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Sample Business Contracts

License Agreement - Duke University and Celsion Corp.

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                                LICENSE AGREEMENT


         THIS  AGREEMENT  made and entered into as of the tenth day of November,
1999 (this  "AGREEMENT"),  by and  between  DUKE  UNIVERSITY,  a North  Carolina
not-for-profit  corporation  organized  under  the laws of North  Carolina  (the
"LICENSOR"),  having its principal  office at Durham,  North Carolina 27708, and
CELSION  CORPORATION,  a corporation  organized  under the laws of Maryland (the
"LICENSEE"), having its principal office at Columbia, MD.

         WHEREAS, David Needham and Mark Dewhirst (the "DISCLOSERS"),  employees
of LICENSOR, have filed an Invention Disclosure Form that has been assigned Duke
University  Office of Science and  Technology  file  number  1544  relating to a
method  whereby  encapsulated  chemotherapeutic  drugs and other  agents  can be
caused to be released by the local application of heat; and

         WHEREAS,  LICENSOR  represents  that it is the sole owner of the entire
right, title and interest in and to the HEAT TRIGGERED  DELIVERY  TECHNOLOGY (as
hereinafter defined) and PATENT RIGHTS related thereto (as hereinafter defined);
and

         WHEREAS,  LICENSOR  has the  right  to  grant  licenses  to  said  HEAT
TRIGGERED  DELIVERY  TECHNOLOGY  and  PATENT  RIGHTS and wishes to have the HEAT
TRIGGERED DELIVERY TECHNOLOGY and PATENT RIGHTS utilized in the public interest;
and

         WHEREAS,  LICENSEE represents that it owns proprietary  technology that
may allow it to develop HEAT  TRIGGERED  DELIVERY  TECHNOLOGY  and PATENT RIGHTS
into products that will be useful in the treatment of disease; and

         WHEREAS,  LICENSEE  wishes  to  obtain a license  to  develop  the HEAT
TRIGGERED DELIVERY TECHNOLOGY and PATENT RIGHTS into such useful products;

         NOW  THEREFORE,  in  consideration  of the  premises  and the  faithful
performance of the covenants herein contained, IT IS AGREED:


                             ARTICLE 1 - DEFINITIONS

         1.01 - For the purposes of this AGREEMENT, and solely for that purpose,
the terms and phrases set forth  hereinafter in capital letters shall be defined
as follows:

         a. "AFFILIATE" shall mean any corporation,  partnership or other entity
            at least fifty  percent (50%) of whose voting or other capital stock
            is owned or controlled, directly or indirectly, by a party.

         b. "FIELD" shall mean the use of the HEAT TRIGGERED DELIVERY TECHNOLOGY
            and PATENT RIGHTS in thermally  sensitive  formulations  designed to
            release,   activate,  or  express   pharmaceutically  active  agents
            locally, such release,  activation, or expression being initiated by
            local application of heat and being made for the purpose of treating
            any  disease  or  altering  a  physiological   process  in  animals,
            including, without restriction, in humans.


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         c. "HEAT TRIGGERED  DELIVERY  TECHNOLOGY"  shall mean PATENT RIGHTS and
            know-how  related to the use in the FIELD of liposomes  that contain
            pharmacologically  active agents at normal body temperature and that
            can  be  induced  to  release  said  agents  locally  by  the  local
            application  of heat  as  heretofore  conceived  and/or  reduced  to
            practice by DISCLOSERS as evidenced by written  records,  including,
            without  limitation,  Duke University Office of Science & Technology
            File #1544.

         d. "PATENT  RIGHTS" shall mean all existing and presently being drafted
            US and  Foreign  patent  applications  relating  to Duke  University
            Office of Science and Technology file number 1544. The parties agree
            that all such existing and presently being drafted  applications are
            US  Patent   Application   Serial  #09/099688  and  PCT  application
            US99/12964 designating all countries of the EPO, Australia,  Canada,
            and Japan. In addition PATENT RIGHTS shall mean all U.S. and foreign
            patent application(s)  hereafter issuing on any such existing patent
            application,  substitutes,  continuations,  divisionals, or reissues
            thereof.

         e. "LICENSED  PRODUCT" shall mean any product which is produced or sold
            by or on behalf of LICENSEE,  its  AFFILIATES or  sublicensees  that
            utilizes the HEAT TRIGGERED DELIVERY  TECHNOLOGY or PATENT RIGHTS or
            that is covered  by one or more  claims of the  PATENT  RIGHTS,  and
            which is intended for use in, or is used in, the FIELD.

         f. "ALLIANCE FEES" shall include upfront cash fees,  sublicensing fees,
            periodic  maintenance  fees,  and other cash  payments  or  non-cash
            consideration   actually   received  by  LICENSEE  pursuant  to  the
            formation,  maintenance,  extension or continuation of a DEVELOPMENT
            ALLIANCE.  ALLIANCE  FEES  shall not  include  amounts  received  by
            LICENSEE in the form of research  and  development  funding,  equity
            investments, performance-based research milestones, royalties on net
            sales, sales bonuses,  commercialization or development  milestones,
            or fees for hiring  subcontractors  to manufacture all or components
            of the LICENSED PRODUCTS.

         g. "DEVELOPMENT   ALLIANCE"   shall   mean  any   strategic   alliance,
            partnership,  joint venture,  sublicense arrangement,  manufacturing
            arrangement,  or other business  relationship  between  LICENSEE and
            another  commercial  party or parties which involves the development
            of LICENSED PRODUCTS based on HEAT TRIGGERED DELIVERY  TECHNOLOGY or
            the PATENT RIGHTS.

         h. "NETSALES" shall mean the aggregate United States dollar  equivalent
            of gross  revenues paid LICENSEE,  its  AFFILIATES and  sublicensees
            from or on account of the sale or distribution of LICENSED  PRODUCTS
            to  third  parties  who  are  not  AFFILIATES  of  LICENSEE,  less a
            provision, determined under generally accepted accounting principles
            in the United States for, first,  shipping,  handling,  trade, cash,
            prompt  payment  and/or  quantity  discounts or rebates  (other than
            price  discounts  granted  at the time of  invoicing  and  which are
            included in the  determination  of gross revenues from sales);  and,
            second,  credits or  allowances,  if any,  actually  made or granted
            (prospectively or  retroactively)  on account of price  adjustments,
            recalls,  rejection  or return of, or on  account  of  uncollectible
            amounts on, LICENSED PRODUCT previously sold,  including Medicare or
            other  similar  rebates  or  discounts;   and,  third,   credits  or
            allowances given or made for wastage replacement or indigent patient
            programs;


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<PAGE>

            NET SALES shall not  include  any  transfer  between  LICENSEE,  its
            AFFILIATES  or  sublicensees,  on the one  hand,  and  any of  their
            AFFILIATES or sublicensees, on the other hand, for resale, but shall
            include the resale price to a third party payable to such AFFILIATES
            or sublicensees.

            If  LICENSEE  or any of its  AFFILIATES  or  sublicensees  sells any
            LICENSED  PRODUCT  to a  distributor  which is not an  AFFILIATE  of
            LICENSEE, the gross revenues derived by or payable to LICENSEE, such
            AFFILIATE or  sublicensee on account of such sale shall be the gross
            revenues  received by LICENSEE or such AFFILIATE or sublicensee from
            the sale of such  LICENSED  PRODUCTS  to such  distributor.  If such
            distributor is an AFFILIATE of LICENSEE, then gross revenues derived
            by or payable to LICENSEE,  such AFFILIATE or  sublicensee  from the
            sale of such LICENSED PRODUCTS shall be those received from the sale
            of such  LICENSED  PRODUCTS to the first third party which is not an
            AFFILIATE of LICENSEE.

