Master Termination Agreement, effective as of June 20, 2008, by and between The Trustees of Columbia University in the City of New York and Omnimmune Corp

(a)  

Stock Purchase Agreement–

(i)  

Section 2.2(a):  Relating to Company’s obligation to notify Columbia of certain amendments to its Articles of Incorporation; and

(ii)  

Sections 6.1 & 6.2:  Relating to Company’s obligations in connection with the exercise by Columbia of its preemptive rights (together, the obligations referred to in clause (a)(i) above and this clause (a)(ii) shall be referred to as the “Stock Purchase Performance Obligations”); and

(b)  

License Agreement–

(i)  

Section 6(a)(i):  Relating to certain required expenditures for research and development;

(ii)  

Section 6(a)(ii):  Relating to certain minimum funding requirements;

(iii)  

Section 6(a)(iv)(a):  Relating to the timing of certain FDA filings;

(iv)  

Section 6(a)(v)(a):  Relating to the timing of certain animal studies;

(v)  

Section 16(a)(i):  Relating to Company’s obligation to pay fully and promptly amounts due under Section 3, 4 or 7; and

(vi)  

Section 16(a)(iii):  Relating to certain defaults created under the License Agreement by virtue of acts or omissions relating to the Stock Purchase Performance Obligations under the Stock Purchase Agreement (together, the obligations referred to in clauses (b)(i) through (v) above and this clause (b)(vi) shall be referred to as the “License Performance Obligations”).

(a)  

Section 1, entitled “Definitions,” shall be amended by deleting in its entirety Subsection 1a., thereof entitled “Affiliate,” and in lieu thereof, the following new section shall be added:

(b)  

Section 3, entitled “Royalties and Payments,” shall be amended as follows:

(i)  

a reimbursement in the amount of $25,000 for past patent expenses, upon the initial $1,000,000 of sales of Licensed Products by Company, its successors or Sublicensees or any of their respective Affiliates (or any combination thereof);

(ii)  

a running royalty, to be determined on a Territory (as defined below) by Territory basis, equal to the greater of either 1% or the Pass-Thru Multiple (as defined below) of Net Sales of all Licensed Products that involve use of Licensed Material or Licensed Information but are not covered by a Claim of a Licensed Patent (the “Non-Patented Products”) for a term of ten (10) years from the date of the First Sale of each Non-Patented Product; provided, however, that in no event shall the running royalty under this Subsection (ii) exceed 2%; and

(iii)  

 a running royalty, to be determined on a Territory by Territory basis, equal to the greatest of (1) 2%, (2) the Pass-Thru Multiple, if applicable, or (3) the Transaction Multiple (as defined below), if applicable, of Net Sales of all Licensed Products covered by a Claim of a Licensed Patent licensed hereunder to the Company (the “Patented Products”), for a period of ten (10) years from the date of First Sale of each new Patented Product in a Territory or the last to expire Licensed Patent in such Territory, whichever is longer; provided, however, that in no event shall the running royalty under this Subsection (iii) exceed 4%.

(a)  

Definitions.  For purposes of this Section 3.a, the following term and phrases shall have the meaning ascribed thereto:

(1)  

“Acquisition” shall mean the initial consummation of any of the following, effected, directly or indirectly, in one or more transactions:  (x) any sale, lease, license or other transfer or disposition of all or a majority of the business or assets of the Company, including, without limitation, by means of any revenue sharing, participation or other arrangement that confers all or a majority of the benefits and economic indicia of ownership of such business or assets; or (y) any merger, consolidation, conversion, other business combination, share exchange, sale or other transfer or disposition of shares, spin-off, spin-out, contractual transfer of control or voting power, reorganization, recapitalization or other transaction or transactions involving the Company, if after giving effect to any such transaction or transactions described in this clause (y) the holders of record or beneficial owners of the voting shares of, or other voting interests in, the Company prior to the first such transaction no longer hold or own beneficially (in substantially the same percentages) a majority of the voting shares of, or other voting interests in, the Company (a “Control Shift”); provided that neither issuances by the Company of its capital stock (whether as an original issuance or from treasury shares) to investors, solely for bona fide equity financing purposes nor any Control Shift that may occur solely by means of (aa) the private placement of up to 3,200,000 Units (as such term is defined in the PAA (as defined below) conducted pursuant to that certain Placement  Agency Agreement, dated June 20, 2008, between the Company and New Castle Financial Services, LLC, as such agreement is in effect on the date hereof, and/or (bb) the merger of the Company into a wholly-owned subsidiary Roughneck Supplies, Inc. (the “Merger Sub”), pursuant to a Merger Agreement between the Company and Roughneck Supplies, Inc. (or any successor thereof) and the Merger Sub., substantially upon the terms disclosed in the draft Confidential Private Placement Memorandum with respect to the sale of  up to $8 million of units, furnished to Columbia on the date hereof, shall, in and of themselves, be deemed to be an Acquisition. Without limitation as to Section 20, the term “Company,” as used in this definition, shall include any Successor Issuer.

