Document:

*Certain
                confidential information contained in this document, marked by brackets,
                has been omitted and filed with the Securities and Exchange Commission
                pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
                amended.

            

    

     

    LICENSE
      AGREEMENT

     

    THIS
      AGREEMENT (the “Agreement”) is made and is effective December 5, 2006, (the
“Effective Date”) by and between Targeted Genetics Corporation, a corporation
      having a principal place of business at 1100 Olive Way, Suite 100, Seattle,
      Washington 98101 (“TGC”), and Amsterdam Molecular Therapeutics B.V. (“AMT”), a
      corporation having a principal place of business at Meibergdreef 61, 1100 DA
      Amsterdam, The Netherlands. 

     

    RECITALS

     

    WHEREAS,
      TGC has exclusively licensed the Licensed Patent Rights (relating to an AAV1
      Vector gene delivery system) from the University of Pennsylvania as part of
      a
      license agreement entered into between TGC and the University of Pennsylvania
      (“UPenn”) with the effective date of June 1, 2002 (“UPenn Agreement”).

     

    WHEREAS,
      AMT is developing an AAV1 product to treat LPL type 1 and LPL type 5 deficiency
      that requires a license to the Licensed Patent Rights and therefore seeks a
      license to the Licensed Patent Rights in the Field, as such terms are defined
      herein; and

     

    WHEREAS,
      TGC is willing to grant such a license on the terms set forth herein and the
      University of Pennsylvania is willing to acknowledge such grant of a sublicense.
      

     

    NOW
      THEREFORE, the parties agree as follows:

     

    1.
      DEFINITIONS
      

     

    1.1 “AAV1
      Vector” means the adeno-associated virus serotype 1 vector technology which
      includes without limitation the AAV serotype 1 rep, cap, and ITR sequences
      and
      proteins whether utilized in whole or in part to deliver therapeutic genes
      into
      cells, and which is the subject of the Licensed Patent Rights 

     

    1.2 “Affiliate”
      means any company or other legal entity other than AMT in whatever country
      organized, controlling, controlled by or under common control with AMT. The
      term
“control” means possession, direct or indirect, of the powers to direct, cause
      or significantly influence the direction of the management and policies of
      the
      company or entity in question, whether through the ownership of voting
      securities, by contract or otherwise.

     

    1.3 “Federal
      Government Interest” means the rights of the United States Government under
      Public Laws 96-517, 97-256 and 98-620, codified at 35 U.S.C. 200-212, and any
      regulations issued thereunder, as such statute or regulations may be amended
      from time to time hereafter.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.4 “Field”
      means treatment of LPL deficiency type 1 and LPL deficiency type 5 by in vivo
      gene therapy utilizing an AAV1 Vector encoding the LPL gene. 

     

    1.5 “Included
      CIPs” has the meaning given in Paragraph 1.9.

     

    1.6 “License”
      has the meaning given in Paragraph 2.1.

     

    1.7 “LPL”
      means Lipoprotein Lipase.

     

    1.8 “Licensed
      Patent Rights” means rights to any subject matter described or claimed in U.S.
      Patent Nos. 6,759,237 and 7,105,345;and all foreign counterparts including
      all
      continuations, divisionals, and any continuation-in-part applications, to the
      extent that such continuation-in- part (or any continuation or divisional
      thereof) has claims directed to subject matter enabled and described in U.S.
      Patent Nos. 6.759,237 and 7,105,345 and such claims are necessary or relevant
      for the Field ( collectively, “Included CIPs”); any patents issuing on said
      applications, continuing applications, divisional applications, including
      reissues and reexaminations thereof, and any foreign applications or patents
      corresponding directly thereto. 

     

    1.9 “Licensed
      Product” means a product in the Field that, absent the License, would in the
      country of sale infringe any Valid Claim within the Licensed Patent Rights
      in
      such country.

     

    1.10 “Net
      Sales” means [*].
      

     

    1.11 “Person”
      means an individual, sole proprietorship, partnership, limited partnership,
      limited liability partnership, corporation, limited liability company, business
      trust, joint stock company, trust, unincorporated association, joint venture,
      or
      other similar entity or organization, including without limitation, a government
      or political subdivision, department or agency of a government.

     

    1.12 “Royalties”
      has the meaning given in Paragraph 4.1.

     

    1.13 “Third
      Party” means any Person other than AMT, TGC or any of their respective
      Affiliates.

     

    1.14 “Valid
      Claim” means 

     

    
      	 	
              i)

            	
              
                a
                  claim of an issued and unexpired patent included within Licensed
                  Patent
                  Rights, which has not been held permanently revoked, unenforceable
                  or
                  invalid by a decision of a court or other governmental agency of
                  competent
                  jurisdiction, unappealable or un-appealed within the time allowed
                  for
                  appeal, and which has not been admitted to be invalid or unenforceable
                  through reissue or disclaimer or otherwise;
                  or

              

            

    

     

    
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              ii)

            	
              a
                claim of a pending patent application included within Licensed Patent
                Rights which claim was filed and is being prosecuted in good faith
                and has
                not been abandoned or finally disallowed without the possibility
                of appeal
                or refiling of the application, provided that no more than [eight
                (8)]
                years have passed since the earliest priority date for such
                application.

            

    

     

    2.
      GRANT

     

    2.1 TGC
      grants to AMT a non-exclusive, non-sublicensable license under the Licensed
      Patent Rights in each country of the world where there are Valid Claims of
      Licensed Patent Rights, to make, have made, develop, use, sell, offer to sell
      and import Licensed Products (the “License”). 

     

    2.2 AMT
      acknowledges that in accordance with the Federal Government Interest, the United
      States government retains certain rights in intellectual property funded in
      whole or part under any contract, grant or similar agreement with a Federal
      agency, including but not limited to the requirement that Licensed Products
      subject to sale in the United States must be substantially manufactured in
      the
      United States. The license grant of this Article 2 is expressly subject to
      all
      of such rights.

     

    2.3 UPenn
      retains the reserved right to use, and to permit other for-profit or nonprofit
      organizations to use, the Licensed Patent Rights strictly for educational and
      for research purposes. Any such rights of U Penn or a third party to practice
      the Licensed Patent Rights for educational or research purposes shall be
      royalty-free.

     

    3.
      CONSIDERATION
      AND MAINTENANCE FEES

     

    3.1 Upon
      signing this Agreement, AMT shall pay to TGC a $1,750,000 fee in consideration
      of the License.

     

    3.2 Upon
      the
      first anniversary of the Effective Date and upon each anniversary during the
      Term thereafter, AMT shall pay to TGC a $[*]
      maintenance fee for maintenance of the License.

     

    4.
      ROYALTIES
      AND PAYMENTS

     

    4.1 AMT
      shall
      pay to TGC earned royalties based on Net Sales (“Royalties”) in the amount of:
      (i) [*]
      percent
      ([*]%)
      of the
      Net Sales of Licensed Products if cumulative Net Sales are less than
      $[*],
      or (ii)
[*]
      percent
      ([*]%)
      of the
      Net Sales of Licensed Products if cumulative Net Sales are equal to or greater
      than $[*]
      but less
      than $[*],
      or
      (iii) [*]
      percent
      ([*]%)
      of Net
      Sales of Licensed Products if cumulative Net Sales are $[*]
      or more.
[*] The
      Net
      Sales thresholds in such section (i)-(iii) will be applied separately to each
      distinct Licensed Product, but where the same Licensed Product is packaged
      or
      labeled differently in different nations, or otherwise to accommodate the same
      to different markets or indications, the Net Sales thereof in all such nations,
      markets and indications shall be aggregated. 

     

    
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    4.2 In
      addition to the Royalties and other payments set forth herein, AMT shall pay
      TGC
      the following “Milestone Payments.” For the purposes of this Agreement, the
      human clinical trial designations of phase I, phase II, phase III, and Biologic
      License Application, or BLA, while referring to United States Food and Drug
      Administration shall also be construed to mean any such jurisdiction the
      equivalent designation applied to clinical trial and drug development of similar
      status by the appropriate foreign governmental health regulatory agency.
[*]:

     

    
      	
              Section

            	 	
              Milestone

            	 	
              Milestone
                Payments

            
	
              4.2.1

            	 	
              [*]

            	 	
              $[*]

            
	
              4.2.2

            	 	
              [*]

            	 	
              $[*]

            
	
              4.2.3

            	 	
              [*]

            	 	
              $[*]

            
	
              4.2.4

            	 	
              [*]

            	 	
              $[*]

            
	
              4.2.5

            	 	
              [*]

            	 	
              $[*]

            

    

     

    4.3 Royalties
      accruing to TGC shall be paid to TGC on a quarterly basis. Each such payment
      will be for royalties which accrued within the most recently completed calendar
      quarter and payment shall be made by AMT within thirty (30) days of the end
      of
      such calendar quarter.

     

    4.4 Milestone
      Payments shall be paid to TGC within thirty (30) days of
      achievement.

     

    4.5 Royalty
      or Milestone Amounts that are not paid when due shall accrue interest from
      the
      due date until paid, at a rate equal to one and one quarter percent (1.25%)
      per
      month (or the maximum allowed by law, if less).

     

    4.6 AMT
      must
      maintain complete and accurate books and records which enable the Royalties,
      fees, and payments payable under this Agreement to be verified. The records
      for
      each calendar quarter must be maintained for three (3) years after the
      submission of each report under Article 4. Upon reasonable prior written notice
      to AMT from TGC, AMT shall permit a certified public accountant or a person
      possessing similar professional status and associated with an independent
      accounting firm reasonably acceptable to AMT to inspect all books and records
      relating to the sales of Licensed Products by AMT as necessary to verify the
      same. Access to these books and records pertaining to Net Sales must be made
      available no more than once each calendar year for each Licensed Product, during
      normal business hours, and once each year for each Licensed Product during
      each
      of the three (3) years after expiration or termination of this Agreement. The
      accounting firm shall enter into appropriate obligations with AMT to treat
      all
      information it receives during its inspection in confidence. The accounting
      firm
      shall disclose to the parties only whether such books and records are correct
      and details concerning any discrepancies, but no other information shall be
      disclosed to TGC. The charges of the accounting firm shall be paid by TCG,
      except if a review or audit of such books and records of AMT determines that
      AMT
      has underpaid royalties on Licensed Products by five percent (5%) or more then
      AMT must pay the charges of the accounting firm in connection with such review
      or audit. Notwithstanding the foregoing, AMT agrees to conduct, at its expense,
      an independent audit of sales and Royalties with respect to a Licensed Product
      at least every two (2) years once annual sales of such Licensed Product are
      greater than five million dollars ($5,000,000) per annum. The audit shall
      address, at a minimum, the amount of gross sales by or on behalf of AMT during
      the audit period, the amount of funds owed to TGC under this Agreement, and
      whether the amount owed has been paid to TGC and is reflected in the records
      of
      the AMT. A report by the auditors shall be submitted promptly to TGC upon
      completion. 

     

    
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    4.7 In
      the
      event that any patent or any claim thereof included within the Licensed Patent
      Rights shall be held invalid or unenforceable in a final decision by a court
      of
      competent jurisdiction from which no appeal has or can be taken, any and all
      obligation to pay Royalties based solely on such patent or claim shall cease
      as
      of the date of such final decision.

     

    4.8 Any
      component of Net Sales denominated in currencies other than U.S. Dollars shall
      be converted into U.S. Dollars in accordance with the provisions of this
      paragraph, and reported in U.S. Dollars. All payments required under this
      Agreement from time to time shall be made in U.S. Dollars. Any currency
      conversions shall be made using the average quarterly exchange rates published
      regularly by Citibank, New York, or its successor. The average will be
      calculated by summing the exchange rates for the final business day of each
      of
      the three (3) months in the applicable calendar quarter and dividing by three
      (3). All currency conversions will be calculated to an accuracy of three (3)
      digits after the decimal point.

     

    5.
      PATENT
      FILING, PROSECUTION AND MAINTENANCE

     

    5.1 As
      between the parties, TGC shall have the responsibility for the preparation,
      filing, prosecution and maintenance of the Licensed Patent Rights in the United
      States and foreign countries for which patent protection has been sought. TGC
      shall maintain the Licensed Patent Rights in all territories for the maximum
      time period permitted by applicable law, including by timely paying all
      applicable maintenance fees and diligently prosecuting any patent applications
      and diligently defending any Third Party challenges to validity or
      enforceability. 

     

    
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    6.
      PATENT
      INFRINGEMENT

     

    6.1 In
      the
      event that AMT
      learns of the infringement of any Licensed Patent Rights by the manufacture,
      use
      or sale of a product in the Field, AMT shall so inform TGC in writing and shall
      provide TGC with reasonable evidence of such infringement. 

     

    6.2 As
      between the parties, TGC shall have the first right but not the obligation
      to
      prosecute such infringement of the Licensed Patent Rights. In the event such
      infringement relates specifically to the manufacture, use or sale of a product
      in the Field, AMT shall have the right but not the obligation to participate
      in
      such infringement litigation and be represented by counsel of its choice at
      its
      own expense. In the event TGC notifies AMT that it will not bring such action
      as
      it relates specifically to the manufacture, use or sale of a product in the
      Field, AMT at it is own expense shall have the right to bring such action and
      shall cause TGC to be joined in such action in jurisdictions where it is
      necessary for TGC to be named in order for AMT to have standing in such
      infringement litigations; provided, however, that AMT shall allow TGC to
      participate and be represented by counsel of its own choice at AMT’s sole
      expense. AMT shall not nor shall AMT cause TGC to settle or compromise any
      such
      suit in a manner that imposes any obligations or restrictions on TGC or grants
      any License Patent Rights without TGC’s written permission.

     

    6.3 Each
      party shall, at the request and expense of the party initiating such suit,
      cooperate in all respects, including being joined as a named party, and, to
      the
      extent possible, have its employees testify when requested and make available
      relevant records, papers, information, samples, specimens, and the like. No
      such
      suit shall be settled by a party in any manner which diminishes the rights
      of
      the other party hereto under this Agreement without the written agreement of
      both parties. 

     

    6.4 Any
      legal
      action against a third party under this Section 6 shall be at the expense of
      the
      party on account of whom suit is brought and recoveries recovered thereby shall
      first be allocated to reimburse the expenses of the parties on a pro rata basis,
      after which, when the infringement relates to the manufacture, use or sale
      of a
      product in the Field,, any remaining recoveries shall belong to AMT and AMT
      shall pay TGC royalty amounts set forth in Section 4 on such remaining
      recoveries as if such recoveries were Net Sales. 

     

    7.
      REPORTING

     

    7.1 AMT
      will
      make quarterly royalty reports to TGC on or before each January 30, April 30,
      July 30 and October 30 of each year (i.e., within thirty (30) days from the
      end
      of each calendar quarter) and certified by the chief financial officer of AMT.
      Each such royalty report will cover AMT’s most recently completed calendar
      quarter and will show: (a) the gross sales and Net Sales of Licensed Products
      sold by AMT during the most recently completed calendar quarter, including
      (i)
      all amounts invoiced, billed, or received; and (ii) the number of units and
      the
      country of sale; and (b) the Royalties payable hereunder with respect to such.
      If no sales of Licensed Products have been made during any reporting period,
      a
      statement to this effect shall be provided by AMT to TGC.

     

    7.2 Progress
      Reports.

     

    
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    7.2.1 AMT
      will
      provide TGC with a written plan relating to AMT’s development in the Field (the
“Development Plan”) within thirty (30) days after the signing of this Agreement
      by both parties. The Development Plan will outline the disease indications,
      patient populations to be addressed, publicly available information on
      competition and estimates of development timelines for AMT’s products in the
      Field. The Development Plan will separately address activities applicable to
      each Licensed Product. 

    

    7.2.2 At
      or
      within thirty (30) days following each anniversary of the Effective Date, AMT
      will provide TGC with a written progress report that describes any progress
      made
      against the Development Plan (as supplemented by progress reports, where
      applicable) submitted a year earlier and plans for development in the coming
      year. AMT shall also notify TGC within thirty (30) days of the first commercial
      sale of any Licensed Product. 

    

    7.2.3 AMT
      will
      provide TGC with audited financial statements, produced by a certified public
      accounting firm, ninety (90) days following the end of each of AMT’s fiscal
      years, as well as a copy of any management letter recommendations submitted
      by
      the auditors.

    

    7.2.4 Where
      applicable AMT will provide TGC with copies of reports such as Form 10-K and
      Form 10-Q filings made to the United States Securities and Exchange Commission
      or other similar regulatory agency outside of the United States. 

    

    7.2.5 TGC
      shall
      keep the Development Plan, all such progress reports, financial statements
      and
      any other information AMT provided to TCG under this Section 7 confidential,
      other than the provision of such reports to the University of Pennsylvania
      as
      required under the UPenn Agreement, for five (5) years or until the time, if
      any, of the first commercial sale of any Licensed Product(s). 

     

    8.
      TERM
      OF THE AGREEMENT

     

    8.1 Unless
      otherwise terminated in accordance with the terms of this Agreement, this
      Agreement shall be in force from the Effective Date until the last to
expire
      Valid Claim of Licensed Patent Rights (the “Term”).

     

    8.2 Any
      termination of this Agreement shall not affect the rights and obligations set
      forth in the following Articles:

    

    Article
      6.4 Allocation of Patent Infringement Recovery

    Article
      11.2 Disposition of Licensed Products on Hand upon Termination

    Article
      13 Use of Names and Trademarks 

    Article
      15 Indemnification

    Article
      20 Failure to Perform

    Article
      21 Governing Law

     

    9.
      TERMINATION
      BY TGC

     

    9.1 If
      AMT
      violates or fails to pay Royalties, Milestone Payments or fees under Articles
      3
      or 4, or (ii) breaches or fails to perform, or has any other default, under
      any
      contractual obligation of AMT to TGC and fails to repair any default in Sections
      9.1(i) or 9.1(ii) within thirty (30) days after receipt of such notice of
      breach, TGC shall have the right to terminate this Agreement by a second written
      notice (“Notice of Termination”) to AMT. If a Notice of Termination is sent to
      AMT, this Agreement shall terminate fifteen (15) days after receipt of such
      notice unless other terms are mutually agreed upon. 

     

    
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    9.2 If
      AMT
      shall cease its operations other than in connection with a reorganization of
      its
      business in connection with a redomociliation or other corporate event unrelated
      to the solvency of AMT, become bankrupt or insolvent, apply for or consent
      to
      the appointment of a trustee, receiver or liquidator of its assets or seek
      relief under any law for the aid of debtors then TGC shall have the right to
      terminate the License. 

     

    10.
      TERMINATION
      BY AMT

     

    10.1 AMT
      shall
      have the right to terminate this Agreement at any time, effective sixty (60)
      days after receipt by TGC of a written notice of termination delivered pursuant
      to this section.

     

    10.2 AMT
      may
      terminate this Agreement with immediate effect by giving written notice to
      TGC,
      if TGC ceases its operations, becomes insolvent, applies for or consents to
      the
      appointment of a trustee, receiver or liquidator of its assets, or seeks relief
      under any law for the aid of debtors. If TGC violates or fails to perform any
      material term or covenant of this Agreement, then AMT may give written notice
      of
      such default (“Notice of Default”) to TGC. If TGC fails to repair such default
      within thirty (30) days after receipt of such Notice of Default, AMT shall
      have
      the right to terminate this Agreement by a Notice of Termination to TGC,
      effective immediately.

     

    11.
      EFFECT
      OF TERMINATION, DISPOSITION OF LICENSED PRODUCTS UPON
      TERMINATION

     

    11.1 Effect
      of Termination.
      Upon
      the termination of this Agreement, except pursuant to Paragraph 10.2, the
      License granted by TGC to AMT hereunder shall revert to TGC. 

     

    11.2 Upon
      termination of this Agreement for any reason, except pursuant to Paragraph
      10.2,
      AMT shall have the right to dispose of all previously made or partially made
      Licensed Products, within a period of three (3) months; provided, however,
      that
      the sale of such Licensed Products shall be subject to the terms of this
      Agreement including, but not limited to, the payment of Royalties at the rate
      and at the time provided herein and the rendering of reports. 

     

    11.3 Upon
      termination of this Agreement for any reason, except pursuant to Paragraph
      10.2,
      AMT shall pay, within thirty (30) days to TGC, pursuant to Section 3 and 4,
      any
      and all amounts due within sixty (60) days of receipt by TGC of a notice of
      termination from AMT.

     

    11.4 Upon
      the
      termination of this Agreement pursuant to Paragraph 10.2 or the termination
      of
      the UPenn Agreement, TGC’s rights hereunder shall be assigned directly to the
      UPenn and shall remain in full force and effect under the terms hereof; and,
      provided that AMT is not in material breach of this Agreement, the rights and
      obligations of AMT herein (including but not limited to the License) shall
      continue in full force and effect without expansion, restriction, inhibition
      or
      diminution; provided that [*].

     

    
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    11.5 
      Nothing
      herein shall constitute a waiver of either party's right to seek damages in
      the
      event of a material breach of this Agreement by the other party.

     

    12.
      PATENT
      MARKING

     

    12.1 AMT
      agrees to mark all Licensed Products made, used or sold under the terms of
      this
      Agreement, or their containers, in accordance with the applicable patent marking
      laws.

     

    13.
      USE
      OF NAMES AND TRADEMARKS

     

    13.1 Unless
      required by law, nothing contained in this Agreement shall be construed as
      conferring any right to use in advertising, publicity, or other promotional
      activities any name, trade name, trademark, or other designation of either
      party
      hereto or the UPenn (including any contraction or abbreviation of the
      foregoing).

     

    13.2 Unless
      required by law, neither party shall disclose, at any time, the financial terms
      or events upon which financial obligations are triggered in the License, save
      that TGC and AMT shall have the right to do so (i) to the extent such disclosure
      is required in publicly filed financial statements or other public statements
      under rules governing a stock exchange (e.g., the rules of the United States
      Securities and Exchange Commission, NASDAQ, NYSE, Amsterdam, UKLA or any other
      stock exchange on which securities issued by either Party may be listed); and
      (ii) to its actual or potential investment bankers; (iii) to existing and
      potential investors in connection with an offering or placement of securities
      for purposes of obtaining financing for its business and to actual and
      prospective lenders for the purpose of obtaining financing for its business;
      and
      (iv) to a bona fide potential acquiror or merger partner for the purposes of
      evaluating entering into a merger or acquisition, provided, however, any such
      persons must be obligated to hold in confidence and not make use of such
      confidential information for any purpose. A press release acknowledging the
      grant of the License by TGC to AMT shall be publicly disclosed by either or
      both
      parties, only upon mutual agreement of the text of such release by both parties.
      

     

    14.
      REPRESENTATIONS,
      WARRANTIES AND COVENANTS

     

    14.1 Each
      party hereby represents, warrants, and covenants to the other party as of the
      Effective Date as follows:

     

    i) such
      party (i) has the power and authority and the legal right to enter into this
      Agreement and perform its obligations hereunder, and (ii) has taken all
      necessary action on its part required to authorize the execution and delivery
      of
      this Agreement and the performance of its obligations hereunder. This Agreement
      has been duly executed and delivered on behalf of such party and constitutes
      a
      legal, valid, binding obligation of such party and is enforceable against it
      in
      accordance with its terms;

     

    
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    ii) such
      party is not aware of any pending or threatened litigation (and has not received
      any communication) that alleges that such party’s activities related to this
      Agreement have violated, or that by conducting the activities as contemplated
      herein such party would violate, any of the intellectual property rights of
      any
      other Person;

     

    iii) all
      necessary consents, approvals and authorizations of all governmental authorities
      and other Persons or entities required to be obtained by such party in
      connection with this Agreement have been obtained; and

     

    14.2 TGC
      hereby represents, warrants, and covenants to AMT
      as of
      the Effective Date that TGC is the exclusive licensee of the Licensed Patent
      Rights. During the term of this Agreement, TGC shall use its best efforts not
      to
      encumber or diminish the rights granted to AMT hereunder, including, without
      limitation, by not committing any acts or permitting the occurrence of any
      omissions that would cause the breach or termination of the UPenn Agreement.
      TGC
      shall promptly provide AMT with notice of any alleged breach or termination
      of
      the UPenn Agreement. As of the date hereof, TGC is not in breach of the UPenn
      Agreement, and it is in full force and effect.

     

    15.
      DISCLAIMER
      OF WARRANTY; INDEMNIFICATION

     

    15.1 THE
      LICENSED PATENT RIGHTS AND LICENSED PRODUCTS ARE PROVIDED ON AN “AS IS” BASIS
      AND TGC MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT
      THERETO. BY WAY OF EXAMPLE BUT NOT OF LIMITATION, TGC MAKES NO REPRESENTATION
      OR
      WARRANTY: (i) OF COMMERCIAL UTILITY; (ii) OF MERCHANTABILITY OR FITNESS FOR
      A
      PARTICULAR PURPOSE; OR (iii) THAT THE USE OF THE LICENSED PATENT RIGHTS AND
      LICENSED PRODUCTS UNDER THIS AGREEMENT WILL NOT INFRINGE ANY PATENT, COPYRIGHT
      OR TRADEMARK OR OTHER PROPRIETARY OR PROPERTY RIGHTS OF OTHERS. TGC SHALL NOT
      BE
      LIABLE TO AMT OR ANY THIRD PARTY WITH RESPECT TO: ANY CLAIM ARISING FROM THE
      USE
      OF THE LICENSED PATENT RIGHTS AND LICENSED PRODUCTS LICENSED UNDER THIS
      AGREEMENT OR FROM THE MANUFACTURE, USE OR SALE OF LICENSED PRODUCTS; OR ANY
      CLAIM FOR LOSS OF PROFITS, LOSS OR INTERRUPTION OF BUSINESS, OR FOR INDIRECT,
      SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND. 