            If any  LICENSED  PRODUCT  is sold as part of a system,  package  or
            combination  product wherein other  components are or have been sold
            as separate  products not  dependent on such LICENSED  PRODUCT,  NET
            SALES for the purpose of  calculating  payments  under  Section 4.01
            hereof  shall be  calculated  by  multiplying  the NET  SALES of the
            combination  product by the fraction  A/B,  where "A" is the average
            unit price of such LICENSED  PRODUCT when sold separately and "B" is
            the average unit price of the combination  product. If such LICENSED
            PRODUCT is not sold  separately,  the NET SALES of such  combination
            product shall be negotiated in good faith by the Parties.

            Notwithstanding  the foregoing,  no transfer of any LICENSED PRODUCT
            for testing,  pre-clinical,  clinical or development  purposes or as
            samples shall be considered a sale hereunder for accounting purposes
            and for payments under Section 4.01 hereof.

         i. "FDA"  shall  mean the Food and Drug  Administration  of the  United
            States of America.

         j. "MAJOR  MARKET  COUNTRY"  shall mean the United  States of  America,
            Canada, the United Kingdom, France, Germany, and Japan.

         k. "EFFECTIVE DATE" shall mean November 20, 1999.


                               ARTICLE 2 - LICENSE

         2.01 - LICENSOR  hereby grants to LICENSEE and LICENSEE  hereby accepts
from LICENSOR,  upon the terms and conditions  herein  specified,  an exclusive,
sublicensable  license  under the HEAT  TRIGGERED  DELIVERY  TECHNOLOGY  and the
PATENT RIGHTS to practice the INVENTIONS and to,  directly or indirectly,  make,
import, export, use, lease, sell or otherwise dispose of LICENSED PRODUCTS for a
period of (i) twenty  (20) years or (ii) until the full end of the term or terms
for which a patent is issued by the U.S. Patent and Trademark  Office in respect
of  the  PATENT  RIGHTS,  whichever  is  longer,  unless  sooner  terminated  as
hereinafter  provided.  With regard to HEAT TRIGGERED DELIVERY TECHNOLOGY,  this
license shall be world-wide;  with regard to PATENT  RIGHTS,  this license shall
extend to the United States of America,  MAJOR MARKET COUNTRIES,  and DESIGNATED
COUNTRIES as defined and specified under ARTICLE 7 hereof.


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<PAGE>

         2.02 -  LICENSEE  shall have the right to grant  sublicenses.  Any such
sub-licenses shall be subject to the terms of this AGREEMENT. LICENSEE agrees to
be responsible for the performance  hereunder by its sub-licensees,  if any, but
not to be a guarantor for such sublicensees.  If, for any reason, this AGREEMENT
is terminated, LICENSEE hereby agrees to assign all such sublicenses directly to
LICENSOR, to the extent permitted by such sublicenses.

         2.03 - It is agreed  that,  notwithstanding  anything  to the  contrary
contained herein, LICENSOR is free to use the HEAT TRIGGERED DELIVERY TECHNOLOGY
and PATENT RIGHTS for its own non-commercial educational, teaching, research and
clinical purposes without  restriction and without payment of royalties or other
fees, provided that LICENSOR discloses in connection with such use that the HEAT
TRIGGERED  DELIVERY  TECHNOLOGY  and  PATENTS  RIGHTS are  licensed  to LICENSEE
pursuant to the terms of this AGREEMENT.


         2.04 - If LICENSEE,  acting alone or together with any of its officers,
directors,   employees,   agents  or  sublicensees,   makes  any   modification,
enhancement or improvement to the HEAT TRIGGERED DELIVERY  TECHNOLOGY and/or the
PATENT RIGHTS (the  "IMPROVEMENTS") then LICENSEE shall own all right, title and
interest in and to such  IMPROVEMENTS  and shall be  responsible  for patent and
other intellectual property protection thereon.

         2.05 - LICENSOR shall provide  reasonable  opportunities for LICENSEE'S
personnel to have access to DISCLOSERS so that  DISCLOSERS can provide  training
and  information  with respect to the HEAT  TRIGGERED  DELIVERY  TECHNOLOGY  and
PATENT RIGHTS.  Once available  information  concerning HEAT TRIGGERED  DELIVERY
TECHNOLOGY and PATENT RIGHTS has been transmitted to LICENSEE,  DISCLOSERS shall
be entitled to be compensated  by LICENSEE if additional  training or consulting
is necessary. Such arrangement shall be made between DISCLOSERS and LICENSEE and
shall comply with all  regulations  and policies of LICENSOR  governing  faculty
consulting relationships.


                   ARTICLE 3 - ROYALTIES, RECORDS AND REPORTS

         3.01 - LICENSEE shall pay to LICENSOR a running  royalty (i) during the
term of this  AGRREMENT  up to the date on which the U.S.  Patent and  Trademark
Office  shall  issue a patent in respect of the  PATENT  RIGHTS,  at the rate of
[Confidential Treatment Requested] percent ([Confidential Treatment Requested]%)
of NET SALES of LICENSED  PRODUCTS  and (ii) during the terms of this  Agreement
from and after the date on which the U.S.  Patent  and  Trademark  Office  shall
issue a patent in  respect  of the  PATENT  RIGHTS at the rate of  (Confidential
Treatment Requested) percent ([Confidential  Treatment Requested]%) of NET SALES
of LICENSED PRODUCTS.  If LICENSEE demonstrates through written records (i) that
it has been  necessary to license  additional  technology  from third parties in
order to commercialize  the LICENSED  PRODUCTS (the "NECESSARY  TECHNOLOGY") and
(ii) that such additional license for NECESSARY TECHNOLOGY obligates LICENSEE to



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<PAGE>

pay  royalties  on NET  SALES of  LICENSED  PRODUCTS  such  that the  aggregates
royalties  on NET SALES due to third  parties  exceeds  [Confidential  Treatment
Requested]  percent  ([Confidential  Treatment  Requested]%) of NET SALES,  then
LICENSEE  shall be  permitted  to reduce the  royalty  due  LICENSOR  under this
AGREEMENT by one-half of any such additional  royalties payable to third parties
in excess of [Confidential Treatment Requested] percent ([Confidential Treatment
Requested]%] percent of NET SALES of LICENSED PRODUCTS; provided, however, in no
case shall the royalty  rate  payable by  LICENSEE to LICENSOR  pursuant to this
Section  3.01 from and after the date on which  the U.S.  Patent  and  Trademark
Office shall issue a patent in respect of the PATENT RIGHTS, when reduced by any
royalties  due  to  third  parties  for  NECESSARY  TECHNOLOGY,   be  less  than
[Confidential Treatment Requested] percent ([Confidential Treatment Requested]%)
of NET SALES.

         3.02 -  Beginning  with the year that  ensues on the  second  January 1
after the  approval  of the first  LICENSED  PRODUCT by the FDA or a  comparable
regulatory authority in a MAJOR MARKET COUNTRY, LICENSEE shall pay to LICENSOR a
minimum   annual   royalty   of   [Confidential   Treatment    Requested]dollars
($[Confidential  Treatment Requested]).  For avoidance of doubt, this means that
should the running  royalties  due under Section 3.01 hereof for a calendar year
not equal [Confidential Treatment Requested] dollars  ($[Confidential  Treatment
Requested]),  LICENSEE  shall pay to LICENSOR an  additional  amount so that the
total  royalties paid to LICENSOR for such calendar year shall be  [Confidential
Treatment Requested]dollars ($[Confidential Treatment Requested]).

         3.03 - LICENSEE  shall  render to LICENSOR  prior to February  28th and
August 31st of each year during the term of this AGREEMENT a written  account of
the NET SALES of LICENSED  PRODUCTS subject to royalty  payments  hereunder made
during  the  prior  six  month  periods  ending  December  31st and  June  30th,
respectively, and shall simultaneously pay to LICENSOR the royalties due on such
NET SALES in United States Dollars.  Minimum annual royalties, if any, which are
due  LICENSOR for any calendar  year,  shall be paid by LICENSEE  along with the
written report due on February 28 of each year.

         3.04- Specified reports shall be submitted on the forms giving the same
information  and having  substantially  the same  layout as the  sample  form in
EXHIBIT A of this AGREEMENT.

