Document:

EXHIBIT
10.27

 

PUBLIC
HEALTH SERVICE

 

PATENT
LICENSE AGREEMENT –NONEXCLUSIVE

 

COVER
PAGE

 

	
  For Office of
  Technology Transfer/NIH internal use only:

  	
   

  	
   

  
	
  Patent License Number:

  	
   

  	
   

  
	
  Serial Numbers of
  Licensed Patents:

  	
   

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

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

  
	
  Licensee:

  	
   

  	
  Virus Research
  Institute

  
	
  CRADA Number (if
  applicable):

  	
   

  	
  none

  
	
  Additional Remarks:

  	
   

  	
  none

  

 

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

 

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

 

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

 

 

PHS
PATENT LICENSE AGREEMENT–NONEXCLUSIVE

 

PHS and Licensee agree as follows:

 

1.                                      BACKGROUND

 

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

 

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

 

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

 

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

 

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

 

2.                                      DEFINITIONS

 

2.01                           “Licensed
Patent Rights” shall mean:

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3.                                      GRANT OF RIGHTS

 

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

 

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

 

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

 

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

 

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

 

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

 

4.                                      STATUTORY AND PHS
REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS

 

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

 

5.                                      ROYALTIES AND
REIMBURSEMENT

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

6.                                      RECORD KEEPING

 

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

 

7.                                      REPORTS ON
PROGRESS, SALES, AND PAYMENTS

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

8.                                      PERFORMANCE

 

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

 

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

 

9.                                      INFRINGEMENT AND
PATENT ENFORCEMENT

 

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

 

6

 

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

 

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

 

10.                               NEGATION OF WARRANTIES
AND INDEMNIFICATION

 

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

 

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

 

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

 

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

 

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

 

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11.                               TERMINATION AND
MODIFICATION OF RIGHTS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

12.                               GENERAL PROVISIONS

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

SIGNATURES
BEGIN ON NEXT PAGE

 

11

 

PHS
PATENT LICENSE AGREEMENT –NONEXCLUSIVE

 

SIGNATURE
PAGE

 

	
  FOR PHS:

  
	
   

  
	
  by:

  	
  /s/ Barbara
  McGarey

  	
   

  	
   3/25/98

  
	
  Barbara McGarey, J.D.

  	
   Date

  
	
  Deputy Director, Office
  of Technology Transfer

  National Institutes of Health

  	
   

  

 

Mailing Address for
Notices:

 

Office of Technology
Transfer

National Institutes of
Health

6011 Executive Boulevard,
Suite 325

Rockville, Maryland 20852

 

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

 

	
  Licensee

  
	
   

  
	
  by:

  	
  /s/ William A.
  Packer

  	
   

  	
   3/4/98

  
	
  Signature of Authorized
  Official

  	
   Date

  
	
   

  	
   

  
	
  William A. Packer

  	
   

  
	
  Printed Name

  	
   

  
	
   

  	
   

  
	
  President/CFO

  	
   

  
	
  Title

  	
   

  

 

 

Mailing Address for Notices:

 

	
  61 Moulton Street

  	
   

  
	
   

  
	
  Cambridge, MA 02138

  	
   

  
	
   

  
	
   

  	
   

  

 

 

APPENDIX
A - Patent or Patent Application

 

PATENT
OR PATENT APPLICATION:

 

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

 

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

 

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

 

 

APPENDIX
B - Licensed Fields of Use and Territory

 

LICENSED
TERRITORY:

 

Worldwide

 

LICENSED
FIELDS OF USE:

 

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

 

 

APPENDIX
C - Royalties

 

ROYALTIES:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Licensee agrees to pay
PHS benchmark royalties as follows:

 

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

 

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

 

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

 

 

APPENDIX
D - Modifications

 

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

 

none

 

 

APPENDIX
E - Benchmarks

 

	
  Cancer
  Vaccines

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
  12/1/98

  
	
   

  	
   

  	
   

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

  	
   

  	
  12/1/99

  
	
   

  	
   

  	
   

  
	
  DNA
  Delivery Systems

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Evaluation of the AT
  system for efficiency of DNA expression.

  	
   

  	
  12/1/98

  
	
   

  	
   

  	
   

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

  	
   

  	
  12/1/98

  
	
   

  	
   

  	
   

  
	
  Testing of a human
  pathogen as a DNA vaccine target.

  	
   

  	
  12/1/99

  
	
   

  	
   

  	
   

  
	
  Persistent
  Viral Infections

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
  12/1/98

  
	
   

  	
   

  	
   

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

  	
   

  	
  12/1/99

  
	
   

  	
   

  	
   

  
	
  Clinical
  Development

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Phase I Clinical Trials

  	
   

  	
  12/1/2000

  
	
   

  	
   

  	
   

  
	
  Phase II Clinical
  Trials

  	
   

  	
  12/1/2001

  
	
   

  	
   

  	
   

  
	
  Manufacturing
  Activities

  	
   

  	
  12/1/2003

  
	
   

  	
   

  	
   

  
	
  Phase III Clinical
  Trials and preparation of Registration File.

