Exclusive Patent And Know How Licence Agreement

(1)

PSIONCOLOGY PTE. LTD. , a wholly owned subsidiary of pSiMedica and a company incorporated under the laws of Singapore of Registered office: Wong Tan & Molly Lim, 80 Robinson Road # 17-02, Singapore 068898 (the “Licensor”);

(2)

BEIJING MED-PHARM CORP., a corporation incorporated under the laws of the State of Delaware and having its principal office at 600 W. Germantown Pike, Suite 400, Plymouth Meeting, PA 19462, USA (the “Licensee”); and

(3)

PSIMEDICA LTD, a company incorporated under the laws of England of: Registered office at Malvern Hills Science Park, Malvern, Worcestershire WR14 3SZ England (“pSiMedica”)

(A)

The Licensor has an exclusive licence dated 24 July 2002 from pSiMedica to certain rights relating to the Patents and Know How, inter alia, radiotherapeutic agents based on BioSilicon. (“the Superior Licence”).

(B)

The Licensor is willing to grant the Licensee, and the Licensee wishes to receive, an exclusive sub-licence to use the Technology (as defined below) to research, develop, import, market, use sell, supply and otherwise exploit products in the Licensed Field (as defined below) in accordance with and subject to the provisions set out in this Agreement.

(C)

The Licensee wishes to enter into a manufacturing and supply agreement with pSiMedica and/or the Licensor in accordance with this Agreement.

1.

DEFINITIONS

In this Agreement the following words and expressions shall have the following meanings:-

means in relation to a party, any body corporate or other legal entity which:-

(a)

is directly or indirectly owned and/or controlled by that party;

(b)

that directly or indirectly owns and/or controls that party;

or

(c)

is directly or indirectly owned and/or controlled by the legal entity referred to in (b) above.

In the case of legal entities having stocks and/or shares, ownership or control shall exist through the direct or indirect ownership and/or control of more than fifty percent (50%) of the voting shares (other than any shares of stock whose voting rights are subject to restriction). In the case of any other legal entity, ownership and/or control shall exist through the ability to directly or indirectly control the management and/or business of the legal entity;

shall mean the date of this Agreement;

shall have the meaning given to it in Clauses 12.1 and 12.2;

means:-

(a)

any patents granted in respect of the Patent Applications; and

(b)

in relation to any patents falling within (a) above, any re-issue or renewals thereof and any extensions of the exclusivity granted in connection with such patents;

means any:-

(a)

invention, discovery or information relating to the Technology created after the Commencement Date; and

(b)

data relating to the Technology created after the Commencement Date including, but not limited to, any raw data, charts, summaries, analyses, reports and other information resulting from tests or trials of material formulated using the Technology;

(c)

for avoidance of doubt (a) and (b) shall not extend to improvements which are acquired or licensed in by the parties or which are produced by the Licensor’s sub-licensee;

an unauthorized third party that uses any of the Licensed Rights within the Licensed Field;

any infringement of any of the Licensed Rights by an Infringer;

the know how developed by the Licensor prior to the Commencement Date relating to the inventions disclosed in the Patents, as outlined in Schedule 2 ;

the licence granted under Clause 2.1;

32P BioSilicon microparticles for use as a radiotherapy agent for the treatment or monitoring of solid cancerous tumours, including the primary tumour and metastases, which can be applied:

i)

interstitially within a cancerous tumour;

ii)

into a resection cavity after surgical removal of a cancerous tumour;

iii)

into the peritoneal cavity; or

iv)

via the vasculature ( to the extent it becomes technically feasible).

any product whose research, development, import, marketing, use, sale or supply is covered by, or utilises, any of the Licensed Rights;

the Patents and the Know How;

the dates and events set out in Schedule 3;

the payments set out in Schedule 3;

the gross amount invoiced by the Licensee, its Associates or its Sub-Licensee to third parties in respect of the Sale of Licensed Products, less the following items as indicated on the relevant invoice:

(a) customary trade, quantity and cash discounts actually granted;

(b) sales taxes, excise taxes and customs duties and other

      governmental charges specified in the invoiced amount;

(d) amounts actually repaid or credited for defective or returned Licensed Products.

the Granted Patents and the Patent Applications;

means the patent applications listed in Schedule 1, including any continuation applications, divisional applications or continuation-in-part applications relating to such patent applications and any national or international patent applications claiming priority from such patent applications anywhere in the world.

