Document:

License Agreement

EXHIBIT 10.12

Non-Exclusive Evaluation and Biological Material License

Agreement

By And Between

American Type Culture Collection (ATCC)

And

Heat Biologics, Inc.

TABLE OF CONTENTS

		
	ARTICLE 1. DEFINITIONS

	3

	 
	 

	ARTICLE 2. LICENSE GRANT

	8

	 
	 

	ARTICLE 3. SUBLICENSES

	11

	 
	 

	ARTICLE 4. LICENSE FEES

	11

	 
	 

	ARTICLE 5. PROGRESS AND SALES REPORTS

	13

	 
	 

	ARTICLE 6. RECORDS AND INSPECTIONS

	15

	 
	 

	ARTICLE 7. PATENTS, TRADEMARKS AND NAMES

	15

	 
	 

	ARTICLE 8. PRE-COMMERCIAL AND COMMERCIAL ACTIVITIES

	17

	 
	 

	ARTICLES 9. INDEMNIFICATION AND INSURANCE

	17

	 
	 

	ARTICLE 10. WARRANTIES AND LIMITATIONS

	18

	 
	 

	ARTICLE 11. COMPLIANCE WITH LAWS

	19

	 
	 

	ARTICLE 12. TERM AND TERMINATION

	20

	 
	 

	ARTICLE 13. CONFIDENTIALITY

	22

	 
	 

	ARTICLE 14. NOTICES

	22

	 
	 

	ARTICLE 15. GENERAL PROVISIONS

	23

	 
	 

	Appendix A: ATCC's MTA (version of February 1, 2101)

	27

	 
	 

	Appendix B: Annual Progress Report

	31

	 
	 

	Appendix C: Annual Royalry Report

	32

	 
	 

	Appendix D: ATCC Material

	32

	 
	 

	Appendix E: Third Party Transfer Agreement

	32

Page 2 of 35

American Type Culture Collection

Non-Exclusive Biological Material License Agreement

THIS NON-EXCLUSIVE EVALUATION AND BIOLOGICAL MATERIAL LICENSE AGREEMENT (the “Agreement”), effective as of the date of the last signature to the Agreement (“Effective Date”), is by and between the American Type Culture Collection, a District of Columbia not-for-profit corporation, having it offices at 10801 University Boulevard, Manassas, Virginia 20110-2209, USA (hereafter referred to as “ATCC”) and Heat Biologics, Inc., a for-profit corporation, having offices at 119 Washington Avenue, Suite 401, Miami Beach, FL 33139, USA (hereafter referred to as “Licensee”).

WHEREAS, ATCC is organized for the primary purpose of the acquisition authentication, preservation, production, development and distribution of biological materials, information, technology, intellectual property, and standards for the support, advancement, validation, and application of scientific knowledge, research and analysis, and

WHEREAS, ATCC sells and has sold it products only to registered customers and only under the terms of a Material Transfer Agreement (“AMT” as hereinafter defined and included as Appendix A) that placed certain restrictions o the use of ATCC Materials purchases from ATCC; and

WHEREAS, Licensee initially desires to obtain a non-exclusive Evaluation License from ATCC to Evaluate Biological Materials and Confidential Information under the terms herein; and

WHEREAS, if such Evaluation is successful, Licensee desires to obtain a non-exclusive license to develop, make, use, and Sell Licensed Products (as hereinafter defined); and

WHEREAS, ATCC is willing to grant to Licensee a non-exclusive Evaluation License and a non-exclusive biological material license to utilize the ATCC Materials to Evaluate, develop, make, use, and Sell Licensed Products in accordance with the terms and conditions set forth herein;

NOW THEREFORE, for good and valuable consideration and the following mutual promises, the receipt and sufficiency of which is hereby acknowledged, ATCC and Licensee agree to the following terms and conditions in order to utilize the ATCC Materials and hereby enter into this Agreement:

ARTICLE 1. DEFINITIONS

1.1

“Affiliate” means, in respect of any entity, any company, partnership or other entity which, directly or indirectly Controls, is Controlled by or is under the common Control with that entity. For purposes of this definition, “Control” (including, with correlative meanings, the terms “Controlled by” and “under common Control with”), mean, (a) in the case of a 

Page 3 of 35

corporate entity, direct or indirect ownership of fifty percent (50%) or more of the stock or shares entitled to vote for the election of directors; b) in the case of a non-corporate entity, direct or indirect ownership of fifty percent (50%) or more of the equity, or (c) possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the entity n questions (whether through ownership of securities or other ownership interest, by contract or otherwise).

1.2

“Agreement Term” means the term of this Agreement as set forth in Section 12.3 herein.

1.3

“ATCC Materials” means the items listed in Appendix D. If Licensee desires to acquire additional ATCC Materials during the Agreement Term, the Licensee will notify ATCC in writing. Approval of additional ATCC Materials by ATCC will not be unreasonably withheld, continued or delayed, but will be contingent on ATCC’s determination of whether such additional ATCC Material is available for distribution under this Agreement. Fees associated with the addition of ATCC Material are subject to Section 2.9 and Section 4.1(b)(iv).

1.4

“Biological Material” means the ATCC Materials, their Progeny, Unmodified Derivatives and Modifications, either individually or jointly.

1.5

“Biological License Application” or “BLA” means a Biological License Application as defined in the U.S. Food, Drug and Cosmetic Act and the regulations promulgated thereunder, and any corresponding or equivalent foreign application, registration or certification.

1.6

“Calendar Year” shall mean each successive period of twelve (12) months commending on January 1 and ending on December 31.

1.7

“Clinical Trial” means a human clinical trial, the principal purpose of which is to establish safety and efficacy in patients with the disease being studied, as further described in the U.S. Food, Drug and Cosmetic Act and the regulations promulgated thereunder, and any corresponding or equivalent foreign law or regulation, which is designed and intended to be of a size and statistical power sufficient to serve to support the filing of a marketing application with the relevant regulatory authority for the indication of being studied. A Clinical Trail shall be deemed to have been initiated upon the first dosing of the first patient in such Clinical Trail.

1.8

“Commercial Use” means the Sale, license, lease, export or other transfer or distribution of the Biological Materials for financial gain or other commercial purposes and/or the use of Biological Materials: (a) to provide a service to a Third Party for financial gain; (b) to produce or manufacture products for general sale, or products for use in the manufacture of products ultimately intended for general sale, including but not limited to quality assurance or quality control; (c) in connection with ADMI; (Absorption, Distribution, Metabolism and Excretion) testing; (d) in connection with drug potency or toxicity testing which does not include either screening multiple cell lines for potential inclusion in a screening multiple cell lines for potential inclusion in a screening assay system or screening multiple compounds in a system for internal research purposes only; or (f) for research conducted under an agreement wherein a Third Party for profit entity receives a right whether actual or contingent to the results of the research.

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1.9

“Commercial Use License” means a non-exclusive license or use the Biological Materials to develop, make, use and Sell Licensed Products in the Territory in the Field of Use, subject to the terms and conditions of this Agreement.

1.10

“Commercial Use License Term” means the term of the Commercial Use Licensee as set forth in Section 12.2.

1.11

“Confidential Information” means information of the disclosing party that has commercial value, including, without limitation, trade secrets, compounds, reagents, Biological Materials, techniques for the handling and use of Biological Materials; know-how, formulas, processes, product ideas, inventions (whether patentable or not), improvements, copyrightable or patentable materials, schematics, and other technical, business, financial, and product development plans, forecasts, strategies, and information, and that the disclosing party discloses to the receiving party. IN order to be considered Confidential Information, information disclosed orally or in any other transitory medium must be identified to the Recipient as confidential orally at the time of discloser and in writing within thirty (30) days after such disclosure. Confidential Information shall not include information that the receiving party can demonstrate:

(a)

was/is at the time of disclosure in the public domain; or

(b)

has come into or is in the public domain through no fault of the receiving party; or

(c)

was/is known to the receiving party prior to disclosure thereof by the disclosing party and was not acquired directly from the disclosing party on a confidential basis, as shown by written records in the receiving party’s possession; or

(d)

was/is lawfully disclosed to the receiving party without obligation of confidence by a Third Party which was not under an obligation of confidence to the disclosing party with respect thereto; or

(e)

was/is independently developed n the receiving party without reference to or use of Confidential Information provided by the disclosing party as shown by written records in the receiving party’s possession; or

(f)

is required by law to be disclosed, contingent upon the receiving party informing the disclosing party prior to any said disclosure in the sufficient time to enable the disclosing party to seek a protective order or other appropriate legal remedy to protect the disclosure.

1.12

“Conversion Rate” means the exchange rate quoted in the Wall Street Journal on the last working day of each Calendar Year.

1.13

“Evaluate” or “Evaluation” or “Evaluation Purpose” means examination, research, testing or analysis of Biological Materials for the sole purpose of enabling Licensee to determine whether such Biological Materials are suitable for Commercial Use.

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1.14

"Evaluation License" means the non-exclusive right to evaluate and use Biological Materials solely for Evaluation Purposes that Are described in Section 1.13, and subject to the terms of this Agreement.

1.15

“Evaluation License Term” means the term of the Evaluation License as set forth in the Section 12.1.

1.16

“Field of Use” means treatment and prevention of diseases in humans and animals. The Field of Use specifically excludes (i) the use or Sale of ATCC Materials and Modifications for any other purposes other than to develop, make, have made, use, and Sell Licensed Products; (ii) the use, Sale or transfer of Biological Materials for Proficiency Testing Services (as hereunder defined); and (iii) the Sale or transfer of ATCC Materials, Progeny, and Unmodified Derivatives to any Third Party, unless otherwise expressly permitted herein.

1.17

“Investigational New Drug Application” or “IND” means Investigational New Drug Application as defined in the U.S. Food, Drug and Cosmetic Act and the regulations promulgated thereunder, and any corresponding foreign applications, registration or certification.

1.18

“Licensed Product(s)” means preventive or therapeutic vaccines or vaccine components where the development, manufacture, use, or Sale uses or incorporates Biological Materials.

1.19

“Marketing Authorization” means a marketing authorization granted by the European Commission for a Licensed Product; or the approval of a BLA by the United States Food and Drug Administration for the same; or any equivalent foreign authorization, registration, or certification.

1.20

“Material Transfer Agreement” (the “MTA”) means the current material transfer agreement, at present dated February 1, 2010, provided to customers by ATCC in the course of its business. A copy of this MTA is available at ATCC’s web site (http://www.ATCC.org) and is included in Appendix A of the Agreement.

1.21

“Modification” means any material created by, for, or on behalf of Licensee or its Related Parties from the ATCC Materials which contains or incorporates a significant or substantial portion of ATCC Materials.

1.22

“Party” means ATCC or Licensee individually; “Parties” means ATCC and Licensee collectively.

1.23

“Price Index” means the Producer Price Index – Drugs and Pharmaceuticals – Ethical Preparations (Prescriptions) or any successor thereto, as compiled and published by the U.S. Department of Labor, Bureau of Labor Statistics or any successor agency that assumes responsibility for the preparation of such index.

1.24

“Proficiency Testing Services(s)” means (i) a program in which multiple specimens are periodically sent to a group of laboratories for analysis and/or identification; in which each laboratory’s results are compared with those of other laboratories n the group and/or with an assigned value and reported to the participating laboratory and others (NCCLS NRSCLS-A, 1998), or (ii) an evaluation of the ability of a laboratory to achieve a correct test result when compared with other laboratories using the same methodology. This is accomplished 

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using the laboratory’s materials, personnel, equipment, environmental conditions, and procedures through the analysis of unknown specimens distrusted at periodic intervals by an external source.

1.25

“Progeny” means an unmodified descendant from the ATCC Materials, such as virus from virus, cell from cell, or organism from organism.

1.26

“Related Party” shall mean each of the Licensee, its Affiliates, and their respective Sublicensees (which term does not include distributors), as applicable.

1.27

"Relevant Sales" shall mean all revenues in any form received by or owing to Licensee and/or its Related Parties from Sales of Licensed Product(s), whether or not assembled (and without excluding therefrom any components or subassemblies thereof, whatever their origin and whether or not patent impacted), less the following items but only insofar as the actually pertain to the disposition of such Licensed Product(s) by I.icensee and/or its Related Parties, are included in such gross revenue, and are separately billed:

a)

credits or refunds actually allowed for spoiled, damaged, outdated, or returned goods; 

b)

sales and other excise tart-s imposed and paid directly ',i-with respect to the Sale-, and

c)

transportation costs to the extent separately invoiced.

1.28

"Sale" means any transaction that transfers to an arm's-length Third Party purchaser, for value, title and right of physical possession to a Licensed Product. Correspondingly, "Sell" means to make or cause to be made a Sale and "Sold" to have made or caused to be made a Sale. For the purpose of this agreement, "Sales" also means those instances where Licensed Product is not Sold or offered for Sale, but it is otherwise commercially exploited by Licensee or a Related party to obtain a commercial gain.

1.29

"Sublicensee" means with respect to a particular Licensed Product, a 'Third party to whom Licensee or its Affiliate has granted (i) a license to develop, make, use or Sell such Licensed Product, or (it) a right or license to market or distribute such licensed product, provided that such Third Party is responsible for some or all of the marketing or promotion of such Licensed Product within such Third Party's portion of the Territory.

1.30

“Territory” means the world.

1.31

“Third Party” means any person or entity that is not a Party to this Agreement.

1.32

“Third Party Contractor(s)” means any person or entity that is not a Party to this Agreement that may be engaged or employed by Licensee for the limited purpose of assisting Licensee in the Evaluation (during the Evaluation License Term) of Biological Materials, and/or in the research, development, and manufacture of the Licensed Product for Licensee’s benefit (during the Commercial Use License Term); such engagement and/or employment is outline in the Section 2.2 and is further subject the terms and conditions of this Agreement.

1.33

“Trademarks” means all trade name, trademark and service mark rights, whether registered or not, now owned or hereafter acquired by ATCC, and the entire goodwill of the business 

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of ATCC connected with and symbolized by such marks, including, without limitation, ATCC®, ATCC catalog marks, Your Discoveries Begin with Us®, The Global BioResource CenterTM, ATCC Licensed Devivative®, ATCC Genuine ProductTM, ATCC Special CollectionsTM, ATCC Cultures®, ATCC BioproductsTM, AuthenticulrTM, Uniplus®, Express Check TM, ATCC Genuine Cultures®, BioEscrow®, ATCC Standards Resource®, ATCC Reference MaterialTM, ATCC Fungal Allergen StandardTM, ATCC Proficiency StandardTM, ATCC Standard Reference MaterialTM, and ATCC ServicesTM.

1.34. "Unmodified Derivative" means substances created by, for, or on behalf of Licensee or its Related Parties, which constitute unmodified functional subunits or products naturally expressed by the ATCC Materials, such as purified fractionated subsets of the ATCC Material. 

ARTICLE 2. LICENSE GRANT

2.1

Subject to the terms and conditions of this agreement, in consideration of the payments due from Licensee to ATCC under Article 4. of the Agreement, as well as the other obligations undertaken by Licensee under the Agreement, ATCC hereby grants, and Licensee hereby accepts the following:.

a)

Evaluation License. During the Evaluation License Term, an Evaluation License.

The license granted in this Section 2.1 a) shall be limited to the Evaluation Purposes set forth in Section 1.13. For purposes that are in addition to or other than those set forth in Section 1.13, Licensee has not license under this Agreement during the Evaluation License Term; and any such use of ATCC Materials that falls outside the scope of the Evaluation Purpose during the Evaluation License Term shall be governed by the terms of the MTA.

b)

Commercial Use License. Upon termination or expiration or expiration of the Evaluation License, and subject to the receipt of payment of applicable fees set forth in Article 4 a Commercial Use Licensee. 

The license granted in this Section 2.1 b) is expressly limited to the methods and products that are within the Field of Use and within the Territory. For other methods and products that are within the Field of Use and within the Territory. For other methods and products, Licensee has no license under this Agreement.

2.2

Subject to the terms and condition set forth in this Agreement, during the Agreement Term, Licensee and its Related Parties may employ and/or engage Third Party Contractors and transfer Biological Material and Confidential Information to such Third Parties, for the limited purpose of assisting Licensee in the Evaluation (during the Evaluation License Term) and also in the research, development, and manufacture of the Licensed Product for Licensee’s benefit (during the Commercial Use License Term): provided that:

a.

any such transfer, employment and/or engagements shall be subject to a written agreement between Licensee or the applicable Related Party and the Third Party Contractor; wherein ATCC is explicitly stated therein as a third party beneficiary with respect to such agreement and where the Third Party Contractor agrees to 

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comply with all applicable terms and conditions that are consistent with and no less restrictive than the terms and conditions set forth in Appendix E;

b)

ATCC shall have the right to inspect such written agreements, upon request. any such agreements shall be deemed Confidential Information of Licensee and ATCC shall maintain such Confidential Information in confidence in accordance with Article 13, except as may be necessary to enforce its rights hereunder;

c)

Licensee shall be responsible to ATCC for all obligations of such Third Party Contractors in the same fashion and to the full extent that Licensee is obligated to ATCC hereunder. A breach of this Agreement by any Third Party Contractor will be treated as a breach of this Agreement, Licensee shall pay all costs incurred in connection therewith, including without limitation attorneys.

2.3

Except in accordance with Section 2.1, Section 2.2 and Article 3, Licensee and its Related Parties are specifically not granted the right to sublicense, distribute, lend, Sell, offer to Sell, or otherwise transfer Biological Materials to any 'Third party and Licensee acknowledges that such action, would constitute a material breach of this agreement.

2.4

ATCC retains ownership rights to ATCC Material, Progeny, Unmodified Derivatives, and ATCC Material, Progeny, and Unmodified Derivatives contained or incorporated in Modifications or Licensed Products. ATCC also retains rights to any intellectual property it owns in ATCC Material. Licensee retains ownership of: (a) Modifications (except that ATCC retains ownership rights to ATCC Material included therein) and (b) those substances created through the use of ATCC Material or Modifications, but which do not contain ATCC Material. If (a) or (b) results from collaborative efforts of ATCC and Licensee, joint ownership may be negotiated by the Parties.

2.5

Neither Licensee, nor its Related Parties shall have any rights in any technologies developed, owned or otherwise controlled by ATCC other than the rights explicitly specified in this Agreement.

2.6

ATCC retains an irrevocable and non-exclusive right to use the ATCC Materials for its own purposes and to grant additional licenses to Third Parties.

2.7

Licensee shall promptly notify ATCC of any quality problems related to (i) the ATCC Materials received pursuant to the MTA and this Agreement; and (ii) the sale of Licensed Products, including all instances in which Licensed Products have been misidentified, contaminated or in which otherwise inauthentic or adulterated Licensed Products have been Sold.

