subject to Article
8 herein.6.2
    
    Inspection of Books and Records. TherAtid and its sublicensees shall
maintain accurate books and records which enable the calculation of royalties payable
hereunder to be verified. TherAtid shall retain the books and records for each
quarterly period for three (3) years after the submission of the corresponding report
under Section 6.1 hereof. Upon thirty (30) days prior notice to TherAtid and the
pertinent sublicensee, independent accountants selected by Ciba, reasonably acceptable
to TherAtid, after entering into a confidentiality agreement with TherAtid, may have
access to the books and records of TherAtid and its sublicensees to conduct a review or
audit once per calendar year, for the sole purpose of verifying the accuracy of
TherAtids payments and compliance with this Agreement. The accounting firm shall
report to Ciba only whether there has been a royalty underpayment and, if so, the
amount thereof. Such access shall be permitted during TherAtids normal business hours
during the term of this Agreement and for two (2) years after the expiration or
termination of this Agreement. Any such inspection or audit shall be at Cibas expense,
however, in the event an inspection reveals underpayment of five percent (5%) or more
in any audit period, TherAtid shall pay the costs of the inspection and promptly pay to
Ciba any underpayment with interest from the date such mount(s) were due, at the prime
rate reported by the Chase Manhattan Bank, New York, New York.
 7.
    
    DILIGENCE
 7.1
    
    Reasonable Efforts. TherAtid agrees to use reasonable efforts
consistent with its prudent business judgment to diligently develop and commercialize the Patent
Rights and obtain such approvals as may be necessary for the sale of the
Licensed Products in the United States and such other worldwide markets as
TherAtid elects to commercialize the Licensed Products. TherAtid shall
notify Ciba within thirty (30) days after the first commercial sale of each
Licensed Product.
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7.2
    
    Sublicense to Ciba. In the event that TherAtid elects not to
commercialize Licensed Products in a particular counter, either itself or
through a sublicensee or a distributor, it shall notify Ciba. In such event,
TherAtid shall negotiate a sublicense with Ciba under the Patent Rights and
Know-How in such country on reasonable terms customary in the industry to be
negotiated in good faith by the parties.
 8.
    
    CONFIDENTIALITY; PUBLICATIONS
 8.1
    
    Confidential Information. Unless otherwise expressly provided
for in this Agreement, both parties shall treat as confidential any Know-How
and any and all other information and data received or derived under this
Agreement from the other party and designated as proprietary or confidential
at the time of disclosure (Confidential Information), and shall not disclose
any Confidential Information received from the other party to any third party
during the Agreement Period and for five (5) years thereafter, except for
information which:
 (a)
    
    was known to the receiving party prior to the disclosure by
the other party as evidenced by written record or other proof;(b)
    
    has become public knowledge through no fault of the receiving
party;(c)
    
    has been received from a third party who did not acquire it
directly or indirectly from the disclosing party;(d)
    
    was independently developed by the receiving party prior to
receipt from the disclosing party, as shown by contemporaneous written
documentation;(e)
    
    needs to be disclosed to government officials for purposes of
obtaining registration of the Products; or(f)
    
    is compelled to be disclosed in the course of litigation by a
third party, provided that the party compelled to make such disclosure
provides the other party to this Agreement with notice of such compulsion
sufficiently in advance of disclosure so as to provide such other party a
reasonable time period to seek a protective order.
 8.2
    
    Use and Disclosure. Notwithstanding the above, TherAtid may disclose
Confidential Information of the other (i) to their legal representatives and
employees, to Affiliates, to legal representatives and employees of Affiliates, and to
consultants, to the extent such disclosure is reasonably necessary to achieve the
purposes of this Agreement, and provided such representatives, employees and
consultants are covered by obligations of confidentiality with respect to such
information no less stringent than
 9




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those set forth herein; (ii) in connection with the filing and support of patent
applications; (iii) as required by law or to comply with applicable governmental
regulations or court order or otherwise submit information to tax or other
governmental authorities, including the FDA and its foreign counterparts, or (iv) to
a sublicensee, in confidence, in connection with a sublicense permitted under this
Agreement; provided that if a party is required to make any such disclosure of
another partys Confidential Information, other than pursuant to a confidentiality
agreement, it will give reasonable advance notice to the other party of such
disclosure and, save to the extent inappropriate in the case of patent applications,
will use its reasonable best efforts to secure confidential treatment of such
information in consultation with the other party prior to its disclosure (whether
through protective orders or otherwise) and disclose only the minimum necessary to
comply with such requirements.8.3
    