         3.05 - LICENSEE  will make all  payments  on or before the later of the
date required by the terms of this AGREEMENT,  or within [Confidential Treatment
Requested]  ([Confidential  Treatment  Requested])  days of any invoice  date on
invoices received from LICENSOR. If LICENSEE has not paid any uncontested amount
due to LICENSOR in accordance  with this Article 3, LICENSOR  shall increase the
amount due (in US Dollars) by an annual  percentage rate equal to  [Confidential
Treatment  Requested]  percent  ([Confidential  Treatment  Requested]%)  on such
unpaid  amount.  Such  increase(s)  shall  compound  monthly  until such time as
LICENSEE  has met the  full  financial  obligation  due at the  time of the next
payment or invoice due date.

         3.06 - LICENSEE  shall keep full,  true and accurate  books of accounts
and other records  containing all particulars which may be necessary to properly
ascertain and verify the royalties payable by it hereunder.  Upon  [Confidential
Treatment Requested] ([Confidential Treatment Requested]) days advance notice by



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<PAGE>

LICENSOR,  LICENSEE  shall permit an  independent  Certified  Public  Accountant
selected by LICENSOR (except one to whom LICENSEE has some reasonable objection)
to have access during ordinary  business hours to such of LICENSEE's  records as
may be necessary to  determine,  in respect of any quarter  ending not more than
two (2) years prior to the date of such request,  the  correctness of any report
and/or  payment made under this  AGREEMENT,  provided that such access shall not
interfere  unreasonably with the business and affairs of LICENSEE,  and provided
further that such audits are  conducted  no more than once during each  calendar
year or portion thereof during the term hereof.

         3.07 - During the term of this  AGREEMENT,  LICENSEE will submit annual
progress  reports to  LICENSOR  by  February  28 of each year which  discuss the
progress  and  results,  as well as  ongoing  plans,  with  respect  to the HEAT
TRIGGERED DELIVERY  TECHNOLOGY and PATENT RIGHTS.  LICENSOR shall have the right
to request one meeting per year at times and places mutually agreed upon between
LICENSOR and  LICENSEE to discuss the  progress and results,  as well as ongoing
plans,  with respect to the  evaluation  and  development  of the HEAT TRIGGERED
DELIVERY TECHNOLOGY and PATENT RIGHTS; provided, however, that should LICENSOR's
personnel be required by LICENSEE to meet with LICENSEE outside of Durham, North
Carolina,  LICENSEE will reimburse reasonable travel and living expenses for two
(2) individuals incident thereto.


                     ARTICLE 4 - MILESTONE-BASED ROYALTIES

         4.01 - LICENSEE will pay royalties (each, a "MILESTONE-BASED  ROYALTY";
collectively,  the "MILESTONE-BASED  ROYALTIES") to LICENSOR upon the attainment
of the commercial milestones specified below by LICENSOR, LICENSEE, an AFFILIATE
of LICENSOR or LICENSEE  or any other  person or entity with whom  LICENSEE  has
formed a DEVELOPMENT  ALLIANCE.  Unless  specifically  noted, no MILESTONE-BASED
ROYALTIES shall be credited towards other royalties or minimum  royalties due to
LICENSOR under any other Article of this AGREEMENT:

         a. Execution    of    this    AGREEMENT,     [Confidential    Treatment
            Requested]United    States   Dollars    ($[Confidential    Treatment
            Requested]);

         b. Filing of the first  Investigational  New Drug (IND)  application or
            comparable foreign application for a LICENSED PRODUCT, [Confidential
            Treatment  Requested]United States Dollars ($[Confidential Treatment
            Requested]);

         c. First  demonstration  of the  efficacy  of a  LICENSED  PRODUCT in a
            clinical  trial using the  definition of efficacy  determined at the
            outset  of the  trial,  [Confidential  Treatment  Requested]  United
            States Dollars ($[Confidential Treatment Requested]);

         d. Filing of the first New Drug Application  (NDA),  Biologic Licensing
            Application (BLA) or comparable  foreign  applications for marketing
            approval   of   a   LICENSED   PRODUCT,    [Confidential   Treatment
            Requested]United States Dollars ($[Confidential Treatment
            Requested]);

         e. Approval of the first NDA, BLA or comparable foreign application for
            marketing  approval of a Licensed Product,  [Confidential  Treatment
            Requested]United    States   Dollars    ($[Confidential    Treatment
            Requested]);


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<PAGE>

         f. Approval of each  second,  third and fourth NDA,  BLA or  comparable
            foreign  applications for marketing approval for additional LICENSED
            PRODUCTS, [Confidential Treatment Requested] United States Dollars
            ($[Confidential Treatment Requested]);

         g. Approval  of  each  additional   NDA,  BLA  or  comparable   foreign
            application for marketing approval for new indications of an already
            approved LICENSED PRODUCT:

                second  indication,   [Confidential  Treatment  Requested]United
                      States Dollars($[Confidential Treatment Requested])
                third  indication,   [Confidential  Treatment   Requested]United
                      States Dollars ($[Confidential Treatment Requested])
                fourth  indication,   [Confidential  Treatment  Requested]United
                      States Dollars ($[Confidential Treatment Requested]);

         h. First  attainment  of total  aggregate  Net  Sales  of all  LICENSED
            PRODUCTs of [Confidential Treatment Requested] United States Dollars
            ($[Confidential  Treatment  Requested])  in a single  calendar year,
            [Confidential    Treatment     Requested]United    States    Dollars
            ($[Confidential Treatment Requested]); and

         i. First  attainment  of total  aggregate  Net  Sales  of all  LICENSED
            PRODUCTS of [Confidential Treatment  Requested]United States Dollars
            ($[Confidential  Treatment  Requested])  in a single  calendar year,
            [Confidential Treatment Requested]United States Dollars
            ($[Confidential Treatment Requested]).

         4.02. a.  Notwithstanding  anything to the contrary  contained  herein,
LICENSOR  and  LICENSEE   hereby  agree  that,   in  lieu  of  paying  any  such
MILESTONE-BASED  ROYALTY in cash,  LICENSEE may issue and LICENSOR  shall accept
shares of the Common Stock of LICENSEE. The number of shares of the Common Stock
of  LICENSEE to be issued at the time that such  MILESTONE-BASED  ROYALTY is due
and  payable  with  respect  to  each  such  MILESTONE-BASED  ROYALTY  shall  be
determined by dividing the amount of such MILESTONE BASED ROYALTY by the average
closing  price of the Common  Stock of LICENSEE  during the twenty (20)  trading
days immediately preceding the date that such MILESTONE-BASED ROYALTY became due
and payable.

                b.  Within  ten (10) days  after the  first  anniversary  of the
EFFECTIVE DATE, LICENSEE shall determine, in good faith, the market value of the
shares of Common Stock issued by LICENSEE to LICENSOR  hereunder as of the first
anniversary  of the EFFECTIVE  DATE (the "FIRST  ANNIVERSARY  MARKET  VALUE") by
multiplying  the number of shares of Common Stock of LICENSEE issued by LICENSEE
to LICENSOR  hereunder  prior to the first  anniversary of the EFFECTIVE DATE by
the average closing price of the Common Stock of LICENSEE during the twenty (20)
trading days immediately  preceding the first anniversary of the EFFECTIVE DATE.
In the event that the FIRST  ANNIVERSARY  MARKET  VALUE of such shares of Common
Stock is less than the aggregate  amount of the  MILESTONE-BASED  ROYALTIES that
LICENSEE  would have been  required  to pay to  LICENSOR  on or before the first
anniversary  of the EFFECTIVE  DATE had LICENSEE  chosen to make such  MILESTONE
-BASED  ROYALTIES in cash rather than in shares of Common Stock of LICENSEE (the
"AGGREGATE FIRST  ANNIVERSARY CASH VALUE") then LICENSEE shall issue to LICENSOR
and LICENSOR shall accept additional shares of the Common Stock of LICENSEE, the
number of which shall be determined by dividing (i) the difference between the


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<PAGE>

AGGREGATE FIRST ANNIVERSARY CASH VALUE and the FIRST ANNIVERSARY MARKET VALUE by
(ii) the average closing price of the Common Stock of LICENSEE during the twenty
(20) trading days immediately  preceding the first  anniversary of the EFFECTIVE
DATE.

                c.  Within  ten (10) days after the  second  anniversary  of the
EFFECTIVE DATE,  LICENSEE shall  determine,  in good faith, the aggregate market
value of the shares of Common  Stock  issued by LICENSEE  to LICENSOR  hereunder
prior to the second  anniversary of the EFFECTIVE DATE (the "SECOND  ANNIVERSARY
AGGREGATE MARKET VALUE").  For the purposes  hereof,  the "market value" of each
share of Common  Stock of LICENSEE  issued by  LICENSEE to LICENSOR  pursuant to
Section 4.02(a) hereof with respect to any MILESTONE-BASED ROYALTY due hereunder
shall be equal to the  average  closing  price of the Common  Stock of  LICENSEE
during the twenty (20) trading  days  immediately  preceding  the date that such
MILESTONE  -BASED  ROYALTY became due and payable and the "market value" of each
share of Common  Stock of LICENSEE  issued by  LICENSEE to LICENSOR  pursuant to
Section 4.02(b) hereof shall be equal to the average closing price of the Common
Stock of LICENSEE during the twenty (20) trading days immediately  preceding the
first  anniversary of the EFFECTIVE  DATE. In the event that SECOND  ANNIVERSARY
MARKET VALUE of such shares of Common Stock is less than the aggregate amount of
the  MILESTONE-BASED  ROYALTIES that LICENSEE would have been required to pay to
LICENSOR on or before the second  anniversary of the EFFECTIVE DATE had LICENSEE
chosen to pay such  MILESTONE-BASED  ROYALTIES  in cash rather than in shares of
Common Stock of LICENSEE (the "Aggregate  Second  Anniversary  Cash Value") then
LICENSEE shall issue to LICENSOR and LICENSOR shall accept  additional shares of
the  Common  Stock of  LICENSEE,  the  number of which  shall be  determined  by
dividing (i) the difference  between the AGGREGATE SECOND ANNIVERSARY CASH VALUE
and the SECOND ANNIVERSARY MARKET VALUE by (ii) the average closing price of the
Common  Stock of  LICENSEE  during  the twenty  (20)  trading  days  immediately
preceding the second anniversary of the EFFECTIVE DATE.

                d. In addition,  (i)  LICENSOR may not sell,  transfer or assign
any shares of the Common  Stock of  LICENSEE  issued to  LICENSOR  hereunder  as
MILESTONE-BASED  ROYALTIES on or before the first  anniversary  of the EFFECTIVE
DATE until the first  anniversary  of the EFFECTIVE DATE and (ii) LICENSOR shall
be prohibited  from selling,  transferring or assigning any shares of the Common
Stock of LICENSEE issued to LICENSOR hereunder with respect to milestones during
the period  commencing on the first anniversary of the EFFECTIVE DATE and ending
on the second  anniversary of the EFFECTIVE DATE until the second anniversary of
the EFFECTIVE DATE.

                e. In the event that, on or before the second anniversary of the
EFFECTIVE DATE, (i) LICENSEE forms a subsidiary to which LICENSEE's rights under
this  AGREEMENT  are  assigned  (the   "SUBSIDIARY")  and  (ii)  the  SUBSIDIARY
undertakes an initial public offering of its Common Stock or otherwise registers
its Common Stock with the Securities and Exchange  Commission  (the "SEC") so as
to permit a public  trading  market to develop for such Common  Stock,  LICENSOR
shall have a one-time  right to exchange  all or any portion of the Common Stock
of LICENSEE which  LICENSOR  received under this AGREEMENT and which LICENSOR is
then holding for shares of the Common Stock of the SUBSIDIARY. Such right may be
exercised by LICENSOR's written notice to LICENSEE, to be given not earlier than
ninety  (90) and not later than one hundred  eighty  (180) days after the Common
Stock of LICENSEE first becomes publicly traded,  which notice shall specify the
number of shares of the Common Stock of LICENSEE to be so  exchanged  for Common
Stock of the SUBSIDIARY.  Within ten (10) days after receipt of such notice (the



                                       8
<PAGE>

"NOTICE  DATE"),  LICENSEE shall notify  LICENSOR of the number of shares of the
Common Stock of the SUBSIDIARY which will be issued in such exchange,  and shall
include in such  notification the computation of such number,  which computation
shall be based on an exchange  price which  incorporates  a thirty percent (30%)
discount from the then market price of the Common Stock of the  SUBSIDIARY,  and
which shall be determined in accordance with the following formula:

                    AP x LS divided by .7 (APS) = No. of SS,

         where  "AP" means the  average  closing  price of the  Common  Stock of
LICENSEE  over the twenty (20) trading  days  immediately  preceding  the NOTICE
DATE;

         "LS" means the number of shares of the Common  Stock of LICENSEE  which
LICENSOR desires to exchange;

         "APS"  means  the  average  closing  price of the  Common  Stock of the
Subsidiary  over the twenty (20) trading days  immediately  preceding the NOTICE
DATE; and

         "No.  of SS" means the  number  of  shares of the  Common  Stock of the
SUBSIDIARY  to be issued in  exchange  for the  shares  of the  Common  Stock of
LICENSEE being tendered for exchange by LICENSOR.

         Within ten (10) days after notice from LICENSEE, LICENSOR shall deliver
a  certificate  or  certificates  for the shares of  LICENSEE  to be  exchanged,
accompanied  by a validly  executed stock power and free and clear of all liens,
charges and  encumbrances,  and LICENSEE shall cause the SUBSIDIARY to deliver a
certificate for shares of the Common Stock of the SUBSIDIARY, which shares shall
be duly and validly issued,  fully paid and free and clear of all liens, charges
and encumbrances.

                f. In the event that, on or before the second anniversary of the
EFFECTIVE DATE, (i) LICENSEE does not form the SUBSIDIARY or (ii) the SUBSIDIARY
does not undertake an initial  public  offering of its Common Stock or otherwise
register its Common Stock with the SEC so as to permit a public  trading  market
to develop for such Common Stock, LICENSOR, at its option, may by written notice
given to LICENSEE  within thirty (30) days after the second  anniversary  of the
EFFECTIVE  DATE,  require  LICENSEE to pay to LICENSOR,  within thirty (30) days
after receipt by LICENSEE of such notice,  the amount of all previously  unpaid,
unearned MILESTONE-BASED ROYALTIES in shares of the Common Stock of LICENSEE; it
being understood,  however,  that by doing so, LICENSOR waives any and all right
it may have pursuant to Section  4.02(e)  hereof or otherwise to exchange all or
any portion of the Common Stock of LICENSEE which  LICENSOR  received under this
AGREEMENT  and which  LICENSOR is holding for shares of the Common  Stock of the
SUBSIDIARY.  The number of shares of the Common  Stock of  LICENSEE to be issued
under this Section  4.02(f)  shall be  determined  by dividing the amount of all
previously  unpaid,  unearned  MILESTONE-BASED  ROYALTIES by the average closing
price of the  Common  Stock of  LICENSEE  during the twenty  (20)  trading  days
immediately preceding the date of receipt by LICENSEE of such notice.

                g. LICENSOR acknowledges that the securities which may be issued
under this  AGREEMENT  are not being  initially  registered  and  therefore  are
"restricted  securities" under the federal  securities laws inasmuch as they are
being acquired from LICENSEE in a transaction  not involving a public  offering,
and that, under such laws and applicable regulations, such securities may not be


                                       9
<PAGE>

transferred or resold without  registration under the Securities Act of 1933, as
amended (the "SECURITIES ACT ), or pursuant to an exemption  therefrom.  In this
connection,  LICENSOR  represents  that it is  familiar  with Rule 144 under the
SECURITIES ACT, as presently in effect,  and understands the resale  limitations
imposed thereby and by the SECURITIES  ACT.  LICENSOR is acquiring the shares of
Common Stock subscribed solely for investment  purposes and not with a view to a
distribution of all or any part thereof.  LICENSOR has the financial  ability to
bear the economic  risk of its  investment  for an  indefinite  period,  and has
adequate means of providing for its current needs and anticipated  contingencies
without  reference to the liquidity of the securities which may be issued to it.
LICENSOR  is a  not-for-profit  organization  with  more  than  ($  Confidential
Treatment Requested) in total assets. LICENSOR has such knowledge and experience
in financial and business  matters that it is fully  capable of  evaluating  the
merits and risks of an investment in LICENSEE.

                h. If LICENSEE  intends to make an underwritten  public offering
of its Common Stock solely for cash at any time after the first  anniversary  of
the EFFECTIVE DATE, and files a registration  statement in connection therewith,
LICENSEE shall, within ten (10) days after the date of such filing, send written
notice  of  such  filing,  together  with a copy of the  preliminary  prospectus
included in such registration  statement,  to LICENSOR. Upon the written request
of  LICENSOR  to  be  included  in  such  registration  statement  as a  selling
stockholder, given not later than twenty (20) days after receipt of such notice,
LICENSEE shall include in such registration  statement all or any portion of the
shares of Common Stock previously issued by LICENSEE to LICENSOR  hereunder,  as
LICENSOR shall so request.  However, if the managing  underwriter of such public
offering shall express  objection to the inclusion of all or part of such shares
of Common Stock of LICENSOR in such public offering because of prevailing market
conditions  or other  factors,  the  amount of such  shares  of Common  Stock of
LICENSOR  to be so  registered  in such  offering  shall be reduced to the level
which such managing underwriter deems appropriate in relation to the size of the
underwritten  offering and the ability of the market to accommodate  the sale of
such shares of Common Stock of LICENSOR,  provided,  however, that if any shares
of Common  Stock are being  included  in such  offering on behalf of any selling
stockholders other than LICENSOR, any reduction of offered securities imposed on
LICENSOR shall be  proportional  to any reduction  imposed on such other selling
stockholders;  and  further  provided  that,  at the  request  of  the  managing
underwriter  of such public  offering,  LICENSOR may be required to refrain from
selling its shares of Common Stock pursuant to such registration statement for a
"lock-up"  period of up to nine (9) months  after the  completion  of the public
sale of securities offered by LICENSEE in such public offering, on terms no less
favorable than those applicable to other selling stockholders.

                Whenever  required  under  this  Section  4.02(h)  to effect the
registration of any securities,  LICENSEE shall, as  expeditiously as reasonably
possible:

                    (i) Prepare and file with the SEC a  registration  statement
with  respect  to such  securities  and use  its  best  efforts  to  cause  such
registration  statement to become effective,  and, upon the request of LICENSOR,
keep such registration statement effective for at least nine (9) months.


                                       10
<PAGE>

                    (ii)  Prepare  and file  with the SEC  such  amendments  and
supplements to such registration statement and the prospectus used in connection
with  such  registration  statement  as may be  necessary  to  comply  with  the
provisions  of  the  SECURITIES  ACT  with  respect  to the  disposition  of all
securities covered by such registration statement.

                    (iii)  Furnish  to  LICENSOR  such  numbers  of  copies of a
prospectus,   including  a  preliminary  prospectus,   in  conformity  with  the
requirements  of the  SECURITIES  ACT,  and  such  other  documents  as they may
reasonably request in order to facilitate the disposition of securities owned by
them.

                    (iv)  Use its best  efforts  to  register  and  qualify  the
securities  covered by such registration  statement under the securities laws of
such  jurisdictions  as  shall  be  reasonably  requested  by  LICENSOR  for the
distribution of the securities covered by the registration  statement,  provided
that LICENSEE  shall not be required in  connection  therewith or as a condition
thereto  to qualify to do  business  or to file a general  consent to service of
process in any such jurisdiction.

                    (v) In the event of an  underwritten  public  offering,enter
into and perform its  obligations  under an  underwriting  agreement  with terms
generally  satisfactory  to  LICENSEE  and  the  managing  underwriter  of  such
offering.

                    (vi) Notify  LICENSOR  promptly  after  LICENSEE  shall have
received notice thereof,  of the time when the  registration  statement  becomes
effective or any supplement to any prospectus forming a part of the registration
statement has been filed.

                    (vii)  Notify  LICENSOR  of any stop  order  suspending  the
effectiveness of the registration  statement and use its reasonable best efforts
to remove such stop order.

                It shall be a condition precedent to the obligations of LICENSEE
to take any action  pursuant to the  provisions  of this  Section  4.02(h)  that
LICENSOR shall furnish to LICENSEE such information in writing regarding itself,
the  securities  held by it,  and the  intended  method of  disposition  of such
securities,  as LICENSEE  shall  reasonably  request and as shall be required to
effect the registration of such securities.  In that connection,  LICENSOR shall
be required to represent to LICENSEE that all such information which is given is
both complete and accurate in all material respects. LICENSOR shall also deliver
to LICENSEE a statement  in writing  that it has a bona fide  intention to sell,
transfer or otherwise dispose of such securities.

                "Registration  Expenses"  shall mean all  expenses  incurred  by
LICENSEE in complying  with the provisions of this Section  4.02(h),  including,
without limitation,  all registration and filing fees,  printing expenses,  fees
and disbursements of counsel for LICENSEE,  blue sky fees and expenses,  and the
expense of any special audits incident to or required by any such  registration.
"Selling Expenses" shall mean all underwriting  discounts,  selling  commissions
and underwriters' expense allowances applicable to the sale of the securities of
LICENSOR, and all fees and disbursements of any special counsel or accountant or


                                       11
<PAGE>

other expert for LICENSOR. All Registration Expenses incurred in connection with
any registration,  qualification or compliance  pursuant to this Section 4.02(h)
shall be borne by LICENSEE, and all Selling Expenses shall be borne by LICENSOR.

                If LICENSOR  proposes to distribute  its  securities  through an
underwriter,  LICENSEE shall enter into an  underwriting  agreement in customary
form with the underwriter or underwriters, provided that the terms thereof shall
not be materially less favorable to LICENSEE than those customarily  arranged in
comparable underwritten offerings.

                LICENSOR  shall  have no right to obtain  or seek an  injunction
restraining  or otherwise  delaying any such  registration  as the result of any
controversy   that  might   arise  with   respect  to  the   interpretation   or
implementation of this Section 4.02(h).

                Nothing  contained herein shall be deemed to limit the rights of
LICENSOR to offer or make a public sale of any portion of such securities  under
Rule 144 of the SEC or any other  applicable  provisions  of  federal  and state
securities laws.  Furthermore,  if, in the opinion of counsel for LICENSEE,  the
offering or transfer by  LICENSOR  in the manner  proposed  (including,  without
limitation,  the number of shares  proposed to be offered or transferred and the
method of offering or transfer) is exempt from the registration  requirements of
the Securities  Act under Rule 144 or otherwise,  LICENSEE shall not be required
to effect any registration of such securities under the Securities Act.

                If, instead of a public offering of securities,  LICENSOR shall,
at any time,  offer or  propose  to offer all or any part of the  securities  of
LICENSEE which it holds,  for sale in an  arms-length  private  transaction,  it
shall, before completing such transaction, notify LICENSEE of the specific terms
and  conditions  of the intended  sale,  including  the identity of the proposed
buyer,  and LICENSEE  shall have then have the prior  right,  during a period of
thirty (30) days from receipt of such  notification,  to elect to purchase  such
securities on the same terms and conditions,  such election to be made by notice
to LICENSOR  within such  thirty  (30) day period and to be  consummated  as set
forth in such notices.


                       ARTICLE 5- SHARING OF ALLIANCE FEES

         5.01 - Upon  execution  of a  DEVELOPMENT  ALLIANCE by LICENSEE  with a
third party,  LICENSEE will pay LICENSOR the greater of [Confidential  Treatment
Requested]United  States  Dollars   ($[Confidential   Treatment  Requested])  or
[Confidential Treatment Requested] percent ([Confidential Treatment Requested]%)
of the total value of any ALLIANCE FEE received by LICENSEE. Such total value of
the ALLIANCE  FEE shall mean the value of any cash  received by LICENSEE as part
of the  ALLIANCE  FEE  added to the cash  value  of any  non-cash  consideration
received by the  LICENSEE  as part of the  ALLIANCE  FEE.  If LICENSEE  receives
non-cash  consideration  as part of an ALLIANCE FEE,  LICENSEE and LICENSOR will
negotiate  in  good  faith  to  determine   the  cash  value  of  such  non-cash
consideration.

         5.02 - In the  event  that  LICENSOR  becomes  a holder  of  equity  in
SUBSIDIARY  under  Article  4.02(e)  hereof,  the parties will  renegotiate  the
provisions of this Article 5.


                                       12
<PAGE>


                     ARTICLE 6 - DUE DILIGENCE REQUIREMENTS

         6.01 -  LICENSEE  shall use  commercially  reasonable  efforts to bring
LICENSED  PRODUCTS to market through a diligent  program for exploitation of the
PATENT RIGHTS, to develop  manufacturing  capabilities,  and to continue active,
diligent  marketing  efforts for LICENSED  PRODUCTS  throughout the term of this
AGREEMENT.

         6.02 - Within six months of the EFFECTIVE  DATE,  LICENSEE shall submit
to LICENSOR a plan (the "PLAN") for development of LICENSED  PRODUCTS.  LICENSOR
will  have  the  right  to  review  and  approve  this  PLAN so that the PLAN is
reasonably  acceptable  to LICENSOR.  Once  approved,  this PLAN will be used to
determine if LICENSEE is making  acceptable  progress to commercialize  LICENSED
PRODUCTS.  Any  proposed  changes in the PLAN will be  discussed by LICENSOR and
LICENSEE and must be reasonably acceptable to both parties.

         6.03 -  Within  six-months  of  the  time  that  LICENSEE  or  LICENSOR
demonstrates  in an animal model  reasonably  acceptably  to both parties that a
candidate  LICENSED  PRODUCT  has  efficacy  in treating a disease or altering a
physiological  process in a useful  way,  LICENSEE  shall  present to LICENSOR a
development  plan  outlining  how the  LICENSEE  intends to develop the LICENSED
PRODUCT from the candidate.  Said  development  plan shall include evidence that
LICENSEE has made  arrangements  for production of GMP grade material for use in
clinical  trials and for  studies  of  toxicity  that will be carried  out under
protocols  that  meet all  standards  for  approval  by the FDA or a  comparable
regulatory agency in a foreign country.

         6.04 -  LICENSEE  agrees  to use  commercially  reasonable  efforts  to
develop a sublicensing program to effect  commercialization of LICENSED PRODUCTS
that the LICENSEE decides not to exploit on its own.

         6.05 - During the term of this  AGREEMENT,  LICENSEE will submit annual
progress  reports to LICENSOR with the royalty  report due pursuant to Article 3
hereof by February 28 of each year which  discuss the progress  and results,  as
well as ongoing plans,  with respect to the HEAT TRIGGERED  DELIVERY  TECHNOLOGY
and PATENT RIGHTS.

         6.06 - LICENSEE  shall support  pre-clinical  and clinical  research at
Duke  University  to develop  LICENSED  PRODUCTS.  The nature and scope of these
research  projects  shall be determined in good faith between the parties.  Such
research  support shall begin no later than November 20, 1999 and shall continue
for no less than sixteen (16) months from such date.  LICENSEE  agrees to commit
no less than an aggregate of  [Confidential  Treatment  Requested]United  States
Dollars ($[Confidential Treatment Requested]) to total direct and indirect costs
of such preclinical and clinical  studies within said sixteen month period.  The
details of the research projects and the timing of such funding by LICENSEE will
be embodied in appropriate non-clinical and clinical research agreements between
LICENSEE and LICENSOR.

         6.07 - LICENSOR may terminate  this AGREEMENT or convert this AGREEMENT
to  a   non-exclusive   AGREEMENT   if  LICENSEE   fails  to  meet  any  of  the
commercialization  milestones in this Article 6 after notice and  opportunity to
cure as specified under Section 10.03 hereof.


                                       13
<PAGE>

       ARTICLE 7 - PATENT PROSECUTION, EXPENSES, DEFENSE, AND INFRINGEMENT

         7.01 - Subsequent to the  EFFECTIVE  DATE of this  AGREEMENT,  LICENSOR
shall  continue  to  have  sole  responsibility  for  filing,   prosecuting  and
maintaining  appropriate  patent  protection  in the United  States and in those
MAJOR MARKET  COUNTRIES  where  patent  protection  is available  for the PATENT
RIGHTS,  and all of the expenses of such  protection  shall be paid by LICENSOR.
LICENSOR shall keep LICENSEE advised as to the prosecution of such  applications
by  forwarding  to  LICENSEE  copies  of all  official  correspondence  relating
thereto.  LICENSEE  agrees to cooperate with LICENSOR in the  prosecution of the
U.S. Patent Applications to insure that the application reflects, to the best of
LICENSEE'S  knowledge,  all  items of  commercial  and  technical  interest  and
importance.  All  final  decisions  with  respect  to the  prosecution  of  said
application are reserved to LICENSOR.

         7.02 - Subsequent to the  EFFECTIVE  DATE of this  AGREEMENT,  LICENSEE
shall designate the foreign countries ("DESIGNATED  COUNTRIES") other than MAJOR
MARKET  COUNTRIES,  if any, in which  LICENSEE  desires patent  protection,  and
LICENSOR  agrees  to  proceed  to seek  patent  protection  in  such  DESIGNATED
COUNTRIES.  LICENSEE shall be responsible for  reimbursing  LICENSOR for foreign
patent  expenses   incurred  in  perfecting   patent  protection  in  DESIGNATED
COUNTRIES.  LICENSOR may elect to seek patent  protection  in  countries  not so
designated by LICENSEE,  in which case LICENSOR shall be solely  responsible for
all expenses  attendant  thereto;  however,  in such  instances  LICENSEE  shall
forfeit its rights under this AGREEMENT as to those countries.

         7.03 - Section 7.01 of this AGREEMENT not withstanding,  LICENSEE shall
reimburse  LICENSOR  for  all  out-of-pocket  legal  expenses  incurred  in  the
prosecution and maintenance of PATENT RIGHTS in the United States of America, in
MAJOR MARKET COUNTRIES, and in DESIGNATED COUNTRIES,  according to the following
schedule:

         a. Within thirty (30) days after the EFFECTIVE DATE of this  AGREEMENT,
            a sum equal to the amount of all unreimbursed  expenses  incurred by
            LICENSOR in the prosecution of PATENT RIGHTS; and

         b. Subsequent to the EFFECTIVE DATE of this  Agreement,  LICENSOR shall
            invoice  LICENSEE  for  additional   patent  expenses  as  they  are
            incurred,  and LICENSEE shall reimburse  LICENSEE within thirty (30)
            days of being invoiced.

         7.04 - LICENSEE and LICENSOR  shall give prompt notice to each other of
each claim or  allegation  received by it that the  manufacture,  use or sale of
LICENSED PRODUCTS constitutes a significant infringement of a third party patent
or patents.  LICENSEE shall have the primary right and responsibility at its own
expense to defend and control the defense of any such claim against LICENSEE, by
counsel of its choosing. The settlement of any such actions must be approved by


                                       14
<PAGE>

LICENSOR,  which approval may not be unreasonably  withheld.  LICENSOR agrees to
cooperate  with  LICENSEE  in any  reasonable  manner  deemed by  LICENSEE to be
necessary  in  defending  or  prosecuting  such  action.   Notwithstanding   the
foregoing,  LICENSOR  shall in its sole  discretion  and at its  sole  cost,  be
entitled to participate through counsel of its own choosing in any such action.

         7.05 - Upon learning of the  infringement  of HEAT  TRIGGERED  DELIVERY
TECHNOLOGY  or  PATENT  RIGHTS by a third  party,  the  party  learning  of such
infringement shall promptly inform the other party in writing of that fact along
with any evidence available pertaining to the infringement.  LICENSEE may at its
own expense  take  whatever  steps are  necessary to stop the  infringement  and
recover damages. In such case, LICENSEE will keep LICENSOR informed of the steps
taken and the progress of any legal actions taken. Any award granted to LICENSEE
by a court or in settlement for lost sales, less any reasonable attorney's fees,
shall be  considered  as NET  SALES by the  LICENSEE,  and  LICENSEE  shall  pay
royalties on such an awards as  specified  under  Section 3.01 hereof.  LICENSEE
will pay to LICENSOR  [Confidential  Treatment Requested] percent ([Confidential
Treatment  Requested]%)  of any punitive  damages awarded during an infringement
action or settlement  that are in excess of legal expenses  incurred by LICENSEE
in enforcing its rights to the HEAT TRIGGERED DELIVERY  TECHNOLOGY or the PATENT
RIGHTS.  If LICENSEE does not  undertake,  within sixty (60) days of notice,  to
enforce  its  rights to the HEAT  TRIGGERED  DELIVERY  TECHNOLOGY  or the PATENT
RIGHTS against the infringing  party,  the LICENSOR shall have the right, at its
own expense to take whatever  steps are necessary to stop the  infringement  and
recover damages, and shall be entitled to retain damages so recovered.


                   ARTICLE 8 - GOVERNMENT CLEARANCE AND EXPORT

         8.01 -  LICENSEE  agrees  to use its  best  efforts  to  have  LICENSED
PRODUCTS  cleared for marketing in those countries in which LICENSEE  intends to
sell LICENSED  PRODUCTS by the responsible  government  agencies  requiring such
clearance. To accomplish said clearances at the earliest possible date, LICENSEE
agrees to file, according to the usual practice of LICENSEE,  any necessary data
with  said  government  agencies.  Should  LICENSEE  terminate  this  AGREEMENT,
LICENSEE  agrees to assign its full interest and title in such market  clearance
application,  including  all data  relating  thereto,  to LICENSOR at no cost to
LICENSOR.

         8.02 - This  agreement is subject to all of the United  States laws and
regulations  controlling  the  export  of  technical  data,  computer  software,
laboratory prototypes and other commodities and technology.


                   ARTICLE 9 - PUBLICATION AND CONFIDENTIALITY

         9.01 - LICENSEE  agrees that the right of  publication of the invention
and said HEAT  TRIGGERED  DELIVERY  TECHNOLOGY and PATENT RIGHTS shall reside in
the  inventor  and other  staff of  LICENSOR.  The  LICENSOR  shall use its best
efforts to provide a copy of such publication forty-five (45) days in advance of
such  submission for review by LICENSEE so that LICENSEE can advise  LICENSOR on
issues  relating  to  patent  protection,  but  such  review  will  be in no way
construed as a right to restrict such publication.  LICENSEE shall also have the
right to publish and/or co-author any publication on the HEAT TRIGGERED DELIVERY
TECHNOLOGY and PATENT RIGHTS based upon data developed by LICENSEE  according to
usual academic procedures.


                                       15
<PAGE>

         9.02 - Each party shall keep confidential and not disclose, directly or
indirectly,  for a period of [Confidential  Treatment Requested]  ([Confidential
Treatment  Requested]) years from the date of disclosure,  and shall not use for
the  benefit  of itself  of any other  individual  or  entity  any  CONFIDENTIAL
INFORMATION  of the  other,  except  with  the  prior  written  approval  of the
disclosing party (the "DISCLOSING PARTY").  "CONFIDENTIAL INFORMATION" means any
trade secrets or confidential,  propriety  information,  whether written,  oral,
digital or other  form,  which is unique,  confidential  or  proprietary  to the
DISCLOSING  PARTY,  including but not limited to, the applicable  HEAT TRIGGERED
DELIVERY TECHNOLOGY, PATENT RIGHTS, LICENSED PRODUCTS and any other materials or
in formation  related to the business or activity of the DISCLOSING  PARTY which
is not generally  known to others  engaged in similar  businesses or activities.
Information disclosed in written media shall be clearly marked "CONFIDENTIAL" in
order to be entitled to  protection  as  CONFIDENTIAL  INFORMATION.  Information
disclosed orally or in other media shall be considered CONFIDENTIAL  INFORMATION
only if the information is reduced to a written summary by the DISCLOSING PARTY,
and if said  written  summary  is  marked  "CONFIDENTIAL"  and sent to the party
receiving the disclosure within thirty (30) days of the date of disclosure.  The
recipient of such  CONFIDENTIAL  INFORMATION has no  confidentiality  obligation
hereunder  with  respect  to  CONFIDENTIAL  INFORMATION  that  (a)  was  in  the
possession  of,  or  was  rightfully   known,   by  such  recipient   without  a
confidentiality  obligation  prior to receipt of such  CONFIDENTIAL  INFORMATION
from the DISCLOSING  PARTY;  (b) is, or becomes,  generally  known to the public
without  violation of this AGREEMENT;  (c) is retained by such recipient in good
faith  from a third  party  having  the  right  to  disclose  such  CONFIDENTIAL
INFORMATION without a confidentiality obligation; (d) is independently developed
by such recipient  without the  participation of individuals who have had access
to the  CONFIDENTIAL  INFORMATION;  or (e) is required to be disclosed by law or
government authority, provided such recipient provides the DISCLOSING PARTY with
reasonable advance written notice.


                      ARTICLE 10 - DURATION AND TERMINATION

         10.01 - This AGREEMENT shall become  effective upon the EFFECTIVE DATE,
and unless sooner  terminated in accordance  with any of the provisions  herein,
shall remain in full force and effect for the life of the  last-to-expire of the
patents and patent applications included in the PATENT RIGHTS.

         10.02 - LICENSEE  may  terminate  this  AGREEMENT at any time by giving
LICENSOR written notice at least three (3) months prior to such termination, and
thereupon terminate the manufacture, use or sale of LICENSED PRODUCTS.

         10.03 - Except as provided  above, if either party fails to fulfill any
of its obligations under this AGREEMENT,  the non-breaching  party may terminate
this AGREEMENT,  upon written notice to the breaching  party, as provided below.
Such  notice  must  contain  a full  description  of  the  event  or  occurrence
constituting  a breach  of this  AGREEMENT.  The party  receiving  notice of the
breach will have the  opportunity to cure that breach within ninety (90) days of
receipt of notice.  If the breach is not cured within that time, the termination
will be  effective as of the  ninetieth  (90th) day after  receipt of notice.  A
party's  ability  to cure a breach  will  apply  only to the first two  breaches
properly noticed under the terms of this AGREEMENT,  regardless of the nature of
those breaches. Any subsequent breach by that party will entitle the other party
to terminate this AGREEMENT upon proper notice.


                                       16
<PAGE>

         10.04 - Either  party may  immediately  terminate  this  AGREEMENT  for
fraud,  willful  misconduct,  or illegal conduct of the other party upon written
notice of same to that other party.

         10.05 - Upon the  termination  of this  AGREEMENT,  LICENSEE may notify
LICENSOR  of the  amount  of  LICENSED  PRODUCT  LICENSEE  then  has on hand and
LICENSEE shall then have a license to sell that amount of LICENSED PRODUCT,  but
no more,  provided LICENSEE shall pay the royalty thereon at the rate and at the
time provided for.

         10.06 - If during the term of this  AGREEMENT,  LICENSEE  shall  become
bankrupt or  insolvent  or if the  business  of LICENSEE  shall be placed in the
hands of a receiver  or  trustee,  whether by the  voluntary  act of LICENSEE or
otherwise,  or if  LICENSEE  shall  cease to exist as an active  business,  this
AGREEMENT shall immediately terminate.


                           ARTICLE 11 - LAW TO GOVERN

         11.01 - This  AGREEMENT  shall be construed  and enforced in accordance
with the laws of the State of North Carolina.