  	
   

  	
  12/1/2005

  
	
   

  	
   

  	
   

  
	
  FDA Review

  	
   

  	
  12/1/2006

  
	
   

  	
   

  	
   

  
	
  Product Approval &
  Marketing

  	
   

  	
  12/1/2007Exhibit
10.28

 

LICENSE AGREEMENT

 

This Agreement, effective
as of November 25, 1988 (“EFFECTIVE DATE”) is between The Johns Hopkins
University, (JHU), a not-for-profit corporation of the State of Maryland,
having a principal place of business at 720 Rutland Avenue, Baltimore, Maryland
21205 and Brigham and Women’s Hospital (BWH), a corporation of the State of
Massachusetts, having a principal place of business at 75 Francis Street,
Boston Massachusetts 02115 (JHU and BWH hereinafter referred to as “Licensor”)
and T Cell Sciences, Inc. a Delaware Corporation, having a principal place of
business at 840 Memorial Drive, Cambridge, MA 02139 (hereinafter the
“Company”).

 

WITNESSETH;

 

WHEREAS, as a center for
research and education, Licensor is interested in licensing PATENT RIGHTS
(hereinafter defined) in a manner that will benefit the public by facilitating
the distribution of useful products, but is without capacity to commercially
develop, manufacture, and distribute any such product; and

 

WHEREAS, a valuable invention
in the field of the human C3b/C4b receptor (CRI) was developed during the
course of work funded by the United States Government and the Government has
certain rights therein; and

 

WHEREAS, Licensor has
acquired through assignment all right, title, and interest in said valuable
invention from the Department of Health and Human Services (hereinafter
“DHHS”); and

 

WHEREAS, Company as a
leader in the development and use of T cell materials, has such capacity, and
desires to commercially develop, manufacture, use and distribute such products
throughout the world; and

 

WHEREAS, JHU and BWH
entered into an agreement (attached as Exhibit A) with an effective date of
June 28, 1988;

 

NOW, THEREFORE, the
parties agree as follows:

 

ARTICLE 1 - DEFINITIONS

 

1.1                                 PATENT
RIGHTS shall mean the U.S. Patent Application Serial No. 176,532 filed on
April 1, 1988 in the names of Drs. Douglas T. Fearon, Lloyd B. Klickstein,
and Winnie W. Wong, assigned to The Johns Hopkins University and The Brigham
and Women’s Hospital entitled “The Human C3b/C4b Receptor (CR1)” (hereinafter
the “Patent Application”) and the invention disclosed and claimed therein, all
continuations, continuations in part, divisions, and reissues thereto, and any
corresponding foreign patent applications that may be filed in the future

 

 

at the Company’s request and expense and any patents issuing thereon,
all of which are more fully set forth in Appendix A attached hereto and
made part of this Agreement.

 

1.2                                 LICENSED
PRODUCTS shall mean all products for therapeutic purposes, the manufacture, use
or sale of which, except for this Agreement, would constitute infringement of
one or more pending claims of a patent application contained within PATENT
RIGHTS or one or more valid and unexpired claims of an issued patent contained
within PATENT RIGHTS. LICENSED PRODUCTS shall not include such products for
research, diagnostic, or medical device purposes and Licensor shall be free to
license such products for such purposes to third parties, subject, however, to
the requirement that the Company shall have the option of first refusal to
negotiate for an exclusive license on reasonable terms to use such products for
research, diagnostic, or medical device purposes.

 

1.3                                 LICENSED
PROCESSES shall mean all methods and/or processes for therapeutic purposes
which are covered by any claim of one or more PATENT RIGHTS.

 

1.4                                 NET
SALES shall mean selling price received by Company and/or Affiliated Company
from the sale of LICENSED PRODUCTS, less trade and quantity discounts allowed,
transportation and handling charges, credits for claims or allowances, refunds,
returns and recalls, and less taxes and other governmental charges levied on or
measured by sales whether absorbed by Company or the customer. For purposes of
this definition, LICENSED PRODUCTS shall be considered sold when billed out to
customers, other than Licensee’s AFFILIATED COMPANY or sublicensee. In the
event that Company and/or AFFILIATED COMPANY sells a LICENSED PRODUCT in
combination with other active ingredients or components which are not LICENSED
PRODUCTS (“Other Items”), the NET SALES for purposes of royalty payments on the
combination shall be calculated as follows:

 

(a)                                  If
all LICENSED PRODUCTS, and Other Items contained in the combination are
available separately, the NET SALES for purposes of royalty payments will be
calculated by multiplying the NET SALES of the combination by the fraction
A/A+B, where A is the invoiced price of all LICENSED PRODUCTS in the
combination, and B is the invoiced price of all Other Items in the combination.

 

(b)                                 If
the combination includes Other Items which are not sold separately (but all
LICENSED PRODUCTS contained in the combination are available separately), the
NET SALES for purposes of royalty payments will be calculated by multiplying
the NET SALES of the combination by A/C, where A is as defined above and C is
the invoiced price of the combination.

 

(c)                                  If
neither the LICENSED PRODUCTS nor the Other Items contained in the combination
are sold separately, the NET SALES for such combination shall be NET SALES of
such combination as defined in the first sentence of this Paragraph 1.4.
However, the royalty rates paid on such combination NET SALES, as described in
Paragraph 4.4 (2%, 3%, and 4%), shall be reduced by fifty percent (50%). In no
event shall the royalty rates be reduced by greater than fifty percent
(50%).  The term “Other Items” is not
intended to include carriers, excipients or the like used in formulating a
pharmaceutical product.

 

2

 

1.5                                 NET
ROYALTIES shall mean all royalties actually received by the Company or its
AFFILIATED COMPANIES, including the receipt of lump sums as advances against
royalties, from nonaffiliated sublicensees in connection with the sublicensing
of any LICENSED PRODUCTS and LICENSED PROCESSES under the PATENT RIGHTS.