(2)  

“Acquisition Pass-Thru Multiple” shall mean the Pass- Thru Multiple required to be paid by Company in respect of Net Sales under any sublicense between Company and any person or entity that is or becomes an Acquiring Sublicensee (as defined below), whether or not such sublicense remains in effect following an Acquisition.

(3)  

“Acquiring Sublicensee” shall mean, any Sublicensee (including any Affiliate of any Sublicensee) that has entered into any Acquisition transaction.

(4)  

“Pass-Thru Multiple” shall mean the product of the Pass-Thru Percentage (as defined below) multiplied by the royalty rate required to be paid by any Sublicensee to Company on account of Net Sales of, in the case of Section 3.a(ii) above, Non-Patented Licensed Products or, in the case of Section 3.a(iii) above, Patented Products, as the case may be; and

(5)  

“Pass-Thru Percentage” shall mean that percentage rate as may be applicable under Section 3.b below, for either sublicensed therapeutics or sublicensed diagnostics and in effect from time to time thereunder.

(6)  

 “Successor Issuer” shall mean any issuer of securities issued to holders of the voting shares of, or other voting interests in, the Company directly or indirectly in consideration for such shares of, or interests in, the Company.

(7)  

“Territory” shall mean any defined area under the jurisdiction or considered to be the possession of a recognized government (e.g., the area described as the United States of America).

(8)  

“Transaction Multiple” shall mean the greater of either:

a.  

the Acquisition Pass-Thru Multiple; or

b.  

in the case of an Acquisition other than by an Acquiring Sublicensee, three percent (3%) of Net Sales of Patented Products sold for therapeutic purposes (whether or not such products are also sold for diagnostic purposes); provided, however, that in the case where the Acquisition occurs at a point in time where the Pass-Thru Percentage of 12.5% is applicable, then in such case, three percent (3%) shall be reduced to two and one-half percent (2.5%)).

(b)  

If more than one Licensed Patent covers a Licensed Product, no additional royalties will be paid by Company than if the Licensed Product is covered by one Licensed Patent.

(c)  

If, after review at any stage of prosecution, Company and Columbia amend this Agreement in writing that all claims issued or pending either do not cover a Licensed Product, or are deemed unpatentable, then the royalty to Columbia under Section 3a(ii) hereof shall be reduced to one percent (1%) of Net Sales on such Licensed Product.  Notwithstanding the foregoing, if a patent subsequently issues from such applications, then the royalty due to Columbia shall return to the original two percent (2%) of Net Sales on such Licensed Product, beginning on the date of such issue.

(1)  

Subsection 6(a)(i) shall be amended by deleting the date “February 1, 2008,” and in lieu thereof adding the date “September 1, 2009”;

(2)  

Subsection 6(a)(ii) shall be amended by deleting the date “February 1, 2007,” and in lieu thereof adding the date “September 1, 2009”;

(3)  

Subsection 6(a)(iii) shall be amended by deleting the date “February 1, 2010,” and in lieu thereof adding the date “August 1, 2010”;

(4)  

Subsection 6(a)(iv)(a) shall be amended by deleting the date “February 1, 2008,” and in lieu thereof adding the date “September 1, 2009”;

(5)  

Subsection 6(a)(iv)(b) shall be amended by deleting the date “February 1, 2010,” and in lieu thereof adding the date “February 1, 2011”;

(6)  

Subsection 6(a)(iv)(c) shall be amended by deleting the date “February 1, 2011,” and in lieu thereof adding the date “February 1, 2012”;

(7)  

Subsection 6(a)(v)(a) shall be amended by deleting the dates “February 1, 2008” and “February 1, 2010,” and in lieu thereof adding the dates “February 1, 2011” and February 1, 2012,” respectively;

(8)  

Subsection 6(a)(v)(b) shall be amended by deleting the date “February 1, 2010,” and in lieu thereof adding the date “February 1, 2012”;

(9)  

Subsection 6(a)(v)(c) shall be amended by deleting the date “February 1, 2011,” and in lieu thereof adding the date “February 1, 2014”; and

(10)  

Subsection 6(a)(v)(d) shall be amended by deleting the date “February 1, 2013,” and in lieu thereof adding the date “February 1, 2016”; and

(d)  

Section 16, entitled “Breach and Cure” shall be amended to delete therefrom in its entirety Subsection 16(a)(iii).

(e)  

Section 17, entitled “Term of Agreement,” shall be amended to delete therefrom in its entirety Subsection 17(a) and, in lieu thereof, the following new Subsection 17(a) shall be added: