Document:

Exhibit 10.21

 

	
   

  	
  [*]         designates
  portions of this document that have been omitted pursuant to a request for
  confidential treatment filed seperately with the Commission

  

 

 

 

AGREEMENT

DATED AS OF OCTOBER 8, 1996

BY AND AMONG

BIOSYN, INC.,

EDWIN B. MICHAELS

AND

E.B.
MICHAELS RESEARCH ASSOCIATES, INC.

 

 

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AGREEMENT

 

AGREEMENT dated this 8th day of October, 1996 (“Agreement”) by and
among BIOSYN, INC., a Pennsylvania corporation (“Buyer”), EDWIN B. MICHAELS, an
individual (“Michaels”), and E. B. MICHAELS RESEARCH ASSOCIATES, INC., a
Connecticut corporation (“Research Associates”) (collectively, Michaels and
Research Associates are referred to herein as “Sellers”).

 

RECITALS:

 

Whereas, Michaels has developed certain broad spectrum antimicrobial
compositions and practice known as “C31G® Technology”, which compositions and
practice are described and protected by certain patents, patent applications
and Know-How of which Michaels is the inventor, which patents, patent applications,
Know-How and related trademarks have been assigned to Research Associates and
are set forth in Schedule 1 attached hereto;

 

Whereas, Research Associates is the owner of all right, title and
interest in and to the aforesaid patents and patent applications and Know-How
specifically related to C31G® technology;

 

Whereas, Buyer has the expertise, capacity and interest to develop
compositions based upon and to develop useful products using the C31G®
Technology or will license or sell the C31G® technology to a third party who
has the expertise, capacity and interest to develop compositions based upon and
to develop useful products using the C31G® Technology;

 

Whereas, Buyer and Research Associates have entered into a certain
License Agreement dated January 3, 1994 (“License Agreement”) pursuant to
which Research Associates granted Buyer an exclusive world-wide license for
certain uses of C31G® Technology for certain products;

 

Now, therefore, in consideration of the mutual covenants, agreements,
representations and warranties contained herein, and in reliance thereon; Buyer
and Sellers, intending to be legally bound, agree as follows:

 

SECTION 1. DEFINITIONS.

 

Capitalized terms, unless defined elsewhere in this Agreement, shall be
used as defined in Section 1 of this Agreement.

 

“Affiliates” shall mean any Person who controls, is controlled by or is
under common control with the designated party.

 

“Agreement” shall mean this Agreement.

 

“Biosyn Stock” shall mean shares of stock of Biosyn, Inc. issued
to E.B. Michaels Research Associates Inc. prior to or on the Closing Date.

 

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  [*]         designates
  portions of this document that have been omitted pursuant to a request for
  confidential treatment filed seperately with the Commission

  

 

“Buyer” shall mean Biosyn, Inc., a Pennsylvania corporation.

 

“C31G® Technology” shall mean certain broad spectrum antimicrobial
compositions and uses thereof falling within the scope of any of the claims of
any of the patents or patent applications listed in Schedule 1 and
Know-How, trade secrets, trademarks and other data set forth on Schedule 1.

 

“Cash Payments” shall mean the cash payment in the amount of [*]to be
paid by Buyer to Research Associates and the cash payment in the amount of [*] to
be paid by Buyer to Michaels pursuant to Section 4(a).

 

“Closing Date” shall mean the date of this Agreement.

 

“Contracts” shall mean all contracts relating to C31G® Technology.

 

“Contract with Raymond Lee” means any agreement between Research
Associates and Raymond Lee and/or Lee Associates International including any
renewal of the agreement of November 20, 1993.

 

“Extensions” shall mean any extension of the term or period of
enforceability of a patent or any part thereof whether granted by a government
authority or a court. Government Authority shall include but is not limited to
an administrative agency that approves the marketing of pharmaceuticals,
medical devices, health care products or cosmetic products, legislative body or
patent office.

 

“Financial Statements” shall mean the balance sheets of Buyer dated December 31,
1994 and 1995, and related statements of operations, shareholders’ equity and
cash flows for the years ended December 31, 1994 and 1995 and the
unaudited trial balance for the first six months of 1996.

 

“Governmental Authority” shall mean the government of the United
States, any state or political subdivision thereof, or any foreign country and
any entity exercising executive, legislative, regulatory or administrative functions
of or pertaining to government.

 

“Improvements” shall mean any improvements whether patentable or
unpatentable, including Know-How, developed by either Michaels or Research
Associates at any time either before the Closing Date or during the period when
Michaels is retained by Biosyn as a consultant as set out in Section 4 (f) which
are useful for the development, manufacture, use or sale of any product that
uses C31G® Technology.

 

“Indemnified Party” shall have the meaning defined in Section 13.

 

“Inventory” shall have the meaning defined in Schedule 1.

 

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“Know-How” shall mean copies of all information and documentation in
Sellers’ possession or under Sellers’ control, which is necessary for or useful
in the development, improvement, manufacture, use, sale, registration, or
receipt of appropriate marketing approval of or for any products using the
C31G® Technology, or any Improvements, the Research Associates Assets or the
Michaels Assets and all information, whether patentable or otherwise, which is
available to Sellers (excluding that which is in the public domain or the
property of Third Parties) and is required or useful for the development,
manufacture, use or sale of any products using the C31G® Technology or any
Improvements, the Research Associates Assets or the Michaels Assets.

 

“Liens” shall mean and include all mortgages, liens, pledges, charges,
title retention or security agreements, claims, restrictions, leases, options,
rights of first offer or first refusal, confidentiality or secrecy agreements,
noncompetition agreements, defects of title or other encumbrances, burdens or
rights of others.

 

“Losses” shall mean all claims, damages, losses, liabilities, costs and
expenses, including reasonable attorneys’ fees and disbursements and any other
legal costs.

 

“Michaels Assets” shall mean (i) the assets listed on Schedule 1
together with an assignment of all rights of Michaels in and to, including
rights to enforce the terms of, all agreements, contracts, licenses,
assignments, indemnities, confidentiality agreements and noncompetition
agreements specifically relating to C31G® Technology including those listed in Schedule 2
and including without limitation all existing unpatented inventions and invention
disclosures directly relating to the use of C31G® Technology; publications and
copyrights relating to C31G® Technology; trade secrets, Know-How and show-how,
all relating to C31G® Technology; copies of formulae and written chemistry
relating to C31G® Technology plus (ii) all rights of Michaels transferred
under Section 2.3.

 

“Michaels” shall mean Edwin B. Michaels, an individual.

 

“Net Sales” shall mean the aggregate invoice price billed by Buyer for
sales of Products by Buyer, its Affiliates or Subsequent Purchaser of the
Assets to Third Parties. In computing Net Sales of Products there shall be
deducted from the gross figures the following expenses: (i) transportation
charges, including insurance, determined in accordance with Buyer’s standard
accounting practice used in the ordinary course of its business and consistent
with custom in the industry; (ii) sales and excise taxes and duties paid
or allowed by a selling party and any other similar governmental charges’
imposed upon the production, importation, use or sale of such-Product; (iii) normal
quantity discounts, cash credits, not as a part of a substitute for a
retroactive price roll-back or equivalent thereof, in the ordinary course of
Buyer’s business; and (iv) rebates, allowances or credits to customers on
account of rejected or returned Products, in the ordinary course of business,
but not as a part of or a substitute for a retroactive price roll back or
equivalent thereof. Sales between or among Buyer and its Affiliates shall be
excluded from the computation of Net Sales except where such Affiliates are end
users, but, as noted in the definition above, the term Net Sales shall include
other subsequent final sales to Third Parties by such Affiliates.

 

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“Permits” shall mean all governmental permits, licenses, registrations,
orders and approvals relating to the use of the Purchased Assets, to the extent
such permits, licenses, registrations, orders and approvals are transferrable
to Buyer (collectively, the “Permits”).

 

“Person” shall mean an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
limited liability company or any other entity of whatever nature.

 

“Products” shall mean any products which contain, use, or are made by
utilizing C31G® Technology.

 

“Purchase Price” shall mean the Cash Payments and the Royalty Payments.

 

“Purchased Assets” shall mean the C31G® Technology, Research Associates
Assets, the Michaels Assets and the Improvements.

 

“Research Associates” shall mean E.B. Michaels Research Associates, Inc.,
a Connecticut corporation.

 

“Research Associates Assets” shall mean (i) the assets listed on Schedule 1
together with an assignment of all rights of Research Associates in and to,
including rights to enforce the terms of, all agreements, contracts, licenses,
assignments, indemnities, confidentiality agreements and noncompetition
agreements specifically relating to C31G® Technology including those listed in Schedule 2
and any agreements relating to the assignment of inventions relating to C31G®
Technology made by prior and present employees of Research Associates and any
analogous agreements with any other Person with respect to the C31G® Technology
plus (ii) all rights of Research Associates transferred under Section 2.3.
For the avoidance of doubt it is expressly agreed that shares of stock of Buyer
(“Biosyn Stock”) currently owned by Research Associates are specifically
excluded from the definition of “Research Associates Assets” and from this
sale.

 

“Royalty Payments” shall mean the royalties to be paid to Research
Associates pursuant to Section 4.

 

“Royalty Period” shall mean from the date of this Agreement until December 31,
2011 or, if longer, so long as a valid patent claim from a patent or
application listed in Schedule 1, including any Extensions thereof,
relating to C31G® Technology is covering a Product and the Product maintains
exclusivity in the market as a result of such patent claim.

 

“Sellers” shall mean Michaels and Research Associates.

 

“Subsequent Purchaser of the Assets” shall mean any person who
purchases any or all of the Purchased Assets being sold by Sellers to Buyer
pursuant to this Agreement.

 

“Taxes” shall mean all taxes and other governmental charges which an
individual,

 

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corporation or partnership may be required to pay, withhold or collect,
imposed by any federal, territorial, state, local or foreign government or any
agency or political subdivision of any such government.

 

“Third Party(ies)” shall mean any party other than a party to this
Agreement or its or his Affiliates.

 

SECTION 2. ASSETS TO BE ACQUIRED.

 

2.1 Research Associates Assets. Subject to the terms and
conditions of this Agreement, and in reliance on the representations,
warranties and covenants contained herein, Research Associates hereby sells,
conveys, assigns, transfers and delivers to Buyer, and Buyer hereby purchases
and acquires all of Research Associates’ right, title and interest in and to
the Research Associates Assets; for the avoidance of doubt it is expressly
agreed that Research Associates will keep the originals of laboratory notebooks
relating to C31G® Technology and other documents relating to written chemistry but
will provide copies of such documents to the Buyer within one (1) month
after the Closing Date. Research Associates use of retained documents shall,
however, be subject to the provisions of Section 14.1 which controls
Sellers rights to compete with Buyer.

 

2.2 Michaels Assets. Subject to the terms and conditions of this
Agreement, and in reliance on the representations, warranties and covenants
contained herein, Michaels hereby sells, conveys, assigns, transfers and
delivers to Buyer, and Buyer hereby purchases and acquires all of Michaels’
right, title and interest in and to the Michaels Assets. For the avoidance of
doubt it is expressly agreed that Michaels will keep the originals of
laboratory notebooks relating to C31G® Technology and other documents relating
to written chemistry but will provide copies of such documents to the Buyer
within one (1) month after the Closing Date. Michaels use of retained
documents shall, however, be subject to the provisions of Section 14.1
which controls Sellers’ rights to compete with Buyer.

 

2.3 Improvements. Sellers each hereby sells, conveys, assigns
and transfers to Buyer and Buyer hereby purchases and acquires all of each of
Sellers’ right, title and interest in, to, and under all Improvements.

 

SECTION 3. NO ASSUMPTION OF LIABILITIES.

 

Sellers shall transfer the Purchased Assets to Buyer free and clear of
all Liens and except as set out hereinafter in this Section 3, Seller
shall convey no other liabilities or obligations to Buyer. However, Buyer
expressly assumes the liabilities and obligations arising after the Closing
Date of Research Associates pursuant to the Contract with Raymond Lee, and
liabilities and obligations arising after the Closing Date under or relating to
contracts, licenses or any other agreements listed on Schedule 2 including
the obligation to supply. For purposes of this Section 3, the phrase “liabilities
and obligations” shall include, without limitation, any direct or indirect
indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost,
expense, obligation or responsibility, fixed or unfixed, Down or unknown,
asserted or unasserted, choate or inchoate, liquidated or unliquidated, secured
or unsecured, whether arising in contract, tort or otherwise, arising after the

 

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  [*]         designates
  portions of this document that have been omitted pursuant to a request for
  confidential treatment filed seperately with the Commission

  

 

 

Closing Date. “Liabilities and obligations” also include but are not
limited to, any liability for property damage, death or personal injury
suffered after the Closing Date.

 

SECTION 4. THE PURCHASE PRICE AND RELAYED MATTERS.

 

Purchase Price.

 

(a) In consideration of the sale, conveyance, assignment, transfer
and delivery of the Purchased Assets, upon execution of this Agreement by all
parties hereto, Buyer shall pay the respective Cash Payment due to each Seller
on the Closing Date in immediately available funds except as provided in Section 13.4.

 

(b) During the Royalty Period, Buyer shall annually pay to
Research Associates, as royalties or other compensation for Products sold or
otherwise disposed of by Buyer or its affiliates, the sum of:

 

(1) [*]of the Net Sales up to [*] of the Products.

 

(1) [*] of the Net Sales over [*]of the Products.

 

(c) During the Royalty period, Buyer shall annually pay to
Research Associates [*]of any fees received by Buyer or its affiliates for
licensing any or all of the Purchased Assets including [*]of any upfront,
milestone and/or royalty payments received from the licensee.

 

(d) During the Royalty period in the event that Buyer or its
affiliates licenses or crosslicenses any or all of the Purchased Assets to a
third party, wherein the major part of the consideration for said license or
crosslicense is not monetary, section 4(b) shall apply mutatis
mutandis.

 

(e) Buyer hereby agrees that any sale of any or all of the
Purchased Assets to a Subsequent Purchaser of the Assets will include as a
condition of sale the obligation to continue paying royalties to Research
Associates as set out in section 4(b), (c) and (d).

 

(f) Buyer shall pay Michaels a fee to provide certain consultancy
services in the amount of [*] per annum payable quarterly on the first business
day of each quarter beginning October 1, 1996 and continuing quarterly
thereafter. In consideration of the payments Michaels will for the period from October 1,
1996 to three years after the Closing Date make himself available to Buyer from
time to time for consultation with regard to further exploitation of the C31G®
Technology. The arrangement set forth in this paragraph 4(f) may be
extended into a fourth and subsequent years upon written agreement of Michaels
and the Buyer. In the event the Buyer or its affiliates agrees to sell all or
substantially all of the Purchased Assets to a Subsequent Purchaser of the
Assets, either Buyer or Michaels may terminate the consultancy, or with
Michaels’ consent, Buyer may assign its rights and obligations relating to
Michaels’ consultancy to the Subsequent Purchaser of the Assets.

 

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(g)                                 Any
payments due to Research Associates due under this agreement will be paid to
Research Associates or a person or entity identified in writing by an
authorized representative of Research Associates.

 

(h)                                 Products
shall be considered to have been “sold or otherwise disposed” when billed out,
or when delivered, or when paid for, whichever shall occur first; provided,
however, that upon the expiration of the Royalty Period, any products made on
or prior to the date of such expiration, which have been sold or otherwise
disposed of as of such date shall be subject to royalty at that time.

 

(i)                                     As
used herein, Products “otherwise disposed of” means: (A) Products not sold
but delivered by Buyer to others (including, by way of illustration, and not
limitation, deliveries on consignment or memorandum of deliveries for export)
regardless of the basis for compensation, if any; and (B) Products not
sold as such, but sold by Buyer as components or constituents of other products
or of systems sold as such; provided, however, that in any event, Products “otherwise
disposed of” shall not include Products used in clinical trials.

 

(j)                                     Where
Products are not sold, but are “otherwise disposed of,” “Net Sales” for the
purpose of computing royalties shall be computed based upon the Net Sales
figures at which products of similar kind and quality, sold in similar
quantities, are then currently being offered for sale by Buyer.

 

(k)                                  Buyer
shall have complete control of the manufacture and/or sale of Products and the
terms and conditions of such sale including the pricing thereof. Buyer shall
have complete discretion regarding the terms and conditions of sale of
Products. Buyer reserves the exclusive right to adjust, increase and/or change
selling prices and discount structures and other terms and conditions involving
the sale and pricing of the Products.

 

(l)                                     In
order to ensure that Research Associates receives the full Royalty Payments
contemplated by this Agreement, Buyer agrees that, if any Products are sold for
resale to any of Buyer’s Affiliates, Royalty Payments shall be computed upon
the Net Sales of such Affiliates, rather than Buyer’s net selling price.

 

(m)                               Buyer
shall make quarterly written statements for each quarter to Research Associates
within sixty (60) days after the first day of the following quarter during the
Royalty Period, and, as of such dates, setting forth in each such statement the’
licensing income received by Buyer and the amount and description of Products
sold or otherwise disposed of during the preceding quarter whether by Buyer,
its affiliates or any third party, and the Net Sales figures upon which such
royalties are payable as provided in Paragraphs (b), (c) and (d) of Section 4
of this Agreement, the deductions from the invoice prices of Products, and the
amount of the royalties due. The first such statement shall include Products
sold or otherwise disposed of between the date of the execution of this
Agreement and the date of such statement. Payment of the royalties due shall
accompany each statement provided herein.

 

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  [*]         designates
  portions of this document that have been omitted pursuant to a request for
  confidential treatment filed seperately with the Commission

  

 

 

(n)                                 Buyer
shall keep records and books of account showing the quantity of all Products
sold or otherwise disposed of under this Agreement, and such records shall be
in sufficient detail to enable the royalties payable to Research Associates to
be ascertained. Within sixty (60) days after the close of each calendar year
during the Royalty Period, Buyer shall furnish to Research Associates a
statement of the aggregate amount of royalties due to Research Associates for
such calendar year (or, as the case may be, part thereof), which statement
shall be certified by a certified public accountant to be an accurate
reflection of the records of Buyer for such a calendar year (or, as the case
may be, part thereof). Research Associates or its authorized representative
shall have the option and right at any reasonable time during normal business
hours and without unreasonable disruption of Buyer’s business, once during any
calendar year during the Royalty Period, to examine and audit such records and
books of account to the extent necessary to verify the statements provided for
in paragraph 4(m) above, such examination to be made at the sole expense of
Research Associates, subject to the next sentence. If, as a result of any such
examination, Research Associates determines that, with respect to the period
being examined, (i) there has been an underpayment of the aggregate amount
of royalties and other payments which should have been paid, Buyer shall
immediately pay the sum due to Seller and if the discrepancy is in excess of [*],
Buyer shall reimburse Research Associates for the reasonable, documented cost
of such examination and the reasonable, documented cost (including reasonable
attorneys’ fees), if any, of the recovery by Research Associates of such
underpayment, or (ii) there has been an overpayment of royalties the
overpayment will be credited against further royalties.

 

(o)                                 Any
license agreement concluded by Buyer with a licensee for use of C31G®
Technology shall include provisions that are substantially the same as those of
paragraphs (m) and (n) of this Section 4.

 

SECTION 5. BIOSYN STOCK

 

All shares of Biosyn Stock issued to Research Associates prior to or on
the Closing Date shall continue to have all rights, including those rights
related to dividends and voting, afforded all other holders of common stock of
Biosyn indefinitely not withstanding the lapse of anti-dilution protection on
the Closing Date. In the event of an Initial Public Offering and if other
substantial shareholders are permitted to make some of their shares available
for sale as part of the offering, then Research Associates shall be entitled to
sell the same percentage of its holdings of the Biosyn Stock as other
substantial shareholders. Schedule 3 lists the number of shares of Biosyn
Stock issued to Research Associates and its percentage of the total shares of
stock issued by Biosyn. Schedule 3 also includes a list of the number of
shares issued to Research Associates and the dates and reasons for issuance of
the stock to Research Associates.

 

SECTION 6. REPRESENTATIONS AND WARRANTIES OF RESEARCH ASSOCIATES.

 

Research Associates represents and warrants to Buyer that:

 

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6 .1 Authority. Research Associates has full power and authority
to execute and deliver this Agreement, and the instruments of transfer and
other documents delivered or to be delivered pursuant hereto to which it is a
party, to perform all the terms and conditions hereof and thereof to be
performed by it and to consummate the transactions contemplated hereby and
thereby. This Agreement and instruments of transfer and other documents
delivered or to be delivered by Research Associates in connection with this
Agreement have been duly authorized and approved by all necessary and proper
action of Research Associates (including all necessary shareholder action) and
constitute, and will constitute, the valid and binding obligations of Research
Associates, enforceable in accordance with their respective terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws or equitable principles from time to
time in effect relating to or affecting the rights of creditors generally.

 

6.2  Organization and Good
Standing. Research Associates is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Connecticut, with
full power and authority to carry on its business as presently conducted by it
and is not registered as a foreign corporation in any state.

 

6.3 Compliance with Laws. To the best of its knowledge, Research
Associates is operating the Research Associates Assets in compliance in all
respects with all requirements of all federal, state and local laws,
regulations, judgments, injunctions, decrees, court orders and administrative
orders regarding such operations.

 

6.4 Permits. To the best of its knowledge, the Permits are the
only permits, franchises, licenses or authorizations used in the operation of
the business of Research Associates. All Permits are in full force and effect
and no suspension or cancellation of any have been threatened. No claims have
been made by any Third Parties relating to the Permits and no such claim is contemplated
by any Governmental Authority or other Person.

 

6.5 Purchased Assets. Research Associates has good and
marketable title to, and all right, title and interest in, all the Research
Associates Assets being transferred and conveyed pursuant to this agreement,
and will transfer and convey assets being transferred and conveyed according to
this agreement to Buyer free and clear of all Liens and no person or entity has
any valid claim of ownership to any of the Purchased Assets.

 

6.6 Inventory. The Inventory of Research Associates is Products
listed on Schedule 1 to which title has not yet passed or which has not
been delivered to a customer and consists of items that are of a quality and
quantity useable or saleable in the normal course of the business of Research
Associates.

 

6.7 Contracts. (a) Schedule 2 sets forth a list of all
Contracts and a true and correct copy of each Contract listed in Schedule 2
has previously been made available to Buyer. To the best of its knowledge, all
Contracts are binding and in full force and effect, and Research Associates and

 

10

 

Michaels have performed all obligations required to be performed by
them under each Contract, and no condition exists or event has occurred which
with notice or lapse of time would constitute a default or a basis for delay or
non-performance by Research Associates or Michaels, and to the best of their
knowledge, no other party to any such Contract is in default thereunder.

 

(b) To the best of its knowledge, none of the Contracts contains
any provision giving any party thereto the right to terminate such agreement by
reason of the execution of this Agreement or the consummation of the
transactions contemplated herein, and none of the terms of any Contract will be
adversely altered in any material respect by reason of the execution of this
Agreement or the consummation of the transactions contemplated herein.

 

6.8 Solvency. The transfer of the Research Associates Assets by
Research Associates in return for the Purchase Price will not render Research
Associates insolvent or unable to pay its debts as they become due in the
ordinary course.

 

SECTION 7. REPRESENTATIONS AND WARRANTIES OF SELLERS

 

Sellers jointly and severally represent and warrant to Buyer that:

 

7.1 Neither the execution and delivery by Sellers of this Agreement or
the instruments of transfer or any other documents delivered or to be delivered
pursuant hereto by either or both Sellers or the performance by Sellers
hereunder or thereunder, nor the consummation of the transactions contemplated
hereby or thereby, will violate, conflict with, result in the breach of or
accelerate the performance required by any of the terms, conditions or
provisions of the articles of incorporation or by-laws of Research Associates
or any covenant, agreement or understanding to which either Seller is a party
or any order, ruling, decree, judgment, arbitration award or stipulation to
which either Seller is subject, or constitute a default thereunder or result in
the creation or imposition of any Lien upon any of the Purchased Assets, or
allow any Person to accelerate any debt secured by any Purchased Asset.

 

7.2 To the best of Sellers’ knowledge, no consent, approval or
authorization of, filing or registration with, or notification to, any
Governmental Authority is required in connection with the execution and
delivery of this Agreement by Sellers, the performance of their obligations
hereunder or the consummation of the transactions contemplated hereby. No consent,
approval or authorization of any Person is required in connection with the
execution or delivery of this Agreement by Sellers, the transfer to Buyer of
the Purchased Assets, or the performance by Sellers of any other obligation
under this Agreement.

 

7.3 Neither Seller is engaged in, or a party to, any legal action,
suit, investigation or other proceeding, except as referred to in Section 13.2
of the Agreement, by or before any court, arbitrator or administrative agency
that relates to the Purchased Assets, and except as referred to in Section 13.2,
neither Seller knows of any basis for any such action, investigation or
proceeding. There are no outstanding orders, rulings, decrees, judgments or
stipulations or proceedings to which either Seller is a party or by which
either Seller is bound, by or with any court, arbitrator or

 

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administrative agency that relate to the Purchased Assets.

 

7.4 Neither Seller is a party to any license, contract, agreement (other
than those listed on Schedule 2) with respect to, and has not made any
sale, pledge or other transfer of, and has not granted any outstanding or
unexpired right or option agreement, grant or obligation, whether written or
oral, to purchase or acquire, all or any part of the Purchased Assets, except
as contemplated by this Agreement or under the License Agreement.

 

7.5 Except for those patents and patent applications listed in Schedule 1
as expired, abandoned or lapsed, all patents and patent applications included
in the Purchased Assets and listed in Schedule 1 are in force. The Sellers
have no knowledge of any facts or claims which may bring validity of the
patents into question. All patent applications, except for those listed in Schedule 1
as expired, abandoned or lapsed, included in the Purchased Assets are pending,
in good standing and are being diligently pursued. There are no currently
pending U.S. patent applications directly relating to C31G® Technology
belonging to either Seller except as identified in Schedule 1. Sellers own
the entire right, title and interest in and to their respective patents and
patent applications without qualification, limitation, burden or encumbrance of
any kind. Schedule 2 lists all licenses to or contracts with any Third
Party or relating to patents, patent applications, patent rights, trademarks or
trademark rights, trade secrets, Know-How or show-how.

 

7.6 To the best of Sellers’ knowledge, no infringement of any United
States or foreign patent, trademark or copyright right has occurred or resulted
from or is in any way involved in connection with the activities of the Sellers
in the manufacture, license, sale and/or use by the Sellers of the C31G®
technology, products and/or proposed products or by the receipt or use of such
technology, products and/or proposed products by their customers for the
purposes for which sold, or the promotion and advertising by them of their
products and services. There is no pending or, threatened action, suit,
proceeding or claim by others that the Sellers are infringing, or otherwise
violating i) any patent rights, trademarks or trademark rights, copyright
rights, licenses or royalty arrangements, trade secrets, Know-How, or
proprietary techniques, including processes and substances, or rights thereto
of others, or (ii) any discovery, invention or process that is the subject
of a patent application filed by any Third Party or that Sellers have competed
unfairly. There is no right of any Third Party (other than as listed on Schedule 2)
to, or any infringement of, any of Sellers’ patents, patent applications,
licensed patents, patent rights, trademark or trademark rights, copyright
rights, licenses or royalty arrangements, trade secrets, Know-How or
proprietary techniques, including processes and substances; and there is no
pending or, to the Sellers’ knowledge, threatened action, suit, proceeding or
claim by others challenging the validity or scope of the patents licensed by
Sellers, or of the validity or ownership of Sellers’ trademarks or copyright
rights. Seller has no copies of any patentability, infringement or validity
searches with respect to any patents listed on Schedule 1 or applications
from which the patents listed on Schedule 1 were issued.

 

7.7 None of the patents or patent applications listed on Schedule 1
is involved in any interference, conflict or opposition proceeding nor has any
such proceeding been threatened.

 

12

 

7.8 To the best of Sellers’ knowledge, none of the patents or patent
applications listed on Schedule 1 is being infringed by any Third Party.
Sellers have no information that any Third Party will undertake activities
which will infringe any of the patents listed on Schedule 1. There is no
reason to know or suspect that any person has sought, is seeking, or will seek
to obtain patent coverage on any invention or development used in the conduct
of the business of the Sellers or which is the subject of any of the patents
and patent applications listed on Schedule 1 apart from the patentee(s)
and applicant(s) currently referred to in such patents and patent applications.
All agreements, contracts, licenses, assignments, indemnities and the like
related to the Purchased Assets are valid and binding and in full force and effect
and there are no defaults thereunder, nor are there any facts or claims which
would bring such validity and enforceability into question. None of the rights
of Sellers thereunder will be impaired by the consummation of the transactions
contemplated by this Agreement, and all of the rights of Sellers thereunder
will be enforceable by Buyer after the Closing Date without the consent or
agreement of any other party.

 

7.9 Except for the expired, lapsed or abandoned patents and patent
applications listed on Schedule 1 or for those patents, patent
applications or publications for which no maintenance fees, annuities, taxes or
the like are required to keep the patent, application or publication in force
all maintenance fees, annuities, taxes and the like for any other patent or
patent application listed on Schedule 1 are up to date.

 

7.10 There are no obligations to assign any of the patents, patent
application or trademarks listed on Schedule 1 to any third party.

 

7.11 Except as identified on Schedule 1, neither Seller owns any
registered copyrights.

 

7.12 Sellers own or possess sufficient licenses or other rights to use
all patent rights, trademarks, service marks, inventions, processes, formulae,
designs, trade names, trade secrets, trade dress, technology, Know-How,
proprietary and confidential information and copyrights necessary to conduct
the business now being conducted by Sellers. Sellers have obtained no licenses
from any third party specifically to practice any of its C31G® Technology.

 

7.13 The Research Associates Assets and the Michaels Assets are all of
the assets owned by Sellers specifically relating to C31G® Technology.

 

7.14 No representations or warranties made by either Seller in this
Agreement and no statements made by either Seller in any certificate, schedule,
exhibit or other writing delivered by each Seller or referred to in or pursuant
to this Agreement contain, or at the date of its delivery will contain, any
untrue statement of a material fact or omit or will omit any statement of a material
fact necessary to make complete, accurate and not misleading every
representation, warranty and statement of each Seller set forth in this
Agreement or any such certificate, schedule, exhibit or other writing.

 

SECTION 8. REPRESENTATIONS AND WARRANTIES OF MICHAELS.

 

Michaels represents and warrants to Buyer that:

 

13

 

8.1 Enforceability. Michaels has the capacity and full power and
authority to execute and deliver this Agreement, and the instruments of transfer
and other documents delivered or to be delivered pursuant hereto to which he is
a party, to perform all the terms and conditions hereof to be performed by him
and to consummate the transactions contemplated hereby and thereby. This
Agreement and instruments of transfer and other documents delivered or to be
delivered by Michaels in connection with this Agreement constitute, and will
constitute, the valid and binding obligations of Michaels enforceable in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws or equitable principles from time to time in effect relating to or
affecting the rights of creditors generally.

 

8.2 Intellectual Property. Michaels is transferring, assigning
and conveying to Buyer all of his right, title and interest in and to the
Michaels Assets. Michaels has executed the necessary formal documents to assign
the patents and patent applications listed on Schedule 1 which are now in
force to Research Associates. In the event that there is a question regarding
the assignment of any such patents or patent applications, Michaels shall
assist Buyer in verifying that such patents and patent applications were
assigned to Research Associates on or prior to the Closing Date and if
necessary, after the Closing Date as provided in Section 10.2.

 

8.3 Purchased Asset. Michaels has good and marketable title to,
and all right, title and interest in, all the Michaels Assets, and will transfer
and convey the Michaels Assets to Buyer, free and clear of all Liens.

 

SECTION 9. REPRESENTATIONS AND WARRANTIES OF BWER.

 

Buyer represents and warrants to Sellers that:

 

9.1 Organization. Good Standing and Corporate Authority.
Buyer is a corporation duly incorporated, validly existing and in good standing
under the laws of the Commonwealth of Pennsylvania, with full power and
authority to carry on its business as presently conducted by it and is duly
qualified and in good standing as a foreign corporation in all states where the
conduct of its business would require registration as a foreign corporation.
Buyer has full power and authority to execute this Agreement, to perform all
the terms and conditions hereof to be performed by it and to consummate the
transactions contemplated hereby. This Agreement has been duly authorized and
approved by all necessary and proper action of Buyer (including all necessary
shareholder action) and constitutes, and will constitute the valid and binding
obligation of Buyer, enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws or equitable principles from time to
time in effect relating to or affecting the rights of creditors generally.

 

9.2 No Violation. Neither the execution and delivery by Buyer of
this Agreement or any other documents delivered or to be delivered pursuant
hereto by Buyer or the performance by Buyer hereunder or thereunder, nor the
consummation of the transactions contemplated hereby or

 

14

 

thereby, will violate, conflict with, result in the breach of or
accelerate the performance required by any of the terms, conditions or
provisions of the articles of incorporation or by-laws of Buyer or any
covenant, agreement or understanding to which Buyer is a party or any order,
ruling, decree, judgment, arbitration award or stipulation to which Buyer is
subject, or constitute a default thereunder.

 

9.3 Consents and Approvals of Governmental Authorities and Others.
To the best of Buyer’s knowledge, no approval or authorization of, filing or
registration with, or notification to, any Governmental Authority is required
in connection with the execution and delivery of this Agreement by Buyer or the
performance of its obligations hereunder or the consummation of the
transactions contemplated hereby other than filings required to transfer the
Purchased Assets to Buyer.

 

9.4 Financial Statements. The Financial Statements have been
delivered to Seller and have been prepared in accordance with GAAP consistently
applied throughout the periods involved except as may be noted therein, are
true and correct and present fairly the financial condition of Buyer. There has
not been since the date of the Financial Statements any material adverse change
in the condition (financial or other), properties, assets, liabilities or
prospects of Buyer that affect the Purchased Assets or the ability of Buyer to
consummate the transactions contemplated by this Agreement.

 

9.5 Solvency. The purchase of the Purchased Assets by Buyer in
return for the Purchase Price will not render Buyer insolvent or unable to pay
its debts as they become due in the ordinary course or leave Buyer with an
unreasonably small capital for the business in which it will engage.

 

9.6 Buyer has not pledged nor is under any obligation to pledge any or
all of the Purchased Assets in a manner which will impair or prevent Buyer from
meeting its obligations under Section 4.

 

SECTION 10. POST CLOSING DATE OBLIGATIONS.

 

10.1 Taxes. Sellers agree that they will pay all sales, use and
transfer Taxes, if any, arising from the sale of the Purchased Assets from
Sellers to Buyer pursuant to this Agreement. Sellers agree that they will pay
all income and corporate taxes, if any, arising from the sale of the Purchased
Assets. Buyer shall not be responsible for any Taxes of either Seller of any
nature.

 

10.2 Further Assurances. From time to time after the Closing
Date, at Buyer’s request and without further consideration, Sellers will
execute and deliver such other and further instruments of conveyance,
assignment and transfer, and take such other action, as Buyer may reasonably
request for the more effective conveyance and transfer of the Purchased Assets
to Buyer or to otherwise effect the purposes of this Agreement. In connection
with the foregoing and without limitation thereof, Sellers shall, subject to
reimbursement of Sellers’ reasonable expenses, cooperate with Buyer in
obtaining execution of any documents and obtaining all information and
testimony by current or former employees of Sellers with respect to existing
patents, pending patent applications,

 

15

 

filing and obtaining new patents relating to C3IG® Technology and
filing and obtaining new patents for the Purchased Assets and in obtaining any
Permits that are not assignable by this Agreement. Sellers also agree, subject
to reimbursement of Seller’s reasonable expenses, to execute all necessary or
desirable documents and give all information and testimony and otherwise, to
cooperate with Buyer in any effort by Buyer to register, extend, reissue or
maintain existing patents, obtain new patents or file patent applications for
the Improvements both in the United States and in countries other than the
United States, and maintain trademark registrations protecting the Purchased
Assets. Buyer will reimburse Seller for any payments made prior to closing to
keep the patents, patent applications or trademarks listed on Schedule 1
in force where the actual due date of such payment is after the Closing Date.

 

10.3 Assignments. Research Associates hereby covenants that it
will assign to Buyer all Contracts listed on Schedule 2 by and between
Research Associates and any Third Party relating to C31G® Technology and obtain
any consents to such assignments within thirty (30) days after the Closing
Date.

 

10.4 Patent or Trademark Prosecution. Trademark Proceedings Before
Trademark Office and Litisation. Sellers shall disclose to Buyer the
complete texts of all patent rights, as well as all information received
concerning the institution or possible institution of any interference,
opposition cancellation, reexamination, reissue, revocation, nullification or
any official proceeding involving the patents, patent applications and
trademarks listed in Schedule 1. Sellers agree to communicate to Buyer
promptly and fully regarding any information either Seller may receive as to
the course of all patent prosecutions or other proceedings relating to the
Purchased Assets. Sellers shall hold all information disclosed to it under this
Section 10.4 as confidential subject to the provisions of Section 17.2
hereof.

 

In the event of the institution of any suit by a Third Party against
Sellers, Buyer or Buyer’s licensee for patent or trademark infringement
involving the manufacture, use, sale, distribution or marketing of Products
using Purchased Assets, the Sellers shall promptly notify Buyer in writing.
Sellers and Buyer shall assist one another and cooperate in any such litigation
at the other’s request; the cost of such assistance by Sellers shall be borne
by the Buyers.

 

In the event that either of Sellers becomes aware of the actual or
threatened infringement of the Purchased Assets, the Buyer shall be notified
promptly in writing of such fact. Any patent or trademark litigation involving
the Purchased Assets, or processes or intermediates for the production of any
Product, shall be under the control and direction of Buyer and at its sole
expense; provided, however, that Sellers may participate and be separately
represented in any such litigation at their own expense.

 

Sellers shall keep Buyer informed of the status of their respective
activities regarding any litigation or settlement thereof concerning the
Purchased Assets.

 

10.5 Sellers will endeavor to refer inquiries that they receive about
Purchased Assets to Buyer. However, Sellers shall be under no liability to
Buyer in respect of any inquiry that is not so 

 

16

 

	
   

  	
  [*]         designates
  portions of this document that have been omitted pursuant to a request for
  confidential treatment filed seperately with the Commission

  

 

 

referred.

 

SECTION 11. CONDITIONS TO BUYER’S OBLIGATIONS.

 

Buyer’s obligations under this Agreement shall be subject to the
fulfillment by Sellers of the following:

 

11.1 Instruments of Conveyance. Etc. Sellers shall execute and
deliver such bills of sale, assignments and instruments of transfer and conveyance
and certificates of title as shall be reasonably required by Buyer for the
transfer to Buyer of all of Sellers’ right, title and interest in and to the
Purchased Assets free and clear of all Liens.

 

11.2 Delivery. Sellers shall deliver physical possession of
information and tangible property included in the Purchased Assets, and all
consents and assignments of the Contracts to Buyer.

 

11.3 Officer’s Certificate. Research Associates shall deliver a
certificate executed by the Secretary of Research Associates certifying copies
of the articles of incorporation and by laws of Research Associates and the
authorizing resolutions of Research Associates.

 

SECTION 12. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.

 

All representations and warranties and covenants made by Sellers or
Buyer as to any fact or condition existing on or before the Closing Date in
this Agreement, in any Schedule or in any certificate delivered pursuant
hereto, shall survive the Closing Date.

 

SECTION 13. INDEMNIFICATION.

 

13.1 Indemnity by Sellers. Sellers jointly and severally shall
defend, indemnify and hold Buyer and each of the officers, directors, employees
subsidiaries and Affiliates of Buyer harmless from and against all Losses
incurred by them arising out of or resulting from (a) the failure of any representation
or warranty of Sellers contained herein, in any Schedule hereto or in any
certificate of Sellers delivered pursuant hereto to be true and correct, or (b) the
breach of any covenant by Sellers contained herein.

 

13.2 [*]Indemnity. Sellers jointly and severally shall defend,
indemnify and hold Buyer and each of the officers, directors, employees,
subsidiaries and Affiliates of Buyer harmless from and against all awards,
judgments, claims, settlements and any reasonable legal fees (“Galla Losses”)
Buyer incurs as a result of any legal action, suit, or other proceeding by or
before any court, arbitrator or administrative agency (“Law Suit”) that is
brought by [*], his heirs or assigns (collectively “[*]”), against Buyer, its
successors or assigns directly relating to Buyer’s purchase of the Purchased
Assets from Sellers. Sellers shall only indemnify Buyer for settlements to
which Seller has consented, and Sellers shall not unreasonably withhold its
consent. EBMRA will have the right to be consulted on any Law Suit brought by
[*] against Biosyn.

 

17

 

	
   

  	
  [*]         designates
  portions of this document that have been omitted pursuant to a request for
  confidential treatment filed seperately with the Commission

  

 

 

13.3 Indemnity by Buyer. Buyer shall defend, indemnify and hold
Sellers harmless from and against all Losses arising out of or resulting from (a) the
failure of any representation or warranty of Buyer contained herein or in any Schedule hereto
or in any certificate delivered hereto to be true and correct, or (b) the
breach of any covenant by Buyer contained herein. Buyer shall further indemnify
Sellers jointly and severally from any and all Losses arising out of any action
brought against Seller in respect of any death, personal injury, illness,
property damage or products liability, infringement of intellectual property
rights or any other cause arising from any use or sale of any product based on
Purchased Assets sold by Buyer, Buyer’s affiliate, licensee of Buyer or
Subsequent Purchaser of the Assets unless said action is brought on the basis
of actual fault by one of the Sellers. Buyer shall indemnify Research
Associates and/or Michaels against any claims brought against Research
Associates and/or Michaels resulting from Buyer’s failure to perform its
obligations under any license, contract, agreement listed on Schedule 2
and the Contract with [*].  To ensure
that it can meet its obligation under this provision, Buyer shall maintain
insurance at a level commensurate with good business practice in the
pharmaceutical industry.

 

13.4 Security Interest. (a) As security for the prompt and
unconditional payment and performance of Sellers’ obligation to indemnify Buyer
under Section 13.2 of this Agreement, [*] (“Collateral”) of the Cash
Payment of [*] payable to Research Associates on the Closing Date will be
withheld by Buyer and will be held by Buyer in a separate, interest bearing
account at PNC Bank, National Association. All interest shall be paid to EBMRA
quarterly. The Collateral including any interest accrued thereon and minus any
payments made pursuant to Section 13.4(b), shall be returned to Research
Associates or to a person or entity identified in writing by an authorized representative
of Research Associates in immediately available funds on the earlier of: (i) one
year from the Closing Date; or (ii) delivery to Buyer by Sellers of
written proof of accord, release and satisfaction of all claims of Galla
against Biosyn.

 

(b)                                 Prior
to the return of the Collateral, the Collateral may be used only for the
following purposes: (i) Buyer may in its sole discretion and at any time
or times after the occurrence and during the continuance of Sellers’ failure to
perform or pay its obligations under Section 13.2 of this Agreement for a
period of thirty (30) days after reasonable notice to Research Associates of
the obligation to indemnify under Section 13.2, apply the Collateral to
any [*] Losses incurred by Buyer; or (ii) In the event a Law Suit is
brought by Galla against Sellers, the Sellers will, upon delivering to Buyer
evidence that [*]filed a Law Suit against Sellers, have the right to be
reimbursed from the Collateral in an amount not to exceed [*] for any awards,
judgments, claims, settlements, legal costs and attorney’s fees connected with
the Law Suit.

 

(c)                                  At
the end of the period set out in paragraph 13.4 (a), Buyer shall pay the
Collateral together with any interest accrued thereon and minus any
disbursements that have been made pursuant to paragraph 13.4(b) by
immediately available funds. After payment in full of the Galla Losses, if any,
any of the remaining Collateral held in escrow shall be paid over to Research
Associates or to a person or entity identified in writing by an authorized
representative of Research Associates.

 

13.5 Notice of Claim. Promptly after service of notice of any
claim or of process on Buyer

 

18

 

or on Sellers (hereinafter in this Section 13.5, the “Indemnified
Party”) by any Third Party, or promptly after obtaining actual knowledge by the
Indemnified Party of any other claim, in any matter in respect of which
indemnity may be sought pursuant to this Section 13, the Indemnified Party
shall promptly notify Buyer or Sellers, as applicable, (hereinafter in this Section 13.5,
the “Indemnifying Party”) of the receipt thereof. In the case of any action or
proceeding by a Third Party, the Indemnifying Party shall have the right to
participate in, or assume, at its in expense, the defense of any such claim or
process or settlement thereof. After notice from the Indemnifying Party of its
election so to assume the defense thereof, the Indemnified Party shall not be
liable to the Indemnifying Party for any legal or other expense in connection
with such defense. Such defense shall be conducted expeditiously (but with due
regard for obtaining the most favorable outcome reasonably likely under the
circumstances, taking into account costs and expenditures) and the Indemnified
Party shall be advised of all developments. With respect to any matter which is
the subject of any such claim and as to which the Indemnified Party fails to
give the Indemnifying Party such notice as aforesaid, and such failure
adversely affects the ability of the Indemnifying Party to defend such claim or
increases the amount of indemnification which the Indemnifying Party is
obligated to pay hereunder, the amount of indemnification which the Indemnified
Party shall be entitled to receive shall be reduced to an amount which the
Indemnified Party would have been entitled to receive had such notice been
timely given.

 

SECTION 14. COMPETITION.

 

14.1 Noncompetition. For a period of three (3) years after
the Closing Date neither Seller nor any of its respective Affiliates shall
engage, directly or indirectly, in developing business for itself, himself or a
third party relating to compositions for topical use of antimicrobial or
antiviral agents.

 

14.2 Remedies. Sellers agree that if they commit or threaten to
commit a breach of Section 14.1, Buyer shall have the right to seek and
obtain appropriate injunctive and other equitable remedies therefor, in
addition to any other rights and remedies that may be available at law, it
being acknowledged and agreed that any such breach would cause irreparable
injury to Buyer and that money damages would not provide an adequate remedy
therefor.

 

SECTION 15. COSTS INCIDENT TO PREPARATION OF AGREEMENT.

 

15.1 Except for the items specified in Sections 10.2, 13 and 15.2 each
of the parties hereto shall pay, without right of reimbursement from any other,
all costs incurred by it incident to the preparation, execution and delivery of
this Agreement and the performance of its obligations hereunder, including
without limitation fees and disbursements of legal counsel, accountants and
consultants employed by the respective parties hereto in connection with the
transactions contemplated by this Agreement.

 

15.2 All costs including government fees associated with preparing,
filing and recording of assignments of intellectual property rights,
applications for governmental approval, other recorded rights from Sellers to
Buyers or to provide for conveyance of Purchased Assets to Buyer will be 

 

19

 

borne by Buyers and the costs will be advanced to Sellers.

 

SECTION 16. RELEASE.

 

Sellers hereby release and hold harmless Buyer from all claims,
obligations and liabilities of any nature whatsoever, hereafter arising,
relating to the License Agreement, certain letters dated September 13,
1994 and December 20, 1993 between Buyer and Research Associates relating
to the creation of a joint venture between Buyer and Research Associates
(collectively, “Letter Agreements”) and any other transactions between Buyer
and Sellers. Buyer and Research Associates agree that effective as of the
Closing Date the Letter Agreements and the License Agreement shall terminate
except for preexisting obligations and liabilities between Buyer and Research
Associates arising from the Letter Agreements and the License Agreement, and
except for those described in Paragraphs 10.1, 10.2, 10.3, 10.4, 10.5 and 13.1
of the License Agreement.

 

SECTION 17. GENERAL.

 

17.1 parties in Interest. This Agreement shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors
and permitted assigns. This Agreement is not made for the benefit of any Person
not a party hereto, and nothing in this Agreement will be construed as giving
any Person, other than the parties hereto and their respective successors and
permitted assigns, any right, remedy or claim under or in respect of this
Agreement, or any provision hereof.

 

17.2 Public Statements/Confidentiality. Each Seller shall treat
as confidential and proprietary and shall not use or reveal or disclose to any
Third Party either directly or indirectly any confidential information received
from Buyer or any confidential information relating to the Purchased Assets or
any other matter contemplated by this Agreement without first obtaining the
written consent of Buyer, except (a) as may be otherwise provided herein; (b) as
may be required to be disclosed to a court or governmental agency; (c) as
may be necessary to assist Buyer to file or prosecute patent applications
concerning any Products; (d) as may be necessary to carry out any
litigation concerning the Purchased Assets; or (e) as may otherwise be
required by law. Sellers shall take reasonable measures to assure that no
unauthorized use or disclosure is made by others (including without limitation
its respective employees, agents and Affiliates) to whom access to such
information is granted. Buyer shall treat as confidential and proprietary and
shall not use or reveal or disclose to any Third Party either directly or
indirectly any confidential information that does not relate to the Purchased
Assets received from Research Associates during the term of the License
Agreement for a period of five (5) years from the date of this Agreement
without first obtaining the written consent of Research Associates, except (a) as
may be otherwise provided herein; (b) as may be required to be disclosed
to a court or governmental agency; (c) as may be necessary to assist Buyer
to file or prosecute patent applications concerning any Products; (d) as
may be necessary to carry out any litigation concerning the Purchased Assets;
or (e) as may otherwise be required by law.

 

17.3 Choice of Law. This

 

20

 

Agreement shall be governed by, construed, interpreted and the rights
of the parties determined in accordance with the laws, including equitable
principles but without regard to principles of conflict of laws, of the Commonwealth
of Pennsylvania.

 

Sellers and Buyer hereby consent to process being served in any suit,
action or proceeding of the nature referred to and in any court having
jurisdiction by the mailing of a copy thereof by registered or certified
first-class mail, postage prepaid, return receipt requested to the address set
forth in Section 17.4.

 

Nothing in Section 17.3 shall affect the right of Sellers and
Buyer to serve process in any manner permitted by law or affect the right of
Sellers and Buyer to bring proceedings in the courts of any jurisdiction or
jurisdictions. Nothing herein shall limit either party from obtaining
injunctive relief for irreparable hardship, in a court of equity.

 

17.4 Notices. Any notice, request, consent, waiver or other communication
required or permitted to be given hereunder shall be effective only if in
writing and shall be deemed sufficiently given only in person or sent by
certified or registered mail, postage prepaid, return receipt requested,
addressed as follows:

 

If to Sellers:

 

E.B. Michaels Research Associates, Inc.

56 Rogers Avenue, Unit S

Milford, CT 06460

 

and

 

Edwin B. Michaels

56 Rogers Avenue, Unit S

Milford, CT 06460

 

with a copy to:

 

John Richards Ladas & Parry

26 West 61 Street

New York NY 10023

 

21

 

If to Buyer:

 

Anne-Marie Corner

President and Chief Executive Officer Biosyn, Inc.

3401 Market Street

Philadelphia, PA 19104

 

with a copy to:

 

Raymond D. Agran

Ballard Spahr Andrews & Ingersoll

1735 Market Street, 51st Floor

Philadelphia, PA 19103

 

or to such other Person or address as either such party may have
specified in a notice duly given by the sender as provided herein. Such notice
or communication shall be deemed to have been given as of the date so
delivered.

 

17.5 Entire Agreement. This Agreement (including the schedules
and exhibits attached hereto) and the documents referred to herein as having
been entered into by any of the parties hereto or delivered by a party hereto
to another party hereto constitute the entire agreement and understanding of
the parties relating to the subject matter hereof and supersede all prior and
contemporaneous agreements and understandings, representations and warranties,
whether oral or written, relating to the subject matter hereof.

 

17.6 Modification. This Agreement may be amended, modified and
supplemented only by written agreement of the parties hereto.

 

17.7 No Waiver. No delay or failure on the part of any party in
exercising any rights hereunder, and no partial or single exercise thereof,
will constitute a waiver of such rights or of any other rights hereunder. The
rights and remedies provided in this Agreement are cumulative and are not
exclusive of any rights or remedies a party may otherwise have at law or in
equity.

 

17.8 Severability. The unenforceability or invalidity of any Section or
subsection or provision of this Agreement shall not affect the
enforceability or validity of the balance of this Agreement. If any provision
of this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only as broad as is enforceable.

 

17.9 Headings. The headings of the Sections and subsections
contained in this Agreement are for reference and purposes only and shall not
in any way affect the meaning, interpretation, enforceability or validity of
this Agreement.

 

17.10 Counterparts. This Agreement may be executed in any number
of counterparts, each of which so executed will be deemed to be an original,
but all of which 

 

22

 

together will constitute one and the same agreement.

 

17.11 Construction. Within this Agreement, the singular shall
include the plural and the plural shall include the singular, and any gender
shall include all other genders, all as the meaning and the context of this
Agreement shall require.

 

17.12.Continuation Provisions. In the event Buyer enters into
any agreement to license or sell any or all of the Purchased Assets the
following sections of this Agreement must be included in said agreement:
Sections 4 (b), (c), (d), (e) , (g), (h), (i), (j) , (m) and (n), Section 5
and Section 13.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.

 

	
   

  	
  BIOSYN, INC.

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  E.B. MICHAELS RESEARCH ASSOCIATES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  EDWIN B. MICHAELS

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Edwin B. Michaels

  	
   

  

 

23

 

Schedule 1

 

	
  COUNTRY

  	
   

  	
  PATENT

  	
   

  	
  APPLN #

  	
   

  	
  PUBL #

  	
   

  	
  PUBL. DATE

  	
   

  	
  GRANT DATE

  	
   

  	
  EXPIRATION DATE

  
	
  ARIPO

  	
   

  	
  AP327

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  March 21, 1994

  	
   

  	
  March 23, 2012

  
	
  AUSTRALIA

  	
   

  	
  606861

  	
   

  	
  8770872

  	
   

  	
   

  	
   

  	
  Sept. 9, 1987

  	
   

  	
  July 9, 1991

  	
   

  	
            , 17,
  2007

  
	
   

  	
   

  	
  661968

  	
   

  	
  9182227

  	
   

  	
   

  	
   

  	
  Oct. 21, 1992

  	
   

  	
  Dec. 12, 1995

  	
   

  	
  July 17, 2011

  
	
  “

  	
   

  	
  663506

  	
   

  	
  9219835

  	
   

  	
   

  	
   

  	
  Oct. 21, 1992

  	
   

  	
            , 6, 1996

  	
   

  	
  March 20, 2012

  
	
  “

  	
   

  	
   

  	
   

  	
  9476835

  	
   

  	
   

  	
   

  	
  April 3, 1995

  	
   

  	
   

  	
   

  	
  Sept. 9, 2014

  
	
  Australia

  	
   

  	
  EP294391

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Feb. 2, 1994

  	
   

  	
  Feb. 17, 2007

  
	
  Belgium

  	
   

  	
  EP294391

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Feb. 2, 1994

  	
   

  	
  Feb. 17, 2007

  
	
  Canada

  	
   

  	
  1315693

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  April 6, 1993

  	
   

  	
  April 6, 2010

  
	
  “

  	
   

  	
   

  	
   

  	
  2106683

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  July 17, 2011

  
	
  “

  	
   

  	
   

  	
   

  	
  2106682

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  March 20, 2010

  
	
  “

  	
   

  	
   

  	
   

  	
  2171294

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Sept. 9, 2014

  
	
   

  	
   

  	
  1052272 (expire

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1052273 (expired)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1058074 (expired)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EPO

  	
   

  	
  294391

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Feb. 2, 1994

  	
   

  	
  Feb. 17, 2007

  
	
  “

  	
   

  	
  576585

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Dec. 20, 1995

  	
   

  	
  March 20, 2012

  
	
  “

  	
   

  	
   

  	
   

  	
  94927365.0

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Sept. 9, 2014

  

 

24

 

	
  “

  	
   

  	
   

  	
   

  	
  91913586.3

  	
   

  	
  576425

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  July 17, 2011

  
	
  EPO

  	
   

  	
   

  	
   

  	
  Div. 96108577.6

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  July 17, 2011

  
	
  France

  	
   

  	
  0294391

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Feb. 2, 1994

  	
   

  	
  Feb. 17, 2007

  
	
  “

  	
   

  	
  0578385

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Dec. 20, 1995

  	
   

  	
  March 20, 2012

  
	
   

  	
   

  	
  073191

  	
   

  	
  2406539

  	
   

  	
   

  	
   

  	
  June 22, 1979

  	
   

  	
   

  	
   

  	
   

  
	
  West Germany

  	
   

  	
  3789020.4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Feb. 2, 1994

  	
   

  	
  Feb. 18, 2007

  
	
  “

  	
   

  	
  P69206976.3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Dec. 20, 1995

  	
   

  	
  March 21, 2012

  
	
   

  	
   

  	
  2747355.8 (expired)

  	
   

  	
   

  	
   

  	
  2818351

  	
   

  	
   

  	
   

  	
  Nov. 9, 1978

  	
   

  	
   

  
	
  Italy

  	
   

  	
  EP294291

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Feb. 2, 1978

  	
   

  	
  Feb. 17, 2007

  
	
  “

  	
   

  	
  EP576585

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Dec. 20, 1995

  	
   

  	
  March 20, 2012

  
	
  Japan

  	
   

  	
  1645253 (abandoned)

  	
   

  	
   

  	
   

  	
  54064    41

  	
   

  	
  May 24, 197   

  	
   

  	
   

  	
   

  	
   

  
	
  “

  	
   

  	
  2548265

  	
   

  	
  501613/87

  	
   

  	
  1502111

  	
   

  	
  July 27, 1989

  	
   

  	
  Aug. 8, 1996

  	
   

  	
  Feb. 17, 2007

  
	
  “

  	
   

  	
   

  	
   

  	
  512474/91

  	
   

  	
  6505700

  	
   

  	
  June 30, 1994

  	
   

  	
   

  	
   

  	
  July 17, 2011

  
	
  “

  	
   

  	
   

  	
   

  	
  508849/92

  	
   

  	
  6506216

  	
   

  	
  July 14, 1994

  	
   

  	
   

  	
   

  	
  March 20, 2012

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ko

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “

  	
   

  	
   

  	
   

  	
  702779/93

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “

  	
   

  	
   

  	
   

  	
  701254/96

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Sept. 9, 2014

  
	
  Luxemboug

  	
   

  	
  EP294391

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  M           2, 1994

  	
   

  	
  M           18,
  2007

  

 

25

 

	
  Malaysia

  	
   

  	
   

  	
   

  	
  PI9402403

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mexico

  	
   

  	
  Utility model

  	
   

  	
  93230 (abandoned)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Sept. 10, 2013

  
	
  “

  	
   

  	
   

  	
   

  	
  9   7042

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Sept. 13, 2014

  
	
  Netherlands

  	
   

  	
  EP294391

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
            , 2, 1994

  	
   

  	
                2,
  1994

  
	
  “

  	
   

  	
  EP576585

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Dec. 20, 1995

  	
   

  	
  March 20, 2012

  
	
  O.A.P.I.

  	
   

  	
  9911

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Sept. 15, 1994

  	
   

  	
  July    , 2011

  
	
  Russia

  	
   

  	
   

  	
   

  	
  93056144/00

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  July    , 2011

  
	
  Rep. of South Africa

  	
   

  	
  1991/94

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  June 28, 1995

  	
   

  	
  Sept. 12, 201    

  
	
   

  	
   

  	
  1981/92

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Nov. 25, 1992

  	
   

  	
   

  
	
  Sweden

  	
   

  	
  87901931-3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Feb. 2, 1994

  	
   

  	
  Feb. 18, 2007

  
	
  Switzerland

  	
   

  	
  EP294391

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Feb. 2, 1994

  	
   

  	
            7, 2007

  
	
  “

  	
   

  	
  EP576585

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Dec. 20, 199    

  	
   

  	
  Mar. 20, 2012

  
	
  United Kingdom

  	
   

  	
  1584847 (expired

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  July 19, 1978

  	
   

  	
  March 31, 1996

  
	
  “

  	
   

  	
      P294391

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Feb. 2, 1994

  	
   

  	
  Feb. 17, 2007

  
	
  “

  	
   

  	
  EP576585

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Dec. 20, 1995

  	
   

  	
  March 20, 2012

  
	
  U.S.