 

1.6                                 AFFILIATED
COMPANY shall mean any corporation, company, partnership, joint venture or
other entity which controls, is controlled or under common control with the
Company or Licensor, as the case may be. For the purposes of this
Section 1.6, control shall mean the direct or indirect ownership of at
least fifty percent (50%) or if less than fifty percent (50%), the maximum
percentage as allowed by applicable law of (a) the stock shares entitled to
vote for the election of directors; or (b) ownership interest.

 

1.7                                 RESEARCH
PHASE of product development shall mean laboratory research efforts up to and
including the completion of protein expression studies, undertaken by Company
and/or AFFILIATED COMPANY, for the purpose of commercializing LICENSED
PRODUCTS.

 

ARTICLE 2 - GRANTS

 

2.1                                 Subject
to the terms and conditions of this Agreement, Licensor hereby grants to the
Company an exclusive license to make, have made, use, and sell the LICENSED
PRODUCTS, and to use the LICENSED PROCESSES in the United States and worldwide
under the PATENT RIGHTS and to sublicense others under LICENSED PRODUCTS,
LICENSED PROCESSES and PATENT RIGHTS subject to section 2.2 and
limitations imposed on Licensor’s right to grant such license by 35 USC 200-211 and the regulations promulgated thereunder.

 

2.2                                 Licensor
retains the right under the PATENT RIGHTS to make, provide and use the LICENSED
PRODUCTS and LICENSED PROCESSES for its own not-for-profit use. For purposes of
this Section 2.2, Licensor shall include but not be limited to JHU, The
Johns Hopkins Health System and BWH.

 

ARTICLE 3 - PATENT INFRINGEMENT

 

3.1                                 Company
shall have the right to enforce any patent within PATENT RIGHTS against any
infringement or alleged infringement thereof, and shall at all times keep
Licensor informed as to the status thereof. Company may, in its sole judgment
and its own expense, institute suit against any such infringer or alleged
infringer and control, settle, and defend such suit in a manner consistent with
the terms and provisions hereof and recover, for its account, any damages,
awards, or settlements resulting therefrom, subject to Section 3.3. This
right to sue for infringement shall not be used in an arbitrary or capricious
manner. Licensor shall reasonably cooperate in any such litigation at Company’s
expense.

 

3.2                                 If
Company elects not to enforce any patent within PATENT RIGHTS, then it shall so
notify Licensor in writing, and Licensor may, in its sole judgment and at its
own expense, do so and control, settle, and defend such suit in a manner
consistent with the terms and

 

3

 

provisions hereof, and recover, for its own account, any damages,
awards or settlements resulting therefrom.

 

3.3                                 Any
recovery by Company under Section 3.1 shall be deemed to reflect loss of
commercial sales, and Company shall pay Licensor a royalty in accordance with
this license agreement on said recovery. Company may, in calculating any
royalty due Licensor on said recovery, deduct reasonable expenses of litigation
actually incurred and not reimbursed, provided, however, that in no event shall
such royalty due Licensor be reduced by more than fifty percent (50%).

 

ARTICLE 4 - PAYMENTS

 

4.1                                 The
Company shall pay to Licensor, within thirty (30) days of the execution of this
agreement by both parties, the sum of Fifteen Thousand Dollars ($15,000.00).

 

4.2                                 The
Company shall pay to Licensor minimum annual royalties at the end of each
calendar year beginning after the first commercial sale by the Company and/or
AFFILIATED COMPANY and/or sublicensee thereof of a LICENSED PRODUCT
(hereinafter “Royalty Year”) as follows:

 

	
  At the end of the first

  Royalty Year:

  	
   

  	
  Twenty-five Thousand
  Dollars

  ($25,000.00)

  
	
   

  	
   

  	
   

  
	
  At the end of the

  second Royalty Year:

  	
   

  	
  Fifty Thousand Dollars

  ($50,000.00)

  
	
   

  	
   

  	
   

  
	
  At the end of the

  third Royalty Year:

  	
   

  	
  Seventy-five Thousand
  Dollars

  ($75,000.00)

  
	
   

  	
   

  	
   

  
	
  At the end of the

  fourth and subsequent

  Royalty Years:

  	
   

  	
  One Hundred Thousand
  Dollars

  ($100,000.00)

  

 

Said minimum annual royalties shall be paid to
Licensor within thirty (30) days after the end of each Royalty Year. Said
minimum annual royalties shall be credited against running royalties as defined
by Section 4.4.

 

4.3                                 The
Company shall use all reasonable efforts to effect the lawful commercial sale
of a LICENSED PRODUCT in each country in which such LICENSED PRODUCT is
licensed hereunder as soon as is commercially practicable, consistent with the
Company’s sound and reasonable business practices and judgment. The Company or
AFFILIATED COMPANY or a sublicensee thereof shall identify a LICENSED PRODUCT
within twenty-four (24) months of the date of execution of this Agreement by
both parties and file an IND with the Food and Drug Administration (FDA) within
five (5) years of the date of execution of this Agreement by both parties and
make a first commercial sale of a LICENSED PRODUCT within ten (10) years of the

 