     

    15.2 AMT
      will
      defend, indemnify and hold harmless TGC and its trustees, officers, agents
      and
      employees and UPenn and its trustees, officers, agents and employees both
      collectively and severally (individually, an “Indemnified
      Party”,
      and
      collectively, the “Indemnified
      Parties”),
      from
      and against any and all liability, loss, damage, action, claim or expense
      suffered or incurred by the Indemnified Parties (including attorney’s fees)
      (individually, a “Liability”,
      and
      collectively, the “Liabilities”)
      that
      results from or arises out of (a) the development, use, manufacture, promotion,
      sale or other disposition of any Licensed Product by AMT or its collaborators
      or
      distributors; and (b) any breach by AMT of any covenant or agreement contained
      in this Agreement; and (c) the enforcement by an Indemnified Party of its rights
      under this Section. . Without limiting the foregoing, AMT will defend, indemnify
      and hold harmless the Indemnified Parties from and against any Liabilities
      resulting from: 

     

    
      *Confidential
        Treatment Requested

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    15.2.1 any
      product liability or other claim of any kind related to the use by a third
      party
      of a Licensed Product that was manufactured, sold or otherwise disposed
of
      by
      AMT, or its collaborators or distributors, pursuant to and within the scope
      of
      such relationships;

     

    15.2.2 a
      claim
      by a third party that the use by AMT or its collaborators or distributors,
      pursuant to and within the scope of such relationships, of Licensed Patent
      Rights or the design, composition, manufacture, use, sale or other disposition
      of any Licensed Product by AMT infringes or violates any patent, copyright,
      trademark or other intellectual property rights of such third party;
      and

     

    15.2.3 
      clinical
      trials or studies conducted by or on behalf of AMT, or its collaborators or
      distributors, pursuant to and within the scope of such relationships, relating
      to the Licensed Products and Licensed Patent Rights, including, without
      limitation, any claim by or on behalf of a human subject of any such clinical
      trial or study, any claim arising from the procedures specified in any protocol
      used in any such clinical trial or study, any claim of deviation, authorized
      or
      unauthorized, from the protocols of any such clinical trial or study, and any
      claim resulting from or arising out of the manufacture or quality control by
      a
      third party of any substance administered in any clinical trial or
      study.

    

    Notwithstanding
      the foregoing, however, the Liabilities shall not include, and in no instance
      shall AMT be required to indemnify any Indemnified Party with respect to, any
      liability, claims, lawsuits, losses, damages, costs or expenses to the extent
      the same are determined to be the result of any Indemnified Party’s gross
      negligence or willful misconduct.

     

    15.3 The
      Indemnified Party shall promptly notify AMT of any claim or action giving rise
      to Liabilities subject to the provisions of the foregoing Section. AMT shall
      have the right to defend or to cause to be defended any such claim or action,
      at
      its cost and expense. AMT shall not settle or compromise any such claim or
      action in a manner that imposes any restrictions or obligations on TGC or grants
      any rights to Licensed Patent Rights or Licensed Products (other than to the
      extent AMT has the right to grant such rights under this Agreement) without
      TGC’s prior written consent. If AMT fails or declines to assume the defense of
      any such claim or action within thirty (30) days after notice thereof, TGC
      may
      assume the defense of such claim or action for the account and at the risk
      of
      AMT, and any Liabilities related thereto shall be conclusively deemed a
      liability of AMT; provided however, that TGC shall not settle such claim or
      action if such settlement affects Licensed Patent Rights other than those
      specifically at issue in such claim or action without AMT’s written permission,
      which shall not be unreasonably withheld. AMT shall pay promptly to the
      Indemnified Party any Liabilities to which the foregoing indemnity relates,
      as
      incurred. The indemnification rights of TGC or other Indemnified Party contained
      herein are in addition to all other rights which such Indemnified Party may
      have
      at law or in equity or otherwise.

     

    16.
      INSURANCE

     

    16.1 AMT
      shall
      procure and maintain a policy or policies of commercial general liability
      insurance, including broad form and contractual liability, in a minimum amount
      of $[*]
      combined
      single limit per occurrence and in the aggregate as respects personal injury,
      bodily injury and property damage arising out of AMT’s performance of this
      Agreement.

     

    
      *Confidential
        Treatment Requested

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    16.2 AMT
      shall, upon commencement of clinical trials involving Licensed Products, procure
      and maintain a policy or policies of product liability insurance in a minimum
      amount of $[*]
      combined
      single limit per occurrence and in the aggregate as respects bodily injury
      and
      property damage arising out of AMT’s performance of this Agreement.

     

    16.3 AMT
      shall
      provide TGC with certificates evidencing the insurance coverage required herein
      and all subsequent renewals thereof. Such certificates shall provide that AMT’s
      insurance carrier(s) notify TGC in writing at least 30 days prior to
      cancellation or material change in coverage. TGC will retain such certificates
      and notices from AMT’s insurance carrier.

     

    16.4 TGC
      shall
      periodically review the adequacy of the minimum limits of liability specified
      herein. Further, TGC reserves the right to require AMT to adjust such coverage
      limits in accordance with prevailing industry norms, to the extent TGC is
      required to do the same by UPenn pursuant to the UPenn Agreement. The specified
      minimum insurance amounts shall not constitute a limitation on AMT’s obligation
      to indemnify TGC under this Agreement.

     

    17.
      NOTICES

     

    17.1 Any
      notice or payment required to be given to either party shall be deemed to have
      been properly given and to be effective (a) on the date of delivery if delivered
      in person or (b) five (5) days after mailing if mailed by a nationally
      recognized courier or by first-class certified mail, postage paid, to the
      respective addresses given below, or to such other address designated by written
      notice, or sent via facsimile transmission to the number specified
      below.

     

    
      	
            	For
              AMT:	
              Meibergdreef
                61

              
                P.O.
                  Box 22506

                1100
                  DA Amsterdam

                The
                  Netherlands

                Fax:
                  31 (0) 20 566 92 72

                Attention:
                  CFO

              

            

    

     

    
      
        	
              	For
                TGC:	
                
                  1100
                    Olive Way, Suite 100

                  Seattle,
                    Washington 98101

                  Fax:
                    +1 206 223-0288

                  Attention:
                    Chief Executive Officer

                

              

      

       

    

    18.
      ASSIGNABILITY

     

    18.1 This
      Agreement is binding upon and shall inure to the benefit of the
      parties and their successors and assigns. 

     

    18.2 This
      Agreement may not be assigned by AMT without first obtaining the express written
      consent of TGC. TGC shall not unreasonably withhold consent for AMT to assign
      this Agreement to a Third Party in the event that AMT transfers all or
      substantially all of the business of AMT to which the License relates to a
      Third
      Party. Such Third Party shall assume all royalty obligations to TGC hereunder.
      TGC further acknowledges that it shall not be entitled to any Royalty or other
      compensation from the transaction pursuant to which the transfer to a Third
      Party of all or substantially all of the business of AMT to which the License
      relates took place.

     

    *Confidential
      Treatment
      Requested

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    19.
      WAIVER

     

    19.1 It
      is
      agreed that no waiver by either party hereto of any breach or default of any
      of
      the covenants or agreements herein set forth shall be deemed a waiver as to
      any
      subsequent and/or similar breach or default.

     

    19.2 UPenn,
      by
      its signature on this Agreement, expressly acknowledges and agrees (1) to the
      terms of this sublicense; (2) to the extent that any term of this sublicense
      is
      in conflict with the UPenn Agreement, the terms of this Agreement shall govern
      as to the rights and obligations of AMT to TGC and AMT to UPenn pursuant to
      this
      Agreement; and (3) to the extent any term of this sublicense is in conflict
      with
      the UPenn Agreement, other than the UPenn Agreement terms of Section 4.1.2
      and
      4.1.5, 4.3.2 and 4.3.3, the terms of this Agreement shall govern as to the
      obligation of TGC to UPenn as they relate to this specific Agreement. TGC shall
      be obligated to comply with Sections 4.1.2, 4.1.5, 4.3.2 and 4.3.3 of the UPenn
      Agreement as they relate to the financial obligations of TGC to UPenn arising
      from the grant of this sublicense to AMT, unless mutually agreed otherwise
      between TGC and UPenn.

     

    20.
      FAILURE
      TO PERFORM

     

    20.1 In
      the
      event of a failure of performance due under the terms of this Agreement and
      if
      it becomes necessary for either party to undertake legal action against the
      other on account thereof, then the prevailing party shall be entitled to
      reasonable attorney’s fees in addition to costs and necessary
      disbursements.

     

    21.
      GOVERNING
      LAW

     

    21.1 This
      Agreement shall be interpreted and construed in accordance with the laws of
      the
Commonwealth
      of Pennsylvania without regard to the principles of conflicts of laws, but
      the
      scope and validity of any patent or patent application shall be governed by
      the
      applicable laws of the country of such patent or patent application. Each party
      hereby submits itself to the non-exclusive jurisdiction of the federal or state
      courts located in the Commonwealth of Pennsylvania, and any courts of appeal
      therefrom, and waives any objection (on grounds of lack of jurisdiction, or
      forum non conveniens or otherwise) to the exercise of such jurisdiction over
      it
      by any such courts, in connection with any action that may be brought in such
      courts. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    22.
      FORCE
      MAJEURE

     

    22.1 For
      a
      period of ninety (90) days, the parties to this Agreement shall be excused
      from
      any performance required hereunder if such performance is rendered impossible
      or
      unfeasible due to any catastrophe or other major event beyond their reasonable
      control, including, without limitation, war, riot, and insurrection; laws,
      proclamations, edicts, ordinances or regulations; strikes, lockouts or other
      serious labor disputes; and floods, fires, explosions, or other natural
      disasters. When such events have abated, the parties’ respective obligations
      hereunder shall resume.

     

    23.
      RIGHTS
      IN BANKRUPTCY

     

    23.1 All
      rights and licenses (including
      but not limited to the License) granted under or pursuant to this Agreement
      by
      TGC to AMT are, and shall otherwise be deemed to be, for purposes of Section
      365(n) of the U.S. Bankruptcy Code, licenses of right to “intellectual property”
as defined under Section 101 of the U.S. Banckruptcy Code. The parties agree
      that AMT, as licensee of such rights under this Agreement, shall retain and
      may
      fully exercise all of its rights and elections under the U.S. Bankruptcy Code
      and to the fullest extent permitted by law. 

     

    24.
      MISCELLANEOUS

     

    24.1 The
      headings of the several sections are inserted for convenience of reference
      only
      and are not intended to be a part of or to affect the meaning or interpretation
      of this Agreement.
      The
      English language is the official language of this Agreement and that text of
      the
      Agreement shall prevail over any translation thereof.

     

    24.2 This
      Agreement will not be binding upon the parties until it has been signed below
      on
      behalf of each party, in which event, it shall be effective as of the dated
      recited on page one.

     

    24.3 No
      amendment or modification hereof shall be valid or binding upon the parties
      unless made in writing and signed on behalf of each party.

     

    24.4 This
      Agreement embodies the entire understanding of the parties and shall supersede
      all previous communications, representations or understandings, either oral
      or
      written, between the parties relating to the subject matter hereof.

     

    24.5 If
      any
      provisions contained in this Agreement are or become invalid, are ruled illegal
      by any court of competent jurisdiction or are deemed unenforceable under then
      current applicable law from time to time in effect during the term hereof,
      it is
      the intention of the parties that the remainder of this Agreement shall not
      be
      affected thereby, provided that a party’s rights under this Agreement are not
      materially affected. It is further the intention of the parties that in lieu
      of
      each such provision which is invalid, illegal, or unenforceable, there be
      substituted or added as part of this Agreement a provision which shall be as
      similar as possible in economic and business objectives as intended by the
      parties to such invalid, illegal or unenforceable, provision, but shall be
      valid, legal and enforceable.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, both TGC and AMT have executed this Agreement, in duplicate
      originals, by their respective officers hereunto duly authorized, on the day
      and
      year hereinafter written.

     

    
      	
              Amsterdam
                Molecular Therapeutics, B.V. 

            	 	
              Targeted
                Genetics Corporation

            
	 	 	 
	
              By  
                /s/ Ronald H.W. Loryn

            	 	
              By  
                /s/ H. Stewart Parker

            
	
              
                

              

            	 	
              
                

              

            
	
              Name
                Ronald H.W. Loryn

            	 	
              Name
                H. Stewart Parker

            
	 	 	 
	
              Title
                CEO

            	 	
              Title
                Pres & CEO

            

    

    

    Acknowledged
      and accepted by:

    

    The
      Trustees of the University of Pennsylvania

    

    By  
      /s/ John S. Zawad

    
      

    

    Name
      John
      S. Zawad, Ph.D.

    

    Title
      Managing Director

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    ATTACHMENT
      1

    

    Articles
      from the UPenn Agreement which would be added to this Agreement, pursuant to
      Section 11.4 of this Agreement .

    

    9.5-
      Penn
      hereby represents that (i) to its knowledge it has the lawful right to grant
      the
      licenses granted herein, and (ii) all actions necessary with respect to due
      authorization, execution and performance of this Agreement to make it legal,
      valid, binding and enforceable with regard to Penn have been taken.

    

    12.1 Targeted
      shall comply with all prevailing laws, rules and regulations pertaining to
      the
      development, testing, manufacture, marketing, sale, use, import or export of
      products. Without limiting the foregoing, it is understood that this Agreement
      may be subject to United States laws and regulations controlling the export
      of
      technical data, computer software, laboratory prototypes and other commodities,
      articles and information, including the Arms Export Control Act as amended
      in
      the Export Administration Act of 1979, and that the parties’ obligations
      hereunder are contingent upon compliance with applicable United States export
      laws and regulations. The transfer of certain technical data and commodities
      may
      require a license from the cognizant agency of the United States Government
      and/or written assurances by Targeted that Targeted shall not export data or
      commodities to certain foreign countries without prior approval of such agency.
      Penn neither represents that a license is not required nor that, if required,
      it
      will issue.

     

    12.9 Nothing
      in this Agreement, express or implied, is intended to confer on any person,
      other than the parties hereto, the Covered Affiliates, or their permitted
      assigns, any benefits, rights or remedies.

    

    12.10 Penn
      and
      Targeted shall not discriminate against any employee or applicant for employment
      because of race, color, sex, sexual or affectional preference, age, religion,
      national or ethnic origin, or handicap.*Certain
                confidential information contained in this document, marked by brackets,
                has been omitted and filed with the Securities and Exchange Commission
                pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
                amended.

            

    

     

    PUBLIC
      HEALTH SERVICE

     

    PATENT
      LICENSE AGREEMENT--EXCLUSIVE

     

    COVER
      PAGE

     

    For
      PHS
      internal use only:

     

    
      	 	Patent License Number:	 
	 	 	 
	 	L-086-00/0	 
	 	 	 
	 	Serial Number(s) of Licensed Patent(s)
              and/or
              Patent Application(s):	 
	 	 	 
	 	07/891,962
              (E-148-1992/0-US-01); 08/455,231 (E-148-1992/0-US-08);
              	 
	 	 	 
	 	08/626,953
              (E-148-1992/0-US-10); and 09/235,375
              (E-148-1992/0-US-11)	 
	 	 	 
	 	Licensee:	 
	 	 	 
	 	Targeted
              Genetics Corporation, a corporation of
              Washington	 
	 	 	 
	 	having
              a principal place of business at 1100 Olive Way, Suite
              100,	 
	 	 	 
	 	Seattle,
              WA 98101	 
	 	 	 
	 	Cooperative
              Research and Development Agreement (CRADA) Number (if
              applicable):	 
	 	 	 
	 	None	 
	 	 	 
	 	Additional Remarks:	 
	 	 	 
	 	
              Related
                to License L-059-93/0

            	 
	 	 	 
	 	 	 
	 	 	 
	 	Public Benefit(s):	 
	 	 	 
	 	 	 

    

     

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

    

    
      	 	
              1)

            	
              The
                National Institutes of Health ("NIH"), the Centers for Disease Control
                and
                Prevention ("CDC"), or the Food and Drug Administration ("FDA"),
                hereinafter singly or collectively referred to as "PHS",
                agencies of the United States Public Health Service within the Department
                of Health and Human Services ("DHHS");
                and

            

    

    

    
      	 	
              2)

            	
              The
                person, corporation, or institution identified above and/or on the
                Signature Page, having offices at the address indicated on the Signature
                Page, and its Affiliates as defined in Appendix D, Paragraph 2.14,
                hereinafter referred to as "Licensee".

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    PHS
      PATENT LICENSE AGREEMENT--EXCLUSIVE

     

    PHS
      and
Licensee
      agree as
      follows:

     

    
      	
              1.

            	
              BACKGROUND

            

    

     

    
      	 	
              1.01

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

            

    

     

    
      	 	
              1.02

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

            

    

     

    
      	 	
              1.03

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

            

    

     

    
      	 	
              1.04

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

            

    

     

    
      	 	
              1.05

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

            

    

     

    
      	
              2.

            	
              DEFINITIONS

            

    

     

    
      	 	
              2.01

            	
              "Benchmarks"
                mean the performance milestones that are set forth in Appendix
                E.

            

    

     

    
      	 	
              2.02

            	
              "Commercial
                Development Plan"
                means the written commercialization plan attached as Appendix
                F.

            

    

     

    
      	 	
              2.03

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

            

    

     

    
      	 	
              2.04

            	
              "Government"
                means the Government of the United States of
                America.

            

    

     

    
      	 	
              2.05

            	
              "Licensed Fields of Use"
                means the fields of use identified in
                Appendix B.

            

    

     

    
      
        
        

      

      
        Page
          2 of
          30

        
          

        

      

      
        
        

      

    

    
      	 	
              2.06

            	
              "Licensed Patent Rights"
                shall mean:

            

    

     

    
      	 	
              a)

            	
              Patent
                applications (including provisional patent applications and PCT patent
                applications) and/or patents listed in Appendix A, all divisions
                and
                continuations of these applications, all patents issuing from such
                applications, divisions, and continuations, and any reissues,
                reexaminations, and extensions of all such
                patents;

            

    

     

    
      	 	
              b)

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

            

    

     

    
      	 	
              c)

            	
              to
                the extent that the following contain one or more claims directed
                to the
                invention or inventions disclosed in a) above: all counterpart foreign
                and
                U.S. patent applications and patents to a) and b) above, including
                those
                listed in Appendix A.

            

    

     

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

     

    
      	 	
              2.07

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

            

    

     

    
      	 	
              2.08

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

            

    

     

    
      	 	
              2.09

            	
              "Licensed Territory"
                means the geographical area identified in
                Appendix B.

            

    

     

    
      	 	
              2.10

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

            

    

     

    
      	 	
              2.11

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

            

    

     

    
      	 	
              2.12

            	
              "Research
                License"
                means a nontransferable, nonexclusive license to make and to use
                the
                Licensed
                Products
                or
                Licensed
                Processes
                as
                defined by the Licensed Patent Rights
                for purposes of research and not for purposes of commercial manufacture
                or
                distribution or in lieu of
                purchase.

            

    

     

    
      
        
        

      

      
        Page
          3 of
          30

        
          

        

      

      
        
        

      

    

     

    
      	
              3.

            	
              GRANT
                OF RIGHTS

            

    

     

    
      	 	
              3.01

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

            

    

     

    
      	 	
              3.02

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

            

    

     

    
      	
              4.

            	
              SUBLICENSING

            

    

     

    
      	 	
              4.01

            	
              Upon
                written approval by PHS,
                which approval will not be unreasonably withheld, Licensee
                may enter into sublicensing agreements under the Licensed Patent Rights.

            

    

     

    
      	 	
              4.02

            	
              Licensee
                agrees that any sublicenses granted by it shall provide that the
                obligations to PHS
                of
                Paragraphs 5.01-5.04, 8.01, 10.01, 10.02, 12.05, and 13.07-13.09
                of this
                Agreement
                shall be binding upon the sublicensee as if it were a party to this
                Agreement.
                Licensee
                further agrees to attach copies of these Paragraphs to all sublicense
                agreements.

            

    

     

    
      	 	
              4.03

            	
              Any
                sublicenses granted by Licensee
                shall provide for the termination of the sublicense, or the conversion
                to
                a license directly between such sublicensees and PHS,
                at the option of the sublicensee, upon termination of this Agreement
                under Article 13. Such conversion is subject to PHS
                approval and contingent upon acceptance by the sublicensee of the
                remaining provisions of this Agreement.

            

    

     

    
      	 	
              4.04

            	
              Licensee
                agrees to forward to PHS
                a
                copy of each fully executed sublicense agreement postmarked within
                thirty
                (30) days of the execution of such agreement. To the extent permitted
                by
                law, PHS
                agrees to maintain each such sublicense agreement in
                confidence.

            

    

     

    
      	
              5.

            	
              STATUTORY
                AND PHS REQUIREMENTS AND RESERVED GOVERNMENT
                RIGHTS

            

    

     

    
      	 	
              5.01

            	
              (a)

            	
              PHS
                reserves on behalf of the Government an irrevocable, nonexclusive,
                nontransferable, royalty-free license for the practice of all inventions
                licensed under the Licensed Patent Rights
                throughout the world by or on behalf of the Government and on behalf
                of
                any foreign government or international organization pursuant to
                any
                existing or future treaty or agreement to which the Government
                is a signatory. Prior to the First
                Commercial Sale,
                Licensee
                agrees to provide PHS
                reasonable quantities of Licensed
                Products
                or
                materials made through the Licensed
                Processes
                for PHS
                research use.

            

    

     

    
      	 	
              (b)

            	
              In
                the event that Licensed Patent Rights
                are Subject Inventions made under a Cooperative Research and Development
                Agreement (CRADA), Licensee
                grants to the Government, pursuant to 15 U.S.C. §3710a(b)(1)(A),
                a nonexclusive, nontransferable, irrevocable, paid-up license to
                practice
                Licensed Patent Rights
                or
                have Licensed Patent Rights
                practiced throughout the world by or on behalf of the
                Government. In the exercise of such license, the
                Government shall not publicly disclose trade secrets or
                commercial or financial information that is privileged or confidential
                within the meaning of 5 U.S.C. §552(b)(4) or which would be
                considered as such if it had been obtained from a non-Federal party.
                Prior
                to the First
                Commercial Sale,
                Licensee
                agrees to provide PHS
                reasonable quantities of Licensed
                Products
                or
                materials made through the Licensed
                Processes
                for PHS
                research use.

            

    

     

    
      
        
        

      

      
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              5.02

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

            

    

     

    
      	 	
              5.03

            	
              Licensee
                acknowledges that PHS
                may enter into future Cooperative Research and Development Agreements
                (CRADAs) under the Federal Technology Transfer Act of 1986 that relate
                to
                the subject matter of this Agreement.
                Licensee
                agrees not to unreasonably deny requests for a Research
                License
                from such future collaborators with PHS
                when acquiring such rights is necessary in order to make a Cooperative
                Research and Development Agreement (CRADA) project feasible. Licensee
                may request an opportunity to join as a party to the proposed Cooperative
                Research and Development Agreement
                (CRADA).

            

    

     

    
      	 	
              5.04

            	
              (a)

            	
              In
                addition to the reserved license of Paragraph 5.01 above, PHS
                reserves the right to grant nonexclusive Research
                Licenses directly or to require Licensee
                to
                grant nonexclusive Research Licenses on reasonable terms.
                The purpose of this Research License is to encourage
                basic research, whether conducted at an academic or corporate facility.
                In
                order to safeguard the Licensed Patent Rights,
                however, PHS
                shall consult with Licensee
                before granting to commercial entities a Research License or providing
                to
                them research samples of materials made through the Licensed
                Processes.

            

    

     

    
      	 	
              (b)

            	
              In
                exceptional circumstances, and in the event that Licensed Patent Rights
                are Subject Inventions made under a Cooperative Research and Development
                Agreement (CRADA), the Government, pursuant to
                15 U.S.C. §3710a(b)(1)(B), retains the right to require the
                Licensee
                to
                grant to a responsible applicant a nonexclusive, partially exclusive,
                or
                exclusive sublicense to use Licensed Patent Rights
                in
                Licensee's
                field of use on terms that are reasonable under the circumstances;
                or if
                Licensee
                fails to grant such a license, the Government retains the
                right to grant the license itself. The exercise of such rights by
                the
                Government shall only be in exceptional circumstances and
                only if the Government determines (i) the action is
                necessary to meet health or safety needs that are not reasonably
                satisfied
                by Licensee;
                (ii) the action is necessary to meet requirements for public use
                specified
                by Federal regulations, and such requirements are not reasonably
                satisfied
                by the Licensee;
                or (iii) the Licensee
                has failed to comply with an agreement containing provisions described
                in
                15 U.S.C. §3710a(c)(4)(B). The determination made by the
                Government under this Article is subject to
                administrative appeal and judicial review under
                35 U.S.C. §203(2).

            

    

     

    
      	
              6.

            	
              ROYALTIES
                AND REIMBURSEMENT

            

    

     

    
      	 	
              6.01

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

            

    

     

    
      	 	
              6.02

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

            

    

     

    
      	 	
              6.03

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

            

    

     

    
      	 	
              6.04

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

            

    

     

    
      	 	
              6.05

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

            

    

     

    
      
        
        

      

      
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              6.06

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

            

    

     

    
      	 	
              6.07

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

            

    

     

    
      	 	
              6.08

            	
              On
                sales of Licensed
                Products
                by
                Licensee
                to
                sublicensees or on sales made in other than an arm's-length transaction,
                the value of the Net
                Sales
                attributed under this Article 6 to such a transaction shall be that
                which
                would have been received in an arm's-length transaction, based on
                sales of
                like quantity and quality products on or about the time of such
                transaction.

            

    

     

    
      	 	
              6.09

            	
              With
                regard to expenses associated with the preparation, filing, prosecution,
                and maintenance of all patent applications and patents included within
                the
                Licensed Patent Rights
                incurred by PHS
                prior to the effective date of this Agreement,
                Licensee
                shall pay to PHS,
                as an additional royalty, within sixty (60) days of PHS's
                submission of a statement and request for payment to Licensee,
                an amount equivalent to such patent expenses previously incurred
                by
                PHS.

            

    

     

    
      	 	
              6.10

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

            

    

     

    (a)
      to
      pay PHS
      on an
      annual basis, within sixty (60) days of PHS's
      submission of a statement and request for payment, a royalty amount equivalent
      to all such patent expenses incurred during the previous calendar year(s);
      or

     

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

     

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

     

    
      	 	
              6.11

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

            

    

     

    
      	
              7.

            	
              PATENT
                FILING, PROSECUTION, AND
                MAINTENANCE

            

    

     

    
      	 	
              7.01

            	
              Except
                as otherwise provided in this Article 7, PHS
                agrees to take responsibility for, but to consult with, the Licensee
                in
                the preparation, filing, prosecution, and maintenance of any and
                all
                patent applications or patents included in the Licensed Patent Rights
                and shall furnish copies of relevant patent-related documents to
                Licensee.

            

    

     

    
      
        
        

      

      
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              7.02

            	
              Upon
                PHS's
                written request, Licensee
                shall assume the responsibility for the preparation, filing, prosecution,
                and maintenance of any and all patent applications or patents included
                in
                the Licensed Patent Rights
                and shall on an ongoing basis promptly furnish copies of all
                patent-related documents to PHS.
                In such event, Licensee
                shall, subject to the prior approval of PHS,
                select registered patent attorneys or patent agents to provide such
                services on behalf of Licensee
                and PHS.
                PHS
                shall provide appropriate powers of attorney and other documents
                necessary
                to undertake such actions to the patent attorneys or patent agents
                providing such services. Licensee
                and its attorneys or agents shall consult with PHS
                in
                all aspects of the preparation, filing, prosecution and maintenance
                of
                patent applications and patents included within the Licensed Patent Rights
                and shall provide PHS
                sufficient opportunity to comment on any document that Licensee
                intends to file or to cause to be filed with the relevant intellectual
                property or patent office.

            

    

     

    
      	 	
              7.03

            	
              At
                any time, PHS
                may provide Licensee
                with written notice that PHS
                wishes to assume control of the preparation, filing, prosecution,
                and
                maintenance of any and all patent applications or patents included
                in the
                Licensed Patent Rights.
                If PHS
                elects to assume such responsibilities, Licensee
                agrees to cooperate fully with PHS,
                its attorneys, and agents in the preparation, filing, prosecution,
                and
                maintenance of any and all patent applications or patents included
                in the
                Licensed Patent Rights
                and to provide PHS
                with complete copies of any and all documents or other materials
                that
                PHS
                deems necessary to undertake such responsibilities. Licensee
                shall be responsible for all costs associated with transferring patent
                prosecution responsibilities to an attorney or agent of PHS's
                choice.

            

    

     

    
      	 	
              7.04

            	
              Each
                party shall promptly inform the other as to all matters that come
                to its
                attention that may affect the preparation, filing, prosecution, or
                maintenance of the Licensed Patent Rights
                and permit each other to provide comments and suggestions with respect
                to
                the preparation, filing, prosecution, and maintenance of Licensed Patent Rights,
                which comments and suggestions shall be considered by the other
                party.

            

    

     

    
      	
              8.

            	
              RECORD
                KEEPING

            

    

     

    
      	 	
              8.01

            	
              Licensee
                agrees to keep accurate and correct records of Licensed
                Products
                made, used, sold, or imported and Licensed
                Processes
                practiced under this Agreement
                appropriate to determine the amount of royalties due PHS.
                Such records shall be retained for at least five (5) years following
                a
                given reporting period and shall be available during normal business
                hours
                for inspection at the expense of PHS
                by
                an accountant or other designated auditor selected by PHS
                for the sole purpose of verifying reports and payments hereunder.
                The
                accountant or auditor shall only disclose to PHS
                information relating to the accuracy of reports and payments made
                under
                this Agreement.
                If an inspection shows an underreporting or underpayment in excess
                of five
                percent (5%) for any twelve (12) month period, then Licensee
                shall reimburse PHS
                for the cost of the inspection at the time Licensee
                pays the unreported royalties, including any late charges as required
                by
                Paragraph 9.08 of this Agreement.
                All payments required under this Paragraph shall be due within thirty
                (30)
                days of the date PHS
                provides Licensee
                notice of the payment due.

            

    

     

    
      	 	
              8.02

            	
              Licensee
                agrees to have an audit of sales and royalties conducted by an independent
                auditor at least every two (2) years if annual sales of the Licensed
                Product
                or
                Licensed
                Processes
                are over two (2) million dollars. The audit shall address, at a minimum,
                the amount of gross sales by or on behalf of Licensee
                during the audit period, terms of the license as to percentage or
                fixed
                royalty to be remitted to the Government,
                the amount of royalty funds owed to the Government
                under this Agreement,
                and whether the royalty amount owed has been paid to the Government
                and is reflected in the records of the Licensee.
                The audit shall also indicate the PHS
                license number, product, and the time period being audited. A report
                certified by the auditor shall be submitted promptly by the auditor
                directly to PHS
                on
                completion. Licensee
                shall pay for the entire cost of the
                audit.

            

    

     

    
      
        
        

      

      
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              9.

            	
              REPORTS
                ON PROGRESS, BENCHMARKS, SALES, AND
                PAYMENTS

            

    

     

    
      	 	
              9.01

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

            

    

     

    
      	 	
              9.02

            	
              Licensee
                shall provide written annual reports on its product development progress
                or efforts to commercialize under the Commercial
                Development Plan
                for each of the Licensed Fields of Use
                within sixty (60) days after December 31 of each calendar year. These
                progress reports shall include, but not be limited to: progress on
                research and development, status of applications for regulatory approvals,
                manufacturing, sublicensing, marketing, importing, and sales during
                the
                preceding calendar year, as well as plans for the present calendar
                year.
                PHS
                also encourages these reports to include information on any of
                Licensee's
                public service activities that relate to the Licensed Patent Rights.
                If reported progress differs from that projected in the Commercial
                Development Plan
                and Benchmarks,
                Licensee
                shall explain the reasons for such differences. In any such annual
                report,
                Licensee
                may propose amendments to the Commercial
                Development Plan,
                acceptance of which by PHS
                may not be denied unreasonably. Licensee
                agrees to provide any additional information reasonably required
                by
                PHS
                to
                evaluate Licensee's
                performance under this Agreement.
                Licensee
                may amend the Benchmarks
                at
                any time upon written consent by PHS.
                PHS
                shall not unreasonably withhold approval of any request of Licensee
                to
                extend the time periods of this schedule if such request is supported
                by a
                reasonable showing by Licensee
                of
                diligence in its performance under the Commercial
                Development Plan
                and toward bringing the Licensed
                Products
                to
                the point of Practical
                Application
                as
                defined in 37 CFR §404.3(d). Licensee
                shall amend the Commercial
                Development Plan
                and Benchmarks
                at
                the request of PHS
                to
                address any Licensed Fields of Use
                not specifically addressed in the plan originally
                submitted.

            

    

     

    
      	 	
              9.03

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

            

    

     

    
      	 	
              9.04

            	
              Licensee
                shall submit to PHS
                within sixty (60) days after each calendar half-year ending June
                30 and
                December 31 a royalty report setting forth for the preceding half-year
                period the amount of the Licensed
                Products
                sold or Licensed
                Processes
                practiced by or on behalf of Licensee
                in
                each country within the Licensed Territory,
                the Net
                Sales,
                and the amount of royalty accordingly due. With each such royalty
                report,
                Licensee
                shall submit payment of the earned royalties due. If no earned royalties
                are due to PHS
                for any reporting period, the written report shall so state. The
                royalty
                report shall be certified as correct by an authorized officer of
                Licensee
                and shall include a detailed listing of all deductions made under
                Paragraph 2.10 to determine Net
                Sales
                made under Article 6 to determine royalties
                due.

            

    

     

    
      	 	
              9.05

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

            

    

     

    
      
        
        

      

      
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              9.06

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

            

    

     

    
      	 	
              9.07

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

            

    

     

    
      	 	
              9.08

            	
              Interest
                and penalties may be assessed by PHS
                on
                any overdue payments in accordance with the Federal Debt Collection
                Act.
                The payment of such late charges shall not prevent PHS
                from exercising any other rights it may have as a consequence of
                the
                lateness of any payment.

            

    

     

    
      	 	
              9.09

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

            

    

     

    
      	
              10.

            	
              PERFORMANCE

            

    

     

    
      	 	
              10.01

            	
              Licensee
                shall use its reasonable best efforts to bring the Licensed
                Products
                and Licensed
                Processes
                to
                Practical
                Application.
                "Reasonable best efforts" for the purposes of this provision shall
                include
                adherence to the Commercial
                Development Plan
                at
                Appendix F and performance of the Benchmarks
                at
                Appendix E. The efforts of a sublicensee shall be considered the
                efforts
                of Licensee.

            

    

     

    
      	 	
              10.02

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

            

    

     

    
      	
              11.

            	
              INFRINGEMENT
                AND PATENT ENFORCEMENT

            

    

     

    
      	 	
              11.01

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

            

    

     

    
      
        
        

      

      
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              11.02

            	
              Pursuant
                to this Agreement
                and the provisions of Chapter 29 of title 35, United States Code,
                Licensee
                may: a) bring suit in its own name, at its own expense, and on its
                own
                behalf for infringement of presumably valid claims in the Licensed Patent Rights;
                b) in any such suit, enjoin infringement and collect for its use,
                damages,
                profits, and awards of whatever nature recoverable for such infringement;
                and c) settle any claim or suit for infringement of the Licensed Patent Rights
                provided, however, that PHS
                and appropriate Government
                authorities shall have the first right to take such actions. If
                Licensee
                desires to initiate a suit for patent infringement, Licensee
                shall notify PHS
                in
                writing. If PHS
                does not notify Licensee
                of
                its intent to pursue legal action within ninety (90) days, Licensee
                will be free to initiate suit. PHS
                shall have a continuing right to intervene in such suit. Licensee
                shall take no action to compel the Government
                either to initiate or to join in any such suit for patent infringement.
                Licensee
                may request the Government
                to
                initiate or join in any such suit if necessary to avoid dismissal
                of the
                suit. Should the Government
                be
                made a party to any such suit, Licensee
                shall reimburse the Government
                for any costs, expenses, or fees which the Government
                incurs as a result of such motion or other action, including any
                and all
                costs incurred by the Government
                in
                opposing any such motion or other action. In all cases, Licensee
                agrees to keep PHS
                reasonably apprised of the status and progress of any litigation.
                Before
                Licensee
                commences an infringement action, Licensee
                shall notify PHS
                and give careful consideration to the views of PHS
                and to any potential effects of the litigation on the public health
                in
                deciding whether to bring suit.

            

    

     

    
      	 	
              11.03

            	
              In
                the event that a declaratory judgment action alleging invalidity
                or
                non-infringement of any of the Licensed Patent Rights
                shall be brought against Licensee
                or
                raised by way of counterclaim or affirmative defense in an infringement
                suit brought by Licensee
                under Paragraph 11.02, pursuant to this Agreement
                and the provisions of Chapter 29 of Title 35, United States Code
                or other
                statutes, Licensee
                may: a) defend the suit in its own name, at its own expense, and
                on its
                own behalf for presumably valid claims in the Licensed Patent Rights;
                b) in any such suit, ultimately to enjoin infringement and to collect
                for
                its use, damages, profits, and awards of whatever nature recoverable
                for
                such infringement; and c) settle any claim or suit for declaratory
                judgment involving the Licensed Patent Rights-provided,
                however, that PHS
                and appropriate Government
                authorities shall have the first right to take such actions and shall
                have
                a continuing right to intervene in such suit. If PHS
                does not notify Licensee
                of
                its intent to respond to the legal action within a reasonable time,
                Licensee
                will be free to do so. Licensee
                shall take no action to compel the Government
                either to initiate or to join in any such declaratory judgment action.
                Licensee
                may request the Government
                to
                initiate or to join any such suit if necessary to avoid dismissal
                of the
                suit. Should the Government
                be
                made a party to any such suit by motion or any other action of
                Licensee,
                Licensee
                shall reimburse the Government
                for any costs, expenses, or fees which the Government
                incurs as a result of such motion or other action. If Licensee
                elects not to defend against such declaratory judgment action,
                PHS,
                at its option, may do so at its own expense. In all cases, Licensee
                agrees to keep PHS
                reasonably apprised of the status and progress of any litigation.
                Before
                Licensee
                commences an infringement action, Licensee
                shall notify PHS
                and give careful consideration to the views of PHS
                and to any potential effects of the litigation on the public health
                in
                deciding whether to bring suit.

            

    

     

    
      	 	
              11.04

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

            

    

     

    
      	 	
              11.05

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

            

    

     

    
      	
              12.

            	
              NEGATION
                OF WARRANTIES AND
                INDEMNIFICATION

            

    

     

    
      	 	
              12.01

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

            

    

     

    
      
        
        

      

      
        Page
          10
          of 30

        
          

        

      

      
        
        

      

    

    
      	 	
              12.02

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

            

    

     

    
      	 	
              12.03

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

            

    

     

    
      	 	
              12.04

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

            

    

     

    
      	 	
              12.05

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

            

    

     

    
      	
              13.

            	
              TERM,
                TERMINATION, AND MODIFICATION OF
                RIGHTS

            

    

     

    
      	 	
              13.01

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

            

    

     

    
      	 	
              13.02

            	
              In
                the event that Licensee
                is
                in default in the performance of any material obligations under this
                Agreement,
                including but not limited to the obligations listed in Article 13.05,
                and
                if the default has not been remedied within ninety (90) days after
                the
                date of notice in writing of such default, PHS
                may terminate this Agreement
                by
                written notice and pursue outstanding amounts owed through procedures
                provided by the Federal Debt Collection
                Act.

            

    

     

    
      	 	
              13.03

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

            

    

     

    
      	 	
              13.04

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

            

    

     

    
      
        
        

      

      
        Page
          11
          of 30

        
          

        

      

      
        
        

      

    

    
      	 	
              13.05

            	
              PHS
                shall specifically have the right to terminate or modify, at its
                option,
                this Agreement,
                if PHS
                determines that the Licensee:
                1) is not executing the Commercial
                Development Plan
                submitted with its request for a license and the Licensee
                cannot otherwise demonstrate to PHS's
                satisfaction that the Licensee
                has taken, or can be expected to take within a reasonable time, effective
                steps to achieve Practical
                Application
                of
                the Licensed
                Products
                or
                Licensed
                Processes;
                2) has not achieved the Benchmarks
                as
                may be modified under Paragraph 9.02; 3) has willfully made a false
                statement of, or willfully omitted, a material fact in the license
                application or in any report required by the license Agreement;
                4) has committed a material breach of a covenant or agreement contained
                in
                the license; 5) is not keeping Licensed
                Products
                or
                Licensed
                Processes
                reasonably available to the public after commercial use commences;
                6)
                cannot reasonably satisfy unmet health and safety needs; or 7) cannot
                reasonably justify a failure to comply with the domestic production
                requirement of Paragraph 5.02 unless waived. In making this determination,
                PHS
                will take into account the normal course of such commercial development
                programs conducted with sound and reasonable business practices and
                judgment and the annual reports submitted by Licensee
                under Paragraph 9.02. Prior to invoking this right, PHS
                shall give written notice to Licensee
                providing Licensee
                specific notice of, and a ninety (90) day opportunity to respond
                to,
                PHS's
                concerns as to the previous items 1) to 7). If Licensee
                fails to alleviate PHS's
                concerns as to the previous items 1) to 7) or fails to initiate corrective
                action to PHS's
                satisfaction, PHS
                may terminate this Agreement.