officers, employees, consultants, agents, representatives, contractors and advisers;

in relation to the Territory the grant of all governmental, regulatory and pricing approvals required to sell a Licensed Product in the Territory;

the quarterly periods ending 31 March, 30 June, 30 September and 31 December;

any proceedings where the validity of any of the Patents is at issue;

a sale shall be deemed to occur when title to Licensed Product transfers to a third party; provided however a “sale” shall not include transfers or dispositions for charitable, promotional, pre-clinical, clinical, regulatory or governmental purposes, or sales between or among Licensee, its Associates and Sub-Licensees.

any agreement between the Licensee and a Sub-Licensee granting a sublicence to the Licences granted pursuant to this Agreement;

a third party (including, but not limited to, an Associate of the Licensee) to whom the Licensee has sub-licensed, sub-contracted or otherwise transferred any of the Licensee’s

rights and / or obligations under this Agreement;

the technology claimed by the Patents and/or included in the Know How; and

means the People’s Republic of China, Hong Kong Special Administrative Region, and Macau Special Administrative Region.

2.

GRANT OF LICENCE

2.1.1

an exclusive (even as to Licensor) licence, under the Licensed Rights to research, develop, import, market, use, sell, supply and otherwise exploit products within the Licensed Field in the Territory.

2.1.2

For avoidance of doubt the grant in Clause 2.1.1 shall include the right to conduct clinical trials and seek regulatory approvals for the Licensed Products in the Territory.

3.

DURATION OF THE LICENCE

3.3

Subject to Clause 3.2, the Licence shall expire on the last to occur of the following:-

3.3.2   ten (10) years from the date the first Licensed Product was first put on the market in the Territory.

4.1

The Licensee may sub-licence and/or subcontract its rights under this Agreement provided it complies with this Clause 4. For clarity, Licensee may appoint dealers, distributors and other agents in connection with fulfilling its obligations under this Agreement; and may contract with third parties to assist in the clinical development of the Licensed Product providing the Licensee adheres to the provisions of this Clause 4.

4.2

The Licensee shall enter into a written agreement with each Sub-Licensee and shall ensure that:

4.3

The Licensee shall use all reasonable endeavours to ensure that each Sub-Licensee complies fully at all times with the provisions of its Sub-licence Agreement.

4.4

The Licensee shall be responsible to the Licensor for all acts and/or omissions of each Sub-Licensee as if such acts or omissions had been made by the Licensee.

4.5

The Licensee shall provide the Licensor with a true and complete copy of any Sub-licence Agreement (reasonably redacted to protect any confidential information) promptly following its execution.

5.

TECHNOLOGY TRANSFER

5.1.1

provide details of the Technology; and

5.1.2

are reasonably necessary or desirable to enable the Licensee to understand and apply the Technology; and

5.1.3

the Licensor is legally entitled to disclose to the Licensee; provided that the Licensor has fully disclosed the nature of the documents that it is not legally entitled to disclose and, to the extent possible, has provided redacted copies of the same.

5.3.1

The Licensee shall pay for the time spent by each of the Licensor’s Personnel engaged in providing the additional assistance (including travelling time) at the rates to be agreed in advance; and

5.3.2

the Licensee shall pay all pre-approved out-of-pocket expenses (including travel, hotel and subsistence expenses) reasonably incurred by the Licensor’s Personnel arising out of the additional assistance.

6.

PAYMENTS

Milestone Payments

6.1

Subject to Section 6.2, 6.3 and 6.4, the Licensee shall pay to the Licensor a royalty at the percentage rate specified in Schedule 3 (the “Royalty Rate”) of the Net Sales Value of all Licensed Products sold by the Licensee or its Sub-Licensee in the Territory where:-

6.1.1  any Granted Patent is in force; and

6.2

In the event that (1) the Licensee or any Sub-Licensee acquires one or more technologies from a third party in order to research, develop, import, market, use, sell, supply Licensed Products in the Territory, and (2) pSiMedia and/or Licensor provide written approval of such acquisition (not to be unreasonably withheld, conditioned or delayed), and (3) Licensee is required to pay a royalty to such a third party; then Licensee may deduct from royalties due to Licensor the royalty paid to such third party(ies), but in no event may the royalties due to Licensor be reduced by greater than fifty percent (50%) and notwithstanding the foregoing, unless otherwise agreed by the parties, the Royalty Rate shall not be less than [**] .