    Non-Disclosure. The existence and the terms of this Agreement shall not
be disclosed by TherAtid or Ciba to any third party or be published unless both
parties expressly agree otherwise in writing. The text of any press release to be
issued by TherAtid and/or Ciba concerning this Agreement as well as the precise date
and timing of the press release shall be agreed between the Parties in writing in
advance, such agreement not to be unreasonably withheld or delayed. However, this
restriction shall not apply to disclosure of information set forth in the form of an
agreed press release, which will be prepared in mutually agreeable format and substance
following the closing of this Agreement, and to announcements required by law or
regulation except that in such event the parties shall coordinate to the extent
possible with respect to the working of any such announcement. This restriction shall
not apply to disclosure of this Agreement to certain private third parties such as the
shareholders of TherAtid, investment bankers, attorneys and other professional
consultants, and prospective investors in TherAtid.
 9.
    
    RIGHT OF FIRST REFUSAL
 
 10.
    
    SUPPLY
 10.1
    
    Supply of CGP19835. Within thirty (30) days from the Effective Date,
Ciba agrees to deliver to TherAtid at no additional cost, at least two hundred (200)
grams of such compound.
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10.2
    
    Supply of OOPS. In the event that TherAtid wishes to develop or
commercialize a Licensed Product containing OOPS and is unable to obtain a license to
or a supply of such compound on commercially reasonable terms from a third party, at
TherAtids request, Ciba agrees during the term of this Agreement at its discretion
either (i) subject to Section 10.4, to deliver to TherAtid or its designee all
Know-How necessary for the manufacture of OOPS and grant to TherAtid non-exclusive,
worldwide, royalty-free licenses with the right to grant and authorize sub-licenses
under all relevant intellectual property owned or controlled by Ciba; or (ii) to
provide TherAtid and its sub-licensees with their requirements of such compound at a
transfer price equal to Cibas actual fully-burdened (direct and indirect) cost of
manufacturing such material, as determined in accordance with GAAP plus a reasonable
profit margin customary in the trade. In the event Ciba opts to supply to TherAtid and
its sub-licensees pursuant to option (ii) hereof, the parties shall promptly enter
into a supply agreement consistent with the preceding terms.10.3
    
    Supply of POPC. In the event that TherAtid wishes to develop or
commercialize a Licensed Product containing POPC and is unable to obtain a license to
or a supply of such compound on commercially reasonable terms from a third party, at
TherAtids request, Ciba agrees during the term of this Agreement at its discretion
either (i) subject to Section 10.4, to deliver to TherAtid or its designee all
Know-How necessary for the manufacture of POPC and grant to TherAtid non-exclusive,
worldwide, royalty-free licenses with the right to grant and authorize sub-licenses
under all relevant intellectual property owned or controlled by Ciba; or (ii) to
provide TherAtid and its sub-licensees with their requirements of such compound at a
transfer price equal to Cibas actual fully-burdened (direct and indirect) cost of
manufacturing such material, as determined in accordance with GAAP plus a reasonable
profit margin customary in the trade. In the event Ciba opts to supply TherAtid and
its sub-licensees pursuant to option (ii) hereof, the parties shall promptly enter
into a supply agreement consistent with the preceding terms.10.4
    
    Manufacturing. In the event that Ciba elects to discontinue
manufacture of OOPS or POPC pursuant to either Section 10.2 or 10.3 above, Ciba shall
provide TherAtid with at least twelve (12) months prior notice, and shall deliver to
TherAtid all Know-How relating to the manufacture of the Product at least nine (9)
months prior to the date that Ciba shall cease to provide the applicable compound to
Jenner. In such event, the parties shall assist and cooperate with each other in order
that TherAtid may initiate manufacture of the Product as soon as practicable, and
shall take such actions as are appropriate to achieve such goal.
 11.
    