            

    

     

    
      	 	
              13.06

            	
              When
                the public health and safety so require, and after written notice
                to
                Licensee
                providing Licensee
                a
                sixty (60) day opportunity to respond, PHS
                shall have the right to require Licensee
                to
                grant sublicenses to responsible applicants, on reasonable terms,
                in any
                Licensed Fields of Use
                under the Licensed Patent Rights,
                unless Licensee
                can reasonably demonstrate that the granting of the sublicense would
                not
                materially increase the availability to the public of the subject
                matter
                of the Licensed Patent Rights.
                PHS
                will not require the granting of a sublicense unless the responsible
                applicant has first negotiated in good faith with Licensee.

            

    

     

    
      	 	
              13.07

            	
              PHS
                reserves the right according to 35 U.S.C. §209(f)(4) to
                terminate or modify this Agreement
                if
                it is determined that such action is necessary to meet requirements
                for
                public use specified by federal regulations issued after the date
                of the
                license and such requirements are not reasonably satisfied by Licensee.

            

    

     

    
      	 	
              13.08

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

            

    

     

    
      	 	
              13.09

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

            

    

     

    
      	
              14.

            	
              GENERAL
                PROVISIONS

            

    

     

    
      	 	
              14.01

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

            

    

     

    
      
        
        

      

      
        Page
          12
          of 30

        
          

        

      

      
        
        

      

    

     

    
      	 	
              14.02

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

            

    

     

    
      	 	
              14.03

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

            

    

     

    
      	 	
              14.04

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

            

    

     

    
      	 	
              14.05

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

            

    

     

    
      	 	
              14.06

            	
              All
                notices required or permitted by this Agreement
                shall be given by prepaid, first class, registered or certified mail
                or by
                an express/overnight delivery service provided by a commercial carrier,
                properly addressed to the other Party at the address designated on
                the
                following Signature Page, or to such other address as may be designated
                in
                writing by such other Party. Notices shall be considered timely if
                such
                notices are received on or before the established deadline date or
                sent on
                or before the deadline date as verifiable by U.S. Postal Service
                postmark
                or dated receipt from a commercial carrier. Parties should request
                a
                legibly dated U.S. Postal Service postmark or obtain a dated receipt
                from
                a commercial carrier or the U.S. Postal Service. Private metered
                postmarks
                shall not be acceptable as proof of timely
                mailing.

            

    

     

    
      	 	
              14.07

            	
              This
                Agreement
                shall not be assigned by Licensee
                except: a) with the prior written consent of PHS,
                such consent not to be withheld unreasonably; or b) as part of a
                sale or
                transfer of substantially the entire business of Licensee
                relating to operations which concern this Agreement.
                Licensee
                shall notify PHS
                within ten (10) days of any assignment of this Agreement
                by
                Licensee,
                and Licensee
                shall pay PHS,
                as an additional royalty, one percent (1%) of the fair market value
                of any
                consideration received for any assignment of this Agreement
                within thirty (30) days of such
                assignment.

            

    

     

    
      	 	
              14.08

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

            

    

     

    
      	 	
              14.09

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

            

    

     

    
      
        
        

      

      
        Page
          13
          of 30

        
          

        

      

      
        
        

      

    

    
      	 	
              14.10

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

            

    

     

    
      	 	
              14.11

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

            

    

     

    
      	 	
              14.12

            	
              The
                Parties agree to attempt to settle amicably any controversy or claim
                arising under this Agreement
                or
                a breach of this Agreement,
                except for appeals of modifications or termination decisions provided
                for
                in Article 13. Licensee
                agrees first to appeal any such unsettled claims or controversies
                to the
                designated PHS
                official, or designee, whose decision shall be considered the final
                agency
                decision. Thereafter, Licensee
                may exercise any administrative or judicial remedies that may be
                available.

            

    

     

    
      	 	
              14.13

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

            

    

     

    
      	 	
              14.14

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

            

    

     

     

    SIGNATURES
      BEGIN ON NEXT PAGE

     

    
      
        
        

      

      
        Page
          14
          of 30

        
          

        

      

      
        
        

      

    

     

    PHS
      PATENT LICENSE AGREEMENT--EXCLUSIVE

     

    SIGNATURE
      PAGE

     

    
      For
        PHS:

       

      
        	/s/
                Steven M. Ferguson 	 	5/7/04
	
                Steven
                  M. Ferguson, MBA 

                Director,
                  Division of Technology Development and Transfer

                Office
                  of Technology Transfer

                National
                  Institutes of Health

              	 	Date
	 	 	 
	
                Mailing
                  Address for Notices:

                Office
                  of Technology Transfer

                National
                  Institutes of Health

                6011
                  Executive Boulevard, Suite 325

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

              	 	 

      

       

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

       

      
      

      
        
          	
                  by:

                  Targeted Genetics Corporation

                	 	 
	Licensee	 	 
	 	 	 
	
                  /s/
                    H. Stewart Parker

                	 	
                  5/21/04

                
	
                  Signature
                    of Authorized Official 

                	 	Date
	 	 	 
	
                  H.
                    Stewart Parker 

                	 	 
	Printed Name	 	 
	 	 	 
	Pres
                  & CEO 	 	 
	Title	 	 
	 	 	 
	Official and Mailing Address for
                  Notices:	 	 
	 	 	 
	Targeted
                  Genetics Corporation 	 	 
	 	 	 
	1100
                  Olive Way, Suite 100 	 	 
	 	 	 
	Seattle,
                  WA 98101	 	 
	 	 	 
	Attention:  	 	 

        

         

      

    

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

     

    
      
        
        

      

      
        Page
          15
          of 30

        
          

        

      

      
        
        

      

    

     

    APPENDIX
      A--PATENT(S) OR PATENT APPLICATION(S)

     

    Patent(s)
      or Patent Application(s):

     

    A. U.S.
      Patents:

     

    
      	 	
              1.

            	
              5,587,308
                issued December 24, 1996 entitled “Modified Adeno-Associated Virus Vector
                Capable of Expression from a Novel Promoter” (NIH Ref:
                E-148-1992/0-US-01);

            

    

     

    
      	 	
              2.

            	
              5,989,540
                issued November 23, 1999 entitled “Modified Adeno-Associated Virus Vector
                Capable of Expression from a Novel Promoter” (NIH Ref:
                E-148-1992/0-US-08);

            

    

     

    
      	 	
              3.

            	
              5,866,696
                issued February 2, 1999 entitled “Modified Adeno-Associated Virus Vector
                Capable of Expression from a Novel Promoter” (NIH Ref:
                E-148-1992/0-US-10); and

            

    

     

    
      	 	
              4.

            	
              6,165,781
                issued December 26, 2000 entitled “Modified Adeno-Associated Virus Vector
                Capable of Expression from a Novel Promoter” (NIH Ref:
                E-148-1992/0-US-11).

            

    

     

    B. PCT
      Patent Application and related Foreign Patents and Patent
      Applications:

     

    
      	 	
              1.

            	
              PCT/US93/05310
                filed June 2, 1993 and published as WO 93/24641 December 9, 1993
                which claims priority to U.S. Patent Application 07/891,962 filed
                June 2,
                1992, now U.S. Patent 5,587,308 issued December 24, 1996 (NIH Ref:
                E-148-1992/0-PCT-02);

            

    

     

    
      	 	
              2.

            	
              Australian
                Patent 673367 issued November 7, 1996 from Australian Patent Application
                45981/93 having an international filing date of June 2, 1993 (NIH
                Ref:
                E-1481992/0-AU-03);

            

    

     

    
      	 	
              3.

            	
              Canadian
                Patent Application 2,136,441 having an international filing date
                of
                June 2, 1993 (NIH Ref:
                E-148-1992/0-CA-04);

            

    

     

    
      	 	
              4.

            	
              European
                Patent 0644944 issued November 21, 2001 from European Application
                EP 93 916425.7 having an international filing date of June 2, 1993
                including all designated countries where the patent grant was registered
                (NIH Ref: E-148-1992/0-EP-06); 

            

    

     

    
      	 	
              5.

            	
              Hong
                Kong Patent 1014549 issued June 7, 2002 from Hong Kong Application
                KH
                9811581435 having an international filing date of June 3, 1993 (NIH
                Ref:
                E-148-1992/0-HK-07); and

            

    

     

    
      	 	
              6.

            	
              European
                Patent Application EP 01 107900.0, a divisional application of
                EP 93 916425.7 having an international filing date of June 2,
                1993 (NIH Ref: E-148-1992/0-EP-05).

            

    

     

    
      
        
        

      

      
        Page
          16
          of 30

        
          

        

      

      
        
        

      

    

     

    APPENDIX
      B--LICENSED FIELDS OF USE AND TERRITORY

     

    
      	Licensed
              Fields of Use:	
              The
                development of compositions and methods utilizing Adeno-Associated
                Viral
                Vectors embodied in the Licensed Patent Rights
                which are useful in the treatment and prophylaxis of human and animal
                diseases. This field of use is separate and distinct form that of
                the
                Agreement
                between Licensee
                and PHS,
                having PHS
                reference number L-059-1993/0 effective March 18, 1994 and does not
                include compositions and methods for the treatment and prophylaxis
                of
                cystic fibrosis.

            

      	 	 

      	Licensed Territory: 	Worldwide

    

     

     

    The
      remainder of this page intentionally left blank

     

    
      
        
        

      

      
        Page
          17
          of 30

        
          

        

      

      
        
        

      

    

    APPENDIX
      C--ROYALTIES

     

    Royalties:

     

    
      	
              A.

            	
              License Issue Royalty
                pursuant to Paragraph 6.01 as amended and set forth in Appendix D
                of this
                Agreement:

            

    

     

    Licensee
      agrees
      to pay to PHS,
      a
      non-refundable, non-creditable License Issue Royalty
      in the
      amount of [*]
      Dollars
      ($[*]).
      The
License Issue Royalty
      as set
      forth herein is due as of the effective date of this Agreement
      and is
      payable to PHS
      within
      thirty (30) days thereof.

     

    
      	
              B.

            	
              Minimum Annual Royalty
                pursuant to Paragraph 6.02 as amended and set forth in Appendix D
                of this
                Agreement:

            

    

     

    Licensee
      agrees
      to pay to PHS,
      a
      non-refundable, non-creditable Minimum Annual Royalty
      in the
      amount of [*]
      Dollars
      ($[*]).
      The
Minimum Annual Royalty
      for the
      first calendar year of this Agreement
      is due
      as of the effective date of this Agreement
      and is
      payable to PHS
      within
      thirty (30) days thereof and of the effective date of this Agreement
      and will
      be prorated according to the fraction of the calendar year remaining between
      the
      effective date of this Agreement
      and the
      next subsequent January 1. Beginning on the first January 1 after the effective
      date of this Agreement
      and for
      each subsequent calendar year of this Agreement
      the
Minimum Annual Royalty
      is due
      on January 1 and is payable to PHS
      within
      thirty (30) days thereof.

     

    
      	C.	
              Earned Royalty(ies)
                pursuant to Paragraph 6.03, as amended and set forth in Appendix
                D, of
                this Agreement:

            

    

     

    Licensee
      agrees
      to pay to PHS,
      according to schedule as set forth in Paragraph 9.04 of this Agreement, an
      Earned Royalty
      amount
      calculated on the basis of Net Sales
      according to percentage set forth below:

     

    
      	 	
              1.

            	
              [*]
                Percent ([*]%)
                of Net Sales
                of
                Licensee
                and its sublicensees of all Licensed Products
                manufactured and sold in the Licensed Territory.

            

    

     

    Notwithstanding
      the foregoing, Licensee
      shall be
      entitled to a [*]
      Percent
      ([*]%)
      [*]
      against
      the earned royalty rate set forth in Paragraph C.1. above for each percent
      of
      royalty in excess of [*]
      Percent
      ([*]%)
      Licensee must pay to other unaffiliated licensors for the manufacture and sale
      of Licensed Products.
      Said
      reduction, however, shall not reduce the earned royalty rate for Licensed Products
      below
[*]
      ([*])
      of the
      rate provided for in Paragraph C.1. above.

     

    The
      remainder of this page intentionally left blank

     

    *Confidential
      Treatment
      Requested.

    
      
        
        

      

      
        Page
          18
          of 30

        
          

        

      

      
        
        

      

    

    
      	D.	
              Benchmark Royalty(ies)
                pursuant to Paragraph 6.04 of this Agreement:

            

    

     

    Licensee
      agrees
      to pay to PHS Benchmark Royalties
      in the
      amounts set forth herein:

     

    
      	
              Benchmark

            	
              Benchmark Royalty

            
	
              For
                each [*]
                up
                to a total of [*],
                at the time of [*]
                of
                a [*]
                or
                equivalent clinical trial for a particular [*]

            	
              [*]

            
	
              For
                each [*],
                up to a total of [*],
                at the time of [*]
                of
                enrollment in [*]
                or
                equivalent clinical trial for a particular [*]

            	
              [*]

            
	
              For
                each [*],
                up to a total of [*],
                at the time of [*]
                approval or equivalent for a particular [*]

            	
              [*]

            

    

     

    Each
      Benchmark Royalty
      payment
      as set forth herein is due to PHS
      upon
Licensee,
      its
      sublicensees, or other Person,
      as set
      forth in Appendix D, Paragraph 2.14 of this Agreement, acting by or on behalf
      of
Licensee,
      achieving the Benchmark
      and is
      payable to PHS
      within
      thirty (30) days thereof or in the event that a sublicense achieves the
      benchmark and sublicensee is responsible for making a benchmark/milestone
      payment to Licensee upon achieving the benchmark/milestone the Benchmark
      Royalty
      is
      payable to PHS
      by
Licensee
      within
      thirty (30) days of receipt by Licensee
      from
      sublicense of the benchmark/milestone payment due from sublicense.

     

    
      	
              E.

            	
              Sublicensing Royalty
                pursuant to Paragraph 6.05, as amended and set forth in Appendix
                D, of
                this Agreement:

            

    

     

    (1)
      In
      addition to any royalties paid to PHS
      on
      behalf of sublicensees as provided for in Section C above, Licensee
      agrees
      to pay to PHS,
      upon
      granting of a sublicense as provided for in Article 4 of this Agreement,
      either
      (i) in the case that such sublicense includes other assets owned or licensed
      by
      Licensee, an [*]
      of the
      fair market value of any consideration received for granting each sublicense,
      or
      (ii) if Licensee grants a sublicense as provided for in Article 4 of this
      Agreement and that sublicense consists only of the grant of rights as provided
      in Article 3 of his Agreement and no other assets owned or licensed by Licensee,
      then Licensee shall pay to PHS an additional royalty in the amount of
[*]
      percent
      ([*]%)
      of the
      RMCV received for granting such sublicense. The Sublicensing Royalty
      as set
      forth herein is due to PHS
      upon the
      effective date of the sublicense and is payable to PHS
      within
      thirty (30) days of receipt of the payment by Licensee from sublicense of the
      FMCV. Furthermore, within thirty (30) days of the effective date of the
      sublicense Licensee will contact PHS and arrange to meet with PHS to discuss
      and
      agree to the FMCV received for the granting of each sublicense.

     

    
      	
              F.

            	
              Assignment Royalty
                pursuant to Paragraph 14.07, as amended and set forth in Appendix
                D, of
                this Agreement:

            

    

     

    Upon
      assignment of this Agreement by Licensee, in accordance with Paragraph 14.07
      of
      this Agreement, the Benchmark Royalty, due with respect to [*],
      as set
      forth in Section D above, will be amended to increase from the current amount
      of
[*]
      Dollars
      ($[*])
      for
      each [*]
      up to
      and including [*]
      to
[*]
      Dollars
      ($[*])
      for
      each [*]
      up to
      and including [*].
      Payment
      will be due in accordance with the terms and conditions set forth in Section
      D
      above.

     

    
      *Confidential
        Treatment Requested.

    

    
      
        
        

      

      
        Page
          19
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    APPENDIX
      D—MODIFICATIONS

     

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

     

    Article
      2. DEFINITIONS

     

    Paragraphs
      2.06, 2.07, 2.08 and 2.10 are amended to read as follows:

     

    
      	 	
              2.06

            	
              "Licensed Patent Rights"
                shall mean:

            

    

     

    
      	 	
              a)

            	
              Patent
                applications (including PCT patent applications) and/or patents listed
                in
                Appendix A, all divisions and continuations of these applications,
                all
                patents issuing from such applications, divisions, and continuations,
                and
                any reissues, reexaminations, substitutions, renewals, confirmations,
                supplementary protection certificates, registrations, revalidations,
                additions of or to and extensions of all such
                patents;

            

    

     

    
      	 	
              b)

            	
              to
                the extent that the following contain one or more claims directed
                to the
                invention or inventions disclosed in a) above: i) continuations-in-part
                of
                a) above; ii) all divisions and continuations of these
                continuations-in-part; iii) all patents issuing from such
                continuations-in-part, divisions, and continuations; iv) priority
                patent
                application(s) of a) above; and v) any reissues, reexaminations,
                substitutions, renewals, confirmations, supplementary protection
                certificates, registrations, revalidations, additions of or to
                and
                extensions of all such patents;

            

    

     

    
      	 	
              c)

            	
              to
                the extent that the following contain one or more claims directed
                to the
                invention or inventions disclosed in a) above: all counterpart foreign
                and
                U.S. patent applications and patents to a) and b) above, including
                those
                listed in Appendix A.

            

    

     

    Licensed Patent Rights
      shall
not
      include
      b) or c) above to the extent that they contain one or more claims directed
      to
      new matter which is not the subject matter disclosed in a) above.
      Notwithstanding the foregoing, Licensed Patent Rights
      shall
      not include U.S. Patent 5,590,279 issued November 23, 1999 except to the extent
      that the application from which this patent issued, U.S. Patent Application
      Serial Number 08/455,552 filed May 31, 1995 (NIH Ref: E-148-1992/0-US-09),
      is
      necessary to establish a claim of priority under the provisions of Title 35
      of
      the United States Code for any other patent or patent application included
      within the Licensed Patent Rights
      as set
      forth in subparagraphs a), b) and c) above.

     

    
      	 	
              2.07

            	
              “Licensed Process(es)”
                means processes which, in the course of being practiced would be
                within
                the scope of one or more claims of the Licensed
                Patent Rights
                that have not been held unpatentable, invalid or unenforceable by
                an
                unappealed or unappealable judgment of a court of competent jurisdiction.
                Nothwithstanding the foregoing, for purposes of calculating Net
                Sales
                as
                set forth in Paragraph 2.10 of this Agreement,
                Licensed Process(es)
                means processes which, in the course of being practiced would be
                within
                the scope of one or more claims of an issued patent within the
                Licensed
                Patent Rights
                that has not been held unpatentable, invalid or unenforceable by
                an
                unappealed or unappealable judgment of a court of competent
                jurisdiction.

            

    

     

    
      	 	
              2.08

            	
              “Licensed
                Product(s)”
                means tangible materials which, in the course of manufacture, use,
                sale,
                or importation would be within the scope of one or more claims of
                the
                Licensed
                Patent Rights
                that have not been held unpatentable, invalid or unenforceable by
                an
                unappealed or unappealable judgment of a court of competent jurisdiction.
                Notwithstanding the foregoing, for purposes of calculating Net
                Sales
                as
                set forth in Paragraph 2.10 of this Agreement,
                Licensed
                Product(s)
                means products which, in the course of being practiced would be within
                the
                scope of one or more claims of an issued patent within the Licensed
                Patent Rights
                that has not been held unpatentable, invalid or unenforceable by
                an
                unappealed or unappealable judgment of a court of competent
                jurisdiction.

            

    

     

    
      
        
        

      

      
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          20
          of 30

        
          

        

      

      
        
        

      

    

     

    
      	 	
              2.10

            	
              “Net
                Sales”
                means the total gross receipts for sales of Licensed
                Products
                or
                practice of Licensed Processes by or on behalf of Licensee or its
                sublicensees, and from leasing, renting, or otherwise making Licensed
                Products
                available to others without sale or other dispositions, whether invoiced
                or not, less returns and allowances, packing costs, insurance costs,
                freight out, taxes or excise duties imposed on the transaction (if
                separately invoiced), and wholesaler and cash discounts in amounts
                customary in the trade to the extent actually granted. No deductions
                shall
                be made for commissions paid to individuals, whether they be with
                independent sales agencies or regularly employed by Licensee,
                or sublicensees, and on its payroll, or for cost of collections.
                Notwithstanding the foregoing, transfers to Affiliates,
                sublicensees, partners, or contractors for research purposes, including
                clinical trials, and including transfers at Licensee’s fully-allocated
                manufacturing cost, shall not be considered a part of Net
                Sales.

            

    

     

    New
      Paragraphs 2.13 through 2.17 are added to the Agreement
      and read
      as follows:

     

    
      	 	
              2.13

            	
              “Person”
                means an individual, corporation, partnership, trust, business trust,
                association, joint stock company, joint venture, pool, syndicate,
                sole
                proprietorship, unincorporated organization, governmental authority
                or any
                other form of entity not specifically listed
                herein.

            

    

     

    
      	 	
              2.14

            	
              “Affiliate(s)”
                shall mean, with respect to Licensee,
                any other Person
                which during the term of this Agreement
                controls, is controlled by or is under common control with Licensee,
                but for only so long as such Person
                controls, is controlled by or is under common control with Licensee.
                For this purpose, control means the possession of the power to direct
                or
                cause the direction of the management and the policies of an entity,
                whether through ownership directly or indirectly of fifty percent
                (50%) or
                more of the stock entitled to vote, and for non-stock organizations,
                the
                right to receive fifty percent (50%) or more of the profits by contract
                or
                otherwise, or where control of fifty percent (50%) or more of such
                rights
                is not permitted in the country where such Person
                exists, the maximum permitted in such a
                country.

            

    

     

    
      
        
        

      

      
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          21
          of 30

        
          

        

      

      
        
        

      

    

    
      	 	
              2.15

            	
              “Indication(s)”
                means a disease or other physiologic condition, for example hemophilia
                or
                heart failure, to be treated with a Licensed Product
                wherein the Licensed Product
                contains a separate and distinct therapeutic gene of interest, for
                exampled a Factor VII gene, a Factor IX gene or the adenylate cyclase
                IV
                gene.

            

    

     

    
      	 	
              2.16

            	
              “Cystic Fibrosis License”
                means the license, having PHS
                Reference Number L-059-93/0, between PHS
                and Licensee
                effective March 18, 1994, which includes the Licensed Patent Rights.

            

    

     

    
      	 	
              2.17

            	
              “Fair
                Market Value of Consideration (FMCV)”
                means cash received by Licensee
                without obligation for use by Licensee
                in
                funding research and development or manufacturing efforts of a product
                candidate. Payments intended to be considered include, but are not
                limited
                to, upfront payments for access to technology and for acknowledgement
                of
                investment in the development of the technology, and any premium
                paid over
                market price if equity is a component of the consideration received
                by
                Licensee upon sublicensing and there is no obligation to use that
                premium
                to fund R&D efforts. FMCV
                does not include clinical development and commercialization milestones
                paid by sublicensees since milestones are governed by Appendix C,
                Section
                D, and it does not include monies received from a sublicense for
                funding
                R&D efforts or equity purchased at market value by the
                sublicense.

            

    

     

    
      	Article
              5.	
              STATUTORY
                AND PHS REQUIREMENTS AND RESERVED GOVERNMENT
                RIGHTS

            

    

     

    Paragraphs
      5.01 and 5.04 are amended to read as follows:

     

    
      	 	
              5.01

            	
              PHS
                reserves on behalf of the Government
                an
                irrevocable, nonexclusive, nontransferable, royalty-free license
                for the
                practice of all inventions licensed under the Licensed
                Patent Rights
                throughout the world by or on behalf of the Government
                and on behalf of any foreign government or international organization
                pursuant to ay existing or future treaty or agreement to which the
                Government
                is
                a signatory. Prior to the First
                Commercial Sale,
                Licensee
                agrees to provide PHS reasonable quantities of Licensed
                Products
                or
                materials made through the Licensed
                Processes
                for PHS
                research use, but not human clinical use. Notwithstanding the foregoing,
                Licensee
                agrees, if a written request is made by PHS, to negotiate in good
                faith
                with PHS
                a
                separate agreement or an amendment to this Agreement regarding the
                supply
                of Licensed
                Products
                or
                materials made through Licensed
                Processes
                for PHS
                use in human clinical trials.

            

    

     

    
      	 	
              5.04

            	
              In
                addition to the reserved license in Paragraph 5.01 above, PHS reserves
                the
                right to grant nonexclusive Research
                Licenses
                directly or to require Licensee
                to
                grant nonexclusive Research
                Licenses
                on
                reasonable terms. The purpose of this Research
                License
                is
                to encourage basic research, whether conducted at an academic or
                corporate
                facility. In order to safeguard the Licensed
                Patent Rights,
                however, PHS
                shall consult with Licensee
                before granting to commercial entities a Research
                License
                or
                providing to them research samples of materials made through the
                Licensed
                Processes.

            

    

     

    
      	Article
              6.	
              ROYALTIES
                AND REIMBURSEMENT

            

    

     

    Paragraphs
      6.01 through 6.05 and 6.09 through 6.10 are amended to read as
      follows:

     

    
      	 	
              6.01

            	
              Licensee
                agrees to pay to PHS
                a
                noncreditable, nonrefundable License Issue Royalty
                as
                set forth in Appendix C, Section A.

            

    

     

    
      	 	
              6.02

            	
              Licensee
                agrees to pay to PHS
                a
                nonrefundable Minimum Annual Royalty
                as
                set forth in Appendix C, Section B.

            

    

     

    
      	 	
              6.03

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

            

    

     

    
      	 	
              6.04

            	
              Licensee
                agrees to pay PHS
                benchmark royalties as set forth in Appendix C, Section
                D.