4

 

date of execution of this Agreement by both parties. If the Company or
AFFILIATED COMPANY or a sublicensee has not identified a LICENSED PRODUCT or
filed an IND within said time periods, Licensor shall have the right to
terminate this Agreement. If the Company, an AFFILIATED COMPANY, or a
sublicensee thereof has not achieved a first commercial sale of a LICENSED
PRODUCT by the end of the ninth year from the date of execution of this
Agreement by both parties, the Company shall begin payment of a minimum annual
royalty of $10,000 per year until the first commercial sale has occurred, at
which time the Company shall begin payment of the minimum annual royalties
pursuant to Section 4.2. If the Company or AFFILIATED COMPANY or a sublicensee
has not achieved a first commercial sale of a Licensed product by the end of
the tenth year of the effective date of this Agreement, Licensor shall have the
right to terminate this Agreement. This tenth year milestone may be extended
for such length of time as the first commercial sale is delayed by reason of a
delay in receiving the required governmental approval for such sale in excess
of one hundred twenty (120) days from the time application for such approval is
made. If the license grant is terminated, all right shall revert to Licensor.

 

4.4                                 The
Company shall pay to Licensor, as a royalty, for each LICENSED PRODUCT sold by
the Company and AFFILIATED COMPANIES thereof, two percent (2%) of the first
fifty million dollars ($50,000,000) of NET SALES, three percent (3%) of the
next fifty million dollars ($50,000,000) of NET SALES, and four percent (4%) of
all the NET SALES over one hundred million dollars ($100,000,000) for the term
of this Agreement. However, if no patent has issued with respect to the PATENT
RIGHTS by December 31, 1992, the applicable royalty rate, pursuant to this
Section 4.4, shall be reduced by fifty percent (50%) unless the Patent
Application is involved in an interference or subject to a secrecy order from
the U.S. Patent and Trademark office, in which cases the full royalty rate
shall apply. If the royalty rate is reduced by fifty percent (50%) as provided
by this Section and a patent subsequently issues, the full royalty rate
shall be payable as of the issue date of the patent. After a patent issues, the
full royalty rate shall again apply.

 

4.5                                 In
the event that the Company grants sublicenses to any third party that is not an
AFFILIATED COMPANY to make, have made, use, and sell the LICENSED PRODUCTS
and/or to use the LICENSED PROCESSES anywhere in the world under the PATENT
RIGHTS at anytime during the term of this Agreement, then for each such
sublicense the Company agrees to pay Licensor NET ROYALTIES at the rates set
forth below in the NET ROYALTY rate schedule. Such NET ROYALTIES shall be paid
to Licensor whether or not a patent issues with respect to the PATENT RIGHTS.

 

NET ROYALTY RATE
SCHEDULE

 

On all of the NET ROYALTIES collected by the Company
or its AFFILIATED COMPANIES (including dollar equivalents in foreign funds)
during each calendar year during the term of this agreement,

 

(1)                                  if
Company or AFFILIATED COMPANY does not complete, within its internal
laboratories, the RESEARCH PHASE of product development, the royalty rate shall
be 50%, or

 

5

 

(2)                                  if
Company or AFFILIATED COMPANY does complete, within its internal laboratories,
the RESEARCH PHASE of product development, the royalty rate shall be 25%.

 

4.6                                 If,
in the Company’s reasonable judgment, it is necessary to have one or more
royalty-bearing licenses from third parties in order to fully exercise the
rights granted by Licensor hereunder, then the applicable royalty rate set
forth in section 4.4 shall be reduced by one percent (1%) for each percent
of royalty the Company would be required to pay under such licenses from third
parties, but in no case will the royalty otherwise due Licensor be reduced by
more than fifty percent (50%).

 

4.7                                 No
multiple royalties shall be payable on NET SALES of any LICENSED PRODUCT by
virtue of such LICENSED PRODUCT being covered by a claim or claims of more than
one patent or patent application within PATENT RIGHTS.

 

4.8                                 In
the event that the Company and Licensor jointly own a patent or patent
application within PATENT RIGHTS by virtue of co-inventorship between personnel
of Licensor and one or more employees of the Company, (i) the applicable
minimum annual royalties as set forth in Sections 4.2 and 4.3 hereof, which
become due by virtue of the sale of a LICENSED PRODUCT covered solely by one or
more claims of such a jointly owned patent or patent application shall be
reduced by fifty percent (50%); and (ii) the applicable royalty rates, as set
forth in Sections 4.4 and 4.5 hereof, based on NET SALES of a LICENSED PRODUCT
covered solely by one or more claims of such a jointly owned patent or patent
application shall be reduced by fifty percent (50%). However, where such
LICENSED PRODUCT is also covered by a claim of a patent or patent application
within PATENT RIGHTS which is owned solely by Licensor, the applicable royalty
reduction of this Section shall not apply.

 

4.9                                 The
Company shall provide within thirty (30) days of the end of each June and
December after execution of this Agreement by both parties a written
report to Licensor of the amount of LICENSED PRODUCT sold, the total NET SALES
of such LICENSED PRODUCT, the royalties due to Licensor as a result thereof,
the amount of NET ROYALTIES received from nonaffiliated sublicensees pursuant
to Section 4.5, and royalties due to Licensor pursuant to
Section 4.5. Payment of any such royalties due shall accompany such
report. Until the Company has achieved a first commercial sale of a LICENSED
PRODUCT, each report shall include a full written report on the progress of the
Company’s efforts towards such first commercial sale.