  	
   

  	
  4839158

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  June 13, 1989

  	
   

  	
  June 13, 2006

  
	
  “

  	
   

  	
  5314917

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  May 24, 1994

  	
   

  	
  May 24, 2011

  
	
  U.S.

  	
   

  	
  5244652

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Sept. 14, 1993

  	
   

  	
  Sept. 14, 2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Jan

  	
   

  	
  Jan

  

 

26

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Feb

  	
   

  	
  Feb

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Ap

  	
   

  	
  Ap

  
	
  “

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “

  	
   

  	
  4183952

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Jan. 15, 1980

  	
   

  	
  Jan. 15, 1997

  
	
   

  	
   

  	
  4107328 (expired)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4145436 (expired)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4062976 (expired)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4075350 (expired)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  08/223, 096

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

PCT APPLICATIONS

 

PCT/7US87/00384, published as WO 8704922 (expired)

PCT/US91/05060, published as WO 9216201 (expired)

PCT/US92/02427, published as WO 9216182 (expired)

PCT/US94/10067, published as WO9597692 (expired)

 

27

 

(b)                                 Trademarks
- Registered U.S. Trademark Registration No. 1,621,919 for “C31G®” and the
following foreign Trademarks: European Community (Community Trademark) - “C31G®”;
South Korea - “C31G®”, and Republic of South Africa - “C31G®”

 

(c)                                  all
existing unpatented inventions, invention disclosures, multinational invention
registrations, patents and patent applications, both U.S. and foreign,
(including, but not limited to, all provisionals, reissues, divisions,
continuations, continuations-in-part, extensions and reexaminations) and all rights
therein provided by law, multinational treaties or conventions which directly
relate to C31G® Technology; publications and copyrights which relate
specifically to C31G® Technology; trade secrets, Know How and show-how which
relate specifically to C31G® Technology; copies of formulae and written
chemistry which relate specifically to C31G® Technology; and all common law and
registered trademarks, trademark registrations, applications for trademark
registrations, tradenames, trade dress, brand names, and logos together with
the goodwill associated therewith and symbolized thereby (collectively, “Trademark”)
which relate to C31G® Technology; service marks other than E.B. Michaels
Research Associates, Inc., E.B. Michaels Research Associates and EBMRA;
and an assignment of any licenses therefore (which relate to C31G® Technology)
to or from either Seller subject to the terms and conditions thereof which
relate specifically to C31G® Technology; and to the extent permitted by any
license agreement that has been concluded relating to C31G® Technology;
customer, dealer and supplier lists and correspondence relating to C31G®
Technology; serial number records relating to C31G® Technology; engineering,
manufacturing, design, installation and other technical drawings and
specifications, calculations and manufacturing and production processes,
techniques and batch records relating to C31G® Technology; scientific,
technical, research and development information relating to C31G® Technology;
FDA inspection reports relating to C31G® Technology; operating, maintenance and
repair manuals and instruction books relating to C31G® Technology; cost and
estimating information, and other business records relating to C31G®
Technology; consultant’s reports; bills of material, copies of lab notebooks
and other data records, test data and selected test material samples relating
to C31G® Technology; and all technical data (including, but not limited to,
data stored electronically or on other format, together with an assignment of
any Third Party licenses necessary to use such data) directly relating to the
Purchased Assets.

 

(d) Permits. All governmental permits, licenses,
registrations, orders and approvals relating to the use of the C31G®
Technology, to the extent such permits, licenses, registration, orders and
approvals are transferrable to Buyer (collectively, the “Permits”).

 

(e) Contracts listed on Schedule 2.

 

28

 

(f) Commercial Information. Details of contacts with potential
users of C31G® Technology and contract manufacturers of products utilizing
C31G® Technology and in particular of Topicare.

 

(g) Inventory. Such quantity of Topicare that as of the Closing
Date is still owned by Research Associates.

 

(h) Rights to use and to have transferred
to the Buyer’s name submissions made to the United States Food and Drug
Administration for the inclusion of C31G® Products in the FDA’s OTC proposed
antiplaque proposed monograph permitting over-the-counter

 

29

 

	
   

  	
  [*]         designates
  portions of this document that have been omitted pursuant to a request for
  confidential treatment filed seperately with the Commission

  

 

 

Schedule 2

 

1)                                      Oratec
license of February 5, 1992, modified by addendum dated December 31,
1992 and further clarified by a letter of Intent of December 31, 1992,-
Second Addendum to License Agreement of May 4, 1995 for C31G® liquid
dentrifice and Letter of June 26, 1996

 

2)                                      Il
Dong license of April 1, 1993 for Topicare (personal care products)

 

3)                                      11
Dong license of April 1, 1993 for C31G® Liquid Dentrifice

 

4)                                      U.S.
Summit Company (M) DSN BI3D (Supply agreement) (there is no document
formalizing this agreement)

 

5)                                      Contract
with [*]

 

30

 

SCHEDULE 3

COMMON STOCK DISTRIBUTIONS TO EBMRA BY BIOSYN

 

	
  Certificate
  #

  	
   

  	
  Date

  	
   

  	
  Amount

  	
   

  	
  Reason

  
	
  080

  	
   

  	
  1/3/94

  	
   

  	
  45,000

  	
   

  	
  Minimums and royalty reduction

  
	
  (cancelled 12/94 and reissued as113 114)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  081

  	
   

  	
  1/3/94

  	
   

  	
  41,334

  	
   

  	
  Minimums and royalty reduction

  
	
  (cancelled 12/94 and reissued as 113/114)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  088

  	
   

  	
  4/25/94

  	
   

  	
  3,572

  	
   

  	
  Antidilution (cancelled)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  113

  	
   

  	
  12/94

  	
   

  	
  82,027

  	
   

  	
  Part of reissuance of certificate #80/81

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  114

  	
   

  	
  12/94

  	
   

  	
  4,317

  	
   

  	
  Part of reissuance of certificate #80/81

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  146

  	
   

  	
  5/10/96

  	
   

  	
  7,500

  	
   

  	
  Minimums 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  147

  	
   

  	
  9/6/96

  	
   

  	
  7,932

  	
   

  	
  Antidilution (cancelled)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  148

  	
   

  	
  9/18/96

  	
   

  	
  19,004

  	
   

  	
  Reissuance of certificate #88/147 and Antidilution

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  149

  	
   

  	
  10/7/96

  	
   

  	
  15,000

  	
   

  	
  Antidilution/final issuance

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  127,848

  	
   

  	
   

  

 

31Exhibit 10.22

 

	
   

  	
  [*]         designates
  portions of this document that have been omitted pursuant to a request for
  confidential treatment filed seperately with the Commission

  

 

PUBLIC HEALTH SERVICE

 

PATENT LICENSE AGREEMENT—EXCLUSIVE

 

 

COVER PAGE

 

For PHS internal use
only:

 

 

Patent
License Number: L-025-01/0

 

US Patent Numbers
5,821,081; 5,843,882; 5,962,653; 5,962,668; 5,998,587; 6,015,876; 6,245,737;
6,420,336; and 6,428,790; and US Patent Applications Numbers [*].

 

Licensee:
Biosyn, Inc.

 

Cooperative
Research and Development Agreement (CRADA) Number (if applicable): N/A

 

Additional
Remarks:

 

	
   

  
	
   

  
	
   

  

 

Public
Benefit(s): Microbicide to protect against infection by HIV

 

This Patent License
Agreement, hereinafter referred to as the “Agreement”,
consists of this Cover Page, an attached Agreement, a
Signature Page, Appendix A (List of Patent(s) and/or Patent Application(s)),
Appendix B (Field of Use and Territory), Appendix C (Royalties), Appendix D
(Modifications), Appendix E (Benchmarks and Performance), Appendix F (Commercial
Development Plan) and Appendix G (Developing Countries).  The Parties to this Agreement
are:

 

1)                                      The
National Institutes of Health (“NIH”), the Centers for Disease Control and
Prevention (“CDC”), or the Food and Drug Administration (“FDA”), 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”.

 

CONFIDENTIAL

 

1

 

PHS PATENT LICENSE AGREEMENT—EXCLUSIVE

 

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/or foreign patent applications or patents corresponding
to the assigned inventions.  DHHS also owns any tangible embodiments of these inventions
actually reduced to practice by PHS.

 

1.03                           The
Secretary of DHHS has delegated to PHS the authority to enter into this Agreement
for the licensing of rights to these inventions.

 

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, and/or
marketable products for public use and benefit.

 

2.                                       DEFINITIONS

 

2.01                           “Benchmarks” mean the performance milestones that are set
forth in Appendix E.

 

2.02                           “Commercial Development Plan” means the written
commercialization plan attached as Appendix F.

 

2.03                           “First Commercial Sale” means the (a) first
shipment of Licensed Products to
an unrelated third party by or on behalf of Licensee
or its sublicensees, or (b) the first performance of a Licensed Process for an unrelated third
party by Licensee or its
sublicensees, in each case by or on behalf of Licensee
in exchange for cash (or some equivalent to which value can be assigned for the
purpose of determining Net Sales)
in excess of fully burdened manufacturing cost. 
Notwithstanding the foregoing, First
Commercial Sale shall not include transfers at or below cost by or
on behalf of Licensee or its
sublicensees of Licensed Products,
or the practice of Licensed Processes,
in connection with compassionate use, emergency use, treatment Investigational
New Drug Applications (IND’s), or the like authorized by the U.S. Food and Drug
Administration (FDA) or corresponding foreign agencies.

 

2.04                           “Government” means the Government of the United States of
America.

 

2.05                           “Licensed Biological Materials” means:

 

a)
Plasmid constructs encoding the wild type or mutant forms of the Cyanovirin-N
gene, and;

 

b) Polyclonal antibodies and hybridoma
cell lines producing monoclonal antibodies specific for wild type or mutant
forms of Cyanovirin-N.

 

2.06                           “Licensed Field of Use” means the field of use identified in
Appendix B.       

 

2.07                           “Licensed Patent Rights” shall mean:

 

2

 

a)                                      Patent
applications (including provisional patent applications and PCT patent
applications) and/or 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 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; iv)
priority patent application(s) of a) above; and v) any reissues,
reexaminations, and extensions and reregistrations of all such patents;

 

c)                                      to
the extent that the following contain one or more claims directed to the
invention or inventions disclosed in a) above: all counterpart foreign and U.S.
patent 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 disclosed in a) above.

 

2.08                           “Licensed Process(es)” means processes which, in the course
of being practiced would be within the scope of one or more claims of the Licensed Patent Rights that have not been held unpatentable,
invalid or unenforceable by an unappealed or unappealable judgment of a court
of competent jurisdiction.

 

2.09                           “Licensed Product(s)” means tangible materials which, in the
course of manufacture, use, sale, or importation would be within the scope of
one or more claims of the Licensed Patent Rights
that have not been held unpatentable, invalid or unenforceable by an unappealed
or unappealable judgment of a court of competent jurisdiction.

 

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

 

2.11                           “Net Sales” means the total gross receipts for sales of Licensed Products or practice of Licensed
Processes by or on behalf of Licensee or its
sublicensees, 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, packing
costs, insurance costs, freight out, taxes or excise duties imposed on the
transaction (if separately invoiced), and wholesaler and cash discounts in
amounts customary in the trade to the extent actually granted.  No deductions shall be made for commissions
paid to individuals, whether they be with independent sales agencies or
regularly employed by Licensee, or
sublicensees, and on its payroll, or for the cost of collections.

 

In the
event PHS, on a country-by-country basis, is
receiving earned royalties under this Agreement from
any Licensed Product sold in a form
containing Licensed Product(s) and at least
one other ingredient, product or component having a specific pharmalogical
effect (i.e., an antiinfective or anti-inflammatory, but not a diluent,
carrier, perfume etc.) (a “Combination Product”)
which is sold separate and apart from the Licensed Product(s)
in the Combination Product, Net Sales for such Combination Product
will be calculated by multiplying the actual Net Sales of
the Combination Product by the fraction
A/(A+B), where A is the Net Sales price
per dose of the Licensed Product(s) if sold
separately and B is the Net Sales price
per dose of the other ingredient(s), product(s) or component(s) in the Combination Product, if sold separately. If the other
ingredient(s), product(s) or component(s) is not sold separately in a country, Net Sales for such Combination Product
will be calculated by multiplying the actual Net Sales of
the

 

3

 

Combination
Product by the fraction A/C, where A is the Net Sales price per dose of the Licensed
Product(s), if sold separately in said country, and C is the Net Sales price per dose of the Combination
Product.  If neither the Licensed Product(s) nor the other ingredient(s), product(s)
or component(s) is sold separately in a country, then Net Sales for
the Combination Product shall be determined
by multiplying the Net Sales of
the Combination Product by X/(X+Y), where X
is the number of Licensed Products and Y the number
of other ingredients, products or components in the Combination
Product. 

 

Notwithstanding
the above determination of Net Sales of Combination Product, in no event shall the Net Sales used to calculate earned royalty due on a Combination Product be reduced by more than fifty (50%)
percent of the actual Net Sales of
the Combination Product.

 

2.12                           “Practical Application” means to manufacture in the case of
a composition or product, to practice in the case of a process or method, or to
operate in the case of a machine or system; and in each case, under such
conditions as to establish that the invention is being utilized and that its
benefits are to the extent permitted by law or Government
regulations available to the public on reasonable terms.

 

2.13                           “Research License” means a nontransferable, nonexclusive
license to make and to use the Licensed Products
or Licensed Processes as defined by the Licensed Patent Rights in the Licensed
Field of Use for purposes of research and not for purposes of
commercial manufacture, sale, distribution or for development for such
commercial purposes.

 

2.14                           “Developing Country” means countries
eligible for support from the Global Alliance for Vaccine Initiatives (GAVI) or
successor organization, or which at the effective date of this Agreement are
those countries with a Gross National Product of less than US $1,000 per capita
per year, and at the effective date of this Agreement
include those listed in Appendix G.

 

2.15                           “Public Sector” means the U.S. government
and/or the government of a Developing Country,
or any nonprofit entity empowered by the U.S. government and/or the government
of a Developing Country to act for
said government in matters applicable to this Agreement,
organizations within the United Nations system including the World Health
Organization and UNICEF, and other non-profit organizations when they purchase
drugs or vaccines for delivery, manufacture and/or sale in the
U.S. and Developing
Countries.

 

2.16                           “Private Sector” means all other parties other than the Public Sector.

 

3.                                       GRANT
OF RIGHTS

 

3.01                           PHS hereby grants and Licensee
accepts, subject to the terms and conditions of this Agreement,
an exclusive license 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 offer to sell, and to
import any Licensed Products in the Licensed Field of Use and to practice and have practiced any
Licensed Processes in the Licensed Field of Use.

 

3.02                           This
Agreement confers no license or
rights by implication, estoppel, or otherwise under any patent applications or
patents of PHS other than Licensed Patent Rights regardless of
whether such patents are dominant or subordinate to Licensed Patent Rights. 
PHS represents to Licensee that as of the Effective Date of
this Agreement, PHS is unaware of any other PHS patent rights that block or limit the Licensed Patent Rights.