            

    

     

    
      
        
        

      

      
        Page
          22
          of 30

        
          

        

      

      
        
        

      

    

     

    
      	 	
              6.05

            	
              Licensee
                agrees to pay PHS
                sublicensing royalties as set forth in Appendix C, Section
                E.

            

    

     

    
      	 	
              6.09

            	
              With
                regard to expenses associated with the preparation, filing, prosecution,
                and maintenance of all patent applications and patents included within
                the
                Licensed Patent Rights
                incurred by PHS
                prior to the effective date of this Agreement Licensee
                shall pay to PHS,
                as an additional royalty, within sixty (60) days of PHS's
                submission of a statement and request for payment to Licensee,
                an amount equivalent to such patent expenses previously incurred
                by
                PHS.
                Notwithstanding the foregoing, if Licensee
                has previously paid to PHS
                said expenses under Paragraph 6.08 of the Cystic Fibrosis License
                no
                additional payment of said expenses by Licensee
                will be required.

            

    

     

    
      	 	
              6.10

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

            

    

     

    (a)
      to
      pay PHS
      on an
      annual basis, within sixty (60) days of PHS's
      submission of a statement and request for payment, a royalty amount equivalent
      to all such patent expenses incurred during the previous calendar year(s);
      or

     

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

     

    PHS
      has
      given Licensee
      the
      right to assume responsibility for the preparation, filing, prosecution, or
      maintenance of any patent application or patent included within the Licensed
      Patent Rights
      under
      the provisions of Paragraph 7.01 of the Cystic
      Fibrosis License.
      In the
      event that the Cystic
      Fibrosis License
      is
      terminated or expired prior to the expiration of this Agreement Licensee
      will
      continue to have, unless this Agreement
      has been
      terminated or expired, or PHS
      has
      agreed to resume responsibility for the preparation, filing, prosecution or
      maintenance of any patent application or patent included in the Licensed
      Patent Rights
      in
      writing, the right to assume responsibility for the preparation, filing,
      prosecution or maintenance of any patent application or patent included in
      the
Licensed
      Patent Rights.
      As long
      as Licensee
      has
      responsibility for the preparation, filing, prosecution or maintenance of any
      patent application or patent included in the Licensed
      Patent Rights Licensee
      shall
      directly pay the attorneys or agents engaged to prepare, file, prosecute, or
      maintain such patent applications or patents and shall provide to PHS,
      if
      requested, copies of each invoice associated with such services as well as
      documentation that such invoices have been paid. Notwithstanding the foregoing,
      if Licensee
      has
      previously paid, to PHS
      or
      directly to the attorneys or agents engaged to prepare, file, prosecute or
      maintain the patents and patent applications included in the Licensed
      Patent Rights,
      said
      expenses under Paragraph 6.08 of the Cystic
      Fibrosis License
      no
      additional payment of said expenses by Licensee
      will be
      required.

     

    
      
        
        

      

      
        Page
          23
          of 30

        
          

        

      

      
        
        

      

    

    
      	Article
              7.	
              PATENT
                FILING, PROSECUTION, AND
                MAINTENANCE

            

    

     

    Paragraph
      7.01 is deleted in its entirety.

     

    Paragraph
      7.02 is amended to read as follows:

     

    
      	 	
              7.02

            	
              Licensee,
                in accordance with the provisions of Paragraph 7.01 of the Cystic
                Fibrosis License
                has assumed the responsibility for the preparation, filing, prosecution,
                and maintenance of any and all patent applications or patents included
                in
                the Licensed
                Patent Rights
                and shall on an ongoing basis promptly furnish copies of all
                patent-related documents to PHS.
                Licensee
                has, subject to the pror approval of PHS,
                select registered patent attorneys or patent agents to provide such
                services on behalf of Licensee
                and PHS.
                PHS
                has provided appropriate powers of attorney and other documents necessary
                to undertake such actions to the patent attorneys or patent agents
                providing such services. Licensee
                and its attorneys or agents shall consult with PHS
                in
                all aspects of the preparation, filing, prosecution and maintenance
                of
                patent applications and patents included within the Licensed
                Patent Rights and
                hall provide PHS
                sufficient opportunity to comment on any document that Licensee
                intends to file or to cause to be filed with the relevant intellectual
                property or patent office.

            

    

     

    
      	Article
              8.	
              RECORD
                KEEPING

            

    

     

    Paragraph
      8.02 is amended to read as follows:

     

    
      	 	
              8.02

            	
              Licensee
                agrees to have an audit on sales and royalties conducted by an independent
                auditor at lease every two (2) years, but not more than once per
                year, if
                annual sales of the Licensed
                Product
                or
                Licensed Processes
                are over two (2) million dollars. The audit shall address, at a minimum,
                the amount of gross sales by or on behalf of Licensee
                during the audit period, terms of the license as to percentage or
                fixed
                royalty to be remitted to the Government,
                the amount of royalty funds owed to the Government
                under this Agreement,
                and whether the royalty amount owed has been paid to the Government
                and is reflected in the records of the Licensee.
                The audit shall also indicate the PHS
                license number, product, and the time period being audited. A report
                certified by the auditor shall be submitted promptly by the auditor
                directly to PHS
                on
                completion. Licensee
                shall pay for the entire cost of the
                audit.

            

    

     

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

            

    

     

    Paragraphs
      9.04, 9.05 and 9.06 are amended to read as follows:

     

    
      	 	
              9.04

            	
              Prior
                to First
                Commercial Sale, Licensee shall
                submit to PHS
                within sixty (60) days after each calendar year ending December 31
                a
                royalty report setting forth for the preceding year period the amount
                of
                the Licensed
                Products
                sold or Licensed
                Processes
                practiced by or on behalf of Licensee
                in
                each country within the Licensed Territory,
                the Net
                Sales,
                and the amount of royalty accordingly due. With each such royalty
                report,
                Licensee
                shall submit payment of the earned royalties due. If no earned royalties
                are due to PHS
                for any reporting period the written report shall so state. After
                First
                Commercial Sale,
                Licensee
                shall submit to PHS within sixty (60) days after each calendar half-year
                ending June 30 and December 31 a royalty report setting forth the
                preceding half-year period the amount of the Licensed Products
                sold or Licensed
                Processes
                practiced by or on behalf of Licensee
                in
                each country within the Licensed
                Territory,
                the Net
                Sales,
                and the amount of royalty accordingly due. With each such royalty
                report,
                Licensee
                shall submit payment of the earned royalties due. If no earned royalties
                are due to PHS
                for any reporting period the written report shall so state. Any royalty
                report submitted pursuant to this paragraph shall be certified as
                correct
                by an authorized officer of Licensee
                and shall include a detailed listing of all deductions made under
                Paragraph 2.10 to determine Net
                Sales
                made under Article 6 to determine royalties
                due.

            

    

     

    
      	 	
              9.05

            	
              Licensee
                agrees to forward, on an annual basis prior to the First
                Commercial Sale
                and semi-annually after First
                Commercial Sale,
                to PHS
                a
                copy of such reports received by Licensee
                from its sublicensees during the preceding year or half-year period
                respectively, as shall be pertinent to a royalty accounting to
                PHS
                by
                Licensee
                for activities under the
                sublicense.

            

    

     

    
      
        
        

      

      
        Page
          24
          of 30

        
          

        

      

      
        
        

      

    

     

    
      	 	
              9.06

            	
              Royalties
                due under Article 6 shall be paid in U.S. dollars. For conversion
                of
                foreign currency to U.S. dollars, the conversion rate shall be the
                average
                New York foreign exchange rate quoted in The
                Wall Street Journal
                for the previous thirty (30) trading days prior to the date the payment
                is
                due. All checks and bank drafts shall be drawn on United States banks
                and
                shall be payable, as appropriate, to "NIH/Patent Licensing." All
                such
                payments shall be sent to the following address: NIH,
                P.O. Box 360120, Pittsburgh, PA 15251-6120. Any loss of
                exchange, value, taxes, or other expenses incurred in the transfer
                or
                conversion to U.S. dollars shall be paid entirely by Licensee.
                The royalty report required by Paragraph 9.04 of this Agreement
                shall accompany each such payment, and a copy of such report shall
                also be
                mailed to PHS
                at
                its address for notices indicated on the Signature Page of this
                Agreement.

            

    

     

    
      	Article
              10.	
              PERFORMANCE

            

    

     

    Paragraphs
      10.01 and 10.02 are amended to read as follows:

     

    
      	 	
              10.01

            	
              Licensee
                shall use its commercially reasonable best efforts to bring the
                Licensed
                Products
                and Licensed
                Processes
                to
                Practical
                Application.
                “Commercially reasonable best efforts” for the purposes of this provision
                shall include adherence to the Commercial
                Development Plan
                at
                Appendix F and performance of the Benchmarks
                at
                Appendix E. The efforts of a sublicense shall be considered the efforts
                of
                Licensee.

            

    

     

    
      	 	
              10.02

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

            

    

     

    
      	Article
              11.	
              INFRINGEMENT
                AND PATENT ENFORCEMENT

            

    

     

    New
      Paragraph 11.06 is added to read as follows:

     

    
      	 	
              11.06

            	
              Notwithstanding
                the provisions of Paragraphs 11.02, 11.03 and 11.04 of this Agreement
                PHS
                and/or the appropriate Government
                authorities may undertake an action under Paragraph 11.02 or Paragraph
                11.03 of this Agreement
                without the consent of Licensee.
                In the event that PHS
                and/or appropriate Government
                authorities undertake an action under Paragraph 11.02 or Paragraph
                11.03
                of this Agreement,
                without the consent of Licensee,
                Licensee
                shall not be required to reimburse PHS
                and/or appropriate Government
                authorities for the expenses associated with said action. However,
                if PHS
                and/or appropriate Government
                authorities undertake an action under Paragraphs 11.02 or 11.03 of
                this
                Agreement,
                without the consent of Licensee,
                PHS
                and/or appropriate Government
                authorities will retain any and all proceeds that may be obtained
                if PHS
                and/or appropriate Government
                authorities are awarded judgment in any such action. Furthermore,
                PHS
                and/or appropriate Government
                authorities may settle any litigation undertaken by PHS
                and/or appropriate Government
                authorities without the consent of Licensee
                a)
                by requiring Licensee
                to
                grant a sublicense, negotiated by PHS
                and/or appropriate Government
                authorities, to all parties adverse to PHS
                and/or appropriate Government
                authorities entering into the settlement or b) Licensee
                must agree to convert this agreement to a non-exclusive
                license.

            

    

     

    
      	Article
              12.	
              NEGATION
                OF WARRANTIES AND
                INDEMNIFICATION

            

    

     

    Paragraph
      12.04 is amended to read as follows:

     

    
      	 	
              12.04

            	
              PHS
                and Licensee
                do
                not represent that either party will commence legal actions against
                third
                parties infringing the Licensed
                Patent Rights.

            

    

     

    
      
        
        

      

      
        Page
          25
          of 30

        
          

        

      

      
        
        

      

    

     

    
      	Article
              14.	
              GENERAL
                PROVISIONS

            

    

     

    Paragraph
      14.07 is amended to read as follows:

     

    
      	 	
              14.07

            	
              This
                Agreement
                shall not be assigned by Licensee,
                to a third party other than an Affiliate as set forth in Paragraph
                2.14 if
                this Agreement except: a) with the prior written consent of PHS,
                such consent not to be withheld unreasonably; or b) as part of a
                sale or
                transfer of substantially the entire business of Licensee
                relating to operations which concern this Agreement.
                Licensee shall
                notify PHS
                within ten (10) days of any assignment of this Agreement
                by
                Licensee,
                and Licensee
                shall pay PHS,
                as an additional royalty, an Assignment Royalty
                as
                set forth in Appendix C, Section F. Notwithstanding the foregoing,
                no
                Assignment
                Royalty,
                as set forth in Appendix C, Section F, would be due and payable to
                PHS
                upon assignment of this Agreement
                to
                an Affiliate
                as
                set forth in Paragraph 2.14 of this Agreement.

            

    

     

    
      
        
        

      

      
        Page
          26
          of 30

        
          

        

      

      
        
        

      

    

     

    APPENDIX
      E--BENCHMARKS AND PERFORMANCE

     

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

     

    
      	
              Benchmark

            	
              Projected
                Date for Achieving Benchmark

            
	
              1. Select
                [*]
                for further clinical development

            	
              [*]
                of
                the effective date of this Agreement

            
	
              2. Begin
                [*]
                or
                equivalent clinical trials for the [*]
                and provide PHS
                with a [*]

            	
              [*]

            
	
              3. If
                only a [*]
                has been selected to date, [*]
                for further clinical development

            	
              Within
                [*]
                of
                the effective date of this Agreement

            
	
              4. [*]
                or
                equivalent clinical trials for the [*]
                and provide PHS
                with a [*]

            	
              [*]

            
	
              5. If
                less than [*]
                have been selected to date, select a [*]
                for further clinical development

            	
              [*]
                of
                the effective date of this Agreement

            
	
              6. Begin
                [*]
                or
                equivalent clinical trials for the [*]
                and provide PHS
                with a [*]

            	
              [*]

            

    

    

    *Confidential
      Treatment Requested.

    
       

      
        
          
          

        

        
          Page
            27
            of 30

          
            

          

        

        
          
          

        

      

    

     

    APPENDIX
      F—COMMERCIAL
      DEVELOPMENT PLAN

     

    
      [*]

    
      
        
        

      

      
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          28
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