6.3

Further provided that in the event that Licensee or any Sub-Licensee is required to acquire one or more technologies from a third party in order to research, develop, import, market, use, sell, supply Licensed Products in the Territory, and is required to pay a royalty to such a third party, Licensee may deduct from royalties due to Licensor the royalty paid to such third party(ies), but in no event may the royalties due to Licensor be reduced by greater than fifty percent (50%) and notwithstanding the foregoing, the Royalty Rate shall not be less than [**] .

6.4

For purposes of clarity, in the event that both Section 6.2 and 6.3 apply to a particular Licensed Product, then the Royalty Rate shall not be reduced to lower than [**] .

6.5

In consideration of the Licensee entering into the aforementioned Licence with pSiMedica’s wholly owned subsidiary company( the Licensor) and payment by the Licensee of 10 (ten) US Dollars to pSiMedica (receipt of which is hereby acknowledged), pSiMedica is entering into this Agreement. pSiMedica and Licensor acknowledge and agree that such consideration is adequate and neither party will undertake to seek additional consideration from Licensee.

7.

PAYMENT TERMS

7.5.1

are exclusive of any Value Added Tax, GST or any other sales tax or duties, which where applicable, shall be payable by the Licensee in addition to any sum in respect of which they are calculated;

7.5.2

shall be paid in US Dollars to the credit of the Licensor’s bank account, details of which shall be notified to the Licensee as and when necessary;

7.5.3

shall be paid in full without any deductions (including, but not limited to, deductions in respect of items such as income, corporation, or other taxes, charges and/or duties) except insofar as the Licensee is required by law to deduct withholding tax from sums payable to the Licensor. If the Licensee is required by law to deduct withholding tax then the Licensee shall:-

and that the Licensor obtains a tax credit in respect of the amount withheld; and

7.5.3.5

shall be paid by the due date for payment as specified in this Agreement. If the Licensee fails to pay any sum due under this Agreement in full by the due date for payment then the Licensor may, without prejudice to any other right or remedy available to the Licensor, charge interest on any outstanding amount on a daily basis at a rate equivalent to the London Inter-Bank Offer Rate (6 months) plus 5%.

8.

RECORDS, INSPECTIONS AND STATEMENTS

8.1

During the term of this Agreement and for a period of six (6) years thereafter, the Licensee shall, and shall procure that its Sub-Licensees shall, keep at their normal place of business detailed, accurate and up to date records and books of account showing the quantity, description and value of all Licensed Products supplied by the Licensee and its Sub-Licensees in the Territory and all sums paid to the Licensee by its Sub-Licensee, in each case during the previous six (6) years. The Licensee shall ensure that such records and books of accounts are sufficient to ascertain the royalties due to the Licensor under this Agreement.

8.2

Subject to Clause 8.3, the Licensee shall, and shall procure that its Sub-Licensees shall, make its records and books available for inspection during normal business hours by an independent certified or chartered accountant appointed by the Licensor (the “Accountant”) for the purpose of verifying the accuracy of any statement provided by the Licensee to the Licensor pursuant to Clause 7.3. Such books and records may be redacted to protect third party confidential information provided that such redaction does not materially diminish the ability for Licensor to conduct a meaningful verification. The Accountant shall be entitled to take copies of such records and books solely for the purposes of carrying out the verification and shall only disclose the records to the Licensor to the extent necessary to support its position that the statement is inaccurate (including in the course of legal proceedings) and then only to the Personnel directly responsible for such matters. Each such inspection shall be limited to pertinent books and records as the Accountant may require for verification purposes only. Licensor shall be responsible for

ensuring that each designee or representative of Licensor that conducts an inspection and audit of the Licensee records shall comply with the confidentiality obligations set out in this Agreement.

8.3

The Licensor shall be entitled to have inspections carried out pursuant to Clause 8.2 once every calendar year (and once following termination or expiry of this Agreement) on up to three calendar years worth of statements, on giving the Licensee and its Sub-Licensees 30 days’ written notice prior to each inspection.

8.4

The Licensor shall bear the cost of carrying out the inspections referred to in Clause 8.2 unless there is an error of more than 7.5% in any four consecutive royalty statements provided by the Licensee or its Sub-Licensees in which case the Licensee shall immediately pay to the Licensor the costs of making the relevant inspection. If the Licensor’s inspection shows that the Licensee has paid more than the amounts properly due under this Agreement then the Licensee shall be entitled to deduct such excess from any sums payable to the Licensor under this Agreement. If the Licensor’s inspection reveals a deficit then, without prejudice to any other right or remedy available to the Licensor, the Licensee shall promptly make good the deficit; and pay interest on the deficit at London Inter-Bank Offer Rate (6 months) plus 5% from the date upon which the deficit arose to the date upon which the deficit was paid.