 

4.10                           The
Company shall make and retain, for a period of three (3) years following the
period of such report, true and accurate records, files and books of account
containing all the data reasonably required for the full computation and
verification of sales and other information required in section 4.9. Such
books and records shall be satisfactory to Licensor and in accordance with
generally accepted accounting principles consistently applied. The Company
shall permit the reasonable inspection and copying of such records, files and
books of account by Licensor during regular business hours upon ten (10)
business days’ written notice to the company. Such inspection shall not be made
more than once each calendar year. All reasonable costs of such inspection and
copying shall be paid by Licensor, provided that if any such inspection shall
reveal that an error has been made in the amount of any payment in amount equal
to 15% or more of such payment, such costs shall be borne by the Company.

 

6

 

ARTICLE 5 - PATENT RIGHTS AND CONFIDENTIAL INFORMATION

 

5.1                                 Licensor
represents that Appendix A contains an accurate and complete listing and
description of the Patent Application and issued patents included within PATENT
RIGHTS.  Appendix A shall be
periodically updated.

 

5.2                                 Licensor
warrants that, except to the extent specifically set forth in Article 6,
Licensor has the right to grant the rights and licenses granted therein to the
Company free and clear of all liens and encumbrances.

 

5.3                                 Title
to all patent and patent applications included within PATENT RIGHTS, in which
no employees of the Company are co-inventors, shall reside in Licensor. All
patent applications included within PATENT RIGHTS in which no employees of the
Company are co-inventors shall be assigned to Licensor. Inventions which arise
from joint inventorship between personnel of Licensor and one or more employees
of the Company shall be assigned to both Licensor and the Company. Throughout
the term of the Agreement, the Company shall have the right, but shall not be
obligated, to file United States and/or foreign patent applications included
within PATENT RIGHTS; to prosecute and defend such applications against third
party oppositions; and upon grant of any Letters Patent included within PATENT
RIGHTS to maintain such Letters Patent in force, and the Company shall be
licensed under such patents or patent applications. In carrying out the filing
and prosecution of applications and maintenance of Letters Patents in which no
employees of the Company are coinventors, due care shall at all times be taken
to reasonably safeguard the interests of Licensor as assignee, and Licensor
shall have the right of final decision on all actions taken in such filing,
prosecution, and maintenance, which decision shall not be unreasonable in view
of the Company’s interests as licensee. All the costs of such filing,
prosecution, and maintenance for PATENT RIGHTS in which Licensor is the sole
assignee shall be billed directly to JHU, and reimbursed in full by the Company
within thirty (30) days of receipt. At the time of billing, a duplicate copy of
such bill shall be sent directly to the Company, so as to keep it informed of
incurred costs. Costs for filing, prosecution, and maintenance of PATENT RIGHTS
which are jointly owned by Licensor and the Company shall be billed directly to
the Company and paid by Company. For PATENT RIGHTS which are either solely
owned by Licensor or jointly owned by Licensor and Company:

 

(a)                                  the
patent attorney will timely send copies of all correspondence to and from the
various patent offices to both parties and shall give both parties an
opportunity to comment thereon.

 

(b)                                 Company,
at its own expense, shall have the right, but shall not be obligated, to file
United States and/or foreign patent applications included within the PATENT
RIGHTS; to prosecute and defend such applications against third party
oppositions; and upon grant of any Letters Patent included within the PATENT
RIGHTS, to maintain such Letters Patent in force.

 

(c)                                  if
the Company elects not to file or prosecute such applications or maintain such
Letters Patent., the Company. shall so notify Licensor, in which event Licensor
shall have the right to file or prosecute such applications and to maintain
such Letters Patent entirely at its own expense, and the Company shall not be
licensed thereunder.

 

7

 

5.4                                 The
Company agrees that the investigators and researchers of Licensor shall have
the right to publish any results relating to the invention disclosed within
PATENT RIGHTS. The Company shall be provided with an advance copy of any such
proposed publication. At the Company’s request, the Licensor agrees to delay
submission for publication to permit the filing of patent application(s) but in
no event shall such delay exceed sixty (60) days from the time the Company
receives the advance copy of the proposed publication.

 

5.5                                 During
the term of this Agreement, Licensor and the Company may disclose to each other
information which each considers to be confidential (hereinafter “CONFIDENTIAL
INFORMATION”). All written CONFIDENTIAL INFORMATION shall be marked as
confidential by the party providing the information at the time it is provided.
All CONFIDENTIAL INFORMATION which is verbally disclosed shall be subject to
the obligations of this Section 5.5 only upon written communication of its
confidential nature prior to or within 20 days after the time of its
disclosure. Upon the acceptance of the disclosure of the CONFIDENTIAL
INFORMATION, each party agrees to employ all reasonable efforts to maintain the
CONFIDENTIAL INFORMATION secret and confidential, such efforts to be no less
than the degree of care employed by each party to preserve and safeguard the
party’s own CONFIDENTIAL INFORMATION. The Company and Licensor each agrees to
treat as confidential and to use only in the conduct of its business all
CONFIDENTIAL INFORMATION disclosed to it by the other party except insofar as this
Agreement authorizes the use of such CONFIDENTIAL INFORMATION other purposes.
The Company and Licensor each agree not to disclose any of the CONFIDENTIAL
INFORMATION received from the other party to any third party who has not agreed
to keep it confidential. The company and/or Licensor shall be relieved from
their respective obligations under this Section 5.5 with regard to any
part of the CONFIDENTIAL INFORMATION:

 

(a)                                  that
can be demonstrated to have been in the public domain or publicly known and readily
available to the trade or the public prior to the date of the disclosure; or

 

(b)                                 that
can be demonstrated, in writing, to have been in the possession of the party
seeking release, or readily available to such party from another source without
binder of secrecy, provided however, that such source is not under obligation
of secrecy to the other party; or

 

(c)                                  that
becomes part of the public domain or known to the trade or public by
publication or otherwise, not due to any unauthorized act by the party seeking
release.

 

The Company’s and
Licensor’s respective obligations under this Section 5.5 shall extend for
a period of five (5) years from the EFFECTIVE DATE hereof; or (b) three (3)
years from the date of termination, whichever occurs later.

 

ARTICLE 6 - DHHS

 

6.1                                 Pursuant
to 35 USC 202, Licensor elected to take all right, title, and interest in the
invention forming the basis of the PATENT APPLICATION.

 

8

 

6.2                                 The
Company hereby specifically agrees to cooperate with Licensor in abiding by the
terms and conditions imposed on Licensor pursuant to 35 USC 200-211 and the
regulations promulgated thereunder. If a conflict arises between the terms of
this agreement and said federal statutes and regulations, said federal statutes
and regulations shall prevail.

 

6.3                                 Licensor
warrants that it has complied with and will continue to comply with all duties
and obligations running from Licensor to the Government pursuant to 35 USC
200-211 and the regulations promulgated thereunder.

 

6.4                                 Licensor
warrants that it has the right to grant the exclusive licenses granted under
this Agreement for the life of any U.S. or foreign patent that might issue with
respect to the PATENT APPLICATION.

 

ARTICLE 7 - TERM AND TERMINATION

 

7.1                                 This
Agreement shall be effective on the date that the last party executes this
Agreement. It shall expire on the date of expiration of the last to expire
patent issued included within PATENT RIGHTS, or if no patent ultimately issues,
fifteen (15) years after the first commercial sale of a LICENSED PRODUCT.

 

7.2                                 The
Company may terminate this Agreement at any time by written notice to Licensor.
Upon termination, all rights revert back to Licensor.

 

7.3                                 Upon
breach or default of any of the terms and conditions of this Agreement, the
defaulting party shall be given notice of such default in writing and a period
of thirty (30) days after receipt of such notice to correct the breach or
default. If the default or breach is not corrected within said thirty (30) day
period, the party not in default shall have the right to terminate this
Agreement.

 

7.4                                 Nonpayment
of the royalties required under Article 4 and nonreimbursement of costs
required under Article 5 hereinabove shall be a breach of this Agreement
in accordance with the provisions of Section 7.3 hereinabove and Licensor
shall have the right to terminate this Agreement if said breach is not
corrected within thirty (30) days. Termination shall not affect right to
recover unpaid royalties and nonreimbursed patent costs.

 

7.5                                 In
the event (a) either party shall become insolvent or shall suspend business or
shall file a voluntary petition or answer admitting the jurisdiction of the
Court and the material allegations of or shall consent to an involuntary
petition pursuant to or purporting to be pursuant to any reorganization or
insolvency law of any jurisdiction or shall make an assignment for the benefit
of creditors, or shall apply for or consent to the appointment of a receiver or
trustee of a substantial part of its property, and (b) no AFFILIATED COMPANY
shall undertake to assume its obligations under the provisions of this
Agreement within ninety (90) days from the date on which the party becomes so
disabled, then to the extent permitted by law, the other party may thereafter
immediately terminate this Agreement by giving written notice of termination to
the disabled party. This Agreement shall terminate upon receipt of such notice,
except with respect to all accrued and unpaid royalties and sales.

 

9

 

7.6                                 Sections
3.3, 4.10, 5.5, 7.4, 7.6, 8.5, 8.6, 8.8 8.9 of this Agreement shall survive the
termination of this Agreement.

 

ARTICLE 8 - MISCELLANEOUS.

 

8.1                                 All
notices pertaining to extension, termination, and amendment to this Agreement
shall be in writing and sent certified mail, return receipt requested, to the
parties at the following addresses or such other addresses as such party shall
have furnished in writing to the other party in accordance with this Section 8.1:

 

ASSOCIATE DEAN FOR
RESEARCH

The Johns Hopkins
University.

School of Medicine

720 Rutland Avenue

Baltimore, Maryland  21205

 

Ms. Susan E. Dubé

Vice President

Brigham and Women’s
Hospital

75 Francis Street

Boston Massachusetts  02115

 

T CELL SCIENCES, INC.

840 Memorial Drive

Cambridge, MA  02139

Attention:  Chairman and Chief Executive Officer

 

8.2                                 All
progress reports, royalty and other payments, and any other related
correspondence shall be in writing and sent certified mail, return receipt
requested, by TCS to:

 

Assistant Dean for
Technology Licensing

The Johns Hopkins
University

School of Medicine

720 Rutland Avenue

Baltimore, Maryland 21205

 

JHU shall provide copies
of said reports and correspondence to BWH.

 

8.3                                 The
Company may assign this Agreement in whole or in part to a party (i) acquiring
substantially all of its business relating to LICENSED PRODUCTS and/,or
LICENSED PROCESSES; (ii) to any AFFILIATED COMPANY; or (iii) to any other party
provided Licensor approves the assignment in writing, which approval shall not
be unreasonably withheld. BWH shall have the right to assign this Agreement to
its parent corporation, Brigham Medical Corporation.