 

3.03                           PHS grants Licensee the benefit of any patent term extensions and
reregistrations applicable to the Licensed
Patent Rights and any Orphan Drug Act registrations applicable to Licensed Products and Licensed Processes and any comparable
extensions and registrations in the Licensed
Territory.  PHS agrees to reasonably cooperate, such as
by submitting applications to appropriate

 

4

 

governmental
agencies, at the request and sole expense of Licensee,
in connection with applying for and obtaining such extensions and
registrations.

 

3.04                           To
the extent permitted by law, governmental regulation, and PHS policy, and other agreements between PHS and third parties, and for purposes
only of seeking regulatory approval to commercialize Licensed Products and Licensed
Processes in the Licensed Field of
Use, PHS agrees to
consider in good faith any requests from Licensee
to make its preclinical and clinical data, if any, relating to Licensed Products and Licensed Processes available nonexclusively
to Licensee, such requests shall
be considered on an expedited basis and shall not be unreasonably denied and,
in particular, where access by Licensee
to such data may expedite obtaining approval from applicable regulatory
agencies.

 

3.05                           In
addition to the above-mentioned rights, PHS
grants to Licensee, subject to
royalties as described herein, the use of Licensed
Biological Materials required for use of the Licensed Patent Rights granted hereunder.

 

4.                                       SUBLICENSING

 

4.01                           Upon
written approval by PHS, which
approval will not be unreasonably withheld, Licensee
may enter into sublicensing agreements under the Licensed Patent Rights. 
Such sublicensing arrangements shall be deemed to have been accepted by PHS if PHS
does not object within Forty Five (45) days of Licensee’s written request for approval of a sublicense.

 

4.02                           Licensee agrees that any sublicenses granted by it shall
provide that the obligations to PHS of
Paragraphs 5.01-5.04, 8.01, 10.01, 10.02, 12.05, and 13.05-13.10 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.  PHS acknowledges that some of the obligations in these
Paragraphs may not appropriately apply to sublicensees, and agrees to
reasonably consider limitations added by Licensee
to such Paragraphs in a sublicense agreement to the extent permitted by law.

 

4.03                           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 13.  Such conversion
is subject to PHS approval, which approval shall
not be unreasonably withheld, and contingent upon acceptance by the sublicensee
of the remaining provisions of this Agreement.

 

4.04                           Licensee agrees to forward to PHS
a copy of each fully executed sublicense agreement postmarked within thirty
(30) days of the execution of such agreement. 
To the extent permitted by law, PHS agrees to
maintain each such sublicense agreement as commercial and financial information
obtained from a person and as privileged and confidential pursuant to the
provisions of Section 9.09 of this Agreement.

 

5.                                       STATUTORY
AND PHS REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS

 

5.01                           PHS reserves on behalf of the Government an irrevocable, nonexclusive, nontransferable,
royalty-free license for the practice of all inventions licensed under the Licensed Patent Rights throughout the world by or on behalf
of the Government and on behalf of
any foreign government or not-for-profit, public health international
organization pursuant to any existing or future treaty or agreement to which
the Government is a signatory.  Prior to First Commercial Sale and to the extent that Licensee has available material,  Licensee agrees to provide PHS, subject to appropriate Materials Transfer
Agreements, reasonable quantities of Licensed
Products or materials made through the Licensed
Processes for PHS research
use, at a cost no greater than Licensee’s fully
burdened cost; i.e., direct costs of manufacturing plus overhead costs. 

 

5

 

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

 

5.03                           Licensee acknowledges that PHS
may enter into future Cooperative Research and Development Agreements (CRADAs)
under the Federal Technology Transfer Act of 1986 that relate to the subject
matter of this Agreement.  Licensee agrees
not to unreasonably deny requests for a Research License
from such future collaborators with PHS when
acquiring such rights is necessary in order to make a Cooperative Research and
Development Agreement (CRADA) project feasible. 
Licensee may request an opportunity to
join as a party to the proposed Cooperative Research and Development Agreement
(CRADA). PHS agrees to notify Licensee in writing as soon as practicable, and before
execution, that it is contemplating a CRADA with a research plan that overlaps
with the Licensed Field of Use of this Agreement.

 

5.04                           In
addition to the reserved license of Paragraph 5.01 above, PHS
reserves the right to grant nonexclusive Research Licenses
directly or to require Licensee to
grant nonexclusive Research Licenses
in the Licensed Field of Use, on reasonable
terms.  The purpose of this Research License is to encourage basic research, whether
conducted at an academic or corporate facility. 
In order to safeguard the Licensed Patent Rights,
however, PHS shall consult with Licensee before granting to commercial entities a Research License in the Licensed Field of Use or
providing to them research samples of materials made through the Licensed Processes for use in the Licensed
Field of Use, except that PHS
may not distribute such Licensed Products
or materials provided to PHS by Licensee pursuant to Section 5.01.

 

5.05                           In
the event that PHS makes any filings or
submissions such as an IND or NDA (or foreign equivalent) to the Food and Drug
Administration (or foreign equivalent) in order to conduct clinical trials or
seek regulatory approval of a Licensed Product in Licensed Fields of Use,
PHS agrees to provide Licensee with an automatic right of
reference to such filings, including all data, reports and documents submitted
in connection therewith.  PHS agrees to sign appropriate
documentation to permit such reference and to promptly notify Licensee upon making such filings.

 

6.                                       ROYALTIES
AND REIMBURSEMENT

 

6.01                           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.

 

6.02                           Licensee agrees to pay to PHS
a nonrefundable minimum annual royalty as set forth in Appendix C. 

 

6.03                           Licensee agrees to pay PHS earned
royalties on Net Sales as set
forth in Appendix C.

 

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

 

6.05                           Licensee agrees to pay PHS
sublicensing royalties as set forth in Appendix C.

 

6.06                           A
patent or patent application licensed under this Agreement
shall cease to fall within the Licensed Patent Rights
for the purpose of computing earned royalty payments in any given country on
the earliest of the dates that a) the application has been abandoned and not
continued, b) the patent expires or irrevocably lapses, or c) the claim has
been held to be invalid or unenforceable by an unappealed or unappealable
decision of a court of competent jurisdiction or administrative agency.

 

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

 

	
   

  	
  [*]         designates
  portions of this document that have been omitted pursuant to a request for
  confidential treatment filed seperately with the Commission

  

 

6

 

6.08                           On
sales of Licensed Products by Licensee to sublicensees or on sales made in other than an
arm’s-length transaction, the value of the Net Sales
attributed under this Article 6 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.

 

6.09                           With
regard to expenses associated with the preparation, filing, prosecution, and
maintenance of all patent applications and patents included within the Licensed Patent Rights incurred by PHS prior to the effective date of this Agreement, Licensee shall pay to PHS
[*] (which is [*] of total patent cost in Appendix A), as an additional
royalty, within thirty (30) days from the date that this Agreement becomes effective. In addition, Licensee shall pay to PHS another [*] within thirty (30) days
from the date that an NDA has been filed. 

 

6.10                           With
regard to expenses associated with the preparation, filing, prosecution, and
maintenance of all patent applications and patents included within the Licensed Patent Rights incurred by PHS
on or after the effective date of this Agreement, PHS, at its sole option, may require Licensee:

 

(a) To
pay PHS on an annual basis, within sixty
(60) days of PHS’s submission of a statement
and request for payment, a royalty amount equivalent to all such patent
expenses incurred during the previous calendar year(s) for the Licensed Patent Rights corresponding to those listed in
Appendix A, divided equally among all commercialization licensees of the Licensed Patent Rights corresponding to those listed in
Appendix A, as applicable, that are on record as of the date on which the
statement and request for payment are sent by PHS to
Licensee, and limited specifically to
those commercialization license(s) under which licensee(s) are responsible for
paying a share of patent expenses, and specifically excluding any license(s)
which are for internal research use and/or for research reagent sales; or

 

(b) To
pay such expenses directly to the law firm employed by PHS
to handle such functions.  However, in
such event, PHS and not Licensee
shall be the client of such law firm.

 

In no
instance shall the amount due from Licensee
be more than [*] as patent cost payment per year.

 

Under
exceptional circumstances, Licensee may be
given the right to assume responsibility for the preparation, filing,
prosecution, or maintenance of any patent application or patent included with
the Licensed Patent Rights.  In that event, Licensee
shall directly pay the attorneys or agents engaged to prepare, file, prosecute,
or maintain such patent applications or patents and shall provide to PHS copies of each invoice associated with such services as
well as documentation that such invoices have been paid.

 

6.11                           In
the event that PHS provides exclusive or
nonexclusive commercialization licenses to more than two (2) licensees
under the Licensed Patent Rights corresponding to
any specific patents and/or patent applications to any additional licensee(s),
limited specifically to those commercialization license(s) under which
licensee(s) are responsible for paying a share of patent expenses, and
specifically excluding any license(s) which are for internal research use
and/or for research reagent sales, Licensee shall
receive as a credit a proportional share of any and all patent expenses
previously paid or due by Licensee under
Paragraphs 6.09 and 6.10 of this Agreement for
those specific patents and/or patent applications, based upon a proportional
reallocation of patent expenses among all exclusive or nonexclusive
commercialization licensees as specified in this Paragraph 6.10.  PHS
will notify Licensee within ninety
(90) of grant of any additional licenses under the Licensed
Patent Rights, and the credit described in this Paragraph 6.11 shall
be applied against Licensee’s next invoice for its share of any current and/or future patent expenses payable
under Paragraphs 6.09 and 6.10, minimum annual royalties, and/or earned
royalties.

 

7

 

6.12                           Licensee may elect to surrender its rights in any country of
the Licensed Territory under any Licensed Patent Rights upon ninety (90) days written notice
to PHS and owe no payment obligation under
Article 6.10 for patent-related expenses incurred in that country after
ninety (90) days of the effective date of such written notice.

 

7.                                       PATENT
FILING, PROSECUTION, AND MAINTENANCE

 

7.01                           PHS agrees to take responsibility for, but to consult with
the Licensee in the preparation, filing,
prosecution, and maintenance of any and all patent applications or patents
included in the Licensed Patent Rights and shall
furnish, upon execution of this Agreement and
on a continuous basis thereafter as long as the Agreement
is in effect, copies of relevant patent-related documents to Licensee, including all drafts of patent applications
filings, domestic and foreign, amendments thereto, related correspondence and
other related documents, sufficiently in advance to allow Licensee
to comment thereon prior to filing or submission and at least fourteen (14)
days in advance if possible.  During the
term of this Agreement, PHS
shall never allow other licensees to assume responsibility for the preparation,
filing prosecution and maintenance of the Licensed Patent Rights without consultation with and prior approval
of Licensee.

 

7.02                           Each
party shall promptly inform the other as to all matters that come to its
attention that may materially affect the preparation, filing, prosecution, or
maintenance of the Licensed Patent Rights
and PHS shall permit Licensee
to provide comments and suggestions with respect to the preparation, filing,
prosecution, and maintenance of Licensed Patent Rights
in both the United States and foreign countries, and PHS shall
consider all reasonable comments and suggestions of Licensee.

 

8.                                       RECORD
KEEPING

 

8.01                           Licensee agrees to keep accurate and
correct records of Licensed Products
made, used, sold, or imported 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
and shall be available during normal business hours for an annual inspection at
the expense of PHS by an
accountant or other designated auditor selected by PHS and reasonably acceptable to Licensee for the sole purpose of verifying reports and
payments hereunder.  The accountant or
auditor shall execute a reasonable confidentiality agreement with Licensee and 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 9.08 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.  If the
inspection shows an overpayment by Licensee,
then Licensee will credit the
overpayment to future royalty payments. 
However in no event shall royalties paid PHS be less than the minimum annual royalty.

 

8.02                           Licensee agrees to have an audit of Net Sales and royalties conducted by an
independent auditor at least every two (2) years if annual royalty-bearing
sales of the Licensed Product or Licensed Processes performed for third
parties are over [*].  The audit shall
address, at a minimum, the amount of gross sales by or on behalf of Licensee during the audit period, terms of
the license as to percentage or fixed royalty to be remitted to the Government, the amount of royalty funds
owed to the Government under this Agreement, and whether the royalty amount
owed has been paid to the Government
and is reflected in the records of the Licensee.  The audit shall also indicate the PHS license number, product, and the time
period being audited.  A report certified
by the auditor shall be submitted promptly by the auditor directly to PHS on completion.  PHS
shall pay for the entire cost of the audit. 
If an inspection shows an underreporting or underpayment in excess of [*]
for any 12 month period, then Licensee
shall reimburse PHS for cost of the
audit at

 

	
   

  	
  [*]         designates
  portions of this document that have been omitted pursuant to a request for
  confidential treatment filed seperately with the Commission

  

 

8

 

the
time Licensee pays the unreported royalties, including late charges as required
by Paragraph 9.08 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.  If the
inspection shows an overpayment by Licensee,
then Licensee will credit the
overpayment to future royalty payments, however in no event shall royalties
paid PHS be less than the minimum
annual royalty.

 

9.                                       REPORTS
ON PROGRESS, BENCHMARKS, SALES, AND PAYMENTS

 

9.01                           Prior
to signing this Agreement, Licensee
has provided to PHS the Commercial
Development Plan at Appendix F, under which Licensee
intends to bring the subject matter of the Licensed Patent Rights
to the point of Practical Application.  This Commercial Development
Plan is hereby incorporated by reference into this Agreement.  Based on
this plan, performance Benchmarks have
been determined and set forth in Appendix E.

 

9.02                           Licensee shall provide written annual reports on its product
development progress or efforts to commercialize under the Commercial
Development Plan for the Licensed Field of Use
within ninety (90) 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, sublicensing, marketing, importing, and
sales during the preceding calendar year, as well as plans for the present
calendar year.  PHS
also encourages these reports to include information on any of Licensee’s public service activities that relate to the Licensed Patent Rights. 
If reported progress differs from that projected in the Commercial Development Plan and Benchmarks,
Licensee shall explain the reasons for
such differences.  In any such annual
report, Licensee may propose amendments to the Commercial Development Plan, acceptance of which by PHS may not be denied unreasonably.  Licensee agrees
to provide any additional information reasonably required by PHS to evaluate Licensee’s
performance under this Agreement.  Licensee may
amend the Benchmarks at any time upon written
consent by PHS.  PHS shall not
unreasonably withhold approval of any request of Licensee
to extend the time periods of this schedule if such request is supported
by a reasonable showing by Licensee of
diligence in its performance under the Commercial Development
Plan and toward bringing the Licensed Products
to the point of Practical Application as defined
in 37 CFR 404.3(d).  Licensee
shall amend the Commercial Development Plan and Benchmarks at the request of PHS
to address any Licensed Field of Use not
specifically addressed in the plan originally submitted.

 

9.03                           Licensee shall report to PHS
the dates for achieving Benchmarks
specified in Appendix E and the First Commercial Sale
in each country in the Licensed Territory
within thirty (30) days of such occurrences.

 

9.04                           Commencing
with the First Commercial Sale by Licensee or a sublicensee, Licensee shall submit to PHS
within ninety (90) 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, if
any, and payments from sublicensees on which a royalty payment is owed to PHS, if any, and the amount of royalty
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 2.10 to
determine Net Sales made under Article 6 to
determine royalties due.

 

9.05                           Licensee agrees to forward semi-annually to PHS a copy of such reports received by Licensee
from its sublicensees during the preceding half-year period as shall be
pertinent to a royalty accounting to PHS by Licensee for activities under the sublicense.

 

9

 

9.06                           Royalties
due under Article 6 shall be paid in U.S. dollars.  For conversion of foreign currency to U.S.
dollars, the conversion rate shall be the New York foreign exchange 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, as
appropriate, to “NIH/Patent Licensing.” 
All such payments shall be sent to the following address:  NIH, P.O. Box 360120, Pittsburgh, PA
15251-6120.   Any loss of exchange,
value, taxes, or other expenses incurred in the transfer or conversion to U.S.
dollars shall be borne or paid entirely by Licensee.  The royalty report required by Paragraph 9.04
of this Agreement shall accompany each such
payment, and a copy of such report shall also be mailed to PHS
at its address for notices indicated on the Signature Page of this Agreement.

 

9.07                           Licensee shall be solely responsible for determining if any
tax on royalty income is owed outside the United States and shall pay any such
tax and be responsible for all filings with appropriate agencies of foreign
governments.

 

9.08                           Interest
and penalties may be assessed by PHS on any overdue
payments in accordance with the Federal Debt Collection Act.  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.

 

9.09                           All
plans and reports required by this Article 9 and marked “confidential” by Licensee shall, to the extent permitted by law, be treated
by PHS as commercial and financial
information obtained from a person and as privileged and confidential, and any
proposed disclosure of such records by the PHS
under the Freedom of Information Act (FOIA), 5 U.S.C. § 552 shall be
subject to the predisclosure notification requirements of 45 CFR § 5.65(d).

 

10.                                 PERFORMANCE

 

10.01                     Licensee
shall use commercially reasonable efforts to bring the Licensed
Products and Licensed Processes
to Practical Application.  “Commercially reasonable efforts” for the
purposes of this provision shall include adherence by Licensee
to the Commercial Development Plan at Appendix
F and performance of the Benchmarks at
Appendix E.  For purposes of this Article 10,
Licensee’s efforts shall be deemed to
include the efforts of its sublicensees.

 

10.02                     Upon the First
Commercial Sale, until the expiration of this Agreement,
Licensee shall use commercially
reasonable efforts to make Licensed Products
and Licensed Processes reasonably
accessible to the United States public. For the purposes of this Article 10,
Licensee’s efforts shall be deemed to
include the efforts of its sublicensees. 

 

11.                                 INFRINGEMENT
AND PATENT ENFORCEMENT

 

11.01                     PHS
and Licensee agree to notify each
other promptly of each infringement of the Licensed
Patent Rights in the Licensed
Field of Use; as well as any material facts which may affect the
validity, scope or enforceability of the Licensed
Patent Rights, in each case, of which either party becomes aware.

 

11.02                     Pursuant to this Agreement and the provisions of Chapter 29 of title 35,
United States Code, Licensee may,
not withstanding the existence of any other license grants by PHS under the Licensed Patent Rights:
a) bring suit in its own name, at its own expense, and on its own behalf for
infringement of the Licensed Patent Rights
in the Licensed Field of Use; b) in any such
suit, enjoin infringement and collect for its use, damages, profits, and awards
of whatever nature recoverable for such infringement; and c) settle any claim
or suit for infringement of the Licensed Patent Rights
provided, however, that PHS and
appropriate Government authorities shall have
the first right to take such actions at their own expense.  If Licensee
desires to initiate a suit for patent infringement, Licensee
shall notify PHS in writing.  If PHS does not
notify Licensee of its intent to pursue legal
action within ninety (90) days, Licensee will
be free to initiate suit.  PHS shall have a continuing right to intervene in such suit
at its own expense.  Licensee
shall take no

 

10

 

action
to compel the Government either to initiate or
to join in any such suit for patent infringement.  However, in the event that Licensee is forced to take action in order
to maintain such suit, then any such action by Licensee shall not be considered to be a material breach of
this Agreement.  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 such motion or other action, including any and all costs
incurred by the Government in opposing any such
motion or other action.  In all cases, Licensee agrees to keep PHS reasonably
apprised of the status and progress of any litigation.  Before Licensee
commences an infringement action, Licensee shall
notify PHS and give careful consideration to
the views of PHS and to any potential effects
of the litigation on the public health in deciding whether to bring suit.  PHS shall
advise all other licensees under the Licensed Patent Rights
of any litigation pursuant to this Paragraph and of Licensee’s
request that they join said litigation, at Licensee’s expense,
if necessary in order for the Licensee to
have standing to bring or to maintain such litigation. In the event that Licensee is not able to maintain a lawsuit
because the necessary parties do not participate, all royalty obligations under
this Agreement shall be reduced as described in Appendix C.

 

11.03                     In the event that a declaratory
judgment action alleging invalidity or non-infringement of any of the Licensed Patent Rights shall be brought against Licensee or raised by way of counterclaim or affirmative
defense in an infringement suit brought by Licensee under
Paragraph 11.02, pursuant to this Agreement and
the provisions of Chapter 29 of Title 35, United States Code or other statutes,
Licensee may, after consultation with
other exclusive licensees of Licensed Patent Rights:
a) defend the suit in its own name, at its own expense, and on its own behalf
for the Licensed Patent Rights; b) in any such
suit, ultimately to enjoin infringement and to collect for its use, damages,
profits, and awards of whatever nature recoverable for such infringement; and
c) settle any claim or suit for declaratory judgment involving the Licensed Patent Rights-provided, however, that PHS and appropriate Government
authorities shall have the first right to take such actions and shall have a
continuing right to intervene in such suit at their own expense.  If PHS does not
notify Licensee of its intent to respond to
the legal action within a reasonable time, Licensee will
be free to do so.  Licensee
shall take no action to compel the Government
either to initiate or to join in any such declaratory judgment action, however,
any such action by Licensee shall
not be considered to be a material breach of this Agreement.  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 such motion or other action.  If Licensee elects
not to defend against such declaratory judgment action, PHS,
at its option, may do so at its own expense. 
In all cases, Licensee agrees
to keep PHS reasonably apprised of the status
and progress of any litigation.  Before Licensee commences an infringement action, Licensee shall notify PHS and give
careful consideration to the views of PHS and to any
potential effects of the litigation on the public health in deciding whether to
bring suit. PHS shall advise all other
licensees under the Licensed Patent Rights
of any litigation pursuant to this Paragraph and of Licensee’s
request that they join said litigation, at Licensee’s expense,
if necessary in order for the Licensee to
have standing to bring or to maintain such litigation.  Also, if PHS grants the
right to litigate under this Paragraph to any other licensee of Licensed Patent Rights, such license shall provide an
opportunity for Licensee to consult in advance
with PHS and such other licensee before suit
is brought and before any settlement is reached that might affect Licensee’s rights under this Agreement.

 

11.04                     In any action under Paragraphs
11.02 or 11.03, the expenses including costs, fees, attorney fees, and
disbursements, shall be paid by Licensee.  The value of any recovery made by Licensee through court judgment or settlement, after
deduction of said expenses, shall be treated as Net Sales
and subject to earned royalties.

 

11.05                     PHS
shall cooperate fully with Licensee in
connection with any action under Paragraphs 11.02 or 11.03.  PHS agrees
promptly to provide access to all necessary documents and to render reasonable
assistance in response to a request by Licensee.

 

11

 

12.                                 NEGATION
OF WARRANTIES AND INDEMNIFICATION

 

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

 

12.02                     PHS
does not warrant the validity of the Licensed Patent Rights
and makes no representations whatsoever with regard to the scope of the Licensed Patent Rights, or that the Licensed
Patent Rights may be exploited without infringing other patents or
other intellectual property rights of third parties.  However, PHS
represents that it has complied with the duty of disclosure at the U.S. Patent
and Trademark Office and that it is unaware of any facts or reasons why the Licensed Patent Rights would not be valid.

 

12.03                     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 OR TANGIBLE MATERIALS RELATED
THERETO.

 

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

 

12.05                     Licensee
shall indemnify and hold PHS, its
employees, students, fellows, agents, and consultants harmless from and against
all liability, demands, damages, expenses, and losses, including but not
limited to death, personal injury, illness, or property damage in connection
with or arising out of: a) the use by or on behalf of Licensee,
its sublicensees, directors, employees, or third parties under contract to Licensee of any Licensed
Patent Rights; or b) the design, manufacture, distribution, or use
of any Licensed Products, Licensed
Processes or materials by Licensee, or
other products or processes developed in connection with or arising out of the Licensed Patent Rights. 
Licensee agrees to maintain a liability
insurance program consistent with sound business practice. Notwithstanding any
other provision to the contrary, Licensee
shall have no indemnification obligation in connection with or arising out
of:  (a) the use by or on behalf of
the indemnified parties identified above of any Licensed Product or Licensed
Process for experimental or research purposes, or (b) the
design, manufacture, distribution or use of any Licensed Product or Licensed
Process by or on behalf of such indemnified parties for experimental
or research purposes.

 

13.                                 TERM,
TERMINATION, AND MODIFICATION OF RIGHTS

 

13.01                     This Agreement
is effective when signed by all parties and shall extend on a country-by-country
basis to the expiration of the last to expire of the Licensed
Patent Rights in each country unless sooner terminated as provided
in this Article 13.

 

13.02                     In the event that Licensee is in default in the performance of any material
obligations under this Agreement,
including but not limited to the obligations listed in Article 13.05, 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 and
pursue outstanding amounts owed through procedures provided by the Federal Debt
Collection Act.

 

13.03                     In the event of the commencement
of a bankruptcy proceeding by or against Licensee under
the Bankruptcy Code that is not dismissed within ninety (90) days after it is
filed, PHS may, at its option, terminate this Agreement.  In the
event of a bankruptcy of Licensee
(unless PHS has already terminated this Agreement), all rights to Licensed
Patent Rights granted to Licensee under
this Agreement to the extent same survive
prior to filing of such bankruptcy are, and shall be deemed to be, for purposes
of Section 365(n) of the United States Bankruptcy Code, as amended from
time to time (the “Bankruptcy code”), licenses of right to “intellectual
property” as defined under Section 101(35A) of the Bankruptcy Code.  The Parties agree that Licensee,
as a

 

12

 

licensee
of such rights under this Agreement,
shall retain and may fully exercise all its rights and elections under the
Bankruptcy Code.

 

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

 

13.05                     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 reasonable 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 not achieved the Benchmarks as
may be modified under Paragraph 9.02; 3) has willfully made a false statement
of, or willfully omitted, a material fact in the license application or in any
report required by the Agreement; 4)
has committed a material breach of a covenant or agreement contained in the Agreement; 5) is not keeping Licensed
Products or Licensed Processes
reasonably available to the public after commercial use commences; 6) cannot
reasonably satisfy unmet health and safety needs within the Licensed Field of Use or 7) cannot reasonably justify a
failure to comply with the domestic production requirement of Paragraph 5.02
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 9.02.  Prior to invoking its rights under this
Paragraph 13.05 upon any of the triggers described in items 1) through 7)
above, 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) through 7).  If Licensee fails
to alleviate PHS’s concerns as to the previous
items 1) through 7) during such 90-day period or fails to initiate corrective
action to PHS’s satisfaction during such 90-day
period, PHS may terminate this Agreement.

 

13.06                     When the public health and safety
so require, and after written notice to Licensee
providing Licensee a ninety (90) day opportunity
to respond, PHS shall have the right to
require Licensee to grant sublicenses to
responsible applicants, on reasonable terms, in the Licensed
Field of Use under the Licensed Patent Rights,
unless Licensee can reasonably demonstrate
that the granting of the sublicense would not materially increase the
availability to the public of the subject matter of the Licensed
Patent Rights.  PHS will not require the granting of a sublicense unless the
responsible applicant has first negotiated in good faith with Licensee. If Licensee is
required to grant sublicense(s) under this Paragraph 13.06, Licensee agrees to provide PHS
and said sublicensee(s) with all data, documents and materials generated or
produced by or on behalf of Licensee that
would be or could be used in regulatory filings with the Food and Drug
Administration (or foreign equivalent regulatory agency). Licensee
agrees that such data, documents and/or materials can be used by PHS or said sublicensee(s) to prepare regulatory filings
with the Food and Drug Administration (or equivalent foreign regulatory
agencies).  Licensee
may charge a fee to said sublicensee(s) that is equal to its direct costs only
(i.e., no overhead shall be compensated) for producing said data, documents and
materials that said sublicensee(s) actually use in their regulatory filings.

 

13.07                     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 use specified by
federal regulations issued after the date of this Agreement and such requirements are not reasonably satisfied
by Licensee.

 

13.08                     Within thirty (30) days of receipt
of written notice of PHS’s
unilateral decision to modify or terminate this Agreement pursuant
to the express provisions in this Agreement, Licensee may, consistent with the provisions of 37 CFR
404.11, appeal the decision by written submission to the designated PHS official.  The
decision of the designated PHS official
shall be the final agency

 

13

 

decision.  Licensee may
thereafter exercise any and all administrative or judicial remedies that may be
available.

 

13.09                     Within ninety (90) days of
expiration or termination of this Agreement under
this Article 13, a final report, as per Paragraphs 9.02, 9.04 and 9.05,
shall be submitted by Licensee.  Any royalty payments, including those
incurred but not yet paid (such as the full minimum annual royalty), and those
related to patent expense, due to PHS shall
become immediately due and payable upon termination or expiration.  If terminated under this Article 13,
sublicensees may elect to convert their sublicenses to direct licenses with PHS pursuant to Paragraph 4.03.  Unless otherwise specifically provided for
under this Agreement, upon termination or
expiration of this Agreement, Licensee shall return all Licensed
Products or other materials included within the Licensed
Patent Rights to PHS or provide PHS with certification of the destruction thereof.

 

13.10                     In the event Licensee
unilaterally terminates this Agreement under
Paragraph 13.04 or this Agreement is
terminated for cause by PHS under
Paragraphs 13.02, 13.03 or 13.05, Licensee agrees
to provide PHS with all data, documents and
materials generated or produced by or on behalf of Licensee
that would be or could be used in regulatory filings with the Food and Drug
Administration (or foreign equivalent regulatory agencies).  Licensee agrees
that such data, documents and/or materials can be used by PHS
or future third party licensee(s) of Licensed Patent Rights
to prepare regulatory filings with the Food and Drug Administration (or
equivalent foreign regulatory agencies). 

 

14.                                 GENERAL
PROVISIONS

 

14.01                     Neither Party may waive or release
any of its rights or interests in this Agreement
except in writing.  The failure of either
the Licensee or 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 either the Licensee
or the Government or excuse a similar
subsequent failure to perform any such term or condition by either party.

 

14.02                     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.

 

14.03                     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.

 

14.04                     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.

 

14.05                     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.

 

14.06                     All notices required or permitted
by this Agreement shall be given by prepaid,
first class, registered or certified mail or by an express/overnight delivery
service provided by a commercial carrier, properly addressed to the other Party
at the address designated on the following Signature Page, or to such other
address as may be designated in writing by such other Party.  Notices shall be considered timely if such
notices are received on or before the established deadline date or sent on or
before the deadline date as verifiable by U.S. Postal Service postmark or dated
receipt from a commercial carrier. 
Parties should request a legibly dated U.S. Postal Service postmark or
obtain a dated receipt from a commercial carrier or the U.S. Postal
Service.  