9.1

Upon Licensees’ receipt of data and results from the dose ranging study of the Licensed Product in Singapore and other such data required to commence further clinical studies, the Licensee shall use all reasonable endeavours to:

9.2

The Licensee shall use the similar level of resources to develop a Licensed Product as it would use to develop one of its own products with a similar commercial potential to that of the Licensed Product.

9.3

During the first 12 calendar months from the later of (a) Commencement Date or (b) the receipt of data (as specified in 9.1 above) from the Singapore dose ranging Study of the Licensed Product, the Licensor and the Licensee shall agree a date when the Product

Approval for the Licensed Product must be filed and once the date is agreed the Licensee shall use all reasonable endeavours to achieve that date.

10.1

The Licensor shall grant to the Licensee, without additional charge, a non-exclusive, worldwide, licence under any intellectual property in any Improvements owned by the Licensor to research, develop, and sell Licensed Products within the Licensed Field in the Territory together with the right to grant sub-licences to Sub-Licensees in accordance with the provisions of Clause 4.

10.2

The Licensee shall grant to the Licensor without charge a non-exclusive, worldwide, royalty free licence (including the right to grant sub-licences) under any Improvements owned by the Licensee to research, develop, manufacture and sell materials and products (in each case) (i) inside and/or outside the Licensed Field outside of the Territory and (ii) outside the Licensed Field in the Territory.

10.3

Each party (the “Requesting Party”) may, from time to time ask the other party (the “Recipient Party”) to provide the Requesting party with a written report detailing any Improvements made by the Recipient Party (or its Sub-Licensees in the case of the Licensee) during the period since the Recipient Party last sent a report pursuant to this Clause. Each report shall contain sufficient details of the Improvements to enable the Requesting Party to understand the Improvements.

12.

CONFIDENTIALITY

12.1.1

any and all data, results, know-how (including the Know How), show-how, software, algorithms, inventions, designs, trade secrets, plans, forecasts, analyses, evaluations, research, technical information, business information, financial information, business plans, strategies, customer lists, marketing plans, or other information whether oral, in writing, in electronic form, or in any other form; and

12.1.2

any physical items, compounds, components, samples or other materials disclosed by one party or any of its Associates (the “Disclosing Party”) to the other party or any of its Associates (the “Receiving Party”) before, on or after the Effective Date.

12.2.1

is or becomes public knowledge through no improper conduct on the part of the Receiving Party, its Associates and/or their respective Personnel;

12.2.2

was in the lawful possession of the Receiving Party and/or its Associates without any obligations of confidentiality or restrictions on use prior to first receiving it from the Disclosing Party;

12.2.3

is obtained subsequently by the Receiving Party and/or its Associates from a third party without any obligations of confidentiality and such third party is in lawful possession of such information or materials and not in violation of any contractual or legal obligation to maintain the confidentiality of such information or materials; or

12.2.4

is independently and lawfully developed by the Receiving Party.

12.5

All documents, materials and other items (including items in electronic form), and any intellectual property rights therein, provided by the Disclosing Party to the Receiving Party containing Confidential Material shall remain the absolute property of the Disclosing Party.

12.6

The Receiving Party shall at all times maintain documents, materials and other items (including items in electronic form) containing Confidential Material received from the Disclosing Party and any copies thereof, in a secure fashion by taking reasonable measures to protect them from theft and unauthorised copying, disclosure and without prejudice to the foregoing shall exercise at least the same degree of care to prevent unauthorised disclosure and/or use of the Disclosing Party’s Confidential Material as the Receiving Party exercises in respect of its own confidential material of like importance.

12.7

The Receiving Party shall notify the Disclosing Party immediately if the Receiving Party becomes aware of any unauthorised use or disclosure of, or any unauthorised access to or of any theft or loss of any copies of any Confidential Material received from the Disclosing Party.

12.8

The provisions of this Clause 12 shall commence on the Commencement Date and shall continue for seven (7) years after the termination or expiry of this Agreement.

12.9

The Licensor shall use all reasonable endeavours to ensure that the Know How does not become public knowledge but reserves the right to make disclosures of the Know How:-