 

10

 

8.4                                 The
construction, performance, and execution of this Agreement shall be governed
and interpreted by the laws of the State of Maryland.

 

8.5                                 Neither
party shall use the other party’s name or, any contraction thereof, or the
names of inventors in any advertising, promotional, or sales literature without
prior written consent from the other party.

 

8.6                                 EXCEPT
AS EXPRESSLY SET FORTH IN THIS SECTION 8.6, LICENSED PRODUCTS AND LICENSED
PROCESSES ARE PROVIDED “AS IS”. NO REPRESENTATION OR WARRANTY IS MADE WITH
RESPECT TO THE PERFORMANCE OF LICENSED PRODUCTS AND LICENSED PROCESSES,
INCLUDING THEIR SAFETY, EFFECTIVENESS, OR COMMERCIAL VIABILITY. LICENSOR
DISCLAIMS ALL WARRANTIES WITH REGARD TO PRODUCTS AND PROCESSES LICENSED UNDER
THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ALL WARRANTIES, EXPRESS OR IMPLIED,
OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE. NOTWITHSTANDING ANY
OTHER PROVISION OF THIS AGREEMENT, LICENSOR ADDITIONALLY DISCLAIMS ALL
OBLIGATIONS AND LIABILITIES ON THE PART OF LICENSOR FOR DAMAGES, INCLUDING BUT
NOT LIMITED TO DIRECT, INDIRECT, SPECIAL, AND CONSEQUENTIAL DAMAGES, ATTORNEYS’
AND EXPERTS’ FEES, AND COURT COSTS (EVEN IF LICENSOR HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, FEES OR COSTS), ARISING OUT OF OR IN CONNECTION
WITH THE MANUFACTURE, USE, OR SALE OF THE PRODUCTS AND PROCESSES LICENSED UNDER
THIS AGREEMENT. COMPANY ASSUMES ALL RESPONSIBILITY AND LIABILITY FOR LOSS OR
DAMAGE CAUSED BY A PRODUCT AND PROCESS MANUFACTURED, USED, OR SOLD BY COMPANY,
ITS SUBLICENSEES AND AFFILIATED COMPANIES WHICH IS A LICENSED PRODUCT OR
LICENSED PROCESS AS DEFINED IN THIS AGREEMENT.

 

8.7                                 Licensor
warrants that it has good and marketable title to the invention claimed under
PATENT RIGHTS and it is free of all liens and encumbrances which may result in
claims against Company or its affiliates.

 

8.8                                 In
as much as Licensor and the inventors of LICENSED PRODUCTS will not, under the
provisions of this Agreement or otherwise, have any control over the manner in
which company or AFFILIATED COMPANY or its sublicensees or those operating for
its account or third parties who purchase LICENSED PRODUCTS from any of the
foregoing entities, practice the inventions of LICENSED PRODUCTS, Company shall
defend and hold Licensor and said inventors harmless as against any judgments,
fees, expenses, or other costs arising from or incidental to any product
liability or other lawsuit, claim, demand or other action brought as a
consequence of the practice of said inventions by any of the foregoing
entitles, whether or not Licensor or any one or more of said inventors, either
jointly or severally, is named as a party defendant in any such lawsuit.
Practice of the inventions covered by LICENSED PRODUCTS, by an affiliate or an
agent or a sublicensee or a third party on behalf of or for the account of the
Company or by a third party who purchases LICENSED PRODUCT from the Company,
shall be considered Licensee’s practice of said inventions for purposes of this
Section 8.8. The obligation of the Company to defend and indemnify as set
out in this Section 8.8 shall survive the termination of this Agreement.

 

11

 

8.9                                 The
Company warrants that it now maintains and will continue to maintain, in each
country Company sells LICENSED PRODUCTS, product liability insurance coverage
appropriate to the risks involved in marketing LICENSED PRODUCT and will
annually present evidence to Licensor that such coverage is being maintained.
The Company will furnish Licensor with a copy of each product liability
insurance policy obtained and agrees to maintain reasonable product liability
insurance pertaining to the LICENSED PRODUCT. Licensor shall be listed as named
insured in Company’s said insurance policy.

 

8.10                           This
Agreement constitutes the entire understanding between the parties with respect
to the obligations of the parties with respect to the subject matter hereof,
and supersedes and replaces all prior agreements, understandings, writings, and
discussions between the parties relating to said subject matter.

 

8.11                           This
Agreement may be amended and any of its terms or conditions may be waived only
by a written instrument executed by the parties or, in the case of a waiver, by
the party waiving compliance. The failure of either party at any time or times
to require performance of any provision hereof shall in no manner affect its
right at a later time to enforce the same. No waiver by either party of any
condition or term in any one or more instances shall be construed as a further
or continuing waiver of such condition or term or of any other condition or
term.

 

8.12                           This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors and permitted assigns.

 

12

 

IN WITNESS WHEREOF the respective parties hereto have
executed this Agreement by their duly authorized officers on the date appearing
below their signatures.

 

	
   

  	
  THE JOHNS HOPKINS
  UNIVERSITY

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ O. Michael
  Colvin, M.D.