    REPRESENTATIONS AND WARRANTIES
 11.1
    
    Ciba. Ciba represents and warrants that: (i) it is a corporation duly
organized validly existing and in good standing under the laws of Switzerland; (ii)
the execution, delivery and performance of this Agreement have been duly authorized
by all necessary corporate action on the part of Ciba; (iii) Ciba and Ciba-Geigy
Corporation are the sole and exclusive owners of all right, title and interest in
the Patent Rights
 11




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and the Know-How; (iv) Ciba has the right to grant the rights and licenses granted
herein; (v) the Patent Rights and Know-How are free and clear of any lien,
encumbrance, security interest or restriction on license; (vi) it has not
previously granted, and will not grant during the term of this Agreement, any
right, license or interest in or to the Patent Rights or Know-How, or any portion
thereof, inconsistent with the license granted to TherAtid herein; (vii) there
are no threatened or pending actions, suits, investigations, claims or proceedings
in any way relating to the Patent Rights or Know-How; and (viii) the practice by
TherAtid or its sublicensees of the Patent Rights or Know-How licensed herein does
not and shall not require a license, additional to the license hereby granted,
under any other intellectual property owned or controlled by Ciba or its
Affiliates.11.2
    
    TherAtid. TherAtid represents and warrants that: (i) it is a
corporation duly organized validly existing and in good standing under the laws of
the State of California; and (ii) the execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate action on the part of
TherAtid.
 12.
    
    PATENT PROSECUTION AND ENFORCEMENT
 12.1
    
    Cibas Responsibilities. Ciba shall, at its sole expense, have the
initial right and obligation to control the preparation, filing, prosecution and
maintenance of the Patent Rights, and any interferences, re-examinations, reissues
and oppositions proceeding relating thereto, using patent counsel of its choice.
Ciba shall consult with TherAtid regarding the conduct of all such activities, by
providing TherAtid a reasonable opportunity to review and comment on all proposed
submissions to any patent office before submittal, and provided further that Ciba
shall keep TherAtid reasonably informed as to the status of such patent applications
by promptly providing TherAtid copies of all communications relating to such patent
applications that are received from any patent office.12.2
    
    Ciba Failure to Prosecute. Ciba may elect on ninety (90) days prior
notice to TherAtid to discontinue prosecution of any patent applications within the
Patent Rights or the conduct of any activities with respect to the patent
applications or patents subject to Section 12.1. In the event Ciba declines to file
or having filed fails to further prosecute or maintain any patent applications or
patents,or conduct any interferences, re-examinations, reissues or
oppositions, then TherAtid shall have the right to prepare, file, prosecute and
maintain such patent applications and patents in such countries worldwide it deems
appropriate, and conduct any interferences, re-examinations, reissues or
oppositions, at its sole expense using patent counsel of its choice. TherAtid may
credit any expenses incurred in connection with such activities set forth in this
Section 12.2 against any royalties due Ciba pursuant to Article 4.12.3
    
    Copies. Upon request by TherAtid, Ciba shall promptly provide to
TherAtid a copy of any patent applications within the Patent Rights filed by Ciba or
its Affiliates during the term of this Agreement and all material documents received
from or sent to any patent office relating thereto which relate to the scope, term,
maintenance, validity or enforceability of any of the Patent Rights, or any
challenge to or change to any of the preceding.
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12.4
    
    Enforcement. If either party becomes aware that any Patent Rights
are being or have been infringed by any third party, such party shall promptly
notify the other party hereto in writing describing the facts relating thereto in
reasonable detail. Ciba shall have the initial right, but not the obligation, to
institute, prosecute and control any action, suit or proceeding (an Action) with
respect to such infringement, including any declaratory judgment action, at its
expense, using counsel of its choice. In the event Ciba fails to initiate or defend
any Action involving the Patent Rights within one hundred eighty (180) days of
receiving notice of any alleged infringement, TherAtid shall have the right, but not
the obligation, to initiate and control such an Action, and Ciba shall cooperate
with TherAtid in connection with any such Action. Any amounts recovered in such
Action shall be used first to reimburse TherAtid and Ciba for any costs and expenses
incurred in connection with such Action (including attorneys and experts
reasonable fees), and any remainder shall be divided between the parties with Ciba
receiving twenty-five percent (25%) and TherAtid the rest.12.5
    
    Third Party Royalty Offset. In the event that TherAtid enters into a
license agreement with any third party with respect to a Dominating Patent or to
avoid or settle a claim of infringement or misappropriation of any intellectual
property right made by such third party due to TherAtids practice of the Patent
Rights, TherAtid may offset any payments made in accordance with such license
agreements against any amounts owed Ciba pursuant to Article 4 hereof, up to a
maximum of fifty percent (50%) of the amounts due thereunder.12.6
    
    Patent Term Extensions. With respect to any patent within the Patent
Rights, Ciba will designate TherAtid or its designee as its agent for obtaining an
extension of such patent or governmental equivalent which extends the exclusivity of
any of the patent subject matter where available in any country in the world or if
not feasible, at TherAtids option, permit TherAtid to file in Cibas name or
diligently obtain such extension for TherAtid or its sublicensee(s), at TherAtids
expense. Furthermore, Ciba and its Affiliates agree to provide reasonable assistance
to facilitate TherAtids or its sublicensees efforts to obtain any
extension.
 13.
    