2.8

Licensee Acknowledges that:

THE ATCC MATERIALS ARE NOT INTENDED FOR USE IN HUMANS. LICENSEE AGREES THAT ATCC MATERIALS DESIGNATED AS BIO-SAFETY LEVEL 2 OR 3 CONSTITUTE KNOWN PATHOGENS AND THAT OTHER ATCC MATERIALS NOT SO DESIGNATED AND ANY PROGENY OR MODIFICATIONS MAY BE PATHOGENIC UNDER CERTAIN CONDITIONS LICENSEE ASSUMES ALL RISK AND RESPONSIBILITY IN CONNECTION WITH THE RECEIPT, HANDLING, STORAGE, DISPOSAL, TRANSFER AND USE OF THE ATCC MATERIALS INCLUDING WITHOUT LIMITATION TAKING ALL APPROPRIATE SAFETY AND 

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HANDLING PRECAUTIONS TO MINIMIZE HEALTH OR ENVIRONMENTAL RISK. LICENSEE AGREES THAT ANY ACTIVITY UNDERTAKEN WITH THE ATCC MATERIALS AND ANY PROGENY OR MODIFICATION WILL BE CONDUCTED IN COMPLIANCE WITH ALL APPLICABLE GUIDELINES, LAWS AND REGULATIONS.

2.9

The licensees granted pursuant to this Agreement are not a purchase order of the ATCC Material, and the licensing fees set forth in Article 4 are not an advance or payment for the purchase of ATCC Material. Licensee understands and agrees that upon execution of this Agreement, and in addition to the license fees paid pursuant to Article 4, if Licensee desires to acquire ATCC Material. Licensee will be required to place a purchase order with ATCC or applicable distributor, customer service representation for the acquisition of the ATCC Materials.

ARTICLE 3. SUBLICENSES

3.1

Subject to the terms and conditions set forth in this Agreement, Licensee and its Affiliates shall have the right to grant sublicenses to Third Parties or develop, make, use and Sell Licensed Products in the Territory and in the Field of Use provided that:

a)

any sublicense granted shall be subject to a written sublicense agreement between Licensee or its respective Affiliates, and the Sublicense;

b)

ATCC is explicitly stated I such written sublicense agreed as a third party beneficiary with respect to any such agreement;

c)

each Sublicense has agreed in the written sublicense agreement to be bound by all applicable terms, conditions, obligations (including payments, reporting, and inspections) and other restrictions of the rights granted by ATCC to Licensee under this Agreement that protect or benefit ATCC’s rights and interests;

d)

the terms and conditions of each such agreement are consistent with and not less restrictive than the terms and conditions of this Agreement; and,

e)

Licensee identifies any and all Sublicensees, including any Sublicensees of its Affiliates, to ATCC.

3.2

For the avoidance of doubt, neither Licensee nor its Affiliates shall have the right to sublicense the ATCC Material, Progeny, or Unmodified Derivatives except to the extent they are incorporated I the Licensed Products. Licensee shall have no right to permit any Sublicensee to further sublicense any f the right granted to Licensee hereunder, unless ATCC, in its sole discretion, agrees in writing to such a sublicense or unless such further sublicense is restricted to the manufacture and Sales of Licensed Products, such agreement will not be unreasonably withheld.

3.3

Licensee shall be responsible to ATCC for all obligations of its Related Parties in the same fashion and to the full extent that Licensee is obligated to ATCC hereunder. A breach of this Agreement by any Related Party will be treated as a breach by Licensee. If ATCC brings suit 

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against a Related Party for breach of this Agreement, Licensee shall pay all reasonable costs incurred in connection therewith, including without limitation attorney’s fees and disbursements. In the event of an uncured breach by any Sublicensee then Licensee shall terminate such sublicense or other agreement with Licensee’s Sublicensee and shall promptly provide ATCC with written notification of said termination.

3.4

Licensee shall notify ATCC of each sublicense granted hereunder and shall provide ATCC with a complete copy of each sublicense within thirty (30 days of issuance of such sublicense. Any such sublicense shall be deemed Confidential Information of Licensee and ATCC shall maintain such Confidential Information in confidence in accordance with Article 13, except as may be necessary to enforce its rights hereunder.

3.5

Upon expiration or termination of this Agreement for any reason, all sublicenses to rights granted to the Licensee and its Affiliates hereunder, shall automatically terminate, unless ATCC, at its sole discretion, agrees in writing to an assignment to ATCC of any sublicense, ATCC shall not be bound to any duties under an assigned sublicense beyond ATCC’s duties under this Agreement. Upon Licensee’s request, at any time during the Agreement Term, ATCC agrees to meet and confer with Licensee and/or Licensee’s Affiliates and their respective Sublicensees (or potential Sublicensees) to discuss what assurances ATCC might give to the Sublicensees that the subject Sublicensees shall not be terminated upon termination of this Agreement, To the extent that ATCC is willing to give such assurances, ATCC agrees that it shall enter into a written agreement with Licensee or its Affiliates, if applicable, and such Sublicensees regarding setting forth ATCC’s assurance and the ATCC’s agreement not to require termination of the sublicense.

ARTICLE 4. LICENSE FEES

4.1

In consideration of the rights granted to Licensee under this Agreement, Licensee agrees to make the following payments to ATCC during the Agreement in accordance with the following provisions:

a)

Fees related to the Evaluation License:

i.

Evaluation License Fee. Licensee shall make a one-time payment to ATCC in the amount of Five Thousand ($5.000) within thirty (30) days after the Effective Date of this Agreement.

ii.

Evaluation License Renewal Fee. If licensee exercises its option(s) to renew the Evaluation License Term pursuant to Section 12.1 of this Agreement, then Licensee agrees to pay ATCC a renewal payment in the amount of Five Thousand Dollars ($5,000) for each such twelve month renewal. ATCC shall submit an invoice upon receipt of notice of such renewal(s), and such invoice shall become payable within thirty (30) days of receipt by Licensee.

b)

Fees related to the Non-Exclusive Commercial Use License:

i.

Commercial Use License Initial Fee. Licensee shall pay ATCC an one-time payment in the amount of Fifty Thousand ($50,000)(“Initial Fee”). Such payment shall be made no later than thirty (30) days after the expiration of the 

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Evaluation License Term; provided, however, that any fees paid pursuant to Section 4.1(a) shall be credited towards and applied to the Initiation Fee. Such payment shall be made no later than thirty (30) days after the expiration or termination of the Evaluation License.

ii.

Royalty on Relevant Sales. An earned annual royalty at the rate of One-Quarter of One Percent (0.25%) based on the Relevant Sales of Licensed Products by Licensee and /or its Related Parties, such payment to be made on or before January 15 (for the Calendar Year) of each year.

iii.

Milestone Payments. Licensee shall owe milestone payments o a Licensed Product by Licensed Product basis to ATCC upon the first occurrence of each event specified below. Each such milestone payment shall be payable by the Licensee to ATCC from the Effective date throughout the Agreement Term and shall be made on or before thirty 30) days following the month in which each of the following events occur:

			
	Initiation of each Phase I Clinical Trial

	 
	Fifteen Thousand Dollars ($15,000)

	Initiation of each Phase II Clinical Trial

	 
	Thirty Thousand Dollars ($30,000)

	Initiation of each Phase III Clinical Trial

	 
	Sixty Thousand Dollars ($60,000)

	Marketing Authorization

	 
	Two Hundred Thousand Dollars ($200,000)

iv.

Additional Material. In the event Licensee is granted approval to add additional ATCC Material to Appendix D as provided in Section 1.2 herein, Licensee will pay an additional licensing fee to ATCC in the amount of Five Hundred Dollars ($500) for each additional ATCC Material, such payment to be made within thirty (30) days after ATCC notifies Licensee of such approval.

4.2

All payments shall be made in Untied States dollars and annually adjusted for inflation based on the Price Index. Conversion of foreign currency to United States dollars shall be made at the Conversion Rate. Such payments shall be without deduction of exchange, collection or other charges. Licensee shall be responsible for any taxes, duties, remittance and permit fees and such payments shall not be deducted from payments due to ATCC; provided, however, that Licensee shall not be responsible for any income or franchise taxes imposed on (or measured by) ATCC’s net income by (i) the United States, (ii) by any state or local jurisdiction within the United States or (iii) by any other jurisdiction in which ATCC has a 

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principal office. If any such withholding is so required by law, Licensee shall withheld the prescribed amount, pay the amount withheld to the appropriate governmental authority before penalties attach thereto or interest accrues thereon and immediately pay such additional amount as may be necessary to ensure that the net amount actually received by ATCC free and clear of such taxes is equal to the amount that ATCC would have received had such withholding not been required.

4.3

Payments are non-refundable and are not an advance or, except as specified herein, otherwise creditable against any other payments required to be paid under the terms of this Agreement. Licensee will bring any claims or causes of action it may have in a separate actions and wives any right it may have to offset, setoff, or withhold payment from ATCC.

					
	Check sent to the following address

	 
	Domestic money wire transfer to:

	 
	International money wire transfer to:

	 
	 
	 
	 
	 

	ATCC

	 
	Account # 0xxxxxxxxxx2

	 
	Account # 0xxxxxxxxxx2

	5779 Collections Center Drive

	 
	ABA # 0xxxxxxx3

	 
	ABA # 0xxxxxxx3

	Chicago, IL 60693 USA

	 
	Bank of America

	 
	SWIFT Code BOFAUS3N

	CASE NUMBER: SCL-00276

	 
	Baltimore, MD USA

	 
	Bank of America

	 
	 
	CASE NUMBER: SCL-00276

	 
	100 West 33rd Street

	 
	 
	 
	 
	New York, NY 10001 USA

	 
	 
	 
	 
	CASE NUMBER: SCL-00276

4.5

Late payments shall be subject to a charge of one and one-half percent (1.5%) per month, the interest being compounded annually, or two hundred fifty dollars ($250.00), whichever is greater. Such interest will be calculated from the date payment was due until actually received by ATCC. Such accrual of interest will be in addition to, and not in lieu of, enforcement of any other rights of ATCC due to such late payment.

ARTICLE 5. PROGRESS AND SALES REPORTS

5.1

All progress and sales reports that are required under this Article 5 shall be deemed Confidential Information of Licensee, and ATCC shall maintain such Confidential Information in confidence in accordance with Article 13, except as may be necessary to enforce its rights hereunder.

5.2

Beginning January 15, 2012 and annually thereafter, the Licensee shall submit to ATCC a written progress report as described in 5.2 and Appendix B covering the Licensee’s and its Related Party’s activities related to the development and testing of all Licensed Products and the obtaining of the necessary permits and government approvals for marketing and commercialization of the Licensed Products. Progress reports are required for each Licensed Product until the first Sale or commercial exploitation of the first Licensed Product occurs and shall be again required if sales of such Licensed Products are suspended or discontinued for more than six (6) months.

5.3

Progress reports shall include but are not limited to, the following topics for each of Licensee and is Related Parties:

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a)

summary of work completed as of the submission dare of the progress report;

b)

summary of work in progress as of the submission dace of the progress report;

c)

commercialization forecast, including anticipated market introduction dates of all Licensed Products; and

d)

activities of the Related Parties as of the submission date of the progress report.

5.4

Licensee shall notify ATCC of the first Sale or commercial exploitation of a Licensed Product in the Territory; such notification shall be made thirty (30) days prior to the relapse of said Licenses Product for Sale.

5.5

Commending with the first Sale or other exploitation of the Licensed Products by Licensee and/or its Related Parties, Licensee shall provide a full accounting showing how any amounts owed to ATCC under Article 4 have been calculated and such annual royalty reports shall be submitted to ATCC on or before the dates payments are due under Section 4.1 ). Such accounting shall be on a per-country and product line, model or trade name basis and shall be summarized on the form shown in Appendix C of this Agreement. As shown in Appendix C, the annual royalty report will consist of one report per product line and then a summary report that consolidates the results of all the product lines. In the event no payment is owed to ATCC, a statement setting forth the fact shall be supplied to ATCC giving the reasons why royalties are not owed for the period.

5.6

Each royalty report shall cover the Licensee’s and its Related Parties’ most recently completed Calendar Year and shall include, but are not limited to, the following items;

a)

the Relevant Sales of Licensed Products Sold or otherwise exploited (itemizing the gross proceeds and any deductions therefrom);

b)

the quantity of each type of Licensed Product Sold or otherwise exploited;

c)

the county in which each Licensed Product was made, used, Sold or otherwise exploited by Licensee and/or its Related Parties;

d)

the royalties, in United States Dollars, payable to ATCC with respect to Relevant Sales;

e)

any other information reasonably necessary to confirm Licensee’s calculation of its royalty payments, such as, by way of non-limiting example, the applied Conversion Rate.

5.7

If the Licensee fails to submit a timely progress of sales report to ATCC, ATCC will be entitled to give notice and terminate the Agreement in accordance to Section 12.5. If either Party terminates the Agreement before any Licensed Products are Sold, then a final progress report covering the period prior to termination must be submitted within thirty (30) days of termination.

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ARTICLE 6. RECORDS AND INSPECTIONS

6.1

ATCC shall provide to Licensee, upon request, available records related to the accessioning, manufacture, preservation, storage and handling of ATCC Materials as may be required by Licensee for its regulatory filings.

6.2

Licensee shall maintain, and shall cause its Related Parties to maintain, complete and accurate records relating to the rights and obligations under this Agreement and any amounts payable to ATCC in relation to this Agreement, which records shall contain amounts payable to ATCC in relation to this Agreement, which records shall contain amounts payable to ATCC in relation to this Agreement, which records shall contain sufficient information to permit ATCC to confirm the accuracy of any reports delivered to ATCC and compliance I other respects with this Agreement. The relevant party shall retain such records for at least five (5) years following the end of the Calendar Year to which they pertain.

6.3

During the Agreement Term and for a period of two (2) years thereafter, ATCC or its representatives shall have the right to inspect, and make copies and abstracts of, the books and records of the Licensee in conjunction with the performance of Licensee’s obligations under the terms and conditions of this Agreement. The scope of such audit and inspection activities may include the review of records supporting activities performed by Licensee and its Related Parties in conjunction with its obligations under this Agreement, as well as processes and related process internal controls and support systems, the quality and accuracy of which are directly related to the performance of Licensee’s and it Related Parties’ obligations under the terms and conditions of this Agreement. Licensee agrees to provide representatives of ATCC reasonable access to books, records, systems and processes, and shall cooperate fully with the ATCC’s representatives in support of their inspection and audit activities during Licensee’s normal business hours.

6.4

If a payment deficiency is reasonably established by such audit, Licensee shall pay the outstanding amounts within thirty (30) days of receiving written notice thereof, plus interest on such outstanding amounts as described in Section 4.5.

6.5

ATCC will pay for any audit done under Article 6. However, in the event that the audit reveals an underpayment of royalties or fees by more than five percent (5%) for the period being audited, the cost of the audit shall be paid by Licensee within thirty (30) days of receiving written notice of such underpayment. If the underpayment is less than five Percent (5%) but more than two percent (2%_ for the period being audited, Licensee and ATCC shall each pay fifty percent (50%) of the cost of the audit.

6.6

ATCC and its representatives or agents shall treat as confidential under Section 13.1 all information concerning notifications, license fees, reports, and all information learned in the course of any audit or inspection, except to the extent necessary for ATCC to revel such information in order to enforce its rights under this Agreement or as may be required by law.

ARTICLE 7. PATENTS, TRADEMARKS AND NAMES

7.1

Licensee shall notify in writing of any allegations, claim or suit by a Third Party that the activity of Licensee or its Related Parties in connection with the ATCC Materials infringes or many infringe the intellectual property rights of such Third Part promptly upon 

Page 15 of 35

Licensee becoming aware of such allegation, claim or suit, so that ATCC may decide whether to participate in or undertake the defense of any legal proceedings.

7.2

ATCC represents, to the best of its knowledge, that no patent or patent application presently owned or licensed by ATCC as of the Effective Date (the “ATCC Patents”) would block Licensee or its Related Parties from practicing the license granted herein. ATCC herby covenants that, during the Agreement Term and thereafter, it will not bring an action for patent infringement against Licensee or its Related Parties based on any ATCC Patents in respect of Licensee’s and/or its Related Parties activities licensed hereunder during the Agreement Term.

7.3

Except as set forth in Section 7.5, neither Licensee nor its Related Parties shall use the names of ATCC, nor of any ATCC employees in connection with this Agreement without prior written approval from an authorized representative of ATCC. ATCC shall not use the names of either Licensee or its Related Parties, or any of their respective employees in connection with this Agreement without prior written approval for an authorized representative of Licensee or the applicable Related Party.

7.4

Licensee and it Related Parties shall assign their own catalog numbers or functionally equivalent identifiers to all Licensed Products, and those catalog numbers or identifiers shall be the primary means by which customers shall order Licensed Products from Licensee or it Related Parties.

7.5

Notwithstanding the prohibition in Section 7.3, Licensee and its Related Parties may identify a Licensed Product as having been manufactured or tested using ATCC Materials licensed from ATCC, so long as such identification is accompanied by the respective ATCC catalog number and all references to ATCC use the phrase “The ATCC trademark and trade name and any and all ATCC catalog numbers are trademarks of the American Type Culture Collection” in close proximity. Neither Licensee nor its Related Parties may identify ATCC or use the ATCC Trademark or logos in any other context. By way of nonlimiting example, Licensee may state in a certificate of analysis, its published catalog or in a Federal Drug Administration Drug Master File that the Licensed Product was tested or made using the ATCC Materials identified with the applicable catalog numbers set forth in Appendix D, e.g., ATCC#CRL-1420TM.

7.6

Licensee explicitly recognizes that all Trademarks are the exclusive property of ATCC.

7.7

In all cases in which Licensee or its Related Parties identify ATCC or uses ATCC’s name or Trademarks in connection with Licensed Products, Licensee and its Related Parties shall also indicate in all of its or its Related Parties’ advertising packaging, brochures, literature and communications containing such reference that the identity, purity and authenticity of Licensed Products Sold by Licensee or its Related Parties are exclusively Licensee’s or the applicable Related Parry’s responsibility and not the responsibility of ATCC, and that ATCC has no responsibility or liability for Licensed Products.

7.8

Licensee and its Related Parties shall use reasonable diligence to assure the accuracy of any representation to its customers that Licensed Products are derived, or manufactured from or contain ATCC Materials and will promptly correct any failures in this regard.

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ARTICLE 8. COMMERCIAL AND COMMERCIAL ACTIVITIES

8.1

As between ATCC and Licensee, Licensee shall be solely responsible, and shall bear the full cost and expense, for the development, governmental approval, manufacturing, marketing, use and Sale of Licensed Products.

8.2

As between ATCC and Licensee, Licensee shall alone have the obligation to ensure that any Licensed Products developed, made, used, or Sold by Licensee or its Related Parties are not defective and that any Licensed Product and any conduct of Licensee and its Related Parties with respect to Licensed Products satisfies all applicable government laws and regulations.

8.3

Licensee shall comply with, and shall contractually obligate its Related Parties to comply with, all Untied States laws and regulations controlling the export and re-export of certain commodities and technical data, including without limitation all Export Administration Regulations of the United States Department of Commerce (as presently promulgated or hereinafter modified or amended). Licensee bears sole responsibility for any violation of such laws and regulations by itself or its Related Parties, and it will indemnify, defend and hold ATCC harmless (in accordance with Section 9.1) for the consequences of any such violation.