  
	
   

  	
   

  	
  O. Michael Colvin, M.D.
  Associate Dean

  for Research

  
	
   

  	
   

  
	
   

  	
  Date

  	
  12/15/88

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BRIGHAM AND WOMEN’S
  HOSPITAL

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Ms. Susan E. Dubé

  
	
   

  	
   

  
	
   

  	
  Name

  	
  Ms. Susan E. Dubé

  
	
   

  	
   

  
	
   

  	
  Title

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Date

  	
  12/7/88

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  T CELL SCIENCES, INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Patrick C. Kung

  
	
   

  	
   

  
	
   

  	
  Name

  	
  Patrick C. Kung

  
	
   

  	
   

  
	
   

  	
  Title

  	
  Executive Vice
  President

  
	
   

  	
   

  
	
   

  	
  Date

  	
  11/30/88

  
										

 

13

 

I have read and
agree with the terms of this Agreement.

 

	
  By

  	
  /s/ Douglas T. Fearson

  	
   

  	
  Date

  	
  December 14,
  1988

  
	
   

  	
  Douglas T. Fearson

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  /s/ Lloyd B. Klickstein

  	
   

  	
  Date

  	
  December 8,
  1988

  
	
   

  	
  Lloyd B. Klickstein

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  /s/ Winnie W. Wong

  	
   

  	
  Date

  	
  December 9,
  1988

  
	
   

  	
  Winnie W. Wong

  	
   

  	
   

  	
   

  

 

14

 

APPENDIX A

 

(TO BE UPDATED
PERIODICALLY)

 

U.S. Patent Application
Serial Number 176,532 filed on April 1, 1988

 

15

 

EXHIBIT A

 

AGREEMENT

 

THIS AGREEMENT is made
between THE JOHNS HOPKINS UNIVERSITY, having a place of business at 720 Rutland
Avenue, Baltimore, Maryland 21205 (hereinafter referred to as “JHU”) and
BRIGHAM AND WOMAN’S HOSPITAL, having a place of business at 75 Francis Street,
Boston, Massachusetts 02115 (hereinafter referred to as “BRIGHAM AND WOMAN’S”);
and

 

WITNESSETH THAT:

 

WHEREAS, Douglas T.
Fearon of JHU, Lloyd B. Klickstein of JHU and BRIGHAM AND WOMAN’S and Winnie W.
Wong of BRIGHAM AND WOMAN’s have jointly invented “The Human C3b/C4b Receptor
(CRT)” (hereinafter referred to as “INVENTION”).

 

WHEREAS, a United States
patent application on the INVENTION was filed on April 1, 1988 and was
accorded Serial Number 176,532.

 

WHEREAS, said United
States patent application shall be assigned jointly to JHU and BRIGHAM AND
WOMAN’S, each of which shall have an equal and undivided half interest in said
INVENTION disclosed and claimed therein, as well as any patent issuing thereon.

 

WHEREAS, JHU and BRIGHAM
AND WOMAN’S wish to act jointly in offering options on licenses and licenses to
others under the patent rights pertaining to said INVENTION.

 

WHEREAS, JHU and BRIGHAM
AND WOMAN’S wish to provide for the handling and division of the monies
received from any licensee under said patent rights.

 

NOW, THEREFORE, in
consideration of the premises and of the mutual covenants and agreements
contained herein and of other good and valuable considerations, the parties
have agreed and do hereby agree as follows:

 

1.                                       Licensing
of said INVENTION shall only be by mutual agreement. Neither party shall
independently grant a license to a third party without agreement from the other
party. JHU shall take the lead in identifying potential licensees and
negotiating a license agreement.

 

2.                                       Foreign
patent applications shall be filed at the mutual discretion of JHU and BRIGHAM
AND WOMAN’S.

 

3.                                       Expenses
related to administering the INVENTION and obtaining, defending, maintaining
and licensing patents issuing thereon shall be equally divided between JHU and
BRIGHAM AND WOMAN’S.

 

4.                                       Royalties
and other income received pursuant to options on licenses and licenses under
the patent rights of said INVENTION shall be equally divided between JHU and
BRIGHAM AND WOMAN’S.

 

16

 

5.                                       This
Agreement shall terminate with the expiration of the last to expire patent
issued on said INVENTION, or on abandonment of all patent applications on the
INVENTION, provided such abandonment is by mutual consent.

 

All notices and communications hereunder shall be
forwarded to:

 

David A. Blake, Ph.D.

Associate Dean for Research

The Johns Hopkins University

School of Medicine

720 Rutland Avenue

Baltimore, MD  21205

 

Ms. Susan Dubé

Vice President

Brigham and Woman’s Hospital

75 Francis Street

Boston, Massachusetts  02115

 

17

 

IN WITNESS WHEREOF, JHU and BRIGHAM AND WOMAN’S have caused
this Agreement to be duly executed as indicated below.

 

	
  WITNESS:

  	
   

  	
  THE JOHNS HOPKINS
  UNIVERSITY

  
	
   

  	
   

  	
   

  
	
   /s/ Carol S. Grap

  	
   

  	
  By:

  	
  /s/ David A. Blake

  
	
   

  	
   

  	
   

  	
  David A. Blake, Ph.D.

  Associate Dean for Research

  
	
  Date:

  	
  6/28/88

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  BRIGHAM AND WOMAN’S
  HOSPITAL

  
	
   

  	
   

  	
   

  
	
   /s/ [signature
  illegible]

  	
   

  	
  By:

  	
  /s/ Susan Dubé

  
	
   

  	
   

  	
   

  	
   

  	
  Susan Dubé

  Vice President

  
	
  Date:

  	
  6/24/88

  	
   

  	
   

  

 

18

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