    ARBITRATION
 
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14.
    
    INDEMNIFICATION
 14.1
    
    TherAtid. TherAtid shall indemnify, defend and hold harmless Ciba
and its directors, officers, employees and agents (each a Ciba Indemnitee) from and
against any and all liabilities, damages, losses, costs or expenses (including
reasonable attorneys and professional fees and other expenses of litigation and/or
arbitration) (a Liability") resulting from any claim, suit or proceeding
brought by a third party against a Ciba Indemnitee, arising out of or in connection
with (i) any misrepresentation with regard to, or breach of any of, the
representations and warranties of TherAtid set forth in Section 11.2, or (ii) the
development, manufacture, use, sale or consumption of any Licensed Product by
TherAtid or its sublicensees, except to the extent caused by the negligence or
willful misconduct of Ciba.14.2
    
    Ciba. Ciba shall indemnify, defend and hold harmless TherAtid and
its directors, officers, employees and agents (each a TherAtid Indemnitee) from and
against any and all liabilities, damages, losses, costs or expenses (including
reasonable attorneys and professional fees and other expenses of litigation and/or
arbitration) (a Liability) resulting from any claim, suit or proceeding brought by
a third party against a TherAtid Indemnitee, arising out of or in
connection with any misrepresentation with regard to, or breach of any of, the
representations and warranties of Ciba set forth in Section 11.1.14.3
    
    Procedure. In the event that any Indemnitee intends to claim
indemnification under this Article 14 it shall promptly notify the other party in
writing of such alleged Liability. The indemnifying party shall have the right to
control the defense thereof. The affected Indemnitees shall cooperate fully with the
indemnifying party and its legal representatives in the investigation and conduct of
any Liability covered by this Article 14. The Indemnitee shall not, except at its own
cost, voluntarily make any payment or incur any expense with respect to any claim,
suit or Liability, or make any admission of liability or attempt to settle any claim
without the prior written consent of the indemnifying party, which such party shall
not be required to give.
 15.
    
    TERM AND TERMINATION
 15.1
    
    Term. The term of this Agreement shall commence on the Effective
Date, and unless earlier terminated as provided in Article 15, shall continue in full
force and effect on a country-by-country and Licensed Product-by-Licensed Product
basis until there are no remaining royalty payment obligations in a country, at which
time the Agreement shall expire in its entirety in such country. Notwithstanding the
above, upon the
 14




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expiration of this Agreement in any country, TherAtid shall have a non-exclusive,
irrevocable, fully paid-up right and license to use and exploit the Know How.15.2
    
    Termination for Cause. If either party materially breaches this
Agreement, the other party may elect to give the breaching party written notice
describing the alleged breach. If the breaching party has not cured such breach
within sixty (60) days after receipt of such notice, the notifying party will be
entitled, in addition to any other rights it may have under this Agreement, to
terminate this Agreement effective immediately; provided, however, if either party
receives notification from the other of a material breach and if the party alleged to
be in default notifies the other party in writing within thirty (30) days of receipt
of such default notice that it disputes the asserted default, the matter will be
submitted to non-binding mediation and no termination shall become effective prior to
the completion of such mediation.15.3
    
    Termination for Insolvency. Either party may terminate this
Agreement if the other becomes the subject of a voluntary or involuntary petition in
bankruptcy or any proceeding relating to insolvency, receivership, liquidation, or
composition or the benefit of creditors, if that petition or proceeding is not
dismissed with prejudice within sixty (60) days after filing.15.4
    
    Permissive Termination. TherAtid may terminate this Agreement with
respect to any country or any patent application or patent within the Patent Rights
with sixty (60) days written notice to Ciba.15.5
    
    Effect of Termination.
 (a)
    
    Accrued Rights and Obligations. Termination of
this Agreement for any reason shall not release any party hereto from any
liability which, at the time of such termination, has already accrued to
the other party or which is attributable to a period prior to such
termination, nor preclude either party from pursuing any rights and
remedies it may have hereunder or at law or in equity which accrued or are
based upon any event occurring prior to such termination.(b)
    
    Return of Materials. Upon any
termination of this Agreement, each party shall promptly return to the
other party all Confidential Information received from the other party
(except one copy of which may be retained for archival purposes).(c)
    