8.4

Licensee shall obtain, and shall contractually obligate its Related Parties to obtain, all authorities, consents and clearances required for the purchase, importation, exportation transportation, distribution, demonstration and Sale of Licensed Products to and within the Territory. Licensee shall comply with, and shall contractually obligate its Related Parties to comply with, all applicable foreign and domestic, federal, state and local statutes, ordinances and regulations.

8.5

Licensee and its Related Parties shall receive, store, handle and ship the Biological Materials and the Licensed Products under procedures which will ensure that there is no degradation of the quality thereof or in their packaging, or appearance, and shall maintain adequate facilities for the receipt, storage, handling and shipment of Biological Materials and Licensed Products.

8.6

Licensee and its Related Parties shall conduct their business in a manner that will reflect favorably on ATCC and the reputation of ATCC and its products, and avoid any deceptive, misleading, or unethical practice that is or might be detrimental to the reputation and good name of ATCC and its products.

ARTICLE 9. INDEMNIFICATION AND INSURANCE

9.1

Licensee hereby indemnifies ATCC, its officers, agents and employees, and agrees to hold them harmless from and against any and all liability, damage, loss or expense (including reasonable attorneys’ fees) arising from any claim, demand, action or proceeding based upon any action or omission of Licensee or any of its Related Parties in connection with this Agreement, including, but not limited to:

a)

The use, manufacture, marketing, Sale, storage, demonstration or advertising of a Licensed Product by Licensee or any of its Related Parties;

Page 17 of 35

b)

The final consumer’s use of a Licensed Product purchased, or otherwise acquired from Licensee or any of its Related Parties;

c)

a Third Party’s manufacture of a Licensed Product at the request of Licensee or any of its Related Parties; and 

d)

any act or omission of Licensee, its employees, Related Parties or any other Third Party acting on behalf of or under authorization from licensee in the performance of this Agreement;

or incurred in the settlement or avoidance of any such claim, demand, action or proceeding. ATCC shall have the right to select counsel and control the defense thereof, subject to right of the Licensee to participate therein. Licensee further agrees to indemnify ATCC, its officer, agents and employees and agrees to hold them harmless from and against, any loss, damage, claim, expense or liability, including but not limited to attorney’s fees, resulting from any property damage, personal injury or death arising out of or in connection with the acts of the officers, agents or employees of Licensee and/or its Related Parties while performing duties under this Agreement. ATCC shall not agree to any settlement relating to any claim, demand, action, or proceeding by a Third party in connection with this Agreement without the express written consent of Licensee.

9.2

Licensee shall maintain and shall cause its Related Parties to maintain, during the Agreement Term and for five (5) years after Licensee and its Related Parties cease Selling Licensed Products, comprehensive General Liability Insurance including Products/Complete Operation coverage in an amount no less than five million dollars ($5,000.000) and Professional Errors and Omissions Liability Insurance in an amount no less than five million dollars ($5,000.000) with reputable and financial secure insurance carrier(s) to cover all claims against liability arising out of the manufacture, distribution, handling, use or sale of Licensed Products, and shall name ATCC as an additional insured and shall provide to ATCC a certificate of such insurance on the first anniversary of the Effective Date and also promptly upon ATCC’s request.

ARTICLE 10. WARRANTIES AND LIMITATIONS

10.1

ATCC WARRANTS THAT ATCC MATERIALS SHALL BE VIABLE UPON SHIPMENT FROM ATCC FOR A PERIOD OF THIRTY (30) DAYS (“WARRANTY PERIOD”). ATCC WARRANTS THAT ANY ATCC MATERIAL PROVIDED BY IT SHALL MEET THE SPECIFICATIONS ON THE PRODUCT INFORMATION SHEET, CERTIFICATE OF ANALYSIS, AND/OR CATALOG DESCRIPTION UNTIL THE EXPIRATION DATE ON THE PRODUCT LABEL. THE EXCLUSIVE REMEDY FOR BREACH OF THIS WARRANTY IS, AT ATCC’S OPTION, (A) REFUND OF THE FEE PAID TO ATCC FOR SUCH ATCC MATERIALS (EXCLUSIVE OF SHIPPING AND HANDLING CHARGES), OR (B) REPLACEMENT OF THE ATCC MATERIALS. THE EXCLUSIVE REMEDY APPLIES UNDER THE CONDITION THAT LICENSEE AND ITS CUSTOMER HANDLES AND STORES ATCC MATERIALS AS DESCRIBED IN THE PRODUCT SHEET. TO OBTAIN THE EXCLUSIVE REMEDY, LICENSEE MUST REPORT THE LACK OF VIABILITY TO ATCC’S TECHNICAL SERVICE DEPARTMENT WITHIN THE WARRANTY PERIOD. ANY EXPIRATION DATE SPECIFIED ON 

Page 18 of 35

THE ATCC MATERIALS SHIPMENT DOCUMENTATION STATES THE EXPECTED REMAINING USEFUL LIFE, BUT DOES NOT CONSTITUTE A WARRANTY OR EXPEND ANY APPLICABLE WARRANTY PERIOD. THIS WARRANTY SHALL BE VOIDED ONCE LICENSEE USES, MODIFIES OR REPLICATES ANY ATCC MATERIALS.

10.2

EXCEPT AS EXPRESSLY PROVIDED ABOVE THE ATCC MATERIAL, ANY OTHER ATCC PRODUCTS, AND ANY TECHNICAL INFORMATION AND ASSISTANCE PROVIDED BY ATCC ARE PROVIDED “AS IS”, WITHOUT WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, MANUFACTURE ACCORDING TO GMP STANDARDS, TYPICALITY, SAFETY, ACCURACY AND NON-INFRINGEMENT.

10.3

IN NO EVENT SHALL ATCC, ITS DIRECTORS, OFFICERS, AGENTS, EMPLOYEES AND AFFILIATES (collectively “ATCC INDEMNIFIED PARTIES”) BE LIABLE FOR INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT (WHETHER IN CONTACT, TORT, NEGLIGENCE, STRICT LIABILITY, STATUTE OR OTHERWISE) EVEN IF ATCC HAS BEEN ADVISED, KNEW OR SHOULD HAVE KNOWN OF THE POSSIBILITY OF SUCH DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOST PROFITS COST OF CAPITAL, COST OF SUBSTITUTE PRODUCTS OR CLAMS OF LICENSEE’S CUSTOMERS FOR SUCH DAMAGE. IN NO EVENT SHALL ATCC’S CUMULATIVE LIABILITY EXCEED THE ACTUAL AMOUNTS PAID NY LICENSEE UNDER THIS AGREEMENT FOR THE TWELVE (12) MONTH PERIOD PRECEDING THE DATE OF THE EVENT GIVING RISE TO THE CLAIM THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS AGREEMENT AND SHALL APPLY EVEN IF THE LIMITED REMEDY SPECIFIED IN THE AGREEMENT IS FOUND TO HAVE FAILED OF ITS ESSENTIAL PURPOSE.

ARTICLE 11. COMPLIANCE WITH LAWS

11.1

Licensee hereby certifies, and shall contractually obligate its Related Parties to certify, that Licensee and its Related Parties to certify, that Licensee and its Related Parties, applicable, shall (1) ensure that only qualified personnel work with Biological Material in proper facilities; (2) provide sufficient internal security to assure access to Biological Material only by those individuals authorized to work with the; (3) not transfer, export, resell, or otherwise dispose of any Biological Material to any Third Parties under any circumstances without written authorization by ATCC and the appropriate government agencies or as explicitly provided for within the Agreement; (4 ) not permit access to Biological Materials by foreign entities or individuals when to do so would be in violation of export control laws; (5) comply with all applicable federal, state or local laws and regulations pertaining to Biological Material or their handling, storage, use transportation; and (6) unless requested otherwise by ATCC, destroy all Biological Material according to accepted practices for destruction of biohazardous material upon expiration or termination of this Agreement as set forth in Article 12.

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ARTICLE 12. TERM AND TERMINATION

12.1

Evaluation License Term. The term of the Evaluation License shall be twelve(12) months from the Effective Date of this Agreement. Subject to the payment of any consideration due under Section 4. Of this agreement, Licensee may renew the Evaluation License term up to two (2) times by providing ATCC written notice of its renewal request within thirty (30) days prior to the expiration of the preceding Evaluation License tern. Notwithstanding the forgoing, the Evaluation License shall under all circumstances terminate immediately upon submission of an Investigational New Drug Application.

12.2

Commercial Use License Term. Subject to the receipt of payment of the applicable fees set forth in Article 4, the Commercial Use License Term will begin immediately upon the termination or expiration of the Evaluation License, and it will continue until the termination or expiration of this Agreement.

12.3

Agreement Term. This Agreement will remain in full force and effect for forty (40) years from the Effective Date of this Agreement, unless earlier terminated under this Article 12.

12.4

Unless earlier terminated under this Article 12, Licensee may terminate the Evaluation License granted in Section 2.11 and the Commercial Use License granted in Section 2.2 under this Agreement at any time upon sixty (60) days written notice to ATCC, subject to the payment of any consideration due.

12.5

This agreement may be terminated by written notice to the other Party, if a Party materially breaches a material provision of this Agreement and has failed to cure or demonstrate the nonexistence of the breach within sixty (60) days of receipt of a written notice and demand to cure such breach. For the avoidance of doubt, ATCC may automatically terminate this Agreement if, within sixty (60) days written notice to Licensee, Licensee fails to cure the following circumstances:

a)

if any payment due ATCC is unpaid under this Agreement;

b)

if Licensee (i) fails to provide a progress or sales report or (ii) provides any false progress or sales reports; or

c)

If Licensee fails to terminate a sublicense to a Sublicense after said Sublicensee materially breaches a material provision of the sublicense, and fails to cure such breach within a reasonable time.

12.6

This Agreement may be terminated by ATCC by it providing written notice to the Licensee, with effect immediately, if

a)

either Licensee becomes insolvent under local law, makes a general assignment for the benefit of creditors, is adjudicated a bankrupt or insolvent, files a voluntary petition in bankruptcy or for a reorganization or to effect a plan or other petition against it for an adjudicated in bankruptcy or thereof, or applies for or permits the appointment of a receiver, trustee, or custodian for any substantial portion of its properties or assets; or

Page 20 of 35

b)

if an order is entered by any court approving an involuntary petition seeking reorganization of Licensee, or appointing a receiver, trustee or custodian for any substantial portion of its assets or business.

12.7

Upon expiration of the Evaluation License under Section 12.1, or upon termination of this Agreement during the Evaluation License Term, as provided in Section 12.4, all terms and conditions set forth this Agreement shall thereafter be governed by the provision of the MTA.

For clarification, this Section shall apply only to expiration or termination of this Agreement during the Evaluation License Term and prior to the commencement of the Commercial Use License granted pursuant to Section 2.1(b). If this Agreement is terminated pursuant to Section 12.4 at any point on or after the date the Commercial Use License has been granted, then this Section 12.7 shall not apply.

12.8

Upon expiration of the Commercial Use License under Section 12.2, or upon termination of this Agreement during the Commercial Use License Term, as provided in Section 12.4, Licensee shall within a period of three (3) months after the date of such expiration or termination, cease all use and destroy all stocks of Biological Material and Licensed Products, and shall provide ATCC with written notification of that fact: provided, however, that Licensee may Sell any Licensed Products actually I the possession of Licensee during such three (3) month period, so long as Licensee continues to submit any records and reports as required in Article 6, and pays to ATCC all fees due under this Agreement, and otherwise continues to comply with the terms of this Agreement. Licensee shall not otherwise develop, make, use, or Sell Licensed Products after the expiration of the three (3) month period.

For clarification, this Section shall apply only to expiration or termination of this Agreement during the Commercial Use License Term granted pursuant to Section 2.1(b). If the Agreement is terminated prior to the date of commencement of the Commercial Use License granted in Section 2.1(b), then this Section 12.8 shall not apply.

12.9

Upon terminate of this Agreement by ATCC for reason of Licensee’s breach as provided in Section 12.5 or as provided in Section 12.6, Licensee shall immediately cease all use and destroy all stocks of Biological Material and Licensed Products and shall provide ATCC with written notification of that fact. Licensee shall not otherwise Evaluate, develop, make, use, or Sell Licenses Products after the date of such termination.

12.10

The exercise by either Party of any remedy under this Agreement will be without prejudice to its other remedies under this Agreement or otherwise.

12.11

Obligation to pay to ATCC the applicable license fees set forth in Article 4 shall survive the termination or expiration of this Agreement for as long as Licensee and its Related Parties (i) receive any payment, license revenue, income, royalty, or any other valuable or monetary consideration or (ii) hold any equity, or warrants or interest in and from any joint venture or Third Parties in consideration for any Sale, sublicense or any other exploitation of Licensed Products granted under Article 2.

Page 21 of 35

12.12

Termination or expiration of this Agreement for any reason shall not relieve the Parties of any rights and obligations set forth in Sections 2.4, 3.3, 6.2, 6.4, 10.3, 12.5, 12.11, 15.8 through 15.11, Article 9, Article 13, and all definitions related thereto.

ARTICLE 13. CONFIDENTIALITY

13.1

ATCC Licensee and its Related Parties shall use reasonable efforts (which shall be at least as great as the efforts it uses to maintain the confidentiality of its own Confidential Information) to maintain the confidentiality of the negotiated terms of this Agreement and any Confidential Information. the receiving party can use the disclosing party’s Confidential Information to exercise its rights and perform its obligations under this Agreement (including, without limitation, the right to use and disclose such Confidential Information in regulatory applications and filings), unless otherwise mutually agreed in writing. The foregoing obligations of confidentiality shall survive expiration or termination of this Agreement for a period of five (5) years after the effective date of expiration or termination.

13.2

Except as required by law, regulation or court order, and, in the case of ATCC, except as may be required in order to maintain its status as an exempt organization under Section 501(c)(3) of the United States Internal Revenue Code and regulations thereunder, neither ATCC nor Licensee nor its Related Parties shall originate any publicity, news release, or other public announcement relating to the ATCC Materials, this Agreement, or to any amendment thereto or to performance hereunder or the existence of an arrangement between the Parties (a “Public Announcement”), written or oral, whether to the public or the press, to stockholder, or otherwise, without prior written approval of the other Party with regard to the form, content and precise timing of such Public Announcement. Approval of Public Announcement must first be submitted to the other Party for its review and approval in sufficient time to enable the other Party to consider and comment thereon. Nothing herein shall be construed to prevent Licensee or its Related Parties from disclosing the name, source, and use of ATCC Materials in patent applications, documents filed before regulatory authorities involved in the marketing approval of drugs or biologics, or scientific publications or presentations. Nor shall anything herein be construed to prevent Licensee of its Related Parties from issuing any publicity, new release, or other public announcement relating to Licensed Products, wherein such publicity, new release, or other public announcement does not mention ATCC.

13.3

Upon expiration or termination of this Agreement, or at any time upon the written request of ATCC, Licensee and its Related Parties immediately shall (i) cease using the Confidential Information disclosed by ATCC, (ii) return any Confidential Information disclosed by ATCC, and (iii) destroy any notes or personal memoranda which includes or make reference to such Confidential Information or redact such information from such material.

ARTICLE 14. NOTICES

14.1

For purposes of mailings of notices, payments, reports, or other communications, the addresses of the Parties are given below:

Page 22 of 35

			
	In the case of ATCC:

	 
	In the case of Licensee:

	 
	 
	 

	Director of Licensing & Intellectual Property

	 
	Jeff Wolf, Chief Executive Officer

	IP, Licensing & Services

	 
	Heat Biologics, Inc.

	American Type Culture Collection

	 
	119 Washington Avenue, Suite 401

	10801 University Boulevard

	 
	Miami Beach, FL 33139

	Manassas, VA 20110-2209 USA

	 
	 

	Fax: 703-334-2932

	 
	 

14.2

Notices shall be deemed properly given if delivered to the above location (or such other location as a Party may specify pursuant to a notice under this Section 14.2) by (a) certified mail, return receipt requested, (b) facsimile with a written confirmation copy (c) hand delivery, or (d) nationally recognized courier service.

14.3

All communication regarding this Agreement shall be in the English language, with exception to official documents that shall be mailed in their original language accompanied by a notarized translation to English.

ARTICLE 15. GENERAL PROVISIONS

15.1

Terms in the Agreement that appear in all capital letters, other than the names of the Parties and article headings, have meanings as defined under Article 1, unless separately defined in the body of Articled 2 through Article 15.

15.2

Article headings are inserted in this Agreement for convenience of reference only and no construction, meaning, interpretation or inference shall be derived from them.

15.3

This Agreement is not assignable by Licensee except with the prior written consent of ATCC unless being assigned to corporate successor of Licensee or assigned o a person r entity acquiring all or substantially all of the business and assets of the division or divisions of Licensee involved in the development and Sale of Licensed Products. Notwithstanding the foregoing, ATCC may assign its rights hereunder; provided, however, that such assignment of ATCC’s rights hereunder shall be subject to all of the terms of this Agreement.

15.4

No term or provision of this Agreement shall be waived and no breach excused unless such waiver for consent shall be in writing and signed by an authorized representative of each of the Parties hereto. No waiver of a breach shall be deemed to be a waiver of a different or subsequent breach. Failure by either Party to enforce, or a delay in exercising, or a partial exercise of any covenants or rights or remedies under this Agreement shall not be deemed or construed as a waiver of such rights, nor shall waiver by either Party in one or more instances be construed as constituting a continuing waiver or as a waiver in other or subsequent instances.

15.5

This Agreement may not be modified, changed or terminated orally. No change, modification, addition or amendment shall be valid unless in writing and signed by an authorized representative of each of the Parties hereto.

Page 23 of 35

15.6

In the event any term or provision of this Agreement is determined to be invalid or unenforceable, the remaining provision shall remain in full force and effect.

15.7

Neither Party shall be held liable or responsible to the other Party nor be deemed to have defaulted under or breached this agreement for failure or delay in fulfilling or performing any term of this Agreement (except as regards payment obligations) when such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party (hereinafter, a Force Majeure Event), including but not limited to (i) any law, regulation, order, rule, direction, priority, seizure, allocation, requisition, or any other official actions by any department, bureau, board, administration, or other instrumentality or agency of any government or political subdivision thereof having jurisdiction over such Party; or (ii) fire, floods embargoes, war, acts of war (whether war be declared or not), insurrections acts of terrorism, riots, civil commotions, strikes, lockouts or other labor disturbances, acts of God or acts, omissions or delays in acting by any governmental authority (including regulatory and advisory bodies). Upon the occurrence of any Force Majeure Event, the affected Party shall give written notice of such event to the other Party, and in the event of (ii) above shall use reasonable efforts to overcome such Force Majeure Event.

15.8

The status of each Party under this Agreement is that of an independent contractor, and neither Party has the right or authority to assume or create any obligation accept legal process, make commitments, incur any charges or otherwise bind or act on behalf of the other or limit the other in any manner whatsoever, except as expressly stated herein. Neither this Agreement nor any act hereunder shall be construed as constituting the foundation of a partnership, association, agency, joint venture or any other entity.