                              ARTICLE 12 - NOTICES

         12.01 -  Notice  hereunder  shall  be  deemed  sufficient  if  given by
registered  mail,  postage  prepaid,  and addressed to the party to receive such
notice at the address  given below,  or such other  address as may  hereafter be
designated by notice in writing.

LICENSOR
--------
Office of Science and Technology
Duke University
Room 230, North Building
Box 90083
Durham, NC  27708

cc:

Office of the University Counsel
Duke University
2400 Pratt Street, Suite 4000
Durham, NC 27710

LICENSEE
--------
Celsion Corporation
10220-1 Old Columbia Road
Columbia, MD 21046-1705

cc:

Bresler Goodman & Unterman, LLP
521 Fifth Avenue
New York, NY  10175
Attention:  Kevin J. Lake, Esq.




                             ARTICLE 13 - ASSIGNMENT

         13.01 - This  AGREEMENT  shall be binding upon and inure to the benefit
of the  respective  successors  and  assigns  of the  parties  hereto.  However,


                                       17
<PAGE>

LICENSEE  may not  assign  its  rights in this  AGREEMENT  without  approval  by
LICENSOR,  such approval not to be unreasonably  withheld.  Notwithstanding  the
foregoing, the LICENSEE may assign its rights under this AGREEMENT,  without the
consent of the  LICENSOR,  to (i) the  SUBSIDIARY  referred  to in Section  4.02
hereof and (ii) a third party which  acquires  all or  substantially  all of its
assets.


           ARTICLE 14 - INDEMNITY, INSURANCE, REPRESENTATIONS, STATUS

         14.01 - Except for intellectual property infringement,  LICENSEE agrees
to indemnify,  hold harmless and defend LICENSOR,  its officers,  and directors,
employees,  and  agents,  against any and all claims,  suits,  losses,  damages,
costs,  fees,  and  expenses  asserted by third  parties,  both  government  and
non-government,  resulting  from or arising  out of the  exercise of the license
granted hereunder; provided, however, that LICENSEE shall not be responsible for
the negligence or intentional wrong doing of LICENSOR.

         14.02 - LICENSEE  shall maintain in force at its sole cost and expense,
with reputable  insurance  companies,  general liability  insurance and products
liability  insurance  coverage  in an amount  reasonably  sufficient  to protect
against liability under paragraph 14.01 above.  LICENSOR shall have the right to
ascertain  from  time to time  that  such  coverage  exists,  such  right  to be
exercised in a reasonable manner.

         14.03 -NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO BE A REPRESENTATION
OR WARRANTY BY LICENSOR OF THE  VALIDITY OF ANY OF THE PATENTS OR THE  ACCURACY,
SAFETY, EFFICACY, OR USEFULNESS, FOR ANY PURPOSE, OF THE HEAT TRIGGERED DELIVERY
TECHNOLOGY  AND PATENT RIGHTS.  LICENSOR  SHALL HAVE NO  OBLIGATION,  EXPRESS OR
IMPLIED, TO SUPERVISE,  MONITOR,  REVIEW OR OTHERWISE ASSUME  RESPONSIBILITY FOR
THE PRODUCTION, MANUFACTURE, TESTING, MARKETING OR SALE OF ANY LICENSED PRODUCT,
AND LICENSOR SHALL HAVE NO LIABILITY WHATSOEVER TO LICENSEE OR ANY THIRD PARTIES
FOR OR ON  ACCOUNT  OF ANY  INJURY,  LOSS,  OR  DAMAGE,  OF ANY KIND OR  NATURE,
SUSTAINED BY, OR ANY DAMAGE ASSESSED OR ASSERTED AGAINST, OR ANY OTHER LIABILITY
INCURRED BY OR IMPOSED UPON LICENSEE OR ANY OTHER PERSON OR ENTITY,  ARISING OUT
OF OR IN CONNECTION WITH OR RESULTING FROM:

                a.  the production, use, or sale of any LICENSED PRODUCT;

                b.  the use of any HEAT TRIGGERED DELIVERY TECHNOLOGY and PATENT
                    RIGHTS; or

                c.  any advertising or other promotional activities with respect
                    to any of the foregoing.

         14.04 -  Notwithstanding  the foregoing,  LICENSOR hereby represents as
follows:  (i) to the best of its  knowledge,  LICENSOR  has the legal  power and
authority to extend the rights granted to LICENSEE in this AGREEMENT and that it
has not made any  commitments to others  inconsistent  with or in degradation of
such  rights;  and (ii)  LICENSOR  is not  aware of any  pending  or  threatened
litigation  involving any of the HEAT  TRIGGERED  DELIVERY  TECHNOLOGY or PATENT
RIGHTS licensed  hereunder,  and that, to its best  knowledge,  neither the HEAT
TRIGGERED  DELIVERY  TECHNOLOGY nor PATENT RIGHTS are subject to any third party
infringement claims.



                                       18
<PAGE>

         14.05 - Neither  party  hereto  is an agent of the other  party for any
purpose whatsoever.

         14.06 - LICENSOR  represents that to the best of its knowledge the HEAT
TRIGGERED  TECHNOLOGY  releases agents under the conditions  specified in PATENT
RIGHTS.

         14.07 -  LICENSOR  agrees  that,  with  respect  to the HEAT  TRIGGERED
DELIVERY  TECHNOLOGY and PATENT RIGHTS, it will not assert against LICENSEE,  or
its  vendees,  mediate or  immediate,  any claim for  infringement  based on the
manufacture,  use or sale of any  apparatus  or product made or sold by LICENSEE
under the license  granted in this AGREEMENT upon which royalty has been paid in
accordance with the provisions of this AGREEMENT.


                       ARTICLE 15 - USE OF A PARTY'S NAME

         15.01 - Neither party will,  without the prior  written  consent of the
other party:

                a.  use in advertising,  publicity or otherwise, any trade-name,
                    personal  name,  trademark,   trade  device,  service  mark,
                    symbol,  or  any  abbreviation,  contraction  or  simulation
                    thereof owned by the other party; or

                b.  represent,  either directly or indirectly,  that any product
                    or service of the other party is a product or service of the
                    representing  party or that it is made in accordance with or
                    utilizes the information or documents of the other party.


                  ARTICLE 16 - SEVERANCE, WAIVER AND ALTERATION

         16.01 - Each  clause of this  AGREEMENT  is a  distinct  and  severable
clause and if any clause is deemed illegal, void or unenforceable, the validity,
legality or enforceability of any other clause or portion of this AGREEMENT will
not be affected thereby.

         16.02 - The  failure  of a party in any  instance  to  insist  upon the
strict  performance of the terms of this AGREEMENT will not be construed to be a
waiver or  relinquishment  of any of the terms of this AGREEMENT,  either at the
time of the party's failure to insist upon strict  performance or at any time in
the future, and such terms will continue in full force and effect.

         16.03 - Any  alteration,  modification,  or amendment to this AGREEMENT
must be in writing and signed by both parties.


                                       19
<PAGE>

                               ARTICLE 17 - TITLES

         17.01 - All titles and article headings contained in this AGREEMENT are
inserted  only as a matter of  convenience  and  reference.  They do not define,
limit,  extend or describe  the scope of this  AGREEMENT or the intent of any of
its provisions.


                        ARTICLE 18 - ENTIRE UNDERSTANDING

         18.01 - This AGREEMENT represents the entire understanding  between the
parties,  and supersedes all other agreements,  express or implied,  between the
parties concerning the FIELD,  including the HEAT TRIGGERED DELIVERY  TECHNOLOGY
and PATENT RIGHTS.

         IN WITNESS  WHEREOF,  the  parties  have  caused  these  presents to be
executed in duplicate as of the date and year first above written.


SEAL                               DUKE UNIVERSITY

                                   By:   /s/Gordan O. Williams
                                         ---------------------
                                         Gordon O. Williams
                                         Vice Dean, Finance &  Administration


SEAL                               CELSION CORPORATION

                                   By:   /s/Augustine Y. Cheung
                                         ----------------------
                                         Augustine Y. Cheung
                                         Chairman of the Board




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