    Stock on Hand. In the event this Agreement is
terminated for any reason, TherAtid and its Affiliates and sublicensees
shall have the right to sell or otherwise dispose of the stock of any
Licensed Product subject to this Agreement then on hand, subject to
Articles 4 and 5.(d)
    
    Sublicensees. In the event of any termination of
this Agreement any sublicensees granted by TherAtid shall remain in force
and effect and shall be assigned by TherAtid. to Ciba, provided, however,
that the financial terms of such sublicenses shall be no less favorable to
Ciba than the terms of this Agreement.
 15




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15.6
    
    Survival. Sections 15.5 and 15.6, and Articles 5, 6, 8, 9,
11, 13, 14 and 16 of this Agreement shall survive termination of this Agreement
for any reason.
 16.
    
    MISCELLANEOUS
 16.1
    
    Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without reference
to principles of conflicts of laws.16.2
    
    Independent Contractors. The relationship of the parties hereto
is that of independent contractors. The parties hereto are not deemed to be
agents, partners or joint venturers of the others for any purpose as a result of
this Agreement or the transactions contemplated thereby.16.3
    
    Assignment. Neither party may assign this Agreement or the
supply agreement without the prior written consent of the other, which consent
shall not be unreasonably withheld; provided, however, TherAtid may assign this
Agreement in connection with a transfer of all or substantially all of its assets
relating to the agreements, whether by sale, merger, operation of law or
otherwise. This Agreement shall be binding upon and inure to the benefit of the
parties and their successors and assigns.16.4
    
    Right to Develop Independently. Nothing in this
Agreement will impair TherAtids right to independently acquire, license, develop
for itself, or have others develop for it, intellectual property and technology
performing similar functions as the Patent Rights and Know-How or to market and
distribute Licensed Products based on such other intellectual property and
technology.16.5
    
    Notices. Any required notices hereunder shall be given in
writing by certified mail or overnight express delivery service at the address of
each party below, or to such other address as either party may indicate on its
behalf by written notice. Notice shall be deemed served when delivered or, if
delivery is not accomplished by reason or some fault of the addressee, when
tendered.
 If to Ciba:
    
    Ciba-Geigy LimitedPharma LicensingKlybecketrasse 1414002 BaselSwitzerlandAttention:If to TherAtid:
    
    TherAtid, Incorporated828 Eastbrook CourtDanville, California94506-1206 Attention:Chief Executive Officer
 16




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16.6
    
    Force Majeure. Neither party shall lose any rights
hereunder or be liable to the other party for damages or losses (except for
payment obligations) on account of failure of performance by the defaulting
party if the failure is occasioned by war, strike, fire, Act of God,
earthquake, flood, lockout, embargo, governmental acts or orders or
restrictions, failure of suppliers, or any other reason where failure to
perform is beyond the reasonable control and not caused by the negligence,
intentional conduct or misconduct of the nonperforming party and the
nonperforming party has exerted all reasonable efforts to avoid or remedy
such force majeure; provided, however, that in no event shall a party be
required to settle any labor dispute or disturbance.16.7
    
    Compliance with Laws. Each party shall furnish to the
other party any information related to the subject matter of this Agreement
requested or required by that party during the term of this Agreement or any
extensions hereof to enable that party to comply with the requirements of
any U.S. or foreign federal, state and/or government agency.16.8
    
    LIMITATION OF LIABILITY. NEITHER PARTY
SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR
INDIRECT DAMAGES ARISING OUT OF THE PERFORMANCE OF THIS AGREEMENT, HOWEVER
CAUSED, UNDER ANY THEORY OF LIABILITY.16.9
    
    Further Assurances. At any time or from time to time on
and after the date of this Agreement, Ciba shall at the request of TherAtid
(i) deliver to TherAtid such records, data or other documents consistent
with the provisions of this Agreement, (ii) execute, and deliver or cause to
be delivered, all such consents, documents or further instruments of
transfer or license, and (iii) take or cause to be taken all such actions,
as TherAtid may reasonably deem necessary or desirable in order for TherAtid
to obtain the full benefits of this Agreement and the transactions
contemplated hereby.16.10
    
    Severability. In the event that any provisions of this
Agreement are determined to be invalid or unenforceable by a court of
competent jurisdiction, the remainder of the Agreement shall remain in full
force and effect without said provision. The parties shall in good faith
negotiate a substitute clause for any provision declared invalid or
unenforceable, which shall most nearly approximate the intent of the parties
in entering this Agreement; provided, if the parties are unable to agree on
such a substitute clause and the deletion of the provision held invalid or
unenforceable would produce material adverse financial consequences for
one party, such party shall have the right to terminate the Agreement with
one hundred eighty (180) days notice.16.11
    