15.9

Any dispute arising under this Agreement (other than a dispute involving a claim for injunctive or equitable relief) shall be resolved as follows:

a)

ATCC and Licensee, through appropriately senior persons, shall first meet and attempt to resolve the dispute in face-to-face or telephonic negotiations. This meeting shall occur within thirty (30) days of the time that one Party notifies the other in writing of the existence of such dispute.

b)

If no resolution is reached, ATCC and Licensee shall, within forty-five (45) days of the first meeting, attempt to settle the dispute by formal mediation. If the parties cannot agree upon a mediator and the place of the mediation, the mediation shall be administered b the American Arbitration Association in Manassas, Virginia, if available, or, otherwise in Prince William County, Virginia.

c)

If no resolution is reached within forty-five (45) days of the initiation of the mediation, the dispute shall be resolved by binding arbitration before a panel of three arbitrators (one arbitrator chosen by each of the Parties and the third arbitrator chosen by the first two, unless the parties agree otherwise), at least one of whom shall have a minimum of five (5) years of experience in the field of biotechnology or pharmaceutical product for patent licensing, and shall be under the jurisdiction of, administered by and in accordance with the rules of the American Arbitration Association. The venue for the arbitration shall be in Manassas, Virginia. In no event shall punitive or exemplary damages be awardable. The arbitrators shall have the authority to grant specific performance and to allocate between the Parties the costs of arbitration, including by 

Page 24 of 35

not limited to reasonable attorney’s fees, in such equitable manner as they determine. The Parties irrevocably agree that a final judgment in any arbitration proceeding relating to this Agreement shall be conclusive and shall be enforceable in any court having jurisdiction thereof.

15.10

Notwithstanding anything to the contrary in the foregoing, either Party may obtain from a court any interim or provisional relief that may be necessary to protect its rights or property. If a claim seeks both equitable relief and other relief, the portion of the claim that seeks relief other than equitable relief shall be stayed until after the claim for equitable relief is finally determined. The remaining portion of the claim shall then be resolved by binding arbitration as provided above.

15.11

All matters affecting the interpretation, validity, and performance of the Agreement shall be governed by the laws of the Commonwealth of Virginia applicable to agreements to be performed wholly with Virginia by Virginia residents.

15.12

This Agreement constitutes and contains the entire Agreement of the Parties respecting the subject matter and supersedes any and all prior negotiations, correspondence, understandings and agreements, whether written or oral, between the Parties respecting its subject matter. Nothing herein shall be construed as granting to a Party under Section 2.1 by implication, estoppels or otherwise, any rights, title or interest in, or any license under, any Confidential Information, unless as provided in this Agreement. Wherever there is any conflict between any provision of the MTA and this Agreement, this Agreement shall prevail.

15.13

This Agreement shall be signed in two (2) counterparts each of which shall be deemed to be an original and both of which taken together shall constitute one and the same instrument. It shall not be necessary in making proof of this Agreement to product or account for more than the number of counterparts containing the respective signatures on behalf o the Parties hereto.

SIGNATURES ARE ON THE FOLLOWING PAGE

Page 25 of 35

IN WITNESS WHEREOF, ATCC and the Licensee have caused this Agreement to be executed in duplicate by their respective duly authorized officers.

For ATCC

10801 University Boulevard, Manassas, Virginia 20110-2209, USA

					
	By:

	/s/ Raymond H. Cypess, D.V.M., PhD.

	 
	Date:

	4/12/11

	 
	Raymond H. Cypess, D.V.M., PhD.

	 
	 
	 

	 
	President and Chief Executive Officer

	 
	 
	 

For Licensee

Heat Biologics, Inc.

119 Washington Avenue, Suite 401, Miami Beach, FL 33139, USA

					
	By:

	/s/ Jeffrey Walt

	 
	Date:

	4/12/11

	Printed Name:

	Jeffrey Walt

	 
	 
	 

	Title:

	CEO

	 
	 
	 

[The remainder of this page intentionally left blank.]

Page 26 of 35

MATERIAL TRANSFER AGREEMENT ("MTA'')                                                                 [logo]

Last updated February 1, 2010                                                                                                 ATCC

IMPORTANT!  PLEASE READ CAREFULLY BEFORE SUBMITTING AN ORDER. THIS IS A CONTRACT.

This Material Transfer Agreement ("MTA'') is between Purchaser and the American Type Culture Collection, a not­for-profit organization, having its principal place of business at 10801 University Boulevard, Manassas, VA 20110-2209 ("ATCC"). Purchaser must have an approved, current ATCC account to place an order. This MTA is effective as of the last date of execution by the parties and governs the purchase and use of all ATCC Materials under the terms and conditions set forth below.

TERMS AND CONDITIONS

Definitions

"ATCC Material(s)" means materials acquired from ATCC as documented on an ATCC Sales Order.

"ATCC Sales Order" means an order submitted for ATCC Materials in a form and format as determined by ATCC from time to time.

"Biological Material(s)" means ATCC Materials Progeny Unmodified Derivatives and any Unmodified Derivatives within Modifications either individually or jointly.

"Commercial Use" means the sale license, lease, export transfer or other distribution of the Biological Materials to a person or entity not party to this MTA for financial gain or other commercial purposes and/or the use of the Biological Material: (a) to provide a service to a person or entity not party to this MTA for financial gain; (b) to produce or manufacture products for general sale or products for use in the manufacture of products ultimately intended for general sale (c) in connection with ADME (Absorption, Distribution Metabolism and Excretion) testing; (d) in connection with drug potency or toxicity testing which does not include either screening multiple cell lines for potential inclusion in a screening assay system or screening multiple compounds in a system for internal research purposes only; (e) in connection with proficiency testing service(s), including but not limited to, providing the service of determining laboratory performance by means of comparing and evaluating calibrations or tests on the same or similar items or materials in accordance with predetermined conditions; or (f) for research conducted under an agreement wherein a for-profit entity receives a right whether actual or contingent to the results of the research. Commercial Use specifically does not include Industry Sponsored Academic Research.

"Contributor(s)" means an organization(s) and/or individual(s) providing original material to ATCC for deposit.

"Industry Sponsored Academic Research" means research sponsored by a for-profit organization carried out at a non-profit organization and by the non-profit organization's employees.

"Investigator" means the Purchaser's principal scientist or researcher using the Biological Material(s).

"Modification(s)" mean substances created by Purchaser which contain and/or incorporate a significant or substantial portion of ATCC Material.

"Progeny’ means an unmodified descendant from the ATCC Materials, such as virus from virus, cell from cell/ or organism from organism.

"Purchaser(s)" means the organization purchasing and receiving ATCC Material pursuant to this MTA.

"Unmodified Derivative(s)" mean substances created by Purchaser that constitute an unmodified functional sub-unit or product not changed in form or character and expressed by the ATCC Material provided by ATCC. Unmodified Derivatives include, but are not limited to, subclones of unmodified cell lines, purified or fractionated subsets of materials provided by ATCC, proteins expressed by DNA/RNA supplied by ATCC, or monoclonal antibodies secreted by a hybridoma cell line.

Scope of Use

Subject to the terms of this MTA, Purchaser's Investigator may make and use the Biological Materials provided to Purchaser by ATCC for research purposes only in Purchaser's Investigator's laboratory only. The Biological Materials are not intended for use in humans. Purchaser agrees that Biological Materials designated as biosafety level 2 or 3 constitute known pathogens and that other Biological Materials not so designated may be pathogenic under certain conditions. Purchaser assumes all risk and responsibility in connection with the receipt, handling, storage, disposal, transfer and Purchaser's use of the Biological Materials including without limitation taking all appropriate safety and handling precautions to minimize health or .environmental risk. Purchaser 

Page 27 of 35

agrees that any activity undertaken with the Biological Materials will be conducted in compliance with all applicable guidelines, laws and regulations, and that Purchaser will obtain all permits, licenses or other approvals required by any governmental authority in connection with purchaser's receipt, handling, storage, disposal, transfer and use of the Biological Materials.

Purchaser shall not distribute, sell, lend or otherwise transfer, to a person other than the Purchasers Investigator, or entity not party to this MTA, the Biological Material, as defined above, for any reason, without ATCC's prior written agreement.

Any Commercial Use of the Biological Material is strictly prohibited without ATCC's prior written consent. Purchaser acknowledges and agrees that Purchaser's use of certain Biological Material may require a license from a person or entity not party to this MTA or be subject to restrictions that may be imposed by a person or entity not party to this MTA ("Third Party Terms"). To the extent of ATCC's knowledge of the existence of any such applicable rights or restrictions, ATCC will take reasonable steps to identify the same, either in ATCC's catalog of ATCC Materials and/or through ATCC's customer service representatives, and to the extent they are in the possession of ATCC, ATCC shall make information regarding such Third Party Terms reasonably available for review by Purchaser upon request. Purchaser expressly acknowledges that if there is a conflict between this MTA and the Third Party Terms, the Third Party Terms shall govern. Use of the Biological Materials may be subject to the intellectual property rights of a person or entity not party to this MTA, the existence of which rights may or may not be identified in the ATCC catalog or website, and ATCC makes no representation or warranty regarding the existence or the validity of such rights. Purchaser shall have the sole responsibility for obtaining any intellectual property licenses necessitated by its possession and use of the Biological Materials.

The use permitted under this MTA for Industry Sponsored Academic Research extends only to the academic research carried out at the non-profit organization and the non-profit organization's employees. Any non profit Purchaser using the Biological Materials in connection with Industry Sponsored Academic Research agrees to notify the industrial sponsor that any use of the Biological Materials by the industry sponsor will require a separate license from ATCC and/or its Contributors and that ATCC and/or its Contributors are under no obligation hereunder to license any Biological Materials to any such industry sponsor.

Warranty; Warranty Disclaimer

ATCC warrants that (a) cells and microorganisms included in the ATCC Material shall be viable upon initiation of culture for a period of thirty (30) days after shipment thereof from ATCC and (b) any ATCC Material other than cells and microorganisms shall meet the specifications on the applicable ATCC Material product information sheet, certificate of analysis, and/or catalog description until the expiration date on the applicable ATCC Material's product label (such thirty (30) day period, or period until the expiration date, referred to herein as the "Warranty Period"). Purchaser's exclusive remedy, and ATCC's sole liability, for breach of the warranties set forth in this paragraph is for ATCC to, at ATCC's sole option, either (i) refund the fee paid to ATCC for such ATCC Material (exclusive of shipping and handling charges), or (ii) replace the ATCC Material. The warranties set forth in this paragraph apply only if Purchaser handles and stores the ATCC Material as described in the applicable ATCC Material product information sheet. To obtain the exclusive remedy, Purchaser must report the lack of viability or non-conformation to specifications to ATCC's Technical Service Department within the applicable Warranty Period. Any expiration date specified on the ATCC Material shipment documentation states the expected remaining useful life, but does not constitute a warranty or extend any applicable Warranty Period. Except as expressly provided above, the ATCC Material and any technical information and assistance provided by ATCC are provided as-is, without warranties of any kind, express or implied, including but not limited to any implied warranties of merchantability, fitness for a particular purpose, typicality, safety, accuracy and/or non-infringement.

Compliance with Laws

Purchaser is solely responsible for compliance with all foreign and domestic, federal, state and local statutes, ordinances and regulations applicable to use of the Biological Material. Without limiting the generality of the foregoing, any shipment of Biological Materials to countries outside the United States must comply with all applicable foreign and U.S. laws, including the U.S. export control laws and related regulations. Distribution by ATCC of Budapest Treaty patent deposits are made pursuant to, and in compliance with, all applicable laws and regulations, including the Budapest Treaty and related 37 C.F.R. provisions. If there is any conflict between the terms of this MTA and any applicable law or regulation with respect to Materials that are supplied hereunder by ATCC from the stock of a Budapest Treaty deposit, then the terms of the applicable law or regulation shall govern.

Page 28 of 35

Indemnification

If Purchaser is a for-profit or private non-profit organization:

1

Purchaser hereby agrees to indemnify, defend and hold harmless ATCC and its Contributors against all third party claims losses, expenses and damages, including reasonable attorneys' fees (collectively "Claims") arising out of or relating to Purchaser's use, receipt, handling, storage, transfer, disposal and other activities relating to Biological Materials, provided that Purchaser's liability shall be limited to the extent that any such Claim arises out of ATCC's gross negligence or willful misconduct. All non-monetary settlements of any such Claims are subject to ATCC's prior written consent, such consent not to be unreasonably withheld.

If Purchaser is a Federal or State non-profit organization or a foreign organization that is prohibited by law from entering into the indemnification obligation set forth in tile above paragraph:

Purchaser assumes all liability for any and all third party claims, losses, expenses and damages, including reasonable attorneys' fees (collectively "Claims") arising out of or relating to Purchaser's use, receipt, handling, storage, transfer, disposal and other activities relating to Biological Materials, provided that Purchaser's liability shall be limited to the extent that any such Claim arises out of ATCC's gross negligence or willful misconduct, and provided further that if the Purchaser is the U.S. federal government or a state institution such Purchaser assumes such liability only to the extent provided under the Federal Tort Claims Act, 28 U.S.C. §§ 2671 et seq. or under equivalent applicable State or foreign law.

Limitation of Liability

In no event will ATCC or its Contributors be liable for any indirect, special, incidental or consequential damages of any kind in connection with or arising out of the MTA or Biological Materials (whether in contract, tort, negligence, strict liability, statute or otherwise) even if ATCC has been advised of the possibility of such damages. In no event shall ATCC's cumulative liability to the Purchaser exceed the fees paid by Purchaser under this MTA for the twelve (12) month period preceding the date of the event giving rise to the claim. Purchaser agrees that the limitations of liability set forth in this MTA shall apply even if a limited remedy provided hereunder fails of its essential purpose.

Intellectual Property Identification

As between the parties, ATCC and/or its Contributors shall retain ownership of all right, title and interest in the ATCC Materials, Progeny, Unmodified Derivatives and Biological Materials contained or incorporated in Modifications. Purchaser retains ownership of: (a) Modifications (except that, as between the parties, ATCC retains ownership rights to Biological Material included therein) and (b) those substances created through the use of Biological Material, but which do not contain Biological Material. Notwithstanding the foregoing, Purchaser acknowledges and agrees that the Biological Materials are subject to the restrictions noted in the "Scope of Use" section above. Purchaser agrees to acknowledge ATCC and any Contributor indicated by ATCC as the source of the Biological Material in all .research, academic or scholarly publications and in patent applications that reference the Biological Material. If required by the Contributor of the ATCC Material, ATCC may inform the Contributor of Purchaser's identity. Purchaser explicitly acknowledges that ATCC retains all right, title and interest in the ATCC trademarks, trade-names, logos, ATCC catalog numbers and ATCC specific designations of ATCC Materials sold by ATCC (including but not limited to ATCC,UNIPLUSTM, YOUR DISCOVERIES BEGIN WITH US®, THE GLOBAL BIORESOURCE CENTERTM, AuthenticultTM, SafeTsourceTM, ATCC CULTURESTM, ATCC BIOPRODUCTSTM, ATCC SPECIAL COLLECTIONSTM, ATCC SERVICESTM, ATCC Genuine CulturesTM, ATCC Licensed Derivative®, BioEscrow®, ATCC Standards Resource®, ATCC Proficiency Standard®, ATCC Standard Reference MaterialTM), Purchaser expressly agrees not to use the ATCC trademarks, trade-names, logos, ATCC catalog numbers or ATCC specific designations of ATCC Materials sold by ATCC in any way without ATCC’s prior written agreement.

Miscellaneous

Any disputes arising under this Agreement shall be tried exclusively in the United States District Court for the Eastern District of Virginia or if subject matter jurisdiction does not exist in that court, then in the state courts of Virginia for Prince William County, and Purchaser hereby expressly consents to, submits to and waives any objection to the jurisdiction of such courts; provided however, if Purchaser is a US Federal or State non-profit organization; then any disputes arising under this Agreement shall be tried exclusively in a court of competent jurisdiction.

Purchaser agrees that any breach of this Agreement, including but not limited to any breach of the scope of use provisions of this Agreement, will entitle ATCC to immediately cease without notice to Purchaser further shipments of Biological Materials and may create such irreparable injury as to entitle ATCC to seek temporary restraining orders and other preliminary or permanent injunctive relief in addition to all other equitable and legal remedies that may be afforded under US or foreign laws.

Page 29 of 35

Purchaser may not assign or otherwise transfer this MTA or any rights or obligations under this MTA, whether by operation of law or otherwise. Any such attempted assignment or transfer will be void and of no force or effect. This MTA, including all documents incorporated herein by reference, constitutes the entire agreement between ATCC and Purchaser with respect to the Biological Material and supersedes all previous agreements or representations (whether written or oral) between ATCC and Purchaser relating to the same subject matter. This MTA may not be modified, waived or terminated except in writing and signed by the parties hereto. No term or provision contained herein shall be deemed waived and no breach excused unless such waiver or consent shall be In writing and signed by the parties. If any provision of this MTA is for any reason found to be unenforceable, the remainder of this Agreement will continue in full force and effect. None of the provisions of this MTA are intended to create, nor shall be deemed or construed to create, any relationship between ATCC or Purchaser other than that of independent entities contracting with each other hereunder solely for the purpose of effecting the provisions of this MTA.

Page 30 of 35

Appendix B: Annual Progress Report

Licensee:

SCL

Period Covered: 

 From:

/

/

Through 

/

/

Reporting of development and Sales activities for Calendar Year. Check all activities that occurred during the Calendar Year for each Licensed Product, and indicate which of the Related Parties is responsible for each such activity.

If Licensee or its Related Parties made Sales of Licensed Products, then also submit an annual royalry report using the form found on Appendix C of this Agreement.

									
	Name of Licensed Product

	IND Filed

	Phase I Clinical Trial

	Phase II Clinical Trial

	Phase III Clinical Trial

	Application Submitted for Marketing Authorization

	Marketing Authorization Granted

	Sale or Commercial Exploitation

	Discontinued

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

I hereby certify the information set forth above is correct and complete and meets all of the reporting requirements set forth under the Agreement.

				
	By: (please sign)

	 

	Date:

	 

	 
	 
	 
	 

	Name (please print)

	 

	 

	 

	 
	 
	 
	 

	Title:

	 

	 

	 

Page 31 of 35

Appendix C: Annual Royalty Report

Licensee:

SCL

Period Covered: 

 From:

/

/

Through 

/

/

If the licenses granted in the Agreement covers several product lines, please prepare a separate report for each Licensed Product line; then combine all Licensed lines into a summary report.

If units were Sold by Related Party other than Licensee, clearly indicate which of the Related Parties were responsible, and the extent to which they were responsible, for each such Sales activity.

			
	Report type:

	o

	Single Licensed Product Report

	 
	 
	Trademark of Licensed Product

	 
	 
	ATCC Cell line(s)

	 
	 
	 

	 
	o

	Multi-product Summary Report

	 
	 
	Licensee's Tradenames of Product Lines

	 
	 
	ATCC Cell line(s)

								
	Country

	Units Sold

	Gross Sales

	*Less Allowances

	Relevant Sales

	Royalty Rate

	Conversion Rate

	Period Royalty Amount in U.S. dollars

	U.S.A.

	 

	 

	 

	 

	 

	 

	 

	Canada

	 

	 

	 

	 

	 

	 

	 

	Europe;

	 

	 

	 

	 

	 

	 

	 

	-

	 

	 

	 

	 

	 

	 

	 

	Japan

	 

	 

	 

	 

	 

	 

	 

	Other:

	 

	 

	 

	 

	 

	 

	 

	-

	 

	 

	 

	 

	 

	 

	 

	TOTAL

	 

	 

	 

	 

	 

	 

	 

On a separate page, please indicate the reasons of any significant adjustment. Also note any unusual occurrences that affected royalty amounts during the period.

I hereby certify the information set forth above is correct and complete and meets all of the reporting requirements set forth under the Agreement.

				
	By: (please sign)

	 

	Date:

	 

	 
	 
	 
	 

	Name (please print)

	 

	 

	 

	 
	 
	 
	 

	Title:

	 

	 

	 

Page 32 of 35

Appendix D: ATCC Materials

	
	ATCC* CRL-1420TM

	ATCC* CRL-1678TM

	ATCC* CRL-1682TM

	ATCC* CRL-1687TM

	ATCC* CRL-1690TM        

	ATCC* CRL-1749TM

	ATCC* CRL-166TM

	ATCC* CRL-78TM

Page 33 of 35

Appendix E. Third Party Contactor Transfer Agreement

This transfer agreement ("Agreement") is between [Third Party Transferee], having a place of business at PLEASE FILL IN ADDRESS ("Recipient") and [Licensee], having its principal place of business at PLEASE FILL IN ADDRESS ("Company"). This Agreement shall be effective as of the date of full execution.

Recitals

Company has entered into a certain biological material license agreement with the American Type Culture Collection ("ATCC") (said agreement, identified by ATCC as 2010·BMLA-00038; hereinafter referred to as the "ATCC Agreement"), regarding the use of certain ATCC Materials.

Pursuant to the terms of the ATCC Agreement, during the term of the ATCC Agreement, ATCC has authorized Company employ and/or engage Third Parties, and transfer ATCC Material and Confidential Information to such Third Parties, for the limited purpose of assisting Company in the evaluation, research, development, and manufacture of Licensed Product for Company's benefit; provided, however, that Recipient agrees in writing to the terms that are set forth in this Agreement.

NOW THEREFORE, for good and valuable consideration and the following mutual promises, the receipt and sufficiency of which is hereby acknowledged, Recipient and Company agree to the following terms and conditions in order to utilize the ATCC Materials and hereby enter into this Agreement:

TERMS AND CONDITIONS

"ATCC Material(s)" means ATCC MATERIAL and all Confidential Information.

"Biological Material(s)" means ATCC Materials, Progeny, Unmodified Derivatives and Modifications, either individually or jointly.

"Confidential Information" means information of the disclosing party which includes or make reference to Biological Materials and/or ATCC that has commercial value, including without limitation, trade secrets, compounds, reagents, biological material, techniques for the handling and use of biological materials; know-how, formulas, processes, product ideas, inventions (whether patentable or not}, improvements, copyrightable or patentable materials, schematics, and other technical, business, financial, and product development plans, forecasts, strategies, and information, and that the disclosing party discloses to the receiving party. Confidential Information shall not include information that the receiving party can demonstrate: (a) was/is at the time of disclosure in the public domain; or (b) has come into or is in the public domain through no fault of the receiving party; or (c) was/is known to the receiving party prior to disclosure thereof by the disclosing party and was not acquired directly from the disclosing party on a confidential basis, as shown by written records in the receiving party's possession; or (d) was/is lawfully disclosed to the receiving party without obligation of confidence by a third party which was not under an obligation of confidence to the disclosing party with respect thereto; or (e) was/is independently developed by the receiving party without reference to or use of Confidential Information provided by the disclosing party as shown by written records in the receiving party's possession; or (f) is required by law to be disclosed, contingent upon the receiving party informing the disclosing party prior to any said disclosure in sufficient time to enable the disclosing party to seek a protective order or other appropriate legal remedy to protect the disclosure.

"Investigator" means the Recipient's principal scientist or research using the Biological Material(s).

"licensed Product(s)" means preventive or therapeutic vaccines or vaccine components where the development, manufacture, use, or Sale uses or incorporates Biological Materials.

"Modification(s)" mean substances created by Company or Recipient which contain and/or incorporate a significant or substantial portion of ATCC Material.

"Progeny" means an unmodified descendant from the ATCC Materials, such as virus from virus, cell from cell, or organism from organism.

"Unmodified Derivative(s)" mean substances created by Company or Recipient that constitute an unmodified functional sub-unit or product expressed by the material provided by ATCC. Such non-limiting examples include: subclones of unmodified cell lines, purified or fractionated subsets of materials provided by ATCC, proteins expressed by DNA/RNA supplied by ATCC, or monoclonal antibodies secreted by a hybridoma cell line.

Page 34 of 35

Scope of Use

COMPANY MAY MAKE AND USE BIOLOGICAL MATERIALS IN Recipient’s LABORATORY ONLY FOR LICENSEE TO DESCRIBE SPECIFIC PURPOSE ("PERMITTED USE"). ANY USE OTHER THAN THE PERMITTED USE IS Strictly PROHIBITED.

Once the Permitted Use is completed, Recipient is authorized to transfer the Biological Materials to Company. Recipient shall have no right to further distribute, sell, lend or otherwise transfer Biological Materials (including any Confidential Information) for any reason to any other third party.

Confidential Information

Each party shall use reasonable efforts (which shall be at least as great as the efforts it uses to maintain the confidentiality of its own Confidential Information) to maintain any Confidential Information. The receiving party can use the disclosing party's Confidential Information for the limited purpose of exercising its rights and perform its obligations under this Agreement. The foregoing obligations of confidentiality shall survive expiration or termination of this Agreement for a period of five {5) years after the effective date of expiration or termination.

Recipient shall not originate any publicity, news release, or other public announcement relating to the Biological Materials (a "Public Announcement"), written or oral, whether to the public or the press, to stockholders, or otherwise, without prior written approval of ATCC with regard to the form, content and precise timing of such Public Announcement. Any such proposed Public Announcement shall first be submitted to ATCC for its review and approval in sufficient time to enable Recipient to consider and comment thereon. For purposes of this section, such submissions may be made to licensing@atcc.org. 

Upon expiration or termination of this Agreement, or at any time upon the written request of Company, Recipient immediately shall (i) cease using the Confidential Information disclosed by Company, (ii) return any Confidential Information disclosed by Company, and (iii) destroy any notes or personal memoranda which includes or make reference to such Confidential Information or redact such information from such material.

IN WITNESS WHEREOF, Company and Recipient have caused this Agreement to be executed in duplicate by their respective duly authorized officers.

For Company:

Company Address

					
	By:

	 
	 
	Date:

	 

	 
	 
	 
	 
	 

	Printed Name:

	 
	 
	 
	 

	 
	 
	 
	 
	 

	Title:

	 
	 
	 
	 

For Recipient:

Recipient Address

					
	By:

	 
	 
	Date:

	 

	 
	 
	 
	 
	 

	Printed Name:

	 
	 
	 
	 

	 
	 
	 
	 
	 

	Title:

	 
	 
	 
	 

Page 35 of 35MANUFACTURING SERVICES AGREEMENT

EXHIBIT 10.13

MANUFACTURING SERVICES AGREEMENT

This Manufacturing Services Agreement (the “Agreement”) is made as of October __, 2011, (the “Effective Date”) between XXXX XXXX., a Delaware corporation having its principal place of business at  ____________________ (“XXXX”), and Heat Biologics, Inc., a Delaware Corporation, having an office at 15 TW Alexander Drive, Suite 119, Research Triangle Park, NC  27709 (“CLIENT”) (each of XXXX and CLIENT, a “Party” and, collectively, the “Parties”).

RECITALS

A.

XXXX operates a multi-client production facility located at  __________________ (the “  Facility”).

B.

CLIENT desires to have XXXX produce a product containing human cells and intended for therapeutic use in humans, and XXXX desires to produce such product.

C.

CLIENT desires to have XXXX conduct work according to individual Statement of Work, as further defined in Section 1.32 below.

NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants hereinafter set forth, XXXX and CLIENT, intending to be legally bound, hereby agree as follows:

AGREEMENT

1.

DEFINITIONS

When used in this Agreement, capitalized terms will have the meanings as defined below and throughout the Agreement.  Unless the context indicates otherwise, the singular will include the plural and the plural will include the singular.

“Acceptance Period” shall have the meaning set forth in Section 5.2.2.

“Affiliate” means, with respect to either Party, any other corporation or business entity that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Party.  For purposes of this definition, the term “control” and, with correlative meanings, the terms “controlled by” and “under common control with” means direct or indirect ownership of more than fifty percent (50%) of the securities or other ownership interests representing the equity voting stock or general partnership or membership interest of such entity or the power to direct or cause the direction of the management or policies of such entity, whether through the ownership of voting securities, by contract, or otherwise.           

“Background Intellectual Property” has the meaning set forth in Section 11.1

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

1

“Batch” means a specific quantity of Product that is intended to have uniform character and quality, within specified limits, and is produced according to a single manufacturing order during the same cycle of manufacture.

“Batch Record” means the production record pertaining to a Batch.

“cGMP” means the regulatory requirements for current good manufacturing practices promulgated by the FDA under 21 CFR Parts 210 and 211, as amended from time to time.

“Change Order” has the meaning set forth in Section 2.2.

“CLIENT Development Materials” has the meaning set forth in Section 2.3.

 “CLIENT Materials” means the CLIENT Development Materials and the CLIENT Production Materials. 

“CLIENT Personnel” has the meaning set forth in Section 4.8.1.

“CLIENT Production Materials” has the meaning set forth in Section 4.2.

“Commencement Date” means the date set forth in the Statement of Work, based on a Draft Plan, for the commencement of the production of the Product.

“Confidential Information” has the meaning set forth in Section 10.1.

“Disapproval Notice” shall have the meaning set forth in Section 5.2.2.

 “Draft Plan” shall have the meaning set forth in Section 4.1.

“End Use Product” means a pharmaceutical or medicinal product containing Product, including without limitation such a product in a final packaged form and labeled for use in clinical trials or for commercial sale to end users.  

“Facility” shall mean the   Facility or such other XXXX facility as designated in writing by XXXX from time to time with the consent of CLIENT, which shall not be unreasonably withheld.

 “FDA” means the U.S. Food and Drug Administration, and any successor agency thereof.

“First Statement of Work” has the meaning set forth in the definition of Statement of Work.

“Intellectual Property” means all patents, copyrights, trade secrets, know-how, inventions (whether or not patentable), discoveries, improvements, and all other intellectual property rights, including all applications and registrations with respect thereto, and all data, information, reports and any and all related documentation.

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

2

“XXXX Operating Documents” means the standard operating procedures, standard manufacturing procedures, raw material specifications, protocols, validation documentation, and supporting documentation used by XXXX, such as environmental monitoring, for operation and maintenance of the Facility and XXXX equipment used in the process of producing the Product, excluding any of the foregoing that are unique to the manufacture of Product.

“XXXX Parties” has the meaning set forth in Section 15.2.

“Master Production Record” means the documentation developed by XXXX that contains a detailed description of a Process and any other instructions to be followed by XXXX in the production of a Product.

“Materials” means all raw materials and supplies to be used in the production of a Product.

“New Client Intellectual Property” has the meaning set forth in Section 11.2.

“New General Application Intellectual Property” has the meaning set forth in Section 11.3.

“Process” means the manufacturing process for a Product developed by XXXX pursuant to the terms of this Agreement.

“Product” means a product based upon CLIENT’s ImPACT Immune Pan Antigen Cytotoxic Technology.  

“Product Warranties” means those warranties as specifically stated in Section 5.2.2.

“Production Term” shall have the meaning set forth in Section 4.4.

“Quality Agreement” means the Quality Agreement entered into by the Parties simultaneously with the execution hereof relating to a Product.

“Regulatory Approval” means the approval by the FDA to market and sell the Product in the United States.

“SOP” means a standard operating procedure.

“Specifications” means the Product specifications set forth in the Statement of Work or as modified by the Parties in connection with the production of a particular Batch of Product hereunder.

“Statement of Work” means a plan to develop a Process or Product that is attached hereto as Appendix A or later becomes attached through an amendment by the Parties.  The first Statement of Work, which is attached hereto, is numbered Appendix A-1 and is hereby incorporated and made a part of this Agreement (the “First Statement of Work”).  It is contemplated that each separate project shall have its own Statement of Work.  As each subsequent Statement of Work is agreed to by the Parties, each shall state that it is to be incorporated and made a part of this Agreement and shall be consecutively numbered as A-2, A-3, etc.

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

3

“Technology Transfer” means the transfer of documentation, specifications, and production process by CLIENT to XXXX for the development of the Master Production Record for the manufacturing of the Product specifically for the CLIENT.

“Third Party” means any party other than XXXX, CLIENT or their respective Affiliates.

2.

STATEMENTS OF WORK - PROCESS AND PRODUCT DEVELOPMENT; TECHNOLOGY TRANSFER; ADDITIONAL SERVICES

2.1

Statement of Work.  Prior to performing any Process or Product development, Technology Transfer, or Process or Product manufacture, the Parties will collaborate to develop a Statement of Work, describing the activities to be performed by the Parties, or to be subcontracted by XXXX to Third Parties.  Once agreed to by the Parties, the Statement of Work shall be executed by each of the Parties and appended hereto as part of Appendix A.  In the event of a conflict between the terms and conditions of this Agreement and any Statement of Work, the terms and conditions of this Agreement shall control.

2.2

Modification of Statement of Work.  Should CLIENT want to change a Statement of Work or to include additional services to be provided by XXXX, CLIENT may propose to XXXX an amendment to the Statement of Work with the desired changes or additional services (“Change Order”).  XXXX shall use commercially reasonable efforts to accommodate any such request and shall promptly notify CLIENT.  If XXXX determines that it has the resources and capabilities to accommodate such Change Order, XXXX will prepare a modified version of the Statement of Work reflecting such Change Order (including, without limitation, any changes to the estimated timing, estimated charges or scope of a project) and will submit such modified version of the Statement of Work to CLIENT for review and comment. The modified Statement of Work shall be binding on the Parties only if it refers to this Agreement, states that it is to be made a part thereof, and is signed by both Parties.  Whereafter such modified version of the Statement of Work will be deemed to have replaced the prior version of the Statement of Work.  Notwithstanding the foregoing, if a modified version of the Statement of Work is not agreed to by both Parties, the existing Statement of Work shall remain in effect.

2.3

CLIENT Deliverables.  Within the time period specified in a Statement of Work, CLIENT will provide XXXX with (a) the materials listed in the Statement of Work for which CLIENT is responsible for delivering to XXXX, and any handling instructions, protocols, SOPs and other documentation necessary to maintain the properties of such materials for the performance of the Statement of Work, and (b) any protocols, SOPs and other information and documentation in possession or control of CLIENT and necessary for the performance of the Statement of Work, and for the preparation of the Master Production Record in conformance with cGMP, including, without limitation, process information, SOPs, development data and reports, quality control assays, raw material specifications (including vendor, grade and sampling/testing requirements), product and sample packing and shipping instructions, and product specific cleaning and decontamination information, (collectively, the “CLIENT Development Materials”).

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

4

2.4

Performance by XXXX.  Subject to the provision by CLIENT of the CLIENT Development Materials pursuant to Section 2.3, XXXX will use commercially reasonable effortsto perform, directly or, subject to the terms of the Statement of Work or approval by CLIENT (such approval not to be unreasonably withheld), through a Third Party contractor, the work described in a Statement of Work in a professional and workmanlike manner in accordance with the terms of this Agreementand will use commercially reasonable efforts to complete tasks in accordance with the timelines specified in a Statement of Work.  XXXX will promptly (and in any event within three business days of becoming aware of such event or circumstance) notify CLIENT of any material delays that arise during the performance of the Statement of Work.

2.5

Process Development Services.  If CLIENT requires process development services (“PD Services”) during the Term, Client shall notify XXXX of its requirements for PD Services.  The parties shall negotiate in good faith for a period of up to sixty days regarding the scope of required services and the terms under which XXXX may provide such PD Service to CLIENT, during which negotiation period CLIENT shall not discuss or solicit proposals from third-party providers of PD Services. The terms may include discounted rates, priority service, a security deposit and/or such other terms as the parties may agree.  CLIENT shall not be required to notify XXXX of, nor to negotiate with XXXX regarding, PD Services to be conducted by CLIENT’s (i) employees at one or more facilities owned or operated by CLIENT or (ii) academic research partners operating under a written agreement for the provision of development services to CLIENT.  In addition, if (a) CLIENT undergoes a Corporate Event (as defined below), the Parties shall thereafter have no further obligation under this Section 2.5 and (b) CLIENT engages a third party to perform PD Services after having afforded XXXX the opportunity to negotiate in good faith to perform such PD Services, the Parties shall thereafter have no further obligation under this Section 2.5 with regard to such PD Services.  

2.6

Consulting Services. XXXX shall make its subject-matter experts in the areas of process improvement and manufacturing cost reduction reasonably available to CLIENT during the Term on a fee-for-service basis at then-current commercial rates.

3.

TECHNOLOGY TRANSFER

3.1

Based on the information provided by CLIENT and including process changes developed by XXXX pursuant to any applicable Statement of Work, XXXX will prepare the Master Production Record for the Process in accordance with the schedule set forth in the Statement of Work.  CLIENT will inform XXXX of any specific requirements CLIENT may have relating to the Master Production Record, including, without limitation, any information or procedures CLIENT wishes to have incorporated therein.  If XXXX intends to include in the Master Production Record the use of any assay, medium, or other technology that is not commercially available, XXXX will inform CLIENT of such intention and the Parties will meet to discuss and attempt to agree in good faith on the terms of use of such non-commercially available materials or technology in the Process.

3.2

CLIENT will cooperate with XXXX to assist XXXX to develop the Master Production Record and Process, including, without limitation, by providing XXXX with additional information and procedures as may be required to create the Master Production Record, Process, and/or any of the following: (i) manufacturing process information, SOPs, development reports, (ii) quality control assays, (iii) raw material specifications (including vendor, grade and sampling/testing requirements), (iv) Product and sample packing and shipping instructions, (v) Product specific cleaning and decontamination information.  

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

5

3.3

XXXX will deliver a draft version of the Master Production Record to CLIENT for its review and approval in accordance with the schedule set forth in the Statement of Work. CLIENT will notify XXXX in writing of any objections it has to the draft Master Production Record, and upon such notification, representatives of XXXX and CLIENT will meet promptly to resolve such objections.  Upon CLIENT’s written acceptance of the draft Master Production Record, or in the event that CLIENT does not submit a written notice setting forth CLIENT’s objections to the draft Master Production Record within ten (10) business days following receipt of such draft by CLIENT, such draft will be deemed approved by CLIENT.

3.4

The Process, Master Production Record, Specifications, and any improvements or modifications thereto developed during the term of this Agreement, but excluding any XXXX Operating Documents, New General Application Intellectual Property or XXXX Confidential Information included in any of the foregoing, will be deemed CLIENT Confidential Information and subject to the provisions set forth in Article 10.  CLIENT shall be permitted to use the Process and/or the Master Production Record to manufacture and sell Product; provided, however, that if the Process and/or the Master Production Record incorporates or contains any XXXX Background Intellectual Property, XXXX Confidential Information or New General Application Intellectual Property, prior to any disclosure of such XXXX Background Intellectual Property, XXXX Confidential Information or New General Application Intellectual Property to, or use by, a Third Party manufacturer, CLIENT shall obtain XXXX’s written consent to such disclosure, which consent shall not be unreasonably withheld.  

4.

MANUFACTURE OF PRODUCT; ORDER PROCESS; DELIVERIES

4.1

Draft Plan.  Together with the draft version of the Master Production Record described in Section 3.3 above, XXXX will deliver to CLIENT for review and comment, a proposed draft plan describing the activities to be performed by XXXX, or to be subcontracted by XXXX to Third Parties, in the production of a Product (the “Draft Plan”).  Once XXXX delivers to CLIENT the proposed Draft Plan, the parties will meet to decide whether to issue a new Statement of Work pursuant to Section 2.1, or to modify an existing Statement of Work pursuant to Section 2.2, based on that Draft Plan and any agreed upon modifications. 

4.2

CLIENT Deliverables.  Within any time period specified in the Draft Plan and agreed to in any applicable Statement of Work, CLIENT will use commercially reasonable efforts to provide XXXX with the materials listed in the Statement of Work required to be supplied by CLIENT for the production of the Product, and any handling instructions, protocols, SOPs and other documentation necessary to maintain the properties of such materials for the performance of the Draft Plan (collectively, the “CLIENT Production Materials”).  XXXX shall not be responsible for any delay resulting from CLIENT’s to deliver the CLIENT Production Materials in accordance with the timelines set forth in the Draft Plan or any applicable Statement of Work.

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

6

4.3

Commencement Date.  The Statement of Work based on a Draft Plan will include a Commencement Date agreed upon by the Parties. 

4.4

Manufacture by XXXX.  During the time period specified in any Statement of Work during which Product will be manufactured (the “Production Term”), XXXX will use commercially reasonable efforts to manufacture, package, ship, handle quality assurance and quality control for the Product, all as set forth in the Statement of Work, and to deliver to CLIENT the quantities of Product requested by CLIENT in the Statement of Work, all in accordance with the terms set forth in Section 4.5 below.

4.4.1

Minimum Purchase Obligations.  CLIENT shall order no less than XXXX percent (XXXX%) of its annual global requirements for Products from XXXX in accordance with the terms of this Agreement (the “Minimum Purchase Obligation”).  The Minimum Purchase Obligation shall apply to all Products required by CLIENT in any year during the Term, except those Products specifically excluded under Section 4.4.2 below.  By way of illustration, the Minimum Purchase Obligation shall include Products for use in (i) any End Use Product in Phase II-B clinical trials or later (including, without limitation, Products in clinical trials for non-small cell lung cancer indications) and (ii) any End Use Product approved for commercial sale.  

4.4.2

Exclusions. 

(a)

Small-Scale Clinical Manufacture.  The Minimum Purchase Obligation shall not apply to Products for use in Phase I or Phase II-A clinical trials with enrollments of less than one hundred (100) patients, only to the extent such Products are manufactured by CLIENT in facilities operated by CLIENT or by CLIENT’s academic research partners under written agreement therefor.  CLIENT shall notify XXXX within a reasonable period of time prior to commencement of manufacturing by CLIENT or its academic research partners of Product under this Section. 

(b)

Following Corporate Event.  Upon consummation of a transaction in which (x) CLIENT transfers all or substantially all of the assets or operations of the business related to the development and sale of a Product to a third party whether by exclusive license, sale or other disposition, (y) Client undergoes a change in control following which more than fifty percent (50%) of the outstanding voting securities of CLIENT are owned by a third party unaffiliated with the stockholders of the CLIENT prior to such transfer or (z) Client grants to a third party a license to make and/or sell (including upon the exercise of an option to acquire the right to make and/or sell) one or more Products where the third party is regularly engaged in the marketing and sale of pharmaceutical and/or biotechnology products  (i.e., such third party is not solely or primarily engaged in the business of providing contract manufacturing services) (any such transaction, a “Corporate Event”), the Minimum Purchase Obligation relating to the Product(s) so effected shall be reduced to XXXX percent (XXXX%) of CLIENT’s annual global requirements for such Product(s) for six months following the consummation of the Corporate Event and to XXXX percent (XXXX%) of CLIENT’s annual global requirements for such Product(s) for the following eighteen months, subject in each case to the exclusions set forth in Section 4.4.2(a); provided, however, that CLIENT may elect to terminate such obligation at any time following the consummation of a Corporate Event by paying to XXXX an amount equal to the greater of:

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

7

(A) the most recent Batch price times twenty-five percent (25%) of the annual volume of Batches ordered in the immediately preceding year times the number of months (or fraction thereof) (if any) remaining in the first eighteen (18) months following consummation of the Corporate Event, with the product divided by twelve (12) OR 

(B) (x) the most recent Batch price times twenty-five percent (25%) of the volume of Batches forecast to be ordered during the months (or fraction thereof) (if any) remaining in the first twelve (12) months following consummation of the Corporate Event, plus (y) the most recent Batch price times ten percent (10%) of the volume of Batches forecast to be ordered during the next six (6) months following conclusion of the period described in clause (x). 

plus in either case, (C) all costs incurred or irrevocably committed by XXXX prior to delivery of such election to XXXX (such payment, the “Termination Fee”).  CLIENT must give XXXX thirty (30) days written notice of any election pursuant to the preceding sentence.  Following delivery by CLIENT of notice of a pending or completed Corporate Event, the Parties shall work together in good faith to provide for the continued production of Product by XXXX for the successor in interest to CLIENT and/or to transition production of Product to the successor or its designated manufacturer.  CLIENT or such successor shall be responsible for the reasonable costs and expenses associated with effecting such transition.  After two years following consummation of the Corporate Event (or sooner if an election is made and Termination Fee is fully paid pursuant to this Section) no Minimum Purchase Obligation for such Product(s) shall apply and either party may thereafter terminate this Agreement as to such Product (in the case of disposition or license of the business or assets related to such Product) or in its entirety (in the case of a change of control of the Company or sale or license of all or substantially all of the Company’s assets) upon sixty (60) days notice.  

4.4.3

Forecasting.  No later than the first (1st) day of each calendar quarter, CLIENT shall supply XXXX with a written forecast showing CLIENT's estimated quarterly requirements for Product for the following twenty-four (24) month period (the “Forecast”).  Except as set forth in Clause 4.4.4 below, the forecast shall not be binding on CLIENT and shall be used by XXXX solely for planning purposes.  No later than thirty days (30) days following XXXX’s receipt of a Forecast, XXXX shall provide written notice to CLIENT of whether it has (as of the date of receipt of the Forecast) capacity available to manufacture the quantities of Products forecasted therein. Notwithstanding the foregoing, CLIENT acknowledges and agrees that such written communication from XXXX shall not constitute a binding obligation upon, or create any liability for, XXXX.   If CLIENT’s Forecasts would require XXXX to expand its capacity beyond the then-current capacity at the Facilities used for the manufacture of Products, then XXXX shall notify CLIENT in writing of the potential expansion required, and the Parties will discuss the amount of additional capacity that is needed, as well as the various options that may be available to provide such capacity as well as associated costs and tax benefits of the various options.  Without limiting the generality of the foregoing, if capacity constraints at the XXXX Facility or other commercial or legal considerations make the production of Product at a facility owned or controlled by an Affiliate of XXXX advantageous to CLIENT, XXXX shall use all reasonable efforts to cause one or more Affiliates of XXXX to produce Product for CLIENT on terms substantially identical to those set forth in this Agreement. 

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

8

4.4.4

Purchase Orders.  CLIENT shall place purchase orders binding on CLIENT for its requirement of the Product in full Batch quantities at least four (4) months (or earlier as may be agreed by the Parties) prior to the Commencement Date. Each binding purchase order, signed by CLIENT’s duly authorized representative and accepted in writing by XXXX, shall authorize XXXX to manufacture such quantities of the Product as are set forth therein. XXXX shall not be obligated to commence manufacture of any Product unless and until such written purchase order is accepted in writing by XXXX.  XXXX shall be obligated to accept any purchase order for delivery of Product during a specified month so long as the quantities of Product ordered by CLIENT for delivery during such month do not exceed the quantity forecasted for that month during the Semi Firm Period (as defined below) by more than twenty five percent.  Any delivery date set forth in XXXX’s written confirmation of a purchase order shall be an estimated delivery date only, and XXXX shall be deemed to have timely delivered Product so long as it is delivered no more than three days before or day after the date specified for delivery by CLIENT.  Where CLIENT issues any purchase order in respect of any Batches, any additional or inconsistent terms or conditions of any purchase order, acknowledgement or similar standardized form given or received pursuant to this Agreement shall have no effect and such terms and conditions are hereby excluded.

4.4.5

Rescheduling.  XXXX shall have the right to reasonably reschedule a Commencement Date upon reasonable prior written notice to CLIENT, provided that the rescheduled Commencement Date is no earlier or no later than ninety (90) days from the original schedule at time of placement of the binding purchase order. If the CLIENT requests to change the Commencement Date, XXXX will make all reasonable attempts to accommodate the request; provided, however, in the event that this change would impact other projects scheduled for occupancy in the designated suite or suites, the CLIENT’s project may be delayed until an adequate time period is available in the schedule.  Any such change requested by CLIENT may result in a fee as may be set forth in the applicable Statement of Work.

4.4.6

Cancellation of a Binding Purchase Order for Product manufactured for use in Clincal Trials.  CLIENT may cancel a binding purchase order upon written notice to XXXX, subject to the payment of a cancellation fee as calculated below (the “Clinical Cancellation Fee”): 

(a)

In the event that CLIENT provides written notice of cancellation to XXXX less than or equal to one (1) month prior to the Commencement Date of a subject Batch, or after XXXX has commenced manufacture of a subject Batch, then one hundred percent (100%) of the Batch Price of each such cancelled Batch is payable; 

(b)

In the event that CLIENT provides written notice of cancellation to XXXX more than one (1) month but less than or equal to four (4) months prior to the Commencement Date of a subject Batch, then thirty-five percent (35%) of the Batch Price of each such cancelled Batch is payable;

(c)

In the event that CLIENT provides written notice of cancellation to XXXX more than four (4) months but less than or equal to six (6) months prior to the Commencement Date of a subject Batch (i.e., during the “Clinical Semi-Firm Period”), then fifteen percent (15%) of the Batch Price of each such cancelled Batch is payable; or

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

9

(d)

In the event CLIENT provides written notice of cancellation more than six (6) months prior to the Commencement Date of a subject Batch, then no Cancellation Fee is payable.

4.4.7

Cancellation of a Binding Purchase Order for Product manufactured for Commercial Supply.  CLIENT may cancel a binding purchase order upon written notice to XXXX, subject to the payment of a cancellation fee as calculated below (the “Commercial Cancellation Fee” and together with the Clinical Cancellation Fee, the “Cancellation Fee”): 

(a)

In the event that CLIENT provides written notice of cancellation to XXXX less than or equal to three (3) months prior to the Commencement Date of a subject Batch, or after XXXX has commenced manufacture of a subject Batch, then one hundred percent (100%) of the Batch Price of each such cancelled Batch is payable; 

(b)

In the event that CLIENT provides written notice of cancellation to XXXX more than three (3) months but less than or equal to six (6) months prior to the Commencement Date of a subject Batch (the “Commercial Semi-Firm Period” and together with the Clinical Semi-Firm Period, the “Semi-Firm Period”), then fifty percent (50%) of the Batch Price of each such cancelled Batch is payable;

(c)

In the event that CLIENT provides written notice of cancellation to XXXX more than six (6) months but less than or equal to nine (9) months prior to the Commencement Date of a subject Batch, then thirty percent (30%) of the Batch Price of each such cancelled Batch is payable; or

(d)

In the event CLIENT provides written notice of cancellation more than nine (9) months prior to the Commencement Date of a subject Batch, then no Cancellation Fee is payable.

4.4.8

Payment of Cancellation Fee.  Any Cancellation Fee shall be payable within thirty (30) days following the Commencement Date of the Manufacturing Process associated with the cancelled Batch.

4.5

Packaging and Shipping.  XXXX will package and label the Product for shipment in accordance with the Master Production Record and XXXX’s standard practices in effect at the time of performance by XXXX.  XXXX will deliver the Product EXW the Facility to a common carrier designated by CLIENT to XXXX in writing not less than ten days prior to the applicable delivery date unless otherwise agreed to in a Statement of Work.  CLIENT will provide to XXXX its account number with the selected carrier and will pay for all shipping costs in connection with each shipment of Product.  Each shipment will be accompanied by the documentation listed in the Draft Plan.  XXXX will use commercially reasonable efforts to deliver each shipment of Product to CLIENT on the requested delivery date for such shipment.  XXXX will promptly notify CLIENT if XXXX reasonably believes that it will be unable to meet a delivery date.  CLIENT may take delivery of a Batch of Product (or any portion thereof) at any time after acceptance of such Batch in accordance with Section 5.2 (the “Delivery Period”).  Until such time as CLIENT takes delivery of any Batch (or portion thereof), XXXX shall store such Product in accordance with the applicable Specifications and on the other terms and conditions set forth in the applicable Statement of Work.

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

10

4.6

Quality Agreement.  Upon the decision to manufacture a Product according to a Draft Plan, the Parties shall enter into a separate Quality Agreement, in the form attached hereto, setting forth the terms for Product quality, quantity, price, and any other terms necessary for such agreements.  Such Quality Agreement shall be separately appended to this Agreement. 

4.7

Records.  XXXX will maintain accurate records for the production of the Product, as required by applicable laws and regulations. XXXX will retain possession of the Master Production Record, all Batch Records and XXXX Operating Documents, and will make copies thereof available to CLIENT upon CLIENT’s request and at CLIENT’s expense.  XXXX Operating Documents will remain XXXX Confidential Information.  CLIENT will have the right to use and reference any of the foregoing in connection with a filing for Regulatory Approval of the Product or as otherwise authorized by the Agreement. 

4.8

CLIENT Access.  

4.8.1

CLIENT’s employees and agents (including its independent contractors) (collectively, “CLIENT Personnel”) may participate in the production of the Product only in such capacities as may be approved in writing in advance by XXXX.  CLIENT Personnel working at the Facility are required to comply with XXXX’s Operating Documents and any other applicable XXXX facility and/or safety policies.  For the avoidance of doubt, CLIENT Personnel may not physically participate in the production or manufacture of any Product that may be used in or on humans.

4.8.2

CLIENT Personnel working at the Facility will be and remain employees of CLIENT, and CLIENT will be solely responsible for the payment of compensation for such CLIENT Personnel (including applicable Federal, state and local withholding, FICA and other payroll taxes, workers’ compensation insurance, health insurance, and other similar statutory and fringe benefits).  CLIENT covenants and agrees to maintain workers’ compensation benefits and employers’ liability insurance as required by applicable Federal and Maryland laws with respect to all CLIENT Personnel working at the Facility.  

4.8.3

CLIENT will pay for the actual cost of repairing or replacing to its previous status (to the extent that XXXX determines, in its reasonable judgment, that repairs cannot be adequately effected) any property of XXXX damaged or destroyed by CLIENT Personnel, provided CLIENT shall not be liable for repair or replacement costs resulting from ordinary wear and tear.

4.8.4

CLIENT Personnel visiting or having access to the Facility will abide by XXXX standard policies, operating procedures and the security procedures established by XXXX.  CLIENT will be liable for any breaches of security by CLIENT Personnel.  In addition, CLIENT will reimburse XXXX for the cost of any lost security cards issued to CLIENT Personnel, at the rate of $50 per security card.  All CLIENT Personnel will agree to abide by XXXX policies and SOPs established by XXXX, and will sign an appropriate confidentiality agreement.

4.8.5

CLIENT will indemnify and hold harmless XXXX from and against any and all losses, damages, liabilities, costs and expenses (including reasonable attorneys’ fees and expenses) arising out of any injuries suffered by CLIENT Personnel while at the Facility or elsewhere, except to the extent caused by the gross negligence or willful misconduct on the part of any XXXX Party.

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

11

4.9

Disclaimers.  CLIENT acknowledges and agrees that XXXX Parties will not engage in any Product refinement or development of the Product, other than as expressly set forth in this Agreement and the Statement of Work.  CLIENT acknowledges and agrees that XXXX Parties have not participated in the invention or testing of any Product, and have not evaluated its safety or suitability for use in humans or otherwise.

5.

PRODUCT WARRANTIES; ACCEPTANCE AND REJECTION OF PRODUCTS

5.1

Product Warranties.  XXXX warrants that any Product manufactured by XXXX pursuant to this Agreement, at the time of delivery pursuant to Section 4.5: (a) conforms to the Specifications; (b) was manufactured in accordance with the Master Production Record; and (c) was manufactured in accordance with cGMP.

5.2

Approval of Shipment.  

5.2.1

When the Product ordered by CLIENT is ready for delivery, XXXX will notify CLIENT and supply CLIENT with the required documentation set forth in the Draft Plan.  

5.2.2

Within thirty (30) calendar days after CLIENT’s receipt of such documentation regarding such Product (the “Acceptance Period”), Client shall determine by review of such documentation whether or not the given Batch conforms to the product warranties set forth in Section 5.1 above (“Product Warranties”).  If CLIENT asserts that the Product does not comply with the Product Warranties set forth in Section 5.1 above, CLIENT will deliver to XXXX, in accordance with the notice provisions set forth in Section 17.4 hereof, written notice of disapproval (the “Disapproval Notice”) of such Product, stating in reasonable detail the basis for such assertion of non-compliance with the Product Warranties.  If a valid Disapproval Notice is received by XXXX during the Acceptance Period, then XXXX and CLIENT will provide one another with all related paperwork and records (including, but not limited to, quality control tests) relating to both the production of the Product and the Disapproval Notice.  If a valid Disapproval Notice is not received during the Acceptance Period, the Product will be deemed accepted and ready for shipment.  Upon acceptance, the Product shall be delivered to CLIENT, and CLIENT shall accept delivery thereof, within 10-days after such acceptance.  Title and risk of loss to such Product shall pass to CLIENT at the time of delivery to the common carrier pursuant to Section 4.5.     

5.3

Dispute Resolution.  XXXX and CLIENT will attempt to resolve any dispute regarding the conformity of a shipment of Product with the Product Warranties.  If such dispute cannot be settled within 30 days of the submission by each Party of such related paperwork and records to the other Party, and if the Product is alleged not to conform with the Product Warranties set forth in Section 5.1(a), then CLIENT will submit a sample of the Batch of the disputed shipment to an independent testing laboratory of recognized repute selected by CLIENT and approved by XXXX (such approval not to be unreasonably withheld) for analysis, under quality assurance approved procedures, of the conformity of such shipment of Product with the Specifications.  The costs associated with such analysis by such independent testing laboratory will be paid by the Party whose assessment of the conformity of the shipment of Product with the Specifications was mistaken.    

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

12

5.4

Remedies for Non-Conforming Product.  

5.4.1

In the event that the Parties agree, or an independent testing laboratory determines, pursuant to Section 5.3, that a Batch of Product fails to conform to the Product Warranties due to the failure of: (a) XXXX personnel properly to execute the Master Production Record, (b) XXXX personnel to comply with cGMP, or (c) the Facility utilities, then, at CLIENT’s request, XXXX will produce for CLIENT sufficient quantities of Product to replace the non-conforming portion of such Batch of Product (the “Production Rerun”), in accordance with the provisions of this Agreement and at no additional cost to CLIENT.  XXXX shall complete any Production Rerun as soon as possible following CLIENT’s request therefore and in any event within 60 days of such request.  If more than 25% of the Batches of a Product ordered by CLIENT for delivery during any 12 month period in which CLIENT orders more than 20 Batches, fails to conform to the Product Warranties due to the failure of (a), (b) or (c) and XXXX cannot cure the cause(s) of such failures within sixty (60) days of notice thereof, then the Minimum Purchase Obligation relating to such Product shall be of no further force and effect.    

5.4.2

In the event that the Parties agree, or an independent testing laboratory determines, pursuant to Section 5.3, that a Batch of Product materially fails to conform to the Product Warranties for any reason other than as set forth in Section 5.4.1, then XXXX shall have no liability to CLIENT with respect to such Batch and XXXX will, at CLIENT’s request, produce for CLIENT a Production Rerun at CLIENT’s expense.

5.4.3

CLIENT acknowledges and agrees that its sole remedy with respect to the failure of Product to conform with any of the Product Warranties is as set forth in this Section 5.4, and in furtherance thereof, Client hereby waives all other remedies at law or in equity regarding the foregoing claims.

6.

DAMAGE OR DESTRUCTION OF MATERIALS AND/OR PRODUCT

6.1

Remedies.  If during the manufacture of Product pursuant to this Agreement, Product and/or Materials are destroyed or damaged by XXXX Personnel, and such damage or destruction resulted from XXXX’s failure to execute the Process in conformity with the Master Production Record or gross negligence, then, except as provided in Section 6.2 below, XXXX, as soon as it is commercially practicable to do so, will provide CLIENT with additional Product production time equal to the actual time lost because of the destruction or damage of the Product and/or Materials and will replace such Product and/or Materials at no additional cost to CLIENT.  CLIENT acknowledges and agrees that its sole remedy with respect to damaged or destroyed Materials and/or Product (except for the non-conformity of shipped Product described in Section 5) is as set forth in this Section 6.1, and in furtherance thereof, CLIENT hereby waives all other remedies at law or in equity regarding the foregoing claims.

6.2

Limitations.  Notwithstanding anything to the contrary set forth in the preceding Section 6.1, if during the manufacture of Product pursuant to this Agreement, Product or Materials are destroyed or damaged by XXXX Personnel while XXXX Personnel were acting at the direction of CLIENT Personnel, then XXXX will have no liability to CLIENT as the result of such destruction or damage.

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

13

7.

STORAGE OF MATERIALS

7.1

Pre-Production.  XXXX will store at the expense of CLIENT any CLIENT Materials, equipment or other property delivered pursuant to the Statement of Work or the Draft Plan to the Facility by CLIENT more than 30 days prior to the Commencement Date.  The storage rates will be set forth in the Statement of Work and may be amended from time to time by XXXX.  No storage fees will be charged during the period starting 30 days prior to the Commencement Date and ending upon the expiration or termination of the Production Term.

7.2

Post-Production.  XXXX will store at the Facility free of charge any in–process materials, CLIENT Materials, equipment and other CLIENT property (other than Product manufactured hereunder) that remains at the Facility on the date of expiration or termination of the Production Term (collectively “Remaining CLIENT Property”), for up to 90 calendar days.  If CLIENT has not provided any instructions as to the shipment or other disposition of Remaining CLIENT Property prior to the expiration of such ninety (90)-day period, XXXX shall, if directed by CLIENT destroy such Remaining CLIENT Property, or otherwise shall continue to store such Remaining CLIENT Property at the Facility or elsewhere.  In the event that XXXX continues to store such Remaining CLIENT Property, CLIENT will pay to XXXX a storage charge at XXXX’s then-standard storage rates for the period beginning on the ninety first (91st) day after the expiration or termination of the Production Term through the date that the storage terminates.

8.

REGULATORY MATTERS

8.1

Permits and Approvals.  During the Production Term, XXXX will maintain any material licenses, permits and approvals necessary for the manufacture of the Product in the Facility.  XXXX will promptly notify CLIENT if XXXX receives notice that any such license, permit, or approval is or may be revoked or suspended.

8.2

Inspections/Quality Audit by CLIENT.  Up to two times during the Production Term provided for in any SOW  and upon not less than 30 days’ prior written notice, XXXX will permit CLIENT to inspect and audit the parts of the Facility where the manufacture of the Product is carried out in order to assess XXXX’s compliance with cGMP, and to discuss any related issues with XXXX’s management personnel. At CLIENT’s request, any such inspection shall occur during the production of PRODUCT.  CLIENT Personnel engaged in such inspection will abide by the terms and conditions set forth in Sections 4.8.4 and 10.

8.3

Inspections by Regulatory Agencies.  XXXX will allow representatives of any regulatory agency to inspect the relevant parts of the Facility where the manufacture of the Product is carried out and to inspect the Master Production Record and Batch Records to verify compliance with cGMP and other practices or regulations and will promptly notify CLIENT of the scheduling of any such inspection relating to the manufacture of Product.  XXXX will promptly send to CLIENT a copy of any reports, citations, or warning letters received by CLIENT in connection with an inspection of a regulatory agency to the extent such documents relate to or affect the manufacture of the Product.

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

14

9.

FINANCIAL TERMS

9.1

Payments.  CLIENT will make payments to XXXX in the amounts and on the dates set forth in the Statement of Work.  In the event that CLIENT has not paid an invoice within thirty (30) business days of the applicable due date (as established by Section 9.3), CLIENT’s failure shall be considered a material breach under Section 14.2, subject to the cure provisions set forth therein.  Further, in addition to all other remedies available to XXXX, in the event that CLIENT has not paid an invoice within sixty (60) business days of the applicable due date (as established by Section 9.3), XXXX may elect to suspend the provision of all or a portion of the services under this Agreement, provided that CLIENT shall remain liable for all fees owed pursuant to the Statement of Work during any such suspension.  

9.2

Security Deposit.  The Security Deposit, as defined in the Statement of Work, will be returned to CLIENT within 60 days after the date of expiration or termination of this Agreement, if CLIENT has paid all fees, charges, or other payments due in connection with charges incurred prior to the expiration or termination of this Agreement, including, but not limited to, charges for lost, destroyed, stolen or damaged property of XXXX (all such fees, charges, or other payments being called “Obligations”).  If any Obligations remain outstanding after the date of expiration or termination of this Agreement, then XXXX shall be entitled to apply the Security Deposit against the payment of such Obligations.  The amount of the Security Deposit remaining, if any, after such application will be returned to CLIENT.  CLIENT shall remain liable to XXXX for any deficiencies remaining after the application of the Security Deposit against the Obligations.

9.3

Invoices.  Within 30 days of the end of each month during which charges were incurred, XXXX will provide CLIENT with an invoice setting forth a detailed account of any fees, expenses, or other payments payable by CLIENT under this Agreement for the preceding month.  The amounts set forth in each such invoice will be due and payable within 30 days of receipt of such invoice by CLIENT.  

9.4

Taxes.  CLIENT agrees that it is responsible for and will pay any sales, use or similar taxes (the “Taxes”) resulting from XXXX’s production of Product under this Agreement (except for income, franchise or property taxes payable by XXXX).  To the extent not paid by CLIENT, CLIENT will indemnify and hold harmless the XXXX Parties from and against any and all penalties, fees, expenses and costs whatsoever in connection with the failure by CLIENT to pay the Taxes.  XXXX will not collect any sales and use taxes from CLIENT in connection with the production of any Product hereunder if CLIENT provides to XXXX the appropriate valid exemption certificates.

9.5

Interest.  Any fee, charge or other payment due to XXXX by CLIENT under this Agreement that is not paid within 30 days after it is due will accrue interest on a daily basis at a rate of 1% per month (or the maximum legal interest rate allowed by applicable law, if less) from and after such date.

9.6

Method of Payment.  All payments to XXXX hereunder by CLIENT will be in United States currency and will be by check, wire transfer, money order, or other method of payment approved by XXXX.  Bank information for wire transfers is as follows:

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

15

Notwithstanding the foregoing, payments of up to $950,000.00 (the “Note Amount”) may be made by CLIENT to XXXX under a Convertible Note (in the form of Exhibit A, the “Convertible Note”) dated as of the Effective Date, which shall be delivered by CLIENT to XXXX on the Effective Date.  Unless otherwise agreed in writing by the parties, each invoice (unless contested in whole or in part by CLIENT) up to an aggregate amount of the Note Amount shall be deemed to be paid thirty days after delivery of the invoice and the uncontested portion of such invoice shall be treated as an advance of principal by XXXX pursuant to the Convertible Note.  CLIENT acknowledges and agrees that XXXX shall have no obligation to accept payment in excess of the Note Amount in any form other that check, wire transfer of immediately available funds or money order for any Product or services performed hereunder in excess of the Note Amount.

9.7

Cost Adjustments.  After the first anniversary of the Effective Date, XXXX may (or in the case of any reduction in the PPI, XXXX shall) annually adjust the various costs and rates set forth in each Statement of Work to reflect changes in the cost of materials and/or labor rate paid by XXXX in connection with the production of Product under this Agreement; provided, however, that any increase in labor rates shall not exceed any percentage increase in the US Producer Price Index for the most recently published percentage change for the 12-month period preceding the applicable contract anniversary date.  XXXX agrees to provide CLIENT with written notice of any such cost adjustment.

10.

CONFIDENTIAL INFORMATION  

10.1

Definition.  “Confidential Information” means all technical, scientific and other know-how and information, trade secrets, knowledge, technology, means, methods, processes, practices, formulas, instructions, skills, techniques, procedures, specifications, data, results and other material, pre-clinical and clinical trial results, manufacturing procedures, test procedures and purification and isolation techniques, and any tangible embodiments of any of the foregoing, and any scientific, manufacturing, marketing and business plans, any financial and personnel matters relating to a Party or its present or future products, sales, suppliers, customers, employees, investors or business, that has been disclosed by or on behalf of such Party to the other Party either in connection with the discussions and negotiations pertaining to this Agreement or in the course of performing this Agreement.  Without limiting the foregoing, the terms of this Agreement will be deemed “Confidential Information” and will be subject to the terms and conditions set forth in this Article 10.

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

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10.2

Exclusions.  Notwithstanding the foregoing Section 10.1, any information disclosed by a Party to the other Party will not be deemed “Confidential Information” to the extent that such information:

(a)

at the time of disclosure is in the public domain;

(b)

becomes part of the public domain, by publication or otherwise, through no fault of the Party receiving such information;

(c)

at the time of disclosure is already in possession of the Party who received such information, as established by contemporaneous written records; 

(d)

is lawfully provided to a Party, without restriction as to confidentiality or use, by a Third Party lawfully entitled to possession of such Confidential Information; or

(e)

is independently developed by a Party without use of or reference to the other Party’s Confidential Information, as established by contemporaneous written records. 

10.3

Disclosure and Use Restriction.  Except as expressly provided herein, the Parties agree that for the term of the Agreement and the five-year period following any termination of the Agreement, each Party and its Affiliates will keep completely confidential and will not publish or otherwise disclose any Confidential Information of the other Party, its Affiliates or sublicensees, except in accordance with Section 10.4.  Neither Party will use Confidential Information of the other Party except as necessary to perform its obligations or to exercise its rights under this Agreement.

10.4

Permitted Disclosures.  Each receiving Party agrees to (i) institute and maintain security procedures to identify and account for all copies of Confidential Information of the disclosing Party and (ii) limit disclosure of the disclosing Party’s Confidential Information to its Affiliates, and with the other party’s prior approval (which shall not be unreasonably withheld) and as part of confirmatory due diligence, investors and prospective sublicensees and prospective successors and each of its and their respective officers, directors, employees, agents, consultants and independent contractors having a need to know such Confidential Information for purposes of this Agreement; provided that such persons are informed of the terms of this Agreement and are subject to obligations of confidentiality, non-disclosure and non-use similar to those set forth herein.  For clarification, CLIENT may disclose Confidential Information to the extent necessary to exercise its rights under Section 4.7 (e.g., to include any applicable XXXX Intellectual Property in regulatory filings).

10.5

Government-Required Disclosure.  If a duly constituted government authority, court or regulatory agency orders that a Party hereto disclose information subject to an obligation of confidentiality under this Agreement, such Party shall comply with the order, but shall notify the other Party as soon as possible, so as to provide the said Party an opportunity to apply to a court of record for relief from the order. 

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

17

10.6

Publicity.  Neither Party will refer to, display or use the other’s name, trademarks or trade names confusingly similar thereto, alone or in conjunction with any other words or names, in any manner or connection whatsoever, including any publication, article, or any form of advertising or publicity, except with the prior written consent of the other Party.

11.

INTELLECTUAL PROPERTY

11.1

Generally.  Except as expressly otherwise provided herein, neither Party will, as a result of this Agreement, acquire any right, title, or interest in any Intellectual Property made or conceived by the other Party prior to the Effective Date or independently of this Agreement (“Background Intellectual Property”). Except as expressly otherwise provided herein, ownership of any Intellectual Property that is developed, conceived, invented, first reduced to practice or made in connection with the manufacture of Product or performance of the services hereunder shall follow inventorship all as determined under applicable laws.

11.2

New Client Intellectual Property.  Subject to Section 11.3, CLIENT shall own all right, title, and interest in and to any and all Intellectual Property that XXXX develops, conceives, invents, first reduces to practice or makes, solely or jointly with CLIENT or others, that is a development or improvement to CLIENT Materials or CLIENT’s Background Intellectual Property (which, for clarity, shall expressly include CLIENT’s ImPACT Immune Pan Antigen Cytotoxic Technology) (collectively, “New Client Intellectual Property”).

11.3

New General Application Intellectual Property.  Notwithstanding Section 11.2, and subject to the license granted in Section 11.4.3, XXXX shall own all right, title and interest in “New General Application Intellectual Property”, which as used in this Agreement means Intellectual Property that XXXX or its Affiliates, contractors or agents develops, conceives, invents, or first reduces to practice or makes in the course of manufacture of Product or performance of the services hereunder that (i) is generally applicable to the development or manufacture of chemical or biological products or (ii) is an improvement of, or direct derivative of, any XXXX Background Intellectual Property.  For avoidance of doubt, “New General Application Intellectual Property” shall include any material, processes or other items that embody, or that are claimed or covered by, any of the foregoing Intellectual Property. 

11.4

License.  Subject to the terms and conditions set forth herein (including payment of the purchase price as set forth herein):

11.4.1

XXXX hereby assigns to CLIENT all of its right, title and interest in and to any New Client Intellectual Property.  XXXX shall promptly disclose to CLIENT in writing all New Client Intellectual Property.  XXXX shall execute, and shall require its personnel as well as its Affiliates and their personnel, to execute, any documents reasonably required to confirm CLIENT’s ownership of the New Client Intellectual Property, and any documents required to apply for, maintain and enforce any patent or other right in the New Client Intellectual Property; 

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

18

11.4.2

CLIENT hereby assigns to XXXX all of its right, title and interest in and to any New General Application Intellectual Property. CLIENT shall promptly disclose to XXXX in writing all New General Application Intellectual Property.  CLIENT shall execute, and shall require its personnel as well as its Affiliates to execute, any documents reasonably required to confirm XXXX’s ownership of the New General Application Intellectual Property, and any documents required to apply for, maintain and enforce any patent or other right in the New General Application Intellectual Property; and

11.4.3

XXXX hereby grants to CLIENT a non-exclusive, world-wide, fully paid-up, irrevocable, transferable license, including the right to grant sublicenses, under the New General Application Intellectual Property, to use, sell and import the Products manufactured under this Agreement and to make, have made, use, sell and import Products made by or on behalf of CLIENT that CLIENT is not required to purchase from XXXX pursuant to this AGREEMENT . 

11.5

License to Client Materials.  CLIENT hereby grants XXXX the non-exclusive right to use any CLIENT Materials, information and Background Intellectual Property during the term of this Agreement solely for the purpose of manufacturing of Product or performing the services hereunder.

11.6

Prosecution of Patents.  

11.6.1

XXXX will have the sole right and discretion to file, prosecute and maintain patent applications and patents claiming New General Application Intellectual Property at XXXX’s expense.  CLIENT will cooperate with XXXX to file, prosecute and maintain patent applications and patents claiming New General Application Intellectual Property, and will, upon XXXX’s request, review and provide comments to XXXX relating to such patent applications and patents. 

11.6.2

CLIENT will have the sole right and discretion to file, prosecute and maintain patent applications and patents claiming New Client Intellectual Property at CLIENT’s expense.  XXXX will cooperate with CLIENT to file, prosecute and maintain patent applications and patents claiming New Client Intellectual Property, and will, upon CLIENT’s request, review and provide comments to CLIENT relating to such patent applications and patents.

12.

REPRESENTATIONS AND WARRANTIES 

12.1

By CLIENT.  CLIENT hereby represents and warrants to XXXX that, to the best of its knowledge, (i) it has the requisite intellectual property and legal rights related to the CLIENT Deliverables and the Product to authorize the performance of XXXX’s obligations under this Agreement, and (ii) the performance of the Statement of Work and the production by XXXX of the Product as contemplated in this Agreement will not give rise to a potential cause of action by a Third Party against XXXX for infringement or another violation of intellectual property rights.  Such representation and warranty will not apply to any production equipment supplied by XXXX.

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

19

12.2

By XXXX.  XXXX hereby represents and warrants to CLIENT that, to the best of its knowledge, (i) it has the requisite intellectual property rights in its equipment and Facility to be able to perform its obligations under this Agreement, and (ii) that XXXX’s use of its equipment and Facility as contemplated in this Agreement will not give rise to a potential cause of action by a Third Party against CLIENT for infringement or another violation of intellectual property rights. 

13.

DISCLAIMER; LIMITATION OF LIABILITY

13.1

DISCLAIMER.  EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT, XXXX MAKES NO REPRESENTATIONS AND GRANTS NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, WITH RESPECT TO THE PRODUCTS, MATERIALS, AND SERVICES PROVIDED UNDER THIS AGREEMENT, AND XXXX SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE WITH RESPECT TO SUCH PRODUCTS, MATERIALS, OR SERVICES.