 

14

 

14.07                     This Agreement
shall not be assigned by Licensee
except: a) with the prior written consent of PHS,
such consent not to be withheld unreasonably; b) as part of a sale or transfer
of substantially the entire business of Licensee
relating to operations which concern this Agreement; or
c) in connection with a merger, consolidation or reorganization.  Licensee shall
notify PHS within ten (10) days of any
assignment of this Agreement by Licensee.

 

14.08                     Licensee
agrees in its use of any PHS-supplied
materials to comply with all applicable statutes, regulations, and guidelines,
including PHS and DHHS
regulations and guidelines.  Licensee agrees not to use the materials for research
involving human 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.

 

14.09                     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.

 

14.10                     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.

 

14.11                     By entering into this Agreement, PHS does not
directly or indirectly endorse any product or service provided, or to be
provided, by Licensee 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 NIH, CDC, PHS, or DHHS or the Government or their employees in any advertising,
promotional, or sales literature without the prior written consent of PHS. Licensee may
publicly identify the existence of this Agreement and
is not prohibited from using publicly available factual information regarding Licensed Patent Rights, Licensed Products,
and Licensed Processes, specifically
including, but not limited to, the names of the inventors as appearing on the Licensed Patent Rights and their associated NIH institutes,
without such consent. 

 

14.12                     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 modifications or termination decisions provided for in Article 13.  Licensee agrees
first to appeal any such unsettled claims or controversies to the designated PHS official, or designee, whose decision shall be
considered the final agency decision. 
Thereafter, Licensee may
exercise any administrative or judicial remedies that may be available.

 

14.13                     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.

 

14.14                     Paragraphs 4.03, 8.01, 9.05-9.07,
12.01-12.05, 13.08, 13.09, and 14.12 of this Agreement
shall survive termination of this Agreement.

 

15

 

SIGNATURES BEGIN ON NEXT PAGE

 

16

 

PHS PATENT LICENSE AGREEMENT—EXCLUSIVE

 

SIGNATURE PAGE

 

For PHS:

 

	
   

  	
   

  	
   

  	
   

  
	
  Steven M.
  Ferguson, M.B.A.

  	
  Date

  

Acting Director, Division
of Technology Development and Transfer

Office of Technology
Transfer

National Institutes of
Health

 

Mailing Address for
Notices:

 

Office of Technology
Transfer

National Institutes of
Health

6011 Executive Boulevard,
Suite 325

Rockville, Maryland  20852-3804 
U.S.A.

 

 

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.):

 

by:

 

	
   

  	
   

  	
   

  	
   

  
	
  Signature of Authorized
  Official

  	
  Date

  

 

Anne-Marie Corner

Printed Name 

 

President and CEO

Title 

 

Official and Mailing
Address for Notices:

 

CEO

Biosyn, Inc.

1800 Byberry Road,
Building 13

Huntingdon Valley, PA 19006-3525

 

Any false or misleading
statements made, presented, or submitted to the Government,
including any relevant omissions, under this Agreement
and during the course of negotiation of this Agreement
are subject to all applicable civil and criminal statutes including Federal
statutes 31 U.S.C. §§ 3801-3812 (civil liability) and 18 U.S.C. § 1001
(criminal liability including fine(s) and/or imprisonment).

 

17

 

	
   

  	
  [*]         designates
  portions of this document that have been omitted pursuant to a request for
  confidential treatment filed seperately with the Commission

  

 

APPENDIX A—Patent(s) or Patent Application(s)

 

Patent(s)
or Patent Application(s):

 

1. U.S. Patent No. 5,843,882,
filed April 27, 1995 from USSN 08/429,965, issued December 1, 1998,
entitled: “Antiviral Proteins and Peptides, DNA, DNA-coding Sequences Therefor,
and Uses Thereof” (Inventors: Michael R. Boyd, Kirk R. Gustafson, Robert H.
Shoemaker and James B. McMahon) (E-117-95/0)

 

2. U.S. Patent No. 5,821,
081, filed April 26, 1996 from USSN 08/638,610, issued October 13,
1998, entitled: “Nucleic Acids Encoding Antiviral Proteins and Peptides,
Vectors and Host Cells Comprising Same, and Methods of Producing the Antiviral
Proteins and Peptides” (Inventors: Michael R. Boyd, Kirk R. Gustafson, Robert
H. Shoemaker and James B. McMahon) (E-117-95/1)

 

3. U.S. Patent No. 5,962,653,
filed Nov. 13, 1997, issued Oct. 05, 1999, from SN 08/969,584 (DIV of
SN 08/429,965 E-117-95/0), entitled: “Methods of Obtaining Antiviral Proteins
and Antiviral Peptides from Nostoc Ellipsosporum” (Inventors: Michael R. Boyd
and Kirk R. Gustafson) (E-117-95/2)

 

4. U.S. Patent No. 6,015,876,
filed November 13, 1997 from USSN 08/969,378, issued January 18,
2000, entitled: “Method of Using Cyanovirins” (Inventor: Michael R. Boyd) (E-117-95/3)

 

5. U.S. Patent No. 5,962,668,
filed Nov. 13, 1997, issued Oct. 05, 1999, from SN 08/970,179 (DIV of
SN 08/638,610, E-117-95/1), entitled: “ Nucleic Acid Encoding Antiviral
Proteins and Peptides Fused to Effector Proteins” (Inventors: Michael R. Boyd
and Robert H. Shoemaker) (E-117-95/4)

 

[*]

 

7.  U.S. Patent No. 5,998,587, filed November 13,
1997 from USSN 08/969,249, issued December 7, 1999, entitled: “Anti-cyanovirin
Antibody “ (Inventors: Michael R. Boyd, Kirk R. Gustafson, Robert H. Shoemaker
and James B. McMahon) (E-117-95/6)

 

8. U. S. Patent No. 6,245,737,
filed Aug. 19, 1998, issued Jun. 12, 2001,from SN 09/137,134 (CON of
SN 08/429,965, E-117-95/0), entitled: “ Conjugates of Antiviral Proteins or
Peptides and Virus or Viral Envelope Glycoportiens” (Inventors: Michael R.
Boyd, Kirk R. Gustafson, Robert H. Shoemaker and James B. McMahon) (E-117-95/7)

 

[*]

 

10.  U.S. Patent No. 6,428,790, filed October 12,
1999, entitled: “Cyanovirin Conjugates and Matrix-Anchored Cyanovirin and
Related Compositions and Methods of Use” (Inventor: Michael R. Boyd) (E-074-99/1)

 

[*]

 

12.  U.S. Patent Application 09/427,873, filed October 27,
1999, entitled: “Methods of Using Cyanovirins to Inhibit Viral Infection”
(Inventor: Michael R. Boyd) (E-074-99/3)

 

[*]

 

14.   U.S. Patent Application 09/815,079, filed March 22,
2001, entitled: “Glycosylation-Resistant Cyanovirins and Related Conjugates,
Compositions, Nucleic Acids, Vectors, Host Cells, Methods of Production and
methods of Using Nonglycosylated Cyanovirins” (Inventor: Michael R. Boyd) (E-074-99/7)

 

18

 

APPENDIX B—Licensed Field of Use and Territory

 

 

Licensed
Fields of Use:  

 

Compositions, devices and methods for the prevention of
infection by HIV and other sexually transmitted pathogens, by topical, but not
systemic, administration, utilizing cyanovirin-N, anti-HIV mutants of
cyanovirin-N, including glycosylation-resistant mutants of cyanovirin-N, and
anti-HIV fragments of both, including conjugated forms of cyanovirin-N, mutants
of cyanovirin-N, and anti-HIV fragments of both, to increase the in vivo
half-life, but excluding pegylated cyanovirin-N, pegylated mutants of
cyanovirin-N, and pegylated anti-HIV fragments of both.  For the avoidance of doubt, such compositions
shall include sustained release formulations; devices shall include all drug
delivery systems, including but not limited to condoms, sponges, vaginal rings,
suppositories, IUDs and other solid matrices; and topical administration shall
include administration to mucosal membranes, including vaginal, anal and oral
membranes.

 

 

Licensed
Territory:

 

Worldwide

 

19

 

	
   

  	
  [*]         designates
  portions of this document that have been omitted pursuant to a request for
  confidential treatment filed seperately with the Commission

  

 

APPENDIX C—Royalties

 

Royalties:

 

Licensee
agrees to pay to PHS a
noncreditable, nonrefundable license issue royalty in the amount of [*].

 

Licensee
agrees to pay to PHS
a nonrefundable minimum annual royalty in the amounts as follows: [*], starting
[*]; [*] starting [*] and [*] starting [*], after [*].

 

Licensee
agrees to pay PHS
earned royalties on Net Sales by
or on behalf of Licensee as
follows:  

 

1.     [*]:

 

[*]

 

[*]

 

[*]

 

2.    [*]

 

[*]

 

[*]

 

[*]

 

3.     [*]

 

[*]

 

[*] 

 

4.     [*]

 

[*]

 

[*] 

 

20

 

	
   

  	
  [*]         designates
  portions of this document that have been omitted pursuant to a request for
  confidential treatment filed seperately with the Commission

  

 

Licensee
agrees to pay PHS the following
one-time only benchmark royalties:

 

1. [*]
payable within sixty (60) days of [*].

 

2. [*]
payable within sixty (60) days [*]. 

 

3. [*]
payable within ninety (90) days after [*] 

 

4. [*]
payable within ninety (90) days after [*].

 

Licensee
agrees to pay PHS sublicensing
royalties, within ninety (90) days of receipt by Licensee, as follows:

 

21

 

	
   

  	
  [*]         designates
  portions of this document that have been omitted pursuant to a request for
  confidential treatment filed seperately with the Commission

  

 

1.                                       Licensee agrees to pay PHS earned royalties on Net Sales by sublicensee(s):

 

a)     [*]

 

[*]

 

[*]

 

[*]

 

b)    [*]

 

[*]

 

[*]

 

[*]

 

[*]

 

2.                                       Licensee agrees to pay PHS additional sublicensing royalties as
follows:

 

[*]

 

APPENDIX
D—Modifications

 

 

Modifications are
included in the main text of this License
Agreement.

 

22

 

	
   

  	
  [*]         designates
  portions of this document that have been omitted pursuant to a request for
  confidential treatment filed seperately with the Commission

  

 

APPENDIX E—Benchmarks and Performance

 

Licensee
agrees to the following Benchmarks for
its performance under this Agreement and,
within thirty (30) days of achieving a Benchmark,
shall notify PHS that the Benchmark
has been achieved.

 

1. [*]

 

2. [*]

 

3. [*]

 

4. [*]

 

5. [*]

 

6.
Developing World Access

 

It is Licensee’s intent to provide Licensed
Product(s) to the Public Sector
in the quantity desired by the

Public
Sector and at the price described below.  License
therefore agrees:

 

a) To
provide a written report to PHS, within six
months of a Licensed Product being approved
for marketing in the U.S. or Europe detailing the potential Public Sector requirement for Licensed
Product(s) to fulfill the public health need in Developing
Countries, said report shall include the effect of any approved
competing products being offered to the Public Sector.
The report shall describe how Licensee
intends to fulfill said Public Sector
requirement for Licensed Product(s).  A similar report shall be required
within six months of marketing approval of the [*] of Licensed
Product(s).  Licensee shall
amend the Commercial Development Plan and this
Benchmarks and Performance Appendix as appropriate.  

 

b) The
price at which each Licensed Product is
sold to the Public Sector shall be i)
preferential to the lowest Private Sector
price, and ii) set at the lowest possible level permitting a commercially
reasonable return on worldwide sales of each said Licensed
Product.

 

c) A Licensed Product shall be sold to the Public
Sector within two years of marketing approval of said Licensed Product in the U.S. or Europe, and thereafter Licensee agrees to use commercially reasonable efforts to
meet any delivery date and in the quantities required in any order placed for Licensed Product(s) placed by the Public
Sector.

 

23

 

	
   

  	
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APPENDIX
F—Commercial Development Plan

 

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26

 

APPENDIX G—Developing Countries

 

The
list of developing countries as the following:

 

	
  1 Afghanistan

  
	
  2 Albania

  
	
  3 Angola

  
	
  4 Armenia

  
	
  5 Azerbaijan

  
	
  6 Bahamas

  
	
  7 Belize

  
	
  8 Bangladesh

  
	
  9 Barbados

  
	
  10 Benin

  
	
  11 Bhutan

  
	
  12 Bolivia

  
	
  13 Bosnia & Herzegov

  
	
  14 Botswana

  
	
  15 Burkina Faso

  
	
  16 Burundi

  
	
  17 Cambodia

  
	
  18 Cameroon

  
	
  19 Central Afr Rep

  
	
  20 Chad

  
	
  21 China

  
	
  22 Comoros

  
	
  23 Congo, Dem Rep

  
	
  24 Congo, Rep

  
	
  25 Côte d’Ivoire

  
	
  26 Cuba

  
	
  27 Dominican Republic

  
	
  28 Djibouti

  
	
  29 Eritrea

  
	
  30 Ethiopia

  
	
  31 Gambia

  
	
  32 Georgia

  
	
  33 Ghana

  
	
  34 Guinea

  
	
  35 Guinea-Bissau

  
	
  36 Guatemala

  
	
  37 Guyana

  
	
  38 Haiti

  
	
  39 Honduras

  
	
  40 India

  
	
  41 Indonesia

  
	
  42 Kenya

  
	
  43 Korea, DPR

  
	
  44 Kyrgyz Republic

  
	
  45 Lao PDR

  
	
  46 Lesotho

  
	
  47 Liberia

  
	
  48 Madagascar

  
	
  49 Malawi

  

 

27

 

	
  50 Mali

  
	
  51 Mauritania

  
	
  52 Moldova

  
	
  53 Mongolia

  
	
  54 Mozambique

  
	
  55 Myanmar

  
	
  56 Namibia

  
	
  57 Nepal

  
	
  58 Nicaragua

  
	
  59 Niger

  
	
  60 Nigeria

  
	
  61 Pakistan

  
	
  62 Panama

  
	
  63 Papua New Guinea

  
	
  64 Rwanda

  
	
  65 São Thomé

  
	
  66 Senegal

  
	
  67 Sierra Leone

  
	
  68 Solomon Islands

  
	
  69 Somalia

  
	
  70 South Africa

  
	
  71 Sri Lanka

  
	
  72 Sudan

  
	
  73 Suriname

  
	
  74 Swaziland

  
	
  75 Thailand

  
	
  76 Tajikistan

  
	
  77 Tanzania

  
	
  78 Togo

  
	
  79 Trinidad

  
	
  80 Tobago

  
	
  81 Turkmenistan

  
	
  82 Ukraine

  
	
  83 Uganda

  
	
  84 Uzbekistan

  
	
  85 Vietnam

  
	
  86 Yemen

  
	
  87 Zambia

  
	
  88 Zimbabwe

  

 

28

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00082-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00082-of-00352.parquet"}]]