    Waiver. The failure of a party to enforce any provision
of the Agreement shall not be construed to be a waiver of the right of such
party to thereafter enforce that provision or any other provision or right.
 17




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16.12
    
    Entire Agreement; Amendment. This Agreement including,
its Exhibits, sets forth the entire agreement and understanding of the
parties with respect to the subject matter hereof, and supersedes all prior
discussions, agreements and writings in relating thereto. This Agreement may
not be altered, amended or modified in any way except by a writing signed by
both parties.16.13
    
    Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original and which together
shall constitute one instrument.
 IN WITNESS WHEREOF
 CIBA-GEIGY LIMITED
    
    
    
    THERATID, INCORPORATEDBy:
    
    /s/ E. Schweizer
    
    
    
    By:
    
    /s/ A.E. MaidaDr. E SCHWEIZER R.E. WalkerPrint
    
    
    
    
    
    Name: A.E. Maida, III, MA, MBAChief Scientific and Technical AdvisorPharma Licensing
    
    
    
    
    
    Division CounselTitle:
    
    
    
    
    
    Title: Chief Executive Officer
 18




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Appendix A: Patent rights by Case 4-12450
 Country
    
    Patent No.
    
    Patent Expiry[. . . *** . . .]
 *Confidential TreatmentRequested under 17 C.F.R.§§ 200.80(b)(4)and240.24b-2(b)(1)
 Appendix A - Page 1




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*Confidential TreatmentRequested under 17 C.F.R.§§200.80(b)(4)and240.24b-2(b)(1)
 Appendix A - Page 2




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*Confidential TreatmentRequested under 17 C.F.R.§§200.80(b)(4)and240.24b-2(b)(1)
 Appendix A - Page 3




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*Confidential TreatmentRequested under 17 C.F.R.§§200.80(b)(4)and240.24b-2(b)(1)
 Appendix A - Page 4




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*Confidential TreatmentRequested under 17 C.F.R.§§200.80(b)(4)and240.24b-2(b)(1)
 Appendix A - Page 5




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*Confidential TreatmentRequested under 17 C.F.R.§§200.80(b)(4)and240.24b-2(b)(1)
 Appendix A - Page 6




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Appendix E: Patent Rights by Case 4-17454
 Country
    
    Patent No.
    
    Patent Expiry[. . . *** . . .]
  *Confidential TreatmentRequested under 17 C.F.R.§§200.80(b)(4)and240.24b-2(b)(1)




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EXHIBIT A
 Part II
 Patents relating to CGP 40774A




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Appendix A : Patent rights by Case 4-
  Country
    
    Patent No.
    
    Patent Expiry[. . . *** . . .]
 *Confidential TreatmentRequested under 17 C.F.R.§§200.80(b)(4)and240.24b-2(b)(1)




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Jenner Biotherapies, Inc.
    
    
    
    Hayden Leason541 Kenosha StreetWalworth, WI 53184262-275-8389  Fax 262-275-8381email: chapunga1@aol.comJanuary 30, 2003
  
    
  Sincerely yours,Hayden L. LessonChief Executive Officer
 Acknowledged and accepted.NOVARTISBy:
    
    [ILLEGIBLE]Name:Title




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Viviane Gesegnet
    
    Novartis Pharma AG(NOVARTIS LOGO)
    
    Secretary
    
    Business Development and
LicensingS-202.5.06P.O. BoxCH-4002 BaselSwitzerlandTel +41 6 1 324 21 90Fax +41 6 1324 2221
 FaxMr. Anthony E. MaidaChief Executive OfficerJenner Biotherapies, Inc.San Ramon, CA 94583-1344Fax No.
    
    001 510 824 3151Date
    
    April 29, 1998Concerning
    
    Remittance Check N° 249044642Dear Anthony,Thank you for your fax of April 28, 1998.Thereafter, I realised that there was a terrible miscommunication and
one of our assistant had made a mistake.By April 1, 1998, you have sent us a check of $ l00000.- and instead
of booking it, a check was sent to you. You could do me a tremendous
favour if you would send back this check and from now on, I would
relief you from further annual payments according to article 4.2 of
our agreement.Thanking you in advance for your help, I remain,with kindest regards,(SIGNATURE)Dr. Ernst Schweizer