13.2

Disclaimer of Consequential Damages.  IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER OR ANY OF ITS AFFILIATES FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS, BUSINESS OR GOODWILL) SUFFERED OR INCURRED BY SUCH OTHER PARTY OR ITS AFFILIATES IN CONNECTION WITH THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

13.3

Limitation of Liability. BOTH PARTIES HEREBY AGREE THAT TO THE FULLEST EXTENT PERMITTED BY LAW, XXXX’S LIABILITY TO CLIENT, FOR ANY AND ALL INJURIES, CLAIMS, LOSSES, EXPENSES, OR DAMAGES, WHATSOEVER, ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT FROM ANY CAUSE OR CAUSES, INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE, ERRORS, OMISSIONS OR STRICT LIABILITY, SHALL NOT EXCEED THE SUM OF (A) THE TOTAL CHARGES PAID BY CLIENT TO XXXX DURING THE 18 (EIGHTEEN) MONTHS PRECEDING THE EVENT GIVING RISE TO LIABILITY PLUS, (B) TO THE EXTENT NOT ALREADY ENCOMPASSED IN SUBCLAUSE (A), THE PRINCIPAL AMOUNT OF OUTSTANDING CONVERTIBLE DEBT SECURITIES OF CLIENT ISSUED TO XXXX OR ITS AFFILIATES; PROVIDED, THAT TO THE EXTENT XXXX INCURS LIABILITY TO CLIENT UNDER THIS AGREEMENT, XXXX MAY, AT ITS OPTION, ELECT TO FIRST CANCEL ALL OR A PORTION OF OUTSTANDING CONVERTIBLE NOTES HELD BY IT PRIOR TO MAKING ANY CASH PAYMENT OR CREDIT OF CLIENT’S ACCOUNT.  TO THE EXTENT THAT THIS CLAUSE 13.3 CONFLICTS WITH ANY OTHER CLAUSE, THIS CLAUSE SHALL TAKE PRECEDENCE OVER SUCH CONFLICTING CLAUSE.  IF APPLICABLE LAW PREVENTS ENFORCEMENT OF THIS CLAUSE, THEN THIS CLAUSE SHALL BE DEEMED MODIFIED TO PROVIDE THE MAXIMUM PROTECTION FOR XXXX AS IS ALLOWABLE UNDER APPLICABLE LAW.   THE FOREGOING LIMITATIONS SHALL NOT LIMIT XXXX’S INDEMNIFICATION OBLIGATIONS OR XXXX’S LIABILITY FOR ANY INTENTIONAL BREACH.

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

20

14.

TERM AND TERMINATION

14.1

Term.  The term of this Agreement will commence on the Effective Date and will continue until the eighth (8th) anniversary of the Effective Date unless terminated prior to that time or extended by the Parties by mutual agreement (the “Term”); provided, that the Term shall automatically extend for up to two (2) additional terms of two (2) years each (each, an “Additional Term”), unless one Party provides no less than ninety (90) days written notice to the other Party prior to the end of the then-expiring Term or Additional Term, as the case may be.  

14.2

Termination for Material Breach.  Either Party may terminate this Agreement, by written notice to the other Party, for any material breach of this Agreement by the other Party, if such breach is not cured within thirty (30) days after the breaching Party receives written notice of such breach from the non-breaching Party; provided, however, that if such breach is not capable of being cured within such thirty-day period and the breaching Party has commenced and diligently continued actions to cure such breach within such thirty-day period, except in the case of a payment default, the cure period shall be extended to 120 days, so long as the breaching Party is making diligent efforts to do so.  Such termination shall be effective upon expiration of such cure period.  

14.3

Termination by Notice.  If a Party receives notice that the production of Product hereunder or the clinical trials for which Product is being produced hereunder have been or will be suspended or terminated by the FDA (or other regulatory authority), either Party may terminate this Agreement (in the case of suspension or termination of all Products by the FDA) or any applicable Statement of Work hereunder (in the case of suspension or termination of any particular Product by the FDA), in each case by providing written notice of termination not less than 2 months in advance of the date of termination. CLIENT may terminate any applicable Statement of Work hereunder if CLIENT determines to discontinue the production of a particular Product hereunder or the clinical trials for which that Product is being produced hereunder, in each case by providing written notice of termination not less than 2 months in advance of the date of termination.  For the avoidance of doubt, in the event of termination by CLIENT under this Section 14.3, CLIENT shall as its sole obligation remain liable for all fees owed pursuant to any outstanding Statement of Work during such two-month period, together with all costs incurred or irrevocably committed by XXXX and any Cancellation Fees incurred in connection with termination; provided, that if CLIENT later pursues PD Services or manufacturing related to such Product during the Term that would otherwise be subject to this Agreement but for the termination of a Statement of Work pursuant to this Section 14.3, such PD Services or manufacturing (as the case may be) shall continue to be subject to this Agreement.

14.4

Termination by Insolvency.  Either Party may terminate this Agreement upon notice to the other Party, upon (a) the dissolution, termination of existence, liquidation or business failure of the other Party; (b) the appointment of a custodian or receiver for the other Party who has not been terminated or dismissed within ninety (90) days of such appointment; (c) the institution by the other Party of any proceeding under national, federal or state bankruptcy, reorganization, receivership or other similar laws affecting the rights of creditors generally or the making by such Party of a composition or any assignment for the benefit of creditors under any national, federal or state bankruptcy, reorganization, receivership or other similar law affecting the rights of creditors generally, which proceeding is not dismissed within ninety (90) days of filing.  All rights and licenses granted pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11 of the United States Code, licenses of rights of “intellectual property” as defined therein.

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

21

14.5

Effects of Termination.

14.5.1

Accrued Rights.  Termination of this Agreement for any reason will be without prejudice to any rights that will have accrued to the benefit of a Party prior to such termination.  Such termination will not relieve a Party of obligations that are expressly indicated to survive the termination of this Agreement.

14.5.2

Disposition of Remaining CLIENT Property and Confidential Information.  Upon termination or expiration of this Agreement, XXXX will store any Remaining CLIENT Property as set forth in Section 7.2 and, at CLIENT’s option, return or destroy any CLIENT Confidential Information in the possession or control of XXXX.  Likewise, CLIENT will, at XXXX’s option, return or destroy any XXXX Confidential Information in the possession or control of CLIENT.  Notwithstanding the foregoing provisions: (i) XXXX may retain and preserve, at its sole cost and expense, samples and standards of each Product following termination or expiration of this Agreement solely for use in determining XXXX’s rights and obligations hereunder; and (ii) each Party may retain a single copy of the other Party’s Confidential Information for documentation purposes only and which shall remain subject to the obligations of nonuse and confidentiality set forth in this Agreement.  In addition, upon CLIENT’s reasonable request and at CLIENT’s expense, XXXX shall use commercially reasonable efforts promptly to transfer to CLIENT or one designee of CLIENT, the Master Production Record and associated Process.

14.5.3

Security Deposits; Securities.  Upon any termination of this Agreement by XXXX pursuant to Section 14.2, XXXX will have the right to retain the portion of any Security Deposit paid to XXXX pursuant to a Statement of Work equal to the unpaid fees and all costs incurred or irrevocably committed by XXXX and any Cancellation Fees incurred in connection with termination., without limiting any of its rights in law or in equity under this Agreement.

14.5.4

Survival.  Sections 1, 3.4, 4.4, 4.9, 7.2, 9, 10, 11, 13, 14.4, 14.5, 15, 16 and 17 of this Agreement, together with any appendices referenced therein, will survive any expiration or termination of this Agreement.  

15.

INDEMNIFICATION

15.1

Indemnification of Client.  XXXX will indemnify CLIENT, its Affiliates, and their respective directors, officers, employees and agents, and defend and hold each of them harmless, from and against any and all losses, damages, liabilities, costs and expenses (including reasonable attorneys’ fees and expenses) in connection with any and all liability suits, investigations, claims or demands (collectively, “Losses”) to the extent such Losses arise out of or result from any claim, lawsuit or other action or threat by a Third Party arising out of:  (a) any material breach by XXXX of this Agreement, or (b) the gross negligence or willful misconduct on the part of one or more of the XXXX Parties in performing any activity contemplated by this Agreement, except for those Losses for which CLIENT has an obligation to indemnify the XXXX Parties pursuant to Section 15.2, as to which Losses each Party will indemnify the other to the extent of their respective liability for the Losses.

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

22

15.2

Indemnification of XXXX.  CLIENT will indemnify XXXX and its Affiliates, and their respective directors, officers, employees and agents (the “XXXX Parties”), and defend and hold each of them harmless, from and against any and all Losses to the extent such Losses arise out of or result from any claim, lawsuit or other action or threat by a Third Party arising out of: (a) any material breach by CLIENT of this Agreement, (b) the use or sale of Products, except to the extent such Losses arise out of or result from a breach by XXXX of the Product Warranties, (c) the gross negligence or willful misconduct on the part of CLIENT or its Affiliates in performing any activity contemplated by this Agreement, or (d) the use or practice by XXXX of any process, invention or other intellectual property supplied by CLIENT to XXXX under this Agreement, except for those Losses for which XXXX has an obligation to indemnify CLIENT pursuant to Section 15.1, as to which Losses each Party will indemnify the other to the extent of their respective liability for the Losses.

15.3

Indemnification Procedure.

15.3.1

An “Indemnitor” means the indemnifying Party.  An “Indemnitee” means the indemnified Party, its Affiliates, and their respective directors, officers, employees and agents.

15.3.2

An Indemnitee which intends to claim indemnification under Section 15.1 or Section 15.2 hereof shall promptly notify the Indemnitor in writing of any claim, lawsuit or other action in respect of which the Indemnitee, its Affiliates, or any of their respective directors, officers, employees and agents intend to claim such indemnification.  The Indemnitee shall permit, and shall cause its Affiliates and their respective directors, officers, employees and agents to permit, the Indemnitor, at its discretion, to settle any such claim, lawsuit or other action and agrees to the complete control of such defense or settlement by the Indemnitor; provided, however, that in order for the Indemnitor to exercise such rights, such settlement shall not adversely affect the Indemnitee’s rights under this Agreement or impose any obligations on the Indemnitee in addition to those set forth herein.  No such claim, lawsuit or other action shall be settled without the prior written consent of the Indemnitor and the Indemnitor shall not be responsible for any legal fees or other costs incurred other than as provided herein.  The Indemnitee, its Affiliates and their respective directors, officers, employees and agents shall cooperate fully with the Indemnitor and its legal representatives in the investigation and defense of any claim, lawsuit or other action covered by this indemnification, all at the reasonable expense of the Indemnitor.  The Indemnitee shall have the right, but not the obligation, to be represented by counsel of its own selection and expense. 

15.4

Insurance.  CLIENT will maintain, at all times during the term of this Agreement when CLIENT is actively engaged in conducting clinical trials and for three years thereafter, a products liability insurance policy (the “Insurance Policy”), with a per occurrence limit of at least one million dollars ($1,000,000) and an aggregate limit of at least five million dollars ($5,000,000), and will provide a Certificate of Insurance to XXXX that the Insurance Policy has been endorsed to designate XXXX as an additional insured.  CLIENT will maintain the Insurance Policy with an insurance company having a minimum AM Best rating of A and that is licensed to do business in the State of Maryland.  CLIENT will provide XXXX with at least 30 days’ written notice prior to termination of such Insurance Policy.

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

23

16.

ADDITIONAL COVENANTS

16.1

Non-Solicitation.  During the term of this Agreement and for six months thereafter, each of the Parties agrees not to seek to induce or solicit any employee of the other Party or its Affiliates to discontinue his or her employment with the other Party or its Affiliate in order to become an employee or an independent contractor of the soliciting Party or its Affiliate; provided, however, that neither Party shall be in violation of this Section 16.1 as a result of making a general solicitation for employees or independent contractors.  For the avoidance of doubt, the publication of an advertisement shall not constitute solicitation or inducement.

17.

MISCELLANEOUS

17.1

Independent Contractors.  Each of the Parties is an independent contractor and nothing herein contained shall be deemed to constitute the relationship of partners, joint venturers, nor of principal and agent between the Parties.  Neither Party shall at any time enter into, incur, or hold itself out to Third Parties as having authority to enter into or incur, on behalf of the other Party, any commitment, expense, or liability whatsoever.

17.2

Force Majeure.  Neither Party shall be in breach of this Agreement if there is any failure of performance under this Agreement (except for payment of any amounts due under this Agreement) occasioned by any reason beyond the control and without the fault or negligence of the Party affected thereby, including, without limitation, an act of God, fire, flood, act of government or state, war, civil commotion, insurrection, acts of terrorism, embargo, sabotage, a viral, bacterial or mycoplasmal contamination which causes a shutdown of the Facility, prevention from or hindrance in obtaining energy or other utilities, a shortage of raw materials or other necessary components, labor disputes of whatever nature, or any other reason beyond the control and without the fault or negligence of the Party affected thereby (a “Force Majeure Event”).  Such excuse shall continue as long as the Force Majeure Event continues.  Upon cessation of such Force Majeure Event, the affected Party shall promptly resume performance under this Agreement as soon as it is commercially reasonable for the Party to do so.  Each Party agrees to give the other Party prompt written notice of the occurrence of any Force Majeure Event, the nature thereof, and the extent to which the affected Party will be unable to fully perform its obligations under this Agreement.  Each Party further agrees to use commercially reasonable efforts to correct the Force Majeure Event as quickly as practicable (provided that in no event shall a Party be required to settle any labor dispute) and to give the other Party prompt written notice when it is again fully able to perform such obligations. Without limiting the foregoing, in the event that a Force Majeure Event occurs with respect to XXXX, XXXX shall use commercially reasonable efforts to cause one or more Affiliates of XXXX to perform the obligations of XXXX under this Agreement.  If a Force Majeure Event substantially interferes with XXXX’s performance for a period of more than 90 days, CLIENT shall have the right to terminate this Agreement and any active statement of work. 

17.3

Condemnation.  If the Facility is condemned or taken as a result of the exercise of the power of eminent domain or will be conveyed to a governmental agency having power of eminent domain under the threat of the exercise of such power (any of the foregoing, a “Condemnation”), then this Agreement will terminate as of the date on which title to the Facility vests in the authority so exercising or threatening to exercise such power and CLIENT will not have any right to the Condemnation proceeds.

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

24

17.4

Notices.  Any notice required or permitted to be given under this Agreement by any Party shall be in writing and shall be (a) delivered personally, (b) sent by registered mail, return receipt requested, postage prepaid, (c) sent by a nationally-recognized courier service guaranteeing next-day or second day delivery, charges prepaid, or (d) delivered by facsimile (with documented evidence of transmission), to the addresses or facsimile numbers of the other Party set forth below, or at such other addresses as may from time to time be furnished by similar notice by any Party.  The effective date of any notice under this Agreement shall be the date of receipt by the receiving Party.

If to XXXX:

XXXX  

With a copy to:

XXXXXXXXIf to Client:

Heat Biologics, Inc.

Attn:  President

15 TW Alexander Drive, Suite 119

Research Triangle Park, NC  27709

Fax: (305) 503-8566

Either Party may change its address for notice by giving notice thereof in the manner set forth in this Section 17.4.

17.5

Entire Agreement; Amendments.  This Agreement, including the Appendices attached hereto and referenced herein, constitutes the full understanding of the Parties and a complete and exclusive statement of the terms of their agreement with respect to the specific subject matter hereof and supersedes all prior agreements and understandings, oral and written, among the Parties with respect to the subject matter hereof.  No terms, conditions, understandings or agreements purporting to amend, modify or vary the terms of this Agreement (including any Appendix hereto) shall be binding unless hereafter made in a written instrument referencing this Agreement and signed by each of the Parties.

17.6

Governing Law.  This Agreement will be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to its conflicts of laws provisions.

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

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17.7

Counterparts.  This Agreement and any amendment hereto may be executed in any number of counterparts, each of which shall for all purposes be deemed an original and all of which shall constitute the same instrument.  This Agreement shall be effective upon full execution by facsimile or original, and a facsimile signature shall be deemed to be and shall be as effective as an original signature.

17.8

Severability.  If any part of this Agreement shall be found to be invalid or unenforceable under applicable law in any jurisdiction, such part shall be ineffective only to the extent of such invalidity or unenforceability in such jurisdiction, without in any way affecting the remaining parts of this Agreement in that jurisdiction or the validity or enforceability of the Agreement as a whole in any other jurisdiction.  In addition, the part that is ineffective shall be reformed in a mutually agreeable manner so as to as nearly approximate the intent of the Parties as possible.

17.9

Titles and Subtitles.  All headings, titles and subtitles used in this Agreement (including any Appendix hereto) are for convenience only and are not to be considered in construing or interpreting any term or provision of this Agreement (or any Appendix hereto).

17.10

Exhibits.  All “RECITALS”, “DEFINITIONS”, exhibits and appendices referred to herein form an integral part of this Agreement and are incorporated into this Agreement by such reference.

17.11

Pronouns.  Where the context requires, (i) all pronouns used herein will be deemed to refer to the masculine, feminine or neuter gender as the context requires, and (ii) the singular context will include the plural and vice versa.

17.12

Assignment.  This Agreement shall be binding upon the successors and assigns of the Parties and the name of a Party appearing herein shall be deemed to include the names of its successors and assigns.  Neither Party may assign its interest under this Agreement without the prior written consent of the other Party, such consent not to be unreasonably withheld, except that a party may assign this Agreement to an Affiliate or in connection with a merger, sale, license or other disposition of all or substantially all of its business to which this Agreement relates.  Any permitted assignment of this Agreement by either Party will be conditioned upon that Party’s permitted assignee agreeing in writing to comply with all the terms and conditions contained in this Agreement.  Any purported assignment without a required consent shall be void.  No assignment shall relieve any Party of responsibility for the performance of any obligation that accrued prior to the effective date of such assignment. 

17.13

Waiver.  The failure of any Party at any time or times to require performance of any provision of this Agreement (including any Appendix hereto) will in no manner affect its rights at a later time to enforce the same.  No waiver by any Party of any term, provision or condition contained in this Agreement (including any Appendix hereto), whether by conduct or otherwise, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, provision or condition or of any other term, provision or condition of this Agreement (including any Appendix hereto).

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17.14

Dispute Resolution.  If the Parties are unable to resolve a dispute, despite its good faith efforts, either Party may refer the dispute to the President of each Party’s respective business unit (or other designee).  In the event that no agreement is reached by the Presidents (or other designees) with respect to such dispute within thirty (30) days after its referral to them, the Parties shall be obligated to submit the dispute to binding arbitration in accordance with the rules of the American Arbitration Association (“AAA”) for commercial arbitration, utilizing one (1) arbitrator mutually agreeable to the Parties.  If the Parties are unable to reach agreement as the arbitrator, the arbitrator shall be chosen in accordance with the AAA commercial arbitration rules.  The arbitrator shall present a detailed written statement of his/her findings; and the Parties shall be bound thereby.  The arbitration proceedings and any documents or other information disclosed in connection therewith shall be subject to the requirements of confidentiality as set forth herein.  

17.15

No Presumption Against Drafter.  For purposes of this Agreement, CLIENT hereby waives any rule of construction that requires that ambiguities in this Agreement (including any Appendix hereto) be construed against the drafter.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date last signed by the parties hereto.

				
	 

	 
	 
	HEAT BIOLOGICS, INC.

	 
	 
	 
	 

	 

	 
	By:

	 

	Date

	 
	 
	Name:

	 

	 
	 
	Title:

	 
	 
	 
	 

	 
	 
	 
	 

	 

	 
	 
	XXXXXXXX 

	 
	 
	 
	 

	 

	 
	By:

	 

	Date

	 
	 
	Name:

	 

	 
	 
	Title:

Portions herein identified by [XXXX] have